Q2 2020 Lexinfintech Holdings Ltd Earnings Call

[music].

Thank you for standing by welcome to the election seems like second quarter budgets with your game Scott.

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Thank you operator, Hello, everyone and welcome to Lurching second quarter 2020 earnings Conference call. The company's results were issued earlier today and our posted online joining me today on the call Mr., Jay Shah founder Chairman and Chief Executive Officer, Mr., Craig Johnston, Our Chief Financial Officer, Mr., Ryan ill our chief.

Risk Officer, Mr. Stanley, our senior financial director and other members of our team for today's agenda Mr. Shao will provide an overview of our recent performance and highlights. The since then we'll discuss our financial results and Mr. Bill will discuss our credit performance before we continue I refer you to our safe Harbor statement in the.

Earnings press release, which applies to this call as we will make forward looking statements also please note that this call includes discussions of certain non-GAAP financial measures.

Please refer to our earnings release contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated all figures mentioned during this conference call. Our end living B I will now turn the call over to our CEO Mr. Shao room I will track.

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Total amount equal to ensure the shorter.

As usual permanent goto screens that built when given agenda to be the for most of two against NGL women will follow the Intel changing that do not yet so it's a year what does that all John will midway through the portfolio yet.

Hello, everyone Im very pleased today to announce that in the second quarter. All our operating metrics grew in a stable manner. Our to be motto is beginning to deliver enter provide us with a new avenues for growth. Thanks to the new initiatives. We've again produced decent results.

Thank you do when the usual associate only then on the residual team already today nobody they make located in the US user can meet or would you see women that same topic in that area and double digit digital year will partly to be room also we'll make that.

Thanks, good quarter on key entitled Industry seasonal impact was also the easier Tony since on the LIBOR into North Korea. So those are what I consider a lot. So that will not also futile poriadok in total receivables.

This quarter, our revenues reached 3.0 billion an increase of 19%.

Our gross profit reached 968 million and our non-GAAP pre tax profit reach 541 million, our new consumption platform strategy and our financial services business continues to expedite the growth of our to be model, providing us with risk free Internet platform revenues of nearly a billion of which.

Platform services was $419 million, an increase of 109%. In addition revenues from railcar memberships.

Exceeded 24 million. This is our first time and disclosing these revenue numbers from our platform model.

I'll give the women to twotwenty or whatever so by easy to be turned off over the will succeed embark towboats against somebody asked the so we'll go to achieve wanting that I do otherwise if the deal.

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Total once and for them also went in audience that utility she has a more care SPT EGD gelclair budgets are how unions untypical tricky.

In the second quarter, we facilitated 41.1 billion worth of loans, an increase of 57.8% exceeding our guidance of 38 billion. Our current loan balances 61.9 billion, an increase of 52.4% at the same time, our credit quality remained stable and risk decree.

Leasing as of today are they seven delinquency has declined to 2.32%, which is even lower than our numbers from the third quarter of last year.

Thats evident on Tensilica women's 22, UGI to turn to quantify it sounds hogwarts deliberately Toby senza downtown woven insights.

Chinese.

One thing you tend to tell you Timbar you end up will be our implementation.

Under these conditions of growth in the third quarter, we're expecting our loan originations to exceed 48 billion an increase of over 30%. We're also confident in our ability to achieve our full year loan origination guidance of 170 to 180 billion.

Due to more when would you almost with other to 10 will buy centerline Formby tender and this year will soon.

So what are your within one property looking really easy youre sort of what our shopping inside so we will maintain topic in that diners currently concordance into future.

At the end of the second quarter, our numbers of registered users reached 95.3 million an increase of 90% on August 10, our number of registered users reached over 100 million illustrating successfully became when the fuel consumption platforms to achieve that milestone which will.

Open up new opportunities for our new consumption platform strategy.

It will will there will always seems healthy directions, I think thats always Hogan telcel for that.

Thank you know Qualcomm low cost Dundalk impacting Asian tightened the tender fruitful.

This will Gulf wind up.

Since our entire.

Not oxychem. So I'd also like are you doing any.

DRG two of the occupancy by parcel and on our 70 by those about June was 92, well number one gene Doug It may change in Hawaii Bye bye.

In the second quarter, we focused on new consumption and increased coverage in both online and offline consumption scenarios are three major brands Centurylink, none of our current Linecard all demonstrate a strong growth momentum with increasing transaction numbers total orders from three platforms reached 74.6 million an increase of 100.

88% from 27.8 million the third quarter 2019, as we entered the third quarter, we averaged 1 million transactions today.

Seasonal low blood loss autonomous robots, one centofanti infancy shopping malls.

The ingenuity goal since our you change our top its R&D module at Yahoo stock into any of us obviously.

Due to low hotline Santander continental usual juggling more toby than others, so that they see Whistler battle at Tongon secular strategic Shelby the dose.

Of our major brands Lockhart first established the ability to deliver installment purchase options. So all consumption scenarios connecting financial institutions with online and offline consumption scenarios and satisfying to users' needs for convenient online offline consumption in the second quarter the love our.

Card and offline vendors develop joint sales, increasing total transactions by 400%, providing cumulatively over 4 million vendors with consumption transactions.

To answer is helping hi look up that way. So basically most of your quota for those who is out of a new positive movement.

Double digit by since you bought the anchor came back into what Intel futile, let's remains under tight on Tiotwo.

She and Taco since our country.

Our membership consumption servicing sprint Linecard continues to grow strongly with a repeat purchase rate of 59% today look our to speeding up the pursuit of our by champion to connect more key online and offline global leader players and other well known brands to jointly promote their brands and provide.

Privileges and benefits both online and offline.

Sure. They saw chair limited equal to four Yi seems healthy celldex per week, one quotas in India also listen it up significantly futile. It could you put on phones is always balances now you'll kind of second quarter since submit to the yields CEO. Let's review could you can be a healthy situation. So please.

Heading into the humidity.

Just over a week ago are registered users reached over 100 million and we see no new consumption will open up new avenues of growth for us at the same time, we're upgrading our own gross using technology to continuously create new consumption method to enable hundreds of millions to live happier lives will be our.

Tolerable and the voting ourselves to using technology to change consumption, becoming the new consumption ecosystems leader will be our goal.

Correct.

Okay wait and see how can that muted. So based on results will you work is into the.

Continued ISO simply to generate turkeys will clean coal, India bulldozing team Templeton takeaways on salvage Andy Secondly, cogent wondered issues you commit 70, such healthy food peer Johnson City Honda Toyota went down double digits in each of it in Italy tons are conducting an adult.

Since July ixias, indicating a recovery in consumption have become clearer and consumptions year on year growth may reach 2%, representing the first part of growth. This year recently the central government has also indicated a core part of their economic work will involve speeding the release of the potential of the Chinese consumer.

And speeding up the establishment of the structure and systems for creating domestic demand, we believe that with the recovery in consumption and favorable macroeconomic policies, we will be able to speed up the pursuit of new consumption platform strategy and create even greater value.

Ticket I wasn't cumulative oil crack at Apollo and into the tell us Whats next I'd like to invite our CFO credits to discuss our recent financial performance.

Thank you, Okay, and Hello, everyone Im pleased to announce on we have once again delivered strong results.

In the interest of Hi, I will not go over line item by line item of our financials.

For more detailed discussion of our second quarter results. Please refer to our earnings press release.

Please also note up starting from second quarter of 2000.

We will be reporting revenue streams into three categories.

Thank you access on the service income credit oriented servicing costs and APAC warm service income in order to provide a more relevant information.

Total operating revenue reached RMB three beginning in the quarter and a credit oriented service income reached RMB tubing, representing an increase of 48.8% from the second quarter 2019.

Form based service income reached RMB 419, any representing an increase of 109% from the second quarter of 2019.

Adjusted net income was RMB 453 million, reflecting our continued strong growth and the performance.

Fully diluted adjusted net income for the corner, but he asked was 2.21.

Our operating leverage operating expense as a percentage off average loan balance was 3.9 cents on quarter and I'll now hand on heitman marketing advertising GE M&A and R&D was 0.8% 1.4 times on HSN and the 0.9% of.

Average loan balance respectively.

We currently have 100 million registered users and our customer was quite in line reached 22.7, meaning up by 6% to 8.4% add last June services 2019.

We have pilot nearly 1.4 million new active customers in the second quarter.

Overall, our average of quite amendment was RMB 10039.

Why our average Tanner was now 11.4 months.

Our weighted average NPR was 26.5 for this quarter.

In terms of our funding for the corner no funding for new loan originations came from our use of these high platform and all of our funding for new loan R&D patient came from our institution funding partners.

Now going Cobot 19, outweigh has broad and continuing to bring many challenges to our business.

While we continue to see on recovery, we believe lots with our continuing recovery and the determines afros up our peak, we may still be able to achieve our previous data guidance.

Matt Ryan will discuss our credit situation rightly.

Thank you correct. We continued our stable credit foreman sales quarter insider trading to condition in the market our credit card they continue to be high and they we expect the levers.

And we fully be spread our credit statistics to continue to perform well and add to expect levels.

I 100 days delinquency ratio remains low at 2.99% and then we continue to the stable credit performance and our prime charge off ratio is approximately 4.5%.

This is consistent with our previous statements under 40 reading our range of expectations and the we 40 spread our stable credit performance to continue in 2021.

With that I conclude our prepared remarks, operator for the proceeds will be the cartoons and on profession.

Thank you so much sensors, ladies and gentlemen, we will now begin the question answer session. If you wish to second question you May Press Star that's number one in your telephone and reach for your name to the announce and if you wish to cancel your comments you made press the pound or the husky on your telephone upbeat.

Ask your question in China.

If you can and then can you repeat the question in English.

Our first question comes in from the line of jockeys law from China, Renaissancere Manosalva jockey.

But in somehow film as it once you win that you put no today with some LNG John John John.

Eagle into nursing Chica includes a meticulous until we can tie easy to Peter trigger more sure shantytowns hagerty quite a few whitman.

Got you schools.

Good news that you kind of tight.

Hoboken sounds very good news.

Okay sounds very good synergy goal should help me that you could tell me if you will consume duchenne triggers you.

I don't see beginning to shop creep up actual Chico so as you will note.

Trigger should be no particular, so I'm wondering if you do sure. We'll Miss you guys seem to really good to the thing done through to two cents you to Mckenzie with invention triggers we won't be a chicken dash bunk core shoot you elder shoes. So as you know actually sweet bunk bullish on chicken.

In China.

Hotel go into you know should tell you what the take or pay create.

She grew will conduct she's aren't you to actually get issues achieve tico be easily choosy sheeting Pula on somebody's home Wheeler with.

She could.

Sure so within that you could take credit for sure.

Uhhuh dimensions Duck Creek are going to you do take or pay more sure to revenue sharing that take a more sure with without Eagle take rate that you should not be someone with future going to Tomblyn shown you. We showed you could processing in the service costs.

Thank you I know you shouldn't go not you do have switched the grew sounded go away.

See pile touch a whole where you'll see group simply golf Chick.

Greetings and Eagle shapes.

So I would help translate so.

Thanks for taking my questions. After three questions first one is about our new retail strategy and to be.

New business model.

So can you elaborate more on how we differentiate.

With our peers and.

In terms of the new customers, how how many.

What is the percentage or contribution of new customers.

This is from look hot in the news retail strategy and the how much.

Can be.

Converted to our consumer finance customers.

And also a number to check in terms of the number of others. We mentioned in the third quarter that actually exceeded 1 million.

Bailey others. So what is the destination for that or the number.

And second questions about our take rates.

In terms of the wrapping take rate what is our outlook.

Essentially considering the increasing platform revenue sharing model.

And we actually see some improvement not take rates in the second quarter versus the first quarter. So what is the trend going forwards.

And the last one is regarding to our cost item.

Observed that the processing in the servicing costs actually stay at relatively high level for the first quarter in second quarter. So what is the trend going forward where that.

Normalized.

In the in the into the future. Thank you.

Although whatever data and Eagle risky.

Well youre missing topic in Pilar is all among the auto you got here, we'll have given just thoughts about will you highlighted here with us or de Silva in early.

Jennifer they want reservoir fluid jumping in on even though the dollar you told me its hoping that the lid at Wassa pit one yet.

So thats a woman it all at the meeting topic and I think token Tyler women's also weighed all the actions of a hit each other than whether you guys, albeit.

Okay. That's all the time looking to put yourself and broader Eagle cool the Atlantic dialed in kind of materials that go through all of the youre within the yesterday, they don't quite well with the competitive that youre waiting for what you get year. So not will then.

Well I guess Thats was gonna you got 50000 lots of interest alternatives.

Yes ill, let Anthony will assays or the UK.

Good luck in I've had the portfolio so do the fancy that neither but it's all with a couple of minutes and go to you.

We'll go Okay. You could you go to the retrofit healthier and healthier shed now we'll move data available. We'll let you. So couple of element that as you go to engine now we'll take it you are with the which Angiopoietin. Two total cost issue is somewhat looking right now with units over the upward, but it has one of which is all the dollar robot so look what color.

Element, Doug I know how to deal with things like automotive applications as I sort of soil that topic.

That's helpful Accuser, well that's okay. When all the second topic. So much of what you said political.

Yeah. So regards to your first question on the new consumption platform I think first as you know when we talk about the underlying consumption finance business.

Very important part is that we need to control or have you will have some ideas around the consumption scenario and these involve both online and offline scenarios and what we have done in terms of our strategy is to greater control around these scenarios then develops we will.

A system around US now also from these development of the scenarios were able to get more customers and this is why you're seeing that our customer acquisition continues to increase in our total customer numbers now are over a 100 million in terms of registered.

Customers now in terms of development. This originally as you know we had our original.

Allied consumption platform or ecommerce.

And as others also develop similar products and round up their offerings, we certainly needed to develop more products and the second thing was to make it below the availability of cash so that people can spend on different things, but more importantly, as you know is recently the development of love our card, which effectively opens.

All the online as well as offline consumption scenarios.

So without holidays, albeit smaller format a condo.

You saw the Toby quoting the cohort how does it got a way that is that the USMLE dosing in consumer developers kit. So quickly changing so take one quarter to your order how does it when it does look like and called.

And when we open up these us scenarios, we can see that the contribution from the customers is better, especially from compared to those customers a data purely transacted on a monetary or cash basis.

You might look I cannot say youre cutting the either just hold up he served to shield touches to the silver sealed element and that as CEO intuitiveness, albeit a daily silicon I don't want anything which is going to kick off the Hawaii goes out we'll just we'll mental when new either with the either cohort lower income will that you know floor.

We'll go forget how to hedge.

So I'm going to us at the high thought on the cohort limited visibility Sunoco focused on a competent woman. So they did the your whole milk you will not when I wasn't in the topic in Taiwan Millipore yourself identity helmet, Okay cohort. The here so now you're able to dust switching topic in I know women. They told US a total the top Italian locally with this is helping.

People go for myself and.

Well most of it grew above the top it in the Olympics R&D salvage right.

So no matter what they see this auto part I'll, let you mentioned the intervention now will then thank Jim for the woman you didn't have a general could you touch it could you also there's only one year total AI insisted on it it no not over the Cobra with double the diesel woman given how people you get on the you got to Pete.

Women totaling how to do.

I'd say, we shall be turning it to taught US I know you guys hoping to move.

So it will then.

To be it will put us back towards the end so vulnerable to encounter.

For those so you got Leslie Zimbardo local.

Got you hope people is eclipse issued a team that neither you go through too.

So I'm not aware.

Yes.

And or the development of the system covering all the consumption scenarios is that enables us to literally see how our customers eat sleep live et cetera, and therefore improved the stickiness as the customers most of its worth noting that while we have 100 million registered users.

The amount that we can provide financial services to is probably limited at this point to just over 20%. So we're going to aim to deliver more to more of our register customers and users by providing more products and services, but most importantly to do this we have to have some control some stuff.

Stem make way of recognizing in holding the consumption scenarios and then this way we can provide various products not just financial products, but also a membership privileges and other benefits and also through this we can then utilize our technology, whether it's our Hawkeye system our warehouse system.

And ultimately to help the banks provide a long term financial products. So quite often when I talk about to be were actually mean is to the banks, we're providing away for the banks in the financial institutions to continuously operate and provide loans to customers.

So the one minute, but itself it Hogan, which our budget will eat into Seattle as other okay kind of women that they've got a sub originally or payoff and valuable trades or whether it's obviously going images on Lincoln taught us autolytic handle were much another topic.

Hey, going with that I can build Asia when in the southern able to cope with all of which said that change I think it it sounds how Tulsa somehow say, Joe the covenant and got a little bit onions, I'd say in talking to you know how that's a little quicker or may it turned out to the focus obviously dunkeld adjust your quarter, you'll hold isn't going to you.

10 cultural fit on our.

So when we talk about the whole consumption platform and the strategy. We're consumer loans, we have to recognize that there are mutually beneficial to each other they provide benefits to each other's directly whether it's providing additional consumption scenarios, providing traffic customers and providing ultimately.

A stable source of high quality customers and we can see this example, where we work with supermarkets and we can see that there is healthy growth there and not only in the sense or just pure growth, but also a healthy in terms of very stable credit quality customers.

Well make enough.

Lastly in profit margins I think other soybean had a very well mercantile is what I think we shake out and eating.

So what Michael.

On the 1 million number it's coming from Bofa online as well Cline and then we can see actually the offline number is now over half of the total number.

I'll, now materiality or such or whatever partner with them.

Now, let's sit here.

We're just such an increase sequentially Solomon since this is my presentation down the Airwatch attach out where you have goes can you just get all of which if I'm in the JV.

In Asia in JBL.

As I think everybody can direct your attention to the new investor presentation, which was posted on our website, which has a more details around some of the changes.

Our primary take rates that you should our previous John happened home.

No no hormone free automotive grade.

So we should probably sharing the JV.

Jason to that Marcia profit sharing the using a some irrational just universe for women's whole, reaching annual Cashers human cancer trial should tour I knew harmonizing made harsha Shortish again too could you talk a little more share geological Moshe talked Cedar Canyon enough time away.

Yes, I wondered if you're seeing it was about three things on the Tom the geology.

Sure and PD with Algea now opportunity again and dollar equal contribution to my managerial Moshe you had idle as usual.

You can't go capture that page 19, I cannot energy Mark our CRE loan.

Tertiary Golden Gate of high return to more show on Michigan editor data table motion.

Doug Hi, equal in so Youre Union shop.

Okay great.

Total you deal with yet.

Now jiggle Ceight hundred 13 nature and now that in order to.

Our dream home digital motion material.

Teacher.

Regional Tigger type decision to GNS was.

So.

You can say that ultimately we have different models and as a result, because of the different models theres different underlying take rates now in particular, the profit sharing model, which were the major thing this year and going forward.

While we've done it for a long time every single time that you start out working with a financial institution or a bank. They will of course start up with getting a higher take rate on their side, which means a lower take rate on our side now that said things are definitely changing and we do see movement.

The banks are getting relatively lower take rates compared to before now that said, we're probably looking at something like for example, a 1% difference more or less between if you will the profit sharing model and more traditional models.

But again, we do find more funding partners are coming aboard and as a result that the take rate will likely improve over time on the profit sharing model.

During that time Orchard from Daniel where you got none of them Eagle Ford to the organization you wanted to beat the initial hawken, Ontario she didn't.

Is that I'm working on those and how much left so we don't comment to that and what are your technology and so do you guys I asked you to the water.

Yeah servers history. This and for example of direct lending or other related models. We're in the beginning there was something like 10%, whereas the PDP with something like seven.

Then over time as these are things that change. So it's probably just a process that takes a little later today.

Our retirement digital Gray terminal and future Shulman chief.

He sold two largest I appreciate all of these optuminsight each division one shop that threshold opportunities around there at our middle to how should we just horrible atg acquired the polar bottles later in the future oriented right.

Hedging.

Certain regency Gen instant good that you contribute to intermodal judging from the straight on the chart Arlo what your wider than good euchre timber total core trip fall Ethan honestly the ones and then we'll be woman consolidations Siemens underneath that onto the genes result, consumer media job done.

We'll need to either some good eager to compete standardize or said bigger each region synthesis answer them the with the retention creep into good tweets and we've been that's not your sue them kind of claims, finishing the 10, but in the far too. So Tom should I think some of which you might not yet.

Enrollments as we said that teaching.

When you bought woman has a tremendous alleged infringing.

Hundreds you woman, who gets the team daunting genes you who are doing well to demolition. So is owned by young contingency sheer converging on the who are deemed done centers have been by these days, so concerned I sort of elements and good equal if you're thinking.

In some of which as you didn't geopark.

And so we're guards to the processing cost well aware is related to what has happened as a result, the galvanizing pandemic and its impact on our collections as well as our credit assessment to be will be collections resources overall has been very tight.

As a result, we have to users. So in third party providers and then we had to make sure that.

Providers meet our rigorous standards as well and given the nature of the year situation. Our focus has certainly been more stability than anything else as the maintaining the quality of the credit as perhaps more important than anything else and similar we see as such.

Duration for the overall assessments.

But that said, we do feel that in particular for the credit assessments the year trends will be for the cost to be a reduced overtime.

Thank you Thats very helpful Shibani come.

Yes.

Your next question comes from the line of Edizione from Bank of America Merrill Lynch your lifestyle.

Thank you.

Turning to one day sushi.

Yes, you could win kishi mutually Keith when my time Jan.

Yeah.

Sure go far again.

Hi, Matt.

Our core since our policy would assumption that the garden, yes, John.

Sure.

18.

Yes.

Todd.

No over time, when you've got some share.

And the type.

80 out how how she sees that yeah, hi, guys you thought shop.

So my question is about potential change your policy I'm wondering what's your thought on the potential impact.

The proposed Oh, no rolling di Na Cal.

Can get Todd Eco protection.

And then a follow up question dropout apps is what's the percentage of loans with 18.

24% thanks.

But oh, well make another so well tell you hit on what is your partner. So those are developed by year end to use and go to you. The Indian hit I think you sometimes indices in acquisition here, a little hydrology, but so sounds rather than go to it.

Uhhuh Fulton I apologies.

As a standalone etail, mainly the handle the Egyptian not just I don't know instead of simply means the it'll two in Tokyo for premium for the warm whatever the single biggest was helped by the Eagle Ford team.

No the Acadia certain that things that are just synta took in the eagle permanent outdoors. So does need that was available to us.

The whole low last long Cindy.

Welcome to think of weight or digital some of the total so it doesn't want to take that off to a total quite a lot is a mobile merchandise I put that into.

So number one.

Tentacle went into the whole onto the Golden play follow a majority of political dollars knowledge.

So what do you think the adult deliberative ancillary here you just horrible digital formulate either so tend to take our target at this was a yield comes available so readily or as to the woman Yokota cogent.

The other nigger sensitive to that.

So thats, what I guess I'll answer that because of the viggo something well so that it wasn't that no one with it so I'd say in the you get into the you go. So this was a little while permanent that little tacos and really the other you got easier so that the hospitals.

The woman's health as well as I also thought not woman reward since our child in the other sort of.

Here's what I will Miss wells on our event and that a year with a well let me deal over the go to it did approve the solar with doubly shutdown business.

So when we submitted our color I also that you might continue both as a total of there's a photo looking at what shade are they going over to lower their volume will cut as opposed to intelligent cloud so unless they have a woman for us. So there was no looked a little over the phone to Iowa.

So I don't want that out so that's all could I kinda well minimally just on habitat relative to its own trial. The IR officer, whether it has eight hours until may look like into the without the hard to sort of our Miller wait till that they feel the income so shall they'd be value ship.

So an area. We've also seen the reports, obviously and I think it's fair to say that ultimately.

There is no conclusion of your wealth from any of the government authorities and then after the.

Article was out there was certainly a lot of media responses and other things up.

That.

Came out discussing the particular news and I think a lot of it.

Basically indicated that well ultimately this doesn't really match the year situation or the needs.

In China right now now the go ultimately is to lower the hbr to strengthen the economy that we can certainly understand and it does make sense by itself.

But what they will do and how they will do it in a way that make sense.

Obviously, we don't know and no one knows yet now we did do our own analysis on our underlying business as well, which we can share.

We can say that businesses, where we're making loans over 24% Aer, we don't really have that.

We're basically focused on an IR, our definition of things and we must focus on the 24% or on where we can be over in the most recent quarter, we were at around 26% well when we calculated it we adhere to some of the calculation stringently than we might have a 10%.

The reduction in our service fees or revenues and anybody who is over that we would cut off unfortunately as a customer but in terms. This is going to reduce our overall risk. So I'm sure there maybe some benefits to it as well.

I didn't want an account that allows us a little women you improve and couldn't sample focus in that and good evening ultrasonic who will put toward the corner, but in this was another hail and others as though it other than the you. Good bye is oncogene at what are you able to go so no okay, but we're sort of awards dot okay, how many people well, but I don't get too so just on the field.

So our units oversight that I think the Ukraine equal apolitical there so yes.

And if we ultimately don't do those types of customers then under at least the current situation. We've consistently direct these customers to others, who will do the business.

Within the constraints with the end of year, new constraints of the rules and hence we may be able to earn a referral fee, which will help offset any potential losses.

That nearby.

And again that Tony Thank you very much.

Thank you. Our next question comes from the line.

Yes.

And Alex.

Uh huh.

Hi, good morning, Thanks Nicholas.

Two quick ones.

Once again you know.

So index Eagle.

Okay. Thank Lycoming kinda woman.

How much in out of into charge off ratio back I'd say.

Uhhuh mine.

Saying, if you don't mind the range, depending on us to deal.

And we don't merchandise.

The idea that you do come once you're done if you go on the consumer Bank line.

Yes, they did.

When I do not lost sight of medicine.

Not home.

Yeah Jake.

Jim I think I'm not quite have joined shot 20 megawatts uses a man who are going to take a but most of the client.

Daniel good.

Thanks, Dave you know so.

Oh.

The signed up on the other question, but.

That's helpful Mark quite cannot guarantee with.

Could you.

All right.

Well, it's something that.

No one deep knowledge Johnson once when I 70, and they just had one.

Yeah.

Hi, My name is on the marketing budget some kinda.

No nothing.

I have asked the question first on the.

Oh look so we have.

Disclosure that the vintage National brands has continued to remain at around.

Lots of them and winning earlier expectation I mentioned.

Excellent. Thanks, So just wondering what is the current budget not tomorrow.

For the Q1 in Q2 loan.

Just a precipitated and.

It's on.

Recent trend.

All in cost and in particular.

In the.

Rick sharing model, how many institutional partners.

On this I mean.

Model and my last question.

South American exam.

We have seen the petsmart, what's your cost coming up.

You too but.

A few quite stable.

So just wondering what would be the outlook for the second half of this year.

What does that.

Hi, four or more of the marketing budget thing.

I'll make or break even when he went up with us about well machines that kind of competency that you could trend younger uniforms, and diamond buttons and new product.

You mean, each in the means counterparties on Japan.

Speaking to them with some here that one would be your gandossi decision until you see it was will determine what has to.

Thank you to argue that good the eco assumed in seven of our country won't let them good or equal.

Link to the positive outlook kinda attention as that happens its Israel.

I don't want me, it's not the incentive to switch to parliament tone to equate that teaches them I doubt that much of that.

So Alex on the overall book, we're probably still looking at 3.5% to 4.5%.

With the number again, 4.5% likely going down overtime for the first quarter and the second quarter based on the current trends on what we're saying.

Looking at something like 4% and hopefully for the third quarter fourth quarter. These numbers will start to improve.

Oh place in timberland them or whatever igniter, well the articles in the Eagle, who got the things and other that she'd in check.

So if you're lucky to strong industry either.

You got it goes again, when I said well then.

Hi, or team who could it was issued upon whether you guys satellite diarrhea, but we are could we talk will get you will then has allowed us was awesome.

Holiday you gotten EBITDAC not you might get on with us and as I just.

You've got a December disappointment as well encountered in the automotive will then walk into its own again tweaking that goes on regular finamore sort of BD. So what are the most of the dealer sounds initial goes on pipe. So we'll then take a dollar theoretical to dive into.

So given the size so it all so a woman takes into sort of us give us what regions. However, this was sort of woman to the body thinking there was a well maybe digging India will mechanical Taco Bell Looser studies, you got BD.

So when you bought so to what are you got feminine wasn't of Tim as closely looking ahead I think it can will equalize Leslie titles are fighting team also.

So he made.

I don't know, mostly a confirm cogen what they do it at the higher by the yield well I don't you got committee appraisal open or more searches, sometimes they've gotten that Hogan I'd have to opening about some problems with the internal goal going at Tulsa locality she's into that as good as you go so leadership team.

Well no cause our general Furthermore, the settlement anecdotal at multi color enterprise will end up so listen to centerboard eating saying they gave us I'm kinda, so higher pile up and look out well maintenance are kinda Yale University dot.

So don't hesitate to serve the good are you go through most of analytical tusa.

Well that's it that's funny the tweaking handled.

And so on the funding cost in the general direction.

Probably saw logs.

Our funding cost is now at 7.7% and so actually this is a a record for.

I've never had such lower funding costs and then we believe that certainly a it will continue to drop although maybe in the near future to your rate it drops slows down a little bit simply because we don't we already have one or the.

Better funding costs and better deals from banks out there.

It is also worth emphasizing that.

For some of this type of model if you will.

In some respects is not that important overall to us.

Because what the focus obviously needs to be would beyond the profit sharing model, which we got to about 30% as long as funding in the second quarter and the latest numbers currently we're actually at around 40% of our funding is coming from the profit sharing model.

[music].

Sure.

Yes.

40, yeah, so again.

Second quarter around 30, and currently at around 40, and then by year end, well hopefully get too close to 50 or even higher using the profit sharing model. Obviously the motto you can say definitely it's more compliant with the regulatory authorities, but there were like it does.

So situation, where clearly the banks make more money and they do so by taking on more risk and the number of the partners that we're gearing up is rapidly increasing I think we certainly have a over 10 and we'll continue to grow that number.

And also to even though for the hospitals.

So several of them, we'll double booking to me on in the US a bacon cheddar cheese or not or willing to inform everybody. Good title. So it'll stay woman without a doubt. It wasn't just wondering if you can download. So typically Furthermore, solar is it one way rights and good are you going here was saying hey talking about we will.

But anyway, you Inglewood, either you got to each other lenders are what I feel about money here. So if I go little penalty got Solomon. Please go to you the eco sort others sold out at the thing that either kind of you eat you can affirming that Tom underway, how should I kind of a woman to quite got off the most of that and what does I'll give a total so they are also.

Within the can get tinseltown, okay for the can pay product than that so on the profit sharing model again. It has many many benefits to us.

Theres no risk reserves were prior to be set aside so hence effectively there's no leverage requirements of us it helps improve our liquidity opposition to overall tremendously and therefore, it allows us to scale and grow a much bigger now of course, there are some negatives if you will as well we do have.

To give up some profits up very profitability on this model will be a lower but because of the benefits were certainly going to do more of it in the future, which will allow us to be asset light and allow us to grow to greater scale and grow faster than before.

I think I will say they always have an engineering.

Well if anything it is a woman's can talk a little doubt data that we can't help but overall the user. So can you kind of personal interests are most of it out so that will take time Darchinyan talk on a couple that India you Daiichi anytime you see we will be equal with other than that you guys about insulet economical yet so it's august citing in.

Thank you.

Well most of it about regarding your side is or what Minnesota and other vessels on a different way, yes. So the other is all that out of it but as you go from what is attached to them and get out of how to how to he got to open. It yourself. So it'll take on all over the whole that's embedded easy it ISO windows without volatility doses that up at all if I was wondering though.

So not just all interestingly shop at well over the fourth quarter can go to Eagle Eagle Ford lawsuit bid on holiday tailwind going to double Tyler. So we'll then.

Quite job faster Internet shake out at that level that at all.

Well covered El Dorado, they seem to have an entire will not change out a topic I'm looking at global geopolitical.

It doesn't make up I think all there's only so it kind of hotel.

Well I think our political December so would be sort of what the L.D.. Okay that will yield a couple of today Waco Hall, so its ortega.

So it is I think that's probably told you.

Well, that's a little partner you guys are what they have a network with data other than going to you got total well known she has held up well, let's hope out well underway Adobes all younger the Eagle yelled at by 40% again kind of local how about sort of thought isn't going to you go to you guys you sounded good eagle, but it will enable budget data update what other than that they go to enable without touching and they are you limit other more.

Hello.

So on the sales and marketing I think as you all know.

Last year was an exceptional year and we spent a lot on the online portion of the sales and marketing we acquired a lot of customers. We were very successful at that but they're also some risks that emerge from a large number of new customers and in particular also as a result.

The situation under the cover 19, so we can see some of the risks that are come from Alodie, relying oh, sorry, coming from the online channels.

And we can see that there are certain underlying credit issues potentially with the customers from those channels.

The result are covered 90, so generally speaking we're reducing the you said the online channel and focusing other channels.

But continue to acquire customers now as a result of that you can also see that our customer acquisition costs as a decrease based on our internal measures. Its now for example, under 150 living be per customer and we think that for the second half. Some of these numbers will be stable, but we're definitely going.

To do a much more offline customer acquisition and this is part of the new consumption platform strategy as we advance the strategy. This is basically to bring more the offline consumption scenarios the aboard and.

Applying their consumption scenarios and the customers that we acquire offline it tends to be cheaper to acquire they tend to be higher quality. So we're definitely going to do more longer strategy in the near future online will continue to do but we're going to definitely tightened our standard we're going to be stricter about it.

And we'll probably get fewer but healthier customers.

From the online channels.

That.

Yes.

Alright, Thank you Oliver.

And now comes from the mine.

Wong from us.

Let's now open.

Okay, and supervising things, which limits you bring on which we knew that when you go into Splunk beyond them almost RGB with new standard jump I should point, Mark Jackson arguments with OEM argued there'll be some tubular switching which grew at all.

No more men and through that lens, you want that each albums really clearly on mortgage government I wish I would you wish them actually grow video.

Good morning, RG communism.

On the ones you should challenge really jump when you jump on it and we shall see immediately Peter juries young arent CGM integration plan.

Going back and you're getting them CGEN.

So I have two questions if not make your own ongoing center.

During the day, PR and what's gone Paramount and so even if they're interesting recap and potential change does not happen in the future. She will also expand <unk> if you I think.

And you know we're interested in.

And our in China, and and my second question rigs on asset quality, and just one or the management can share we'd guys online.

Italia, Shannon and East London delinquency ratio. Thank you.

Oh, well should almost to the C topical nano what sort of when they'll problems or you may well anything reliable whether it be outside those of you our dealer, but what the fact that is what you. We therefore don't necessarily help each other although thoughts into it other than that Eagle portal.

Talented I kind of what's going to go to ignore that even as the treating women that okay. So element the whole head Quaker gone out with us so rather than what I need to your way go no go so thats all the information other than those other kind of what's it away will then follow to I tell them that media to use shutdown that you. Sir you may want to T Mo.

In the Gulf War on coal, so talking you'll sort of engine now if you don't want to heal tendency that publishing youre coming to us organic little harder to get an economic in child, not even without all women that they've got to it.

Good evening, Yeltsin's, kinda yoplait equals lightened up, but even without the which I thought I guess you. So.

So first on the CPR.

I can't say that we would agree with you on saying that the Apiay had a rapid decrease.

We know, what you're saying, but let's say that.

Overall, our Aer has actually they're in a fairly steady around this range. We've had some fluctuations, but generally speaking it's been a stable and hasnt moved that much.

Ultimately it probably depends much more on customer acquisition, and other things going on and the risk or the underlying customers and requiring higher risk customers. Then, we'll probably end up with higher Nprs now that said our long term, yes, we absolutely believe.

That the if you are will decrease up because our goal has always been to grow with our customers and to us or better and better customers over time, so as we do our underlying customers credit quality will improve so as a result, the hbr, we're probably decrease anyway.

Okay, what I switched demographics and credit quality bombed make a 15 before to fix it kinda. So we see trend that you shouldn't that goes to the suit to that.

So I think genus willingness audience summer take their assortment quotes you Charlotte.

India woman dirt is good it you could see so doesn't clearly.

As shown pretty relaxed about between influence it.

To me juices that continue under Essentre is that you do something Viking shutdown about congestion.

Tim could you give a equal to 10 sitting on the problem and then we've seen that kind of which occupied consumers don't seem quite simply put off.

This is Josh I'm graduate high school football season, deserts, and good eco pushing through that she sensuous jotting could see two decade handoff centers hopes of common shares on what they've done what you do that sort of so we'll see young immature push undergraduate circle CSOT day.

Obama kind of seen the consensus is that.

Just our to do more push you could pick on Cotai essentially dosage your go to project, which we didn't et cetera.

Yeah. So.

Yeah.

More.

Well, we say a shorter.

Delinquency and asset quality numbers.

The seven day number currently is at 2.32%.

This is actually a 12 month low.

The one month collection number.

Right now, it's actually better than.

This time last year in fact, it's better than the Q3 Q4 number last year by something like 20%.

So we're actually doing very well right now on the leading numbers.

When we look at the underlying overall asset quality.

I think we're increasing we are going to levels, where we would be very comfortable where historically now that said if you look at numbers like the 30 day the 90 day.

Because these numbers do have a lag.

They are higher and they will be higher where we think that overall the peak at the and the second quarter were toasty yet.

We'll start to see all these numbers improve in the third quarter fourth quarter.

That.

Okay. Thank you.

That.

Your next question comes from the line a tough me from Citi.

Let's now open.

She is right on what's your thought wage outlaying eco forklift when teachers with guns.

Oh, it's just a question Jack English in shop.

Bump on the shabby.

Susan Mcgee sad to say.

Just two tablets in quite sometime.

[laughter].

Oh.

She visits are sort of more services.

From say the single most suitable quake nations on Japanese Yeah, Oh, ER revenue Shannon.

Oh.

Yes.

Yeah.

[laughter].

Sure.

Excellent.

Oh thanks.

So my question is because an acquisition side. So you mentioned that.

I find more assets on your off nine.

Some acquisition, including.

Consumption scenarios.

So just wanted to understand.

See I fish customer acquisition costs, Yeah, and also what is it kind of a fee model.

Hi, just connections.

And also.

If possible can you share E.

He contribution.

In terms of audio borrowers sounds like the second.

Sure.

Other holger them into the second what up at night.

I think a fight we shouldnt change.

Got it isn't until the fourth us about double digit on T cells ethanol will articulate that look engine the fulfillment out of the if I were well that's under our color. So that is continuing to disappoint you wouldn't that what I tell you what seem to all your Timothy by with so much and started very eager eager Samir khanal connected TV to go to them I think I think.

Well I eager to will Oh cheap so it'll take out at the bottom the hyper how sort of what we've got over here a little bit less obvious sandy so no it's out of the vertical as well.

For Lincoln South Dakota, if you look in books and also we have with it I think Jeff Silicon told us already on how to tell me. How would you wouldn't have had a fundamental budget, playing well that know how high or low single so for us I mean, well then some plus.

That have also so dealt with the automobile. So you got to also be soil coastal Dave Kelly just some of the science.

As to that so we'll move it into the vessel then let's open it up with here filler to treat that I can't tell us how do you that's what's coming your way into human will then woman. So youre going to he'll talk about you know how much it has that changed other than the data code that gap I think you'll put as it relates hopefully the im going to you. The you go to either way more totally Weediness Allison.

So looking at only change out of organism antiquated at real woman, So based on Canadian to put here the Ohio.

So let's say the outright.

A telephone kisladag somebody I think how to somebody chemicals silica cold.

So on the customer acquisitions for the offline I haven't done some detail recent analysis on the offline cost and this was partially due to theres additional investments models et cetera are being used as well you employees, we inherently are cheaper, but fair to say that given the none.

There is that we do have where we're acquiring customers at a 150 and these are new active borrowing customers. We're certain that the offline cost is lower than this.

With regards to how we cooperate it's definitely not renew sharing is very much using their consumption scenario and providing other potential benefits.

So for example, let's say Theres a supermarket and there is some particular deal where someone can by 30 and get a discount benefit et cetera. We do this in order to drive our customers and the supermarket, obviously, we've got potential new customers as well so when we.

Do these two membership privilege and benefit it limits our cost greatly and also as we're seeing in our data it helps us acquire very healthy customers.

Hey, Mike I'm not going to.

Hi, Bill will then the you go I think over the quarter.

You mean, we'll let alone or just will make us a total of our cost I think is unique in that local obviously orlando. So so that it at a little too which is a mail that will take you anyway was was it that will allow us to delavan, because it's a year what it looked like others in of the quite.

Yes, it did within that those are up and this city so to a voluntary kind of no other civil makena here within that I don't know it seems like you're going to.

They sell the intended and whatever healing and tight in salaries and other businesses.

So I'll tell you peacefully internally, but so Todd can this all the way that okay did nothing until you get engine.

So it's hard to for us to answer right now in terms of the contribution of new customers that the love our card is making.

Because we can't entirely be sure whether or not it's the product that the new customer came for low as opposed to the new customer coming to us for other reasons and using the Lockhart, but what we can't say and I can give you. Other numbers is that this is clearly the fastest growing part of the business.

Month on month growth it can be as high as 10% again. This month on month, it's a core engine for growth and it certainly made up 30% of our new origination.

Okay. That's helpful.

Hi, Thank you so much and.

Operator next question comes from the line of CB Wong from DBS. Your line is now open to be.

Hi, I should you find technology that you want to keep quiet now we know jungle. What's your sense you might have you guys you see Shaw Lang.

I think he gabby.

Page two sometimes.

Probably told me she has.

No.

Sounds good down so George Holmes, Jacob equals she likes Gi Joe's well kinda Mckenzie she top decile she's like I said now has shown should I can you just wasn't that E T.

Yes, Oh, you can't ship on some day you cancel account Columbia's shown woman she acquired shapes out how quality panel, but no I didn't show you, where I want my data collection and Oh.

Okay.

Thank you Sam you just what do you know when she's not piano once you will see catching gowns, showing all kinda talk at top positions for taking all changed Huntington.

Kevin Keegan equine now.

Yeah, Yeah I suppose.

769, you already see pick up now Fortunately catching fish or any change I think.

So to see pay breakdown you shop.

Towards how should actually do something he didn't that's on what do you see that assumption, but that m. cheat sheet or 10 key tick up permission how does it show up.

He basically just a woman $10 in the field Oh I get it came to make sure. It sounds to me outdoor pool can take up probably Shannon no.

How should I.

Chasing what and when I.

Hi, so as I mentioned that I've been teach out wotif all types any second half of <unk> and Oh kids keep some color on.

Well I guess cabin teach out into the same outcome from the overall market, making things improving Oh, I, because our strategy to acquire mine Alco comedy panel price.

Increase collection, which I'll be too Oh that oh, they teach interest in second half what they see us.

So my second question.

Party to the provision for quite a notional contingent Matthew.

He's asking when she was 90 769 million in second Kodak.

Could you break down how much provisions comes from economy assumption changes and how much comes from the credit UQM 18. Thank you.

Nick or whatever he covered.

Hi, good the it grew a mean could you the improvement.

Just a nicer equals two communities.

Eager for film could a whole bunch in cash CPM Hall. Good that you could talk to me Cardiomems IPO Hall.

Take a because she message registration and pulling on that you. Good coaching tools that we own the credit policy. What that are we have put into easy to pharmaceutical who what that king pharmaceuticals, two plants ensco seem rather cook with the flipping before it seem that you're meeting people do see associate that with anybody could change about maybe how quickly.

Good Keynotes Kennedy Wilson Europe, the U.S. and good equals credit three for the customers. There's just so you go.

So you could trend the ultimate them Ecoquip.

So a woman agenda, which in turn connective hub.

Is it fair for me in the three so some good performance measurement synthetic alarm management or something similar sequential bookings. We also see women's appraisal, yes, we will likely be it seems to be part of thinking when it's based on where you're right to the teams product. Let me see she is good it you get used and generates if we thought it opens up and you say for the fruits of without guys. It that the last time off with.

Yes.

And so.

With regards to the improving credit quality I think if and only be said.

There's a many reasons for that and there's many things up working together to bring together that.

One of course is a improving macro environment and with an improving macro environment, you will have a improving credit environment and hence the you have a although improving environment.

Literally the same credit policies in February if you implemented in February versus your equipment again, the exact same credit policy now you're actually going to get vastly different numbers.

Different results and different first payment default et cetera.

So that's one aspect of this another aspect is that well, it's always an entire process. It's always a whole process. So a some something comes in a particular number default or particular number don't make their first payment the culture.

Actions occurred the collections, then Titan optimize et cetera, and then the from there then things overall start to improve so you have all these different factors going up which is why we feel that by year end, we should probably looking at you looking at something like a 4%.

Number.

When you're young wouldn't you just.

We're confident that accounts for arch Mi annual on the Garnet Hill.

JP energy relative.

Take a particular ticket you to them and they all go CDN and should continue yeah Josh.

Uh huh.

So you're not even though.

Right now.

So I don't know how did that change in that game changer compounded right down to.

Good how that yeah.

Yes, you are showing.

Yeah, so the breakdown.

I think maybe it's best to not to think of it that way or to look at it that way directly simply because you do have different things going on there different models.

With that guarantee your derivatives and then there are different assumptions within the different model. So it's definitely not a simple thing.

Now that said, it's just like what Lyons said.

The overall situation is clearly getting better so certainly the underlying assumptions.

Let me to reflect that as well. So you can say that on that basis certain things are improving if you will.

Okay Oh.

Cancer insurance you can.

Well.

Hi, there is no further questions by him up or sensors and that could be.

Yeah.

Okay, Operator, I think you cannot close the call that.

Alright, Thank you, ladies and gentlemen done the mood our conference call for today.

Thank you for participating Emil disconnect.

[music].

[music].

[music].

Ladies and that's on them.

Thank you for standing by welcome to the election since second quarter Centstwenty earnings Conference call.

At this time all participants are in listen only mode. I must advise you that this conference is being recorded today I would now like to have the conference or with your first speaker today are Mr., Tony Hong Senior director for capital markets I think you'll be go ahead.

Thank you operator, Hello, everyone and welcome to Lurching second quarter 2020 earnings Conference call. The company's results were issued earlier today and our posted online joining me today on the call Mr., Jay Shah, a founder Chairman and Chief Executive Officer, Mr., Craig then our Chief Financial Officer, Mr., Ryan will our chief.

Risk Officer, Mr. Stanley, our senior financial director and other members of our team for today's agenda Mr. Shao will provide an overview of our recent performance and highlights Mr. Ben will discuss our financial results and Mr. Bill will discuss our credit performance before we continue I refer you to our safe Harbor statement in the.

Earnings press release, which applies to this call as we will make forward looking statements also please note that this call includes discussions of certain non-GAAP financial measures.

Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated all figures mentioned during this conference call. Our end living B I will now turn the call over to our CEO, Mr. Shao, whom I will track.

Great Board.

Oh, I don't know thing that.

Total allow people to ensure the shorter.

People woman that goes down Greenfield when given it ends up to be the full most of that we're going to end up. We will then follow the Intel changing that do not yet so yeah. What does that also well maybe always hold up what's what are you getting.

Hello, everyone I'm very pleased today to announce that in the second quarter. All our operating metrics grew in a stable manner. Our to be motto is beginning to deliver and to provide us with a new avenues for growth. Thanks to the new initiatives. We've again produced decent results.

Thank you don't let me use all associate Tony then on the Russo deal team already do they do body. They make worldwide you took us she can meet or what do you see well make a change how we think that Delta will take it is just you know gail body to be a little more so well.

Okay, well on price, although tinsley she's all in type was also the easy Toby since I've only been Angel look quite yet.

Those are what I consider what sets a well that's also futile poriadok Inphi total days with.

This quarter, our revenues reached 3.0 billion an increase a 19%.

Gross profit reached 968 million and our non-GAAP pre tax profit reached 541 million, our new consumption platform strategy and our financial services business continues to expedite the growth of our to be model, providing us with risk free Internet platform revenues of nearly a billion of which.

Form services was 419 billion an increase of 109%. In addition revenues from the car memberships exceeded 24 million. This is our first time in disclosing these revenue numbers from our platform model.

Okay. The womens towards entail what you asked about usually Toby turned off over the will succeed and Bob Towboats again somebody asked the so we'll go to achieve wanting that I do a deal that you feel you told me it ends up as it was our there so.

Total one incident for them, but the went in open surgery. So Lucky kids are Mccann FCB G. D E Delta budgets out how are you seeing is subject to again.

In the second quarter, we facilitated 41.1 billion worth of loans, an increase of 57.8% exceeding our guidance of 38 billion. Our current loan balances 61.9 billion, an increase of 52.4% at the same time or credit quality remains stable and risks are decrease.

And as of today are they southern delinquency has declined to 2.32%, which is even lower than our numbers from the third quarter of last year.

That doesn't know ties with women 22 digit Twotwenty, what do we don't talk also about the toby's ends up Delta Wovens iOS, well, let's say 10 years once a day to tell you Timbar you end up we'll go into my thinking.

Under these conditions of growth in the third quarter, we're expecting our loan originations exceed 48 billion an increase of over 30%. We're also confident in our ability to achieve our full year loan origination guidance, we're under 70 to 180 billion.

A couple more when we knew it was with other to tell by Thats when fully summed up at least you also.

So what are your wholesale local bogey looking it's really easy yokota, what our shopping in tight. So we will they can you tell me, let Doug I thought I'd, certainly put us into it.

At the end of the second quarter, our numbers a registered users reached 95.3 million an increase of 90% on August 10, our number of registered users reached over 100 million illustrating successfully became when the fuel consumption platforms to achieve that milestone, which will open up.

New opportunities for our new consumption platform strategy.

It will work with all the team Toby.

I think thats always Hogan telcel forgot.

Thank you the.

Okay. So dark inviting he'll tell you can attend our sickle cell usual Gulf window.

So I'm not entirely.

We thought she has some I'd also like be heading into again.

The altidore dug into about box about $10 I believe by those about similar thank you to automotive news in does it make any income what are you buy well.

In the second quarter, we focused on new consumption, an increase coverage and both online and offline consumption scenarios are three major brands essentially flockhart work hard all demonstrate a strong growth momentum with increasing transaction numbers total orders from three platforms reached 74.6 million an increase over 100.

68% from 27.8 million the third quarter 2019, as we entered the third quarter, we averaged 1 million transactions today.

I don't know what Los Altos was about one cents hold infancy sobibor. So if you go since our you shake out probably cited module at Yahoo. Since I catch up into the Soviet Union hotels will look like classic Sungard kw, So Joe equally more toby than others, so that they see which by the way they tell us.

So maybe the dose.

Although our major brands Lockhart first established the ability to deliver installment purchase options. So all consumption scenarios connecting financial institutions with online and offline consumption scenarios and satisfying to users' needs for convenient online and offline consumption in the second quarter the low bar.

And offline vendors develop joint sales, increasing total transactions by 400%, providing cumulatively over 4 million vendors the consumption transaction.

We anticipate king.

Okay. So basically most of your quota for voted out of it was if you look at low cost also taken by since you bought the anchor kick back into what do you diesel fuel what's remains under tight on Tiotwo.

You can't talk but can you talk because actually.

Our membership consumption servicing sprint look art continues to grow strongly with a repeat purchase rate of 59% today look our to speeding up the pursuit of our by Chemcare to connect more key online and offline global Lisa players and other well known brands the jointly promote their brands and provide.

Privileges and benefits both online and offline.

So they don't have limited equal to four Yi seems healthy delta. Okay go equal quotas in India also listen it up some evaluating futile. It could you put out until it's always also not you why youre quite a seven quarters since I mean, clearly youre seeing you, let's review could you maybe a healthy so it's in shopping center.

Heading into the humid.

Just over a week ago are registered users reached over 100 million and we see no new consumption will open up new avenues of growth for us at the same time, we're upgrading our own goes using technology to continuously create new consumption method to enable hundreds of millions to live happier lives will be arts.

Hello, and the voting ourselves to using technology to change consumption, becoming the new consumption ecosystems leader will be our go.

TV right.

Shopping we'd like to hook, Indonesia somebody told me essentially work isn't that.

Do you need ISO simply to generate peaceful Tim cope indiegogo several days takeaways for parts of it.

Okay, Okay, London of issues.

She says okay proposals.

So the whole the Toyota well they don't casualty didn't seem to have it in his total conduct sorry.

Since July science, indicating a recovery in consumption have become clearer and consumptions year on year growth may reach 2%, representing the first points of growth. This year recently the central government has also indicated a core part of their economic work will involve speeding the release of the potential of the Chinese consumer.

And speeding up the establishment of the structure and systems for creating domestic demand, we believe that with the recovery in consumption and favorable macroeconomic policies, we will be able to speed up the pursuit of new consumption platform strategy and create even greater value.

Ticket I was actually a little Miller CFO Crocker follow up into the tell us what's.

Next I'd like to invite our CFO quick to discuss our recent financial performance.

Thank you okay.

The one I'm pleased to announce on the we have once again delivered strong results.

Interest up high.

I will not go over line item by line item of our financials for more detailed discussion of our second quarter results. Please refer to our earnings press release.

Please also note.

Starting from second quarter 2020.

We will be reporting revenue streams in three categories.

Thank you access on the service income credit oriented servicing call and APAC on servicing comp in order to provide a more relevant information.

Total operating revenue reached RMB three filling in the quarter and acquired oriented service income reached RMB today.

In the increase of 48.8% from the second quarter 2019.

Platform based service income reached RMB 419, any representing an increase of 109% from the second quarter of 2019.

Adjusted net income was RMB 453 million, reflecting our continued strong growth underperform.

Fully diluted adjusted net income for the quarter.

That was 2.21.

Our operating leverage operating expense as a percentage off average loan balance was 3.9 cents for the quarter and then now handler heitman marketing advertising DNA and R&D quantifying spent 1.4 times or 8.9% of Eric.

And on balance respectively.

We currently have 100 bidding radically over our customer was quite in line reached 22.7 spinning up by 6% to 8.4% as of June surveys 2019.

We are quite at nearly 1.4 million you active customers in the second quarter.

Overall, our average credit limits, what the RMB 10039.

Why our average panel was now 11.4 months.

Our weighted average EBITDA was 26.5 for this quarter.

In terms of our funding for the quarter no funding for new loan originations came from our juice platform and all of our funding when you know R&D patient came from our execution funding partners.

Now going covered 90, outweigh has broad and continuing to bring many challenges Robyn.

We continue to see a recovery, we believe lots with our continuing recovery and determine the efforts of our peak, we make you'll be able to achieve our previous data guidance.

Matt Ryan will discuss our credit situation right pretty.

Correct, we continued our stable credit for Mercedes quarter.

By the we're trying to condition in the market our credit card they continue to be high and they we expect the levels.

Let me 40 spread our credit that is to continue to perform well and the at expected levels.

I will then hit days delinquency ratio remains low at 2.9, and then and then we continue to the stable credit performance and our lifetime charge off ratio is approximately 4.5%.

Maybe the consistent with our previous statements under 40 reading I want to enjoy expectations and the we 40 spread our stable credit performance to continue in 2020.

Yeah, I conclude our prepared remarks, operator pretty proceeds would be the catch incentive compensation.

Thank you so much accomplishments misleading gentlemen, we will now begin to question and answer session. If you wish to US second question you May Press Star that's number one and your telephone and wait for your name to the announce and if you wish to cancel your comments you made press the pound or the husky on your telephone upbeat.

Ask your question in China, If you can and then can you repeat the question in English.

Our first question comes in from the line of jockeys law from China Renaissance. Your line is helping shockey.

But in somehow a feeling as it once you win that you put no which they were Sunderland teach out she can shop, but people into you know she she good when you use a mitigation somebody can tie easy to Peter If you go more sure sounds you don't want to see quite you shoe Whitman moves that your school Jihad statutes.

If you kind of tight.

I will focus on Chico look backwards homes weaker synergy goal should help if you could chime in if you will continue to do shopping triggers you.

I don't see Daniel Busch Accretable actual peak, so as you know there.

Who should be no particular someone wants you to shoot woman. She said she really good to that didn't gunderson to choose entry to Mckenzie Dunn. She she goes way back when she could be done should bunk core shoot you.

Sure. So as you know actually sweet bulk bullish on.

Good good shot.

No go into Chicago, you will actually go take rate.

She grew will conduct she's aren't you to actually get issued achieve chico be easy to its usually sheeting pool on somebody's home, we like with the Chico.

Sure sure chicken that you could take rate that future.

Uhhuh mentioned time, she could you do you have more sure to revenue chairman or take a more sure.

Without Eagle take rate that you should not be somewhat lumpy issue going on but shouldn't you be shown she could processing in the service cost.

Thank you I know you shouldn't going onto do actually grew it sounded like always.

Pretty quiet Joel we don't see group simply golf Chick each and Eagle shapes.

So I would help translate.

So.

Thanks for taking my questions after three questions.

Bruce one is about our new retail strategy and to be.

New business model. So can you elaborate more on how we differentiate.

With our peers and.

In terms of new customers, how how many.

What is the percentage or contribution of new customers.

This is from look hot in the news retail strategy and the how much.

Can be.

Converted to our consumer finance customers.

And also a number to check in terms of the number of others. We mentioned in the third quarter that actually exceeded a one meaning.

Maybe others. So what you said destination for that on the number.

Second question is about our take rate.

In terms of the Refu take rate what is our optimism.

Especially considering the increasing platform revenue sharing model.

And we actually see some improvement not take craziness second quarter versus the first quarter. So what is to the trend going forwards and the last one is regarding to our cost item.

Observed that the processing in the servicing costs actually stay at rents for the high level for the first called in second quarter. So what is the trend going forward with that.

The normalized.

In the in the into the future. Thank you.

Although we don't wait I thought I mean Eagle Vicki.

But youre missing topic in Tyler it's all among the auto you go here, we'll have given just thoughts about where maybe you are either here with US is de Silva can only.

So what I saw toilet soap in only even though he taller you told me token that's a little at that was a bit one yet.

So thats a woman she told at the less entropic insights into okay, well, let's also weighed orders shipped off a hit each other than that are you guys. Obviously took what probably talking to put yourself and broader eagle cool.

Thank you called out is that what you're one of the Youre within I guess, a quieter warmer than the competitive whether you go your way, we'll probably get you. So not will then.

Well I guess, that's what gives you the 70 something that's within yourself that led you to this it gets hung ill, let Tanzania will assays are that go to it.

Good good luck in icons of which will also be the fit into that neither.

So what they can't all women at that as you go.

Okay Youre what people are the right.

Hello.

No were low level, which is a couple of women's and that as you go engine now we're looking at your what he wasn't it.

Sure. It's also the issue is somebody smoking Isla those units at all with Europe, or I guess I'll call. It is all about pull it up so look what color to third quarter element that bundle calacatta here, which is like automotive applications I think our soil the topic.

Nothing out of other tusa well, that's okay, we're not letting him sockets Hogan so much of what is the political.

Yeah. So regarding to your first question on the new consumption platform I think first as you know when we talk about the underlying consumption finance business.

Very important part is that we need to control or have you will have some ideas around the consumption scenario and these involve both online and offline scenarios and what we have done in terms of all of our strategy is to greater control around these scenarios then develops we will.

A system around US now also from these development of the scenarios, we're able to get more customers and this is why you're seeing that our customer acquisition continues to increase in our total customer numbers now are over a 100 million in terms of registered.

Customers now in terms of development. This originally as you know we had our original.

Allied consumption platform or ecommerce App and others also develop similar products and round up their offerings, we certainly needed to develop more products and the second thing was to make a if you will the availability of cash so that people can spend on different things, but more importantly, as you know is recently good.

Development, a la carte, which effectively opens up all the online as well as offline consumption scenarios.

So thats one of the yourself it could be hauler, we'll look at a condo.

You shop, it's hokey quoting the cohort how does a good a way that is that the USMLE dosing in other words clinical hit so quickly changing so today quiet quarter to your order how does it without really gold.

And when we open up these scenarios, we can see that the contribution from the customers is better, especially from compared to those customers that are purely transacted on a monetary or cash basis.

They might look I cannot say, where youre cutting the either just hold up he served to shield touches the silver sold element in that I see opportunities in topic Adelie socolow, you'll hold anything but soon if you go hi, everybody goes out we'll just we'll mental when you either Cook will see the cohort lower income woman that you know for.

A couple that other has to deal with them the us at the height of thought on the cohort limited visibility in Oklahoma I competence woman. So they did the Yahoo.

Now when I wasn't the machine topic in Taiwan sulfate analytic elemetal paperboard. The here. So now you're able to does so switching topic and I know will then they told US a total that's obvious Hogan locally with this is helping to achieve local myself it well they probably for both at the top it into on somebody's home shopping.

So no matter what they see a thought a part of it you mentioned the intervention now we'll then take.

Do you put all that you didn't have it you know could you touch it could you also there's a lot linear total I mean, she should or should it not was not over the coping with juggle. This useful woven given how people you. Good on that you got to beautiful woman totaling how should I.

I'd say is probably starting in June so does it go you guys, hoping it will.

So it will then.

To be she will put us back towards that you have so while it both we encountered.

So those so you go to basically Zimbabwe local.

Okay, you hope people it is eclipse issue that team that neither useful tool.

So I'm not aware.

This.

Or the development of the system covering all the consumption scenarios is that enables us to literally see how our customers eat sleep with et cetera, and therefore improve the stickiness or the customers most of its worth noting that well we have 100 million registered users.

The amount that we can provide financial services to is probably limited at this point to just over 20%. So we're going to aim to deliver more to more of our registered customers and users by providing more products and services, but most importantly to do this we have to have some control some systemic.

Way recognizing holding the consumption scenarios and then this way we can provide various products not just financial products, but also a membership privileges and other benefits and also through this we can then utilize our technology, whether it's our Hawkeye system our warehouse system.

And ultimately to help the banks provide a long term financial products. So quite often when I talk about to be what I actually mean is to the banks, we're providing away for the banks in the financial institutions to continuously operate and provide loans to customers.

Remember that when a topic Hogan, which obviously low you just to Seattle, if other okay kind of women that they've got a subsequent to year will pay off and valuable pays or whether it's obviously going images on woken taught us Olympic handled the cannot a topic.

Hey, going with that I can go to Asia went into it so being able to cope with all that said that change I think it it sounds how Tulsa SOCOM say, Joe the covenants as I guess I'll battalions, I'd say in talking to you.

You know, how that's a little quicker or late.

The focus obviously no doubt others are yada yada yada yada.

10 couple years if at all.

So when we talk about the whole consumption platform and the strategy with consumer loans, we have to recognize that there are mutually beneficial to each other they provide benefits to each other's directly whether it's providing additional consumption scenarios, providing traffic customers and providing ultimately.

A stable source of high quality customers and we can see this example, where we work with supermarkets and we can see that theres coffee growth there and not only in the sense. So just pure growth, but also a healthy in terms of that very stable credit quality customers.

Well make anecdotally you probably won't be mostly in Paul I'd love to talk with each other.

Well look internationally well mercantile is what I think we started eating.

So what parcel.

On the 1 million number it's coming from Bofa online as well Cline and then we can see actually the offline number is now over half of the total number.

Now, let me I'll go into it was actually or whatever partner with them.

Let's see here.

We're just talking up an increase sequentially problem. In Q2 is my presentation don't know airwatch cash out.

Because gotten combing shows just how much if I'm in the JV.

Hey, JBL.

So I think everybody can direct your attention to the new investor presentation, which is posted on our website, which has a more details around some of the changes.

Let me take or pay greater Trisha previous jump up in home.

No no no hormone trialed on the take rate.

Yes, sure profit sharing the Jake.

To that Moshe profit sharing usually get some irrational giacchino Moshe woman's whole each in your annual Cashers should we touch all she saw a new harmonize made harsha shortish again to should usually launcher geological Marcia Dall chiller panjandrum away.

Yes, I wondered if you're seeing it only about three things on the Tom the geology.

Okay.

Yeah, no opportunity again on dollar equal fusion in my mind. This budget legal Moshe you had idle as usual.

You can't go capture.

Connectivity Mccallum condo.

Sure sure you don't pay they'll probably sharing the more show up and if you added today that visual motion.

Doug Hi equal.

Yeah Yeah.

Okay great.

Total amount drawdown.

Jonathan urea jiggle trigger that teenager ideology orders.

I think while digital motion material.

In Asia.

Richard will trigger type issues, which will get us what.

So.

You can say that ultimately we have different models and as a result, because of the different models theres different underlying take rates now in particular, the proper sharing model, which will the major thing this year and going forward.

Well, we've done it for a long time every single time that you start out working with a financial institution or a bank. They were of course start off with getting a higher take rate on their side, which means a lower take rate on our side now that said things are definitely changing and we do see movement.

The banks are getting relatively lower take rates compared to before now that said, we're probably looking at something like for example, a 1% difference much more or less between if you will the profit sharing model and more traditional models.

But again, we do find more funding partners are coming aboard and as a result of that the take rate will likely improve over time on the profit sharing model.

During that time Orchard from Daniel where you got some eagle Quad $2 you won't be to beat the initial Hawk Montreal. She didn't you should that I'm working on those who talk much about that so you don't comment to that and what are your time achievable. So do you get out general of water.

Yes, there's history as others and for example of direct lending or other related models. We're in the beginning there was something like 10%, whereas the PDP was something like seven.

Then over time, but these are things that change. So it's probably just a process that takes hold that attract.

Italo into your way terminal in future Shulman Chief.

He's shown to I just I official.

Submission side, you conditioned on shop that Vishal, such an engine and yet our middle to how should we should total actually to the GE acquired the whole apart.

In the future oriented right.

Certain regency Gen instant good the eco travel to incremental judging from the Suze Orman shot Arlo, what you're right. So good that you could.

Total quote ship all the components, we doldrums and broke it will become part of the ships even need that bundled with the answer is a consumer media jot down.

We will lead to either some good eager to MPD standardized or said bigger each year since the two cents Williams.

We were chasing creep into good tweets and we've been that's going on here soon.

Claims, finishing the 10, but in the partial so tons should I think some of which you might not yup enrollments as we said that engine.

By almost <unk> has a tremendous alleging hinged on thinking.

Hundreds you woman, who gets the team daunting geez, you wouldn't want to them. So it's owned by young on thinking the sheer converging on the gene done. Some those have been buttons that is so concerned I sort of parliament and good equal.

Thank you and some of which as you didn't geopark.

So we're guards to the processing cost well a lot of the is related to what has happened as a result, the tokenizing pandemic and its impact on our collection as well as our credit assessment to be will be collections resources overall has been a very tight.

So as a result, we have to users. So in third party providers and then we had to make sure that.

These providers meet our rigorous standards as well and given the nature of the situation. Our focus has certainly been more on stability than anything else as the maintaining the quality of the credit as perhaps more important than anything else and similarly, we see us.

Situations, where the overall assessments.

But that said, we do feel that in particular for the credit assessments the year trends will be for the cost to be a reduced overtime.

Thank you that's very helpful Shibani.

Yes.

Your next question comes from the line of Edizione from Bank of America Merrill Lynch.

Andy.

Thank you.

Just one day Patricia.

Yes, you could win Kishi continue to achieve what my time Chen.

Yes.

Critical part again.

Jim too tight Matt.

Our core since our policy with some shouldn't that be cut Chuck E. cheese.

Three.

Thinking.

Yes, Hi, Todd.

No overtime when you Shacham share.

And the type.

E P out how how she sees that yes, I guess you towards shop.

So my question is on about potential change it policy I was wondering what's your thought on the potential impact.

Post Oh, no Linky 80, I'll hop back can get Todd Eco protection at Cod and then a follow up question dropout apps is what's the percentage of loans with 18.

And 24% thanks.

But oh, well make another so well tell you hit on what is your partner. So further developed by year end to use and go to you.

Engine here, if you sound catalyst as you're not using a mill.

So it sounds like they'll go to it.

Helpful Fotonation color.

I just out of Etail, mainly the handle the Egyptian Nova just I don't know instead of simply means the it'll two in talking to a premium for the warm whatever the single biggest was helped by the Eagle watching.

No liquidity get so it doesn't just synta took in the Eagle permanent outdoor so I'll leave that let's open it loads with us, but the whole low low indeed.

Our clinical quality or difficult some of the total so it does or was it lets say go to total quit lot use a mobile merchandise I put that into.

So were key factors also went into a whole onto the Golden play follow on what's a good sort of it will go up and go to your thinking so what if anything the adult liberated thank.

Total digital data so again to tell at this was a yield also failed so readily or other women Yokota cogent.

The other nigger thats it all that.

So thats, what I guess I'll answer that because of the vehicle. So looking well so that it wasn't that no work well with it so I'd say in the you get into that you go. So this was a little while many women at that little tacos and really the other you got easier so to us.

So what else you said well for us.

So that's what.

Well then the war since our child in the other sort of kilowatt hour sales on our print and radio with a well let me deal over that go to into the fourth a soda with beltway shutdown, but just.

So what we submitted our Colorado. So that you might continue both as a total of a photo look at opportunities to take a little lower level, you will cut as opposed to teladoc out so that they have a woman sort of other so there was no looked a little over the phone to high loss.

So say what am I doubt so that's all could I kinda well Miller way just on habitat, let us into its own Toyota I was also but it does it take hours was doing more looking into the what's how the hours of sort of our Miller wait till that they feel the engine so shall they'd be value ship.

So.

We've also seen the reports, obviously and I think it's fair to that ultimately.

There is no conclusion of your wealth from any of the government authorities and then after the.

Article was out there was certainly a lot of media responses and other things up.

That.

Came out discussing the particular news and I think a lot of it.

Basically indicated that well ultimately this doesn't really match the year situation, though the need.

In China right now now the go ultimately is to lower the hbr to strengthen the economy that we can certainly understand and it does make sense by itself.

But what they will do and how they will do it in a way that make sense.

Obviously, we don't know and no one knows yet now we did do are all analysis on our underlying business as well, which we can share.

We can say that businesses, where we're making loans over a 24% aer, we don't really have that.

We're basically focused on an IR, our definition things and we very much focused on the 24% or where we can be over in the most recent quarter, we were at around 26% well when we calculate it we adhere to some of the calculation stringently than we might have a 10%.

Net reduction in our service fees or revenues and anybody who is over that we would cut off unfortunately as a customer but in terms. This is going to reduce our overall risk. So I'm sure there maybe some benefits do it as well.

I think my lack of it allows us a little we'll then open couldn't federal focus hindered the leaving out the telecom will put towards the color, but as soon as I havent looked as though 80 other than go to you good bye.

What are you able to go so no okay, but there is little sort of awards thought okay. How would you talk when we don't get too. So just going to feel Giada Terawatt hour units oversight of I think you're paying people apolitical. There. So you know.

And it ultimately don't do those types of customers then under at least the current situation. We can certainly direct these customers to others, who will do the business.

Within the constraints with the end the new constraints of the rules and hence we may be able to earn a referral fee, which will help offset any potential losses.

That nearby.

And again that Tony Thank you very much.

Thank you. Our next question comes from the line.

Yes.

And Alex.

Hi, good morning, Thanks Nicholas.

Thanks, Once again, you know I.

So when do you need a human.

I think quite common kinda woman.

So much in end of into China operation back I'd say today.

Hello.

Saying, if you don't mind event.

So deal that you until midnight D does it seem to come once you've done a t. going on the consumer Bank line woman talk on the T. vintage.

When I do not lost quite side because of medicine.

Not home.

Yeah Jake.

Jim I think you kind of touching one shot. So you may begin to Houston is just.

Hello.

Can you take.

But even more so than decline.

Sounds good.

Thanks, Dave.

So.

Oh.

The strength in the claim but.

In South America quite.

So just doesn't go.

That's helpful or something that.

No. It does not Johnson once that when I said when you made in fact, one Norman Union.

On the marketing budget, so some kinda.

So.

The question first one just on the.

Oh look so we have.

Ah, yes announcement disclosure that the vintage national brands continue to remain at around.

5% and wheezing earlier expectation fundamental.

Hello, I'm quite the same which im wondering what is the current budget not tomorrow.

For the.

Q1 in Q2 loan.

We just put.

Because of that agent and.

On the.

Recent trend.

Borrowing costs and in particular.

In the.

Rick sharing model, how many institutional when kindness I'll be working with on did come in.

Model and my last question.

Sounds the marketing expense.

Yes.

The per customer western cost coming up.

You too but.

Do you quite stable.

So just wondering what would be the outlook for the second half of this year and what does that.

Hi, four or more of the marketing budget thing.

I will make go cranky coming here, we're left with ourselves.

Machines that kind of what MRMC that you could trend down the firm's zendium.

Each team does means on the project will again, and so that speaking with them, we're going to come here. So you can obviously this is going into you take us was definitely not though.

Thank you to articulate and good that you could seem that that consumers look good the eco.

Link to the positive outlook in that sense as that happens the scenario.

Let me start the 72 cents to parliament tone put it that teaches them I doubt that will touch on that.

So.

Alex on the overall.

Okay, well, probably still looking at 3.5% to 4.5%.

With the number again, 4.5% likely going down over time for the first quarter and the second quarter based on the current trends on what we're saying, we're probably looking at something like 4% and hopefully for the third quarter fourth quarter. These numbers will start to improve.

Oh plays into that they were whatever data well the articles in the Eagle, who got the things that went out of that she didn't chick.

People throwing in the street, either Euclid city. The if you go sit and wait I will then.

Our team will kind of whats the should apply memory.

The entire year, but we'll probably talk will get you will then at that other systems out.

You got gotten EBITDAC nothing Michael just how are with us and as I just.

Regarding some but just to build less or Intel is available, but will then walk into its own again tweaking that gets a little bit defendable sort of TV. So what are the most of the dealer something that's what goes on pipe. So we'll then take a dollar that you go to seven.

But given the size so it all so woman 18 vessels of us give us what regions. However, this was little then to the body thinking it was over maybe digging India will look and it was helpful that lupus study to be the total itself.

Let's look at what are you got pillar wasn't of content as well, obviously looking at Hawesville and can materialize that Leslie titles are fighting thing was.

So he made.

But no mostly a confidence in what they do it at the higher other yet.

Well I can only go how many appraisal of Furthermore, searches sometimes they go to not Hogan.

One of the most prominently it's an important at Tulsa loans has chosen to do that as good as you go so either taking.

Well no conduct which is a fuller most of Oh, we cannot go to multi color enterprise will end up so listen instead of oil eating side, but it also tender. So how you have held up well maintenance our kinda youre deals if you got.

So don't hesitate to serve the you got under most of that analytical tusa. So the woman so thats funny that you can download.

And so on the funding cost in the general direction, you're probably saw logs.

Our funding cost is now at 7.7% and so actually this is a record for US we never had such lower funding costs and we believe that certainly will continue to drop although maybe in the near future to your rate it drops slows down a little bit.

Simply because we certainly already have one or the.

Better funding costs and better deals from the banks out there.

It is also worth emphasizing that.

For some of this type of model if you will.

In some respects is not that important overall to us.

Because what the focus obviously needs to be well beyond the profit sharing model, which we got to about 30% of our funding in the second quarter and the latest numbers currently we're actually at around 40% of our funding is coming from the profit sharing model.

[music].

Sure that.

It was 40.

So again.

Second quarter around 30, and currently at around 40, and then by a year end, well hopefully get too close to 30 or even higher using the profit sharing model. Obviously the motto you can say definitely it's more compliant with the regulatory authorities what they were like that so.

As a situation where clearly the banks make more money and they do so by taking our more lives and the number of the partners that we're gearing up is rapidly increasing I think we certainly have a over 10 and we'll continue to grow that number.

But also to even though to the hospitals.

Several of them. We'll double then you tell me on the other Bacon Cheddar cheese fella, although we all too important to deliver you guys have.

Well then what added another person that money can talk about so look at least Furthermore, solar is all the way that isn't going to year was saying Hey talk about we will.

But anyway, you look what he that you got to each other lenders or will they shelf out when they get so if I can go little guilty got Solomon. Please go to eager eager salt others. So that's the thing that either.

If you Didnt for me well underway, how should I kind of normal to quite got off the most of that or whatever they have a total. So they are also flipping that can get changes will not pay for the can quite a public than that so on the profit sharing model again as many many benefits to us.

Theres no risk reserves required to be set aside so hence effectively there's no levers requirements of us it helps improve our liquidity opposition to overall tremendously and therefore, it allows us to scale and grow a much bigger now of course, there are some negatives if you will as well.

We do have to give up some profits up profitability on this model will be a lower but because of the benefits were certainly going to do more of it in the future, which will allow us to be asset light and allow us to grow to greater scale and grow faster than before.

But am I will say always that covenant at what are you selling.

Well the only thing you're not just a woman's can talk a little doubt data that they can't help but rather to open the user. So can you kind of continue the way you talked a little bit Isle called so that will take time darchinyan for well a couple of letting you know you Daiichi Tom It. So we will be local without that they're going to you guys about insulet. It.

So that's all.

In yen.

Yes, I think Emma almost at the bottom you saw it isn't what Minnesota and other lessors on Asia from what it yet so that it goes all the other than that or you get awarded but just what I would guess how to how to you got a lot of yourself. So it's all they cut off over the whole that's on the TV at ISO Windows got limited. It also the start up so I can you go.

So not just all mentality will shop at well over the whole could go the Eagle Eagle will also be the holiday there would be an adult Tyler. So then.

Quite got off to utilize shake out at that level that at all.

We'll go at El Dorado listen topic entire well, let's say to other topic I'm looking at what was your political.

Doesn't make up I think all there's only so take a hotel.

Well I think our political December so would be says on what the hell be okay that will yield a couple of today Waco.

So let's say.

So you said lets say that's always Hogan.

Called it a little partner you guys are what they saw network without how doesn't go to you got although well known she has held up well, let's hope out well underway adobes out yanko, the eagle yelled at by geology, and again kind of local how about the start of the eager to you go you saw that they're going to eagle, but it will mean data update what others are they got a little knievel without touching in a limited.

Live Oracle.

So on the sales and marketing I think as you all know.

Last year was an exceptional year and we spent a lot on the online portion of the sales and marketing we acquired a lot of customers. We were very successful at that but they're also some risks that emerge from a large number of new customers and in particular.

Also as a result, the situation under the cover 19. So we can see some of the risks that are come from a lot.

Lying us sorry coming from the online channels.

And we can see that there are certain underlying credit issues or potentially with the customers from those channels. As a result are covered 90. So generally speaking we are reducing the you said the up online channel and focusing other channels.

I continue to acquire customers now as a result of that you can also see that our customer acquisition cost.

The decrease based on our internal measures. Its now for example, under 150 living be per customer and we think that for the second half. Some of these numbers will be stable, but we're definitely going to do a much more offline customer acquisition and this is part of the new consumption the platform.

Strategy as we have asked the strategy. This is basically to bring more of the offline consumption scenarios the aboard and the offline their consumption scenarios and the customers that we acquire offline it tends to be cheaper to acquire they tend to be higher quality. So we're definitely going to do.

More longer strategy.

The near future online will continue to do but we're going to definitely tightened our standards, we're going to be stricter about it and we'll probably get fewer but healthier customers.

From the online channels.

That.

Yes.

Alright. Thank you all were.

Sure.

Comes from the line of Wong from steel and you are nice now open.

Okay and suited winds and liquidity when as you bring on which we knew that go into legal wouldn't use Splunk Luciano almost argue do Canada jump.

Mark Jackson arguably the volume.

The new something bigger switching weak right now.

Moving on to begin she wants now HM East Ridge, clearly them with government I wish I would you worsen actually going you R&D Argentina.

Gentlemen.

Okay younger ones, you should giant dream job one.

All right. Thank John John if you needed to be Peter juries young arent CGM divisional aren't.

In which you are cheap on package.

[music].

So I have two questions if.

Thank you all ongoing center.

During the day, PR and what's gone on Paramount and so even mix the interest rate caps and potential change does not happen in the future. She will also expand and there were a p. iPhone hearings and due to lower interest advantage.

China and my second question news on asset quality, and just one or the management and share we'd guys are you, saying.

He county Shannon.

He slamming Didnt information centric.

Oh, what sort of look to that is what topical final what sort of $1 million or you may well many easily level weather.

Those of you know what the Anda, but what that is what you hear portola electronically.

Other although thoughts into it other than that Eagle portal.

Talented I kind of what's going to go to your that even us opinion woman that okay. So element the whole head quake, although with us so other than what I need to your way go no go so that although the campus and other dose selection or what are the way will then how do you I had a little in that area to use shutdown that you. Sir you may woman she wells.

Although overcome cohort so let's talk a utilization lets you don't know tendency that some of that to your covenants. Although again, it's a little harder to get any kind of thing child, not because I was all women that they've got to it.

Before the meeting Yeltsin's, yoplait equals lightened up but even without that.

Sure so.

So first on the EPA.

I can't say that we would agree with you on saying that the Apiay had a rapid decrease.

We know, what you're saying, but let's say that.

Overall, our APC our has actually they're in a fairly steady around this range. We've had some fluctuations, but generally speaking it's been stable and hasnt moved that much.

Ultimately it probably depends much more on customer acquisition and other things going on and the risk of the underlying customers and requiring higher risk customers. Then, we'll probably end up with higher Nprs now that said our long term, yes, we absolutely believe up.

That.

Well decrease up because our goal has always been to grow with our customers and.

I sort of better and better customers over time.

So as we do our underlying customers credit quality will improve so as a result, the HP are well, we'll probably decrease anyway.

Okay, we'll actually cemig gifts and credit quality bombed make a footprint before to fix the tender. So we suggest that you shouldn't that goes to the suits that.

So I think genus willing as our summer take their short Mccourt shoes Charlotte.

India, and we'll monitor them good that you could see so doesn't clearly.

Something realize what about between influence it.

To me juices that continue under Essentre usage, you do something to fight in China buttons are.

Tim Good but you could you go to hand sitting on the fall, but then we've seen that kind of which occupied exhibits starting seem quite simply put though.

This is Josh on but as I said I did just superseding.

That's it and good eager pushing through that she says that you'll start they could see two decade handoff centers hopes of government to somewhere that's done what you do that sort of so we'll see young immature push some glass of which will see sort that.

Kind of seen that transfers is that.

Just our to do more push you can pick on our code essentially dosage of the project, which we didn't et cetera.

So the.

More.

Well, we say a shorter delinquency and asset quality numbers.

The seven day number currently is at 2.32%. This was actually a 12 month low.

The one month collection number.

Right now, it's actually better than.

This time last year in fact, it's better than the Q3 Q4 number last year by something like 20%.

So we're actually doing very well right now on the leading numbers and when we look at the underlying overall asset quality.

I think we're increasing we are going to levels, where we would be very comfortable where historically now that said if you look at numbers like the 30 day the 90 day.

Because these numbers do have a lag.

Our higher and they will be higher well, we think that overall the peak at the end of the second quarter were toasty, yet and you'll start to see all these numbers improve in the third quarter fourth quarter.

Okay. Thank you.

That.

Next question comes from the line a tough needs from Citi.

No.

Yes.

Oh.

What's your thought wage outlines Eagle Ford teachers with.

Oh I'm just a question data English in shock.

Offline or something.

He was the shot young age that seems to take off.

Just two tablets axon signal.

Chichi is off to an abortion, which was.

I was just two quick nation Sanjay.

Yeah.

Oh, no lapping of Shannon.

Not only one number one.

Sure.

Yeah.

[laughter].

Sure.

[laughter] action or something.

Yeah.

Oh thanks.

So my question is because an acquisition side I'm sure you mentioned.

With.

Asset on your off nine custom acquisition, including.

The consumption scenarios.

Just wanted to understand I personally see I finished customer acquisition costs and also what is it kind of a fee model.

There's some actions and also.

If possible can you share E.

He contribution.

Hi, I'm Safi audio borrowers and I'm like second.

Sure.

Other tick up a good filled up with ita specific.

Quite recent.

Got it has gotten to the focus of the water double digit on T cells that allow the article that that engine the focus.

Well the condo Carlos will look at it continues to adjust oilfield as it what I tell you what seemed all your Timothy by that so much and thought it really here you got some ethylene capacity with us and I'd say the woman eager to will that although cheap so looking ahead of us.

So Don Healey issue, we've got over here, a little bit less obvious Andy So no. We started the how difficult it will move in South Dakota attributable to underwater, albeit with it hasn't yet so it can go to us all the money on how they probably don't get almost at other target amendable, let it play well, there's a lot about how high or low singles that put us well then some plus I thought that.

Also so dealt with a will look like you saw you guys also it's all local assault I'll tell you, it's almost a science.

Yes.

So well look at engine that also then that without that up with here.

The reason I can't tell us how we get asked whats coming your way into human will then woman so youre going to heal typical bolger purchases that kicked out of the code that gap I go further delays hopefully the single as you can.

As you look we more topia weakness so.

So it's not keep it only takes out of pocket Atlantic budget Thats real woman types of it how many in the fourth here the Ohio layers will may wish to appeal. So, let's say that how can I can.

California today, obviously somebody I think how to somebody telecom Selic a cold.

So on the customer acquisition for the offline I haven't done some detail recent analysis on the offline cost and this was partially due to theres additional investments models et cetera are being used as well as new employees. We currently are cheaper, but fair to say data given the none.

There is that we do have where we're acquiring customers at a 150 and these are new active our borrowing customers. We're certain that the offline cost is lower than this now with regards to how we cooperate it's definitely not revenue sharing is very much using their consumption scenario.

And providing other potential benefit.

So for example, let's say Theres a supermarket and there is some particular deal where someone can by 30 get a discount benefit et cetera, we do this where to drive customers and the supermarket, obviously with the potential new customers as well so when.

We do these two membership privileged and benefit it limits our cost greatly and also as we're seeing in our data it helps us acquire a very healthy customers.

Hey, Mike Huckabee cocktail wetlands and the you go I think over the quarter.

You mean, well metal and we'll just will make us a total of alkyclean chasing that local seriously Orlando. So suggested that that would have the which is a mail that will take it anyway was was it that will allow us to delwyn. So good that you would again like other than others.

Hi, good yeah, it will depend on those but in this city so to a voluntary condone lovaza. So we'll make an idea with another angle until we have assumed.

Yeah.

Yeah.

The settlement intended and whatever he led again tight in Sotheby's and others.

So easily in public you bought so talk and this all the way that isn't until the other you're going to age.

So it's hard to for us to answer right now in terms of the contribution of new customers that the love our card is making.

Because we can't entirely sure whether or not it's the product that the new customer came to a low as opposed to the new customer coming to us for other reasons and using the waqar, but we can't say and I can give you. Other numbers is that this is clearly the fastest growing part of the business.

A month on month growth it can be a highest 10% again this is month on month.

They are core engine for growth and it certainly made up 30%.