Q4 2020 Lexinfintech Holdings Ltd Earnings Call

[music].

Ladies and gentlemen, thank.

Thank you for standing by and welcome to the Nexium, the Fintech fourth quarter and full year 2020 earnings conference call.

At this time all participants are in a listen only mode. I must advise you that this conference is being recorded today.

I'll now turn the conference over to your first speaker today, Mr. Tony Hung senior director of capital markets. Thank you. Please go ahead.

Thank you operator, Hello, everyone and welcome to listen to the fourth quarter and full year of 2020 earnings Conference call. The company's results were issued earlier today and are posted online joining me today on the call on Mr. Jay Shah founder Chairman and Chief Executive Officer, Mr. Craig Zeng, our Chief Financial Officer, Mr. Young Sharp, our vice President.

Mr Stanley Doyle, 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 Suzanne will discuss our financial results and Mr. Chow will discuss our credit performance before we continue I refer you to our safe Harbor statement in the earnings press release, which appear.

Because of this call we will make forward looking statements.

Also please note that this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains the reconciliation of non-GAAP measures for the most stock directly comparable GAAP measures.

Finally, please note that unless otherwise stated all figures mentioned during this conference call on let me I will now turn the call over to our CEO, Mr. Xiao, whom I will translate for.

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In the fourth quarter, <unk> Tabak technology loan facilitation model achieved significant growth as a percentage of new originations on a risk free pure technology service model, which 50% of total new originations for the very first time, we are creating a comprehensive technology service system that will cover all of <unk>.

Aspects of customer acquisition and operation.

<unk> financial institutions to immediately and seamlessly integrate with our system on the spaces fourth quarter of platform revenues reached $720 million, an increase of 232 per cent for the full year of platform revenues reached <unk> 2 billion, an increase of the 150% and increased as a portion of total revenue.

The 17, 5% versus seven 7% from a year ago Mckenzie on line.

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In the fourth quarter of emerging generate of loan originations of $53 2 billion on non-GAAP net income reached over $600 million and total loan originations last year with $176 5 billion representing on ear on year increase of 40% revenues were $11 6 billion. We've also recall.

Our sixth consecutive quarter, where our new registered user growth reached $10 million. In addition, quarterly active users reached $8 2 million a new record high for us and as of the end of 2020 listings total registered users reached $118 million, representing a year on year increase of 61%.

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The only women COVID-19 didn't on trees, yet the team within the woman that hung on either the.

The U N D wave.

That was the result, I'm pleased to announce to everyone on the face of the complex macro environment, we successfully executed our new consumption of strategy achieving once again good results. Our two bank financial technology services has achieved high quality growth arch of business products.

And other new products are rapidly gaining recognition and opening of new Avenue for growth, which will continue to firmly establish our position as the leader in the industry.

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Our asset quality continues to improve on 90 day delinquency declined from two 6% in third quarter two of 195% in the fourth quarter new loans made in the fourth quarter are currently exhibiting even better levels of credit quality in the loans made in 2018.

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Even while our financial Technology service business continues its rapid growth and development. We're also establishing a new consumption ecosystem and expanding our potential customer base from $120 million to the 500 million new consumption consumers our business scope will expand from installment loans to cover the larger new.

Function market, we will establish ourselves as the new consumption digital technology service provider and we have confidence that on many years of accumulated technology capabilities and operational experience in the financial technology sector will ultimately enable us to find opportunities and succeed in the larger new consumption market.

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Yes of course, it has already established working relationships with hundreds of merchants, including movie theaters restaurants shopping centers on hotels totaling over 10 different industries and sectors and has been recognized by 17 centered on industry associations and the consumption documents of proposals.

It is now online and operating within essentially the ecommerce platform and we estimate there on the first month, we will generate approximately $50 million in <unk> with strong potential growth in the second quarter.

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Following the pandemic. The economy has continued to recover and grow rapidly and we now see even more growth opportunities based on the strong growth and improving asset quality that we are seeing in the first quarter. We are raising our full year 2021 loan origination guidance for 240 to 250 billion representing year on year on year of increase of approximately for.

Per cent versus our 2020 numbers.

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Yeah.

Thank you Jay and Hello, everyone I am pleased to announce other we have once again delivered strong results in the interest of time I will not go over line item by line item of our financials, while more detailed discussion of our fourth quarter.

On full year 2020 results, please refer to our earning press release.

Other operating revenue reached RMB 11, six billings for 2020 and the <unk>.

<unk> oriented service income reached RMB seven 5 billion platform based service income reached over RMB 2 billion, representing the increase of <unk>, 150% from 2019.

Net income with the RMB nine 3 million for 2020 fully diluted adjusted net income for the quarter per ads was RMB 293.

Our operating leverage operating expenses as a percentage of average loan balance was $3 one per cent for the quarter and are now at.

Tightening marketing advertising G&A and R&D was 7% one 2% for Samsung <unk> on top of average on balance respectively.

As Jay mentioned, we currently have 180 million registered users on our customers with credit line reached $27 7 million.

Up by 43, 2% submitted December 31, 2019, we acquired of nearly $6 1 million new active customers in 2000 in 2000 financing.

For the.

Last quarter, our average tenor was 12 months, our nominal APR was 16, 1%.

Next we will discuss our credit situation.

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Jim Clemmer.

I'm also pleased to announce a management change.

Our CRO has now been promoted to senior Vice President in charge of new business initiatives, where he will hand, the various new initiatives as well as overseas business.

We strongly think Ryan for his service to our company and we feel that based on his personal preference and desires.

Will you able to meet the challenges and as new business of responsibilities.

I also like to introduce Mr. Chao.

Who has decades of overseas experience as well as domestic experience and the credit the industry and has deep experience and knowhow when it comes to credit scoring risk control and asset management net.

I would like Mr. Young to discuss our current credit situation.

Thank you Jay for the introduction.

Continue our stable credit performance in the quarter in spite of the challenging conditions in the patch here in the market our credit quality continues to be high end with the within expected levels and we fully expect our credit statistics to perform well within expected levels and to improve overtime as Jay mentioned, our 90 day plus delinquency ratio declined for.

On the third quarter to $1 nine 5% in the fourth quarter, and we continue to see stable or improving credit performance as our lifetime charge off ratio has stabilized. In addition, our first payment default rates for new loan originations have been at low had been below 1% for the past five months now and our one month delinquency for our key paths.

Vintages have peaked.

The result, we fully expect our credit performance to remain strong stable and improve in 2021.

With that I conclude our prepared remarks operator. Please proceed with your question and answer session.

Yeah.

Ladies and gentlemen.

Now begin the question and answer session.

We wish to ask the question. Please press star one on your telephone and wait for you need to be announced if you wish to cancel your request. Please press the pound key.

Ask your question in Chinese if he can the economy repeat the question English.

Your first question today comes from the line of Jack Xu from <unk>.

China Renaissance. Please go ahead.

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So I won't translate my questions.

Thanks for taking my questions.

Sorry for the three questions on number one is about our loan growth guidance.

I felt that we are guiding 1% of loan growth for this year just wanted to understand the key drivers behind and.

And we actually missed our guidance with the two months so just want to check the.

The first quarter of trend regarding the loan growth.

And also want to check on what types of the imbalance.

According to our 40% the ball.

M fragrance.

And second question is about the.

Recreation.

At the <unk>.

And document regarding the strengthening our recognition regarding the college zone.

So just wanted to check what is the impact for us because of.

The documents and you actually mentioned that the third party candidates.

Direct the college students I think to the licensed financial institutions.

And sir questions regarding our asset quality.

Because we mentioned that we try to maintain a high quality growth this year so on.

Just trying to understand what type of what is that from what he thought we mentioned the strategy. This year and also what is our vintage losses.

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All of you go down the guidance. So you guys kind of you got to the Cleveland.

So Jay I will answer the Jack in your first couple of questions with regards to the first question on wire, where you have raised guidance well.

Primarily due to two reasons one you can say as a macro reason or high level of reason. The second one you can say as a micro reason or reasons, specifically attributable to us.

Our performance first on the first waves that we're seeing right now of very very good and positive macro environment and in particular when it comes to the regulations on the regulatory environment that is increasingly stable and also increasingly moving towards a favorable direction. While there may be some announcements that same negative to us.

We do see that as the hope what is happening is that it is primarily impacting the much larger players and it's primarily aimed at eliminating the much larger co lending model for the.

The model that we use the loan facilitation model.

We're seeing what we are hearing is actually quite the opposite that it is actually being recognized on increasingly recognized by the regulators as the favorable part of the entire environment and of course that is the only model that we use.

So we see an environment, where the regulatory environment is increasingly stable or even favorable the larger players are in turn also being constrained because of the co lending model and hence this is generating tremendous potential opportunities for us. So hence we feel that theres going to be new additional growth this year. So.

That's the macro reason on the micro reasons when we look at on our first quarter numbers on how we have performed thus far in particular compared to the fourth quarter of last year, which by the way. It was a record quarter. We can actually we see very very strong growth and not only do we see strong growth. We see in fact years to day some of the bed.

The growth if not the best growth ever that we have experienced and in fact this extends also to our asset quality, which we can see is among the historical best and May in fact, even get better so hence the for these two reasons one again, the larger environment on the macro environment and particularly the regulatory through our own recent performed.

We feel strongly about our ability to raise our guidance.

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And then the entering and premises of the Genzyme, maybe tier type view of other than.

Within the the tunnel in the equity type of at the Asa.

So with regards to the specific loan balance we feel that it will probably be something like 25% year on year of growth in loan balance.

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The other chengguan the you've got homes of so we'll look for a minute weighted on the answers.

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Sure Yeah, I know it's been good of you got the engine of <unk>.

So that's on one day, you should turn to the Wassa.

So on the second question that you had Jackie with regards to the student loans and the impact from the recent regulatory announcements as you know from actually many years of covering US. This is nothing new in particular this is something that has been out there and written in very very similar ways of literally years ago.

And as a result, you can say that we have been preparing since years ago and of course, the banks or the.

For institutions to actually approve the credit card.

It needs to go through their system and hence we're on.

Already compliant in many ways on this so in a lot of ways with regards to the request or the actual details of the proposal and how it's implemented.

Very much within that system and range already now of course, we may.

Make some possible adjustments.

But primarily the adjustments will be made on our funding partner side and we'll work with them to make these adjustments. However, I think we do want to emphasize that we expect very limited change or impact for our underlying operations as we continue to work with our partners on instituting the appropriate changes.

Yeah.

To answer your third question.

As I mentioned in the conference call hours 30 days, plus the 90 days plus delinquency ratio continue to improve our vintage delinquencies.

<unk> also been decreasing.

Over the past couple of months and our day one delinquency in the collection performance have also continued to improve.

So we believe our current credit performance, it's a very healthy condition and we believe this.

Credit performance walk the support our strategic plan to grow our portfolio. So in the future we think.

We will maintain a cautious approach on our.

Credit performed well fluctuate, we think of very controllable and narrow range and at our new business continued to grow well.

Attract on.

Lower risk customers to our portfolio so our per.

Portfolio risk will continue to improve so our target.

If I have to give the number I think I would say well.

On our vintage loss target won't be around the 4% for the year 2021.

I will take any type of accounting true.

Think of engine.

And your next question today comes the line of Eddie Leung from Bank of America. Please ask your question.

And plenty of time day she's here.

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On the loan growth type assets.

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Jimmy on the take rate or shipment of solar roof.

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I'm, sorry, I thought two fairly quick questions. The first one is about a buy now pay later on model what could be the contribution.

For from Bye.

Now paying later on.

For the full year.

Loan growth guidance, and then secondly about the of puppy sharing model.

Might that affect the take rate and hence the revenue growth for 2021 I think of.

Although the chicken on whatever they come from.

So hopefully I think the when tier.

Hopefully the Wilmington.

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The southeast share the whole if you will some day life.

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In the technical sooner than the other either.

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Hang on hopefully within the year without the.

Family of good Chinese equity.

The way you're going to see the attraction.

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The other tenant you've got kind of the kind of out of the yard.

So Eddie with regards to your first question on the buy now pay later product on my other product well as you know.

So it's a totally new models of different kind of model, where there is no charge to the customer, but there is a cost to the business, which no doubt they'll make back and we're obviously very very pleased to see all the positive reaction from our customers two of this product, which is why we expect to do the math.

And Dnb and the very first month now that said this is the new product and this is still very very true.

So it's hard to say what it will do and it also depends on how things develop and depending on how things develop we may deploy so on resources and commit additional resources to this product which of course, then in turn impacts as potential growth. So there's a few things going on here.

Hence it would probably not be appropriate for us right now to give a full year number on this now I think it's also very very important to point out to everyone that this product similar to what you would see if you look at after pay in Australia Slash. The U S. This is not a loan product and that is.

By definition.

And by definition of actually mean by the regulatory authorities that definition. This is not the loan product and so on that sense.

There is no loan origination there's no loan balance so it is basically very different and hence.

It would not be regarded as if you will of financial product in the sense that you're used to looking at our underlying business.

But we are in the journey.

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So do you do for an you talk all of our revenue share.

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Net earnings summary, and I shall should you have the Athena the timing.

The capital on a co Danielle on cash flow.

I wish all of your share of data that we issued shortage on the gotcha.

So as that channel on.

Kind of how the doors in.

In China, you against all of that.

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Our cash if I could tell harvesters yet.

The other continuing GE the feedback.

We've got feet on the back of the moment.

The cost of debt.

No.

The wasn't so much in the Ohio, That's one day peak rate of galvanized around a lot going on.

Gambled on Ito Youll come on shoes. So you can travel to assure that you book a new on either most of that you got hobby of I think right.

And so on.

On the year of profit sharing of motto as you know in the fourth quarter, we were able to do over 50% of our loan originations.

In the profit sharing so this was actually very very rapid growth and the demonstrated very clearly our ability to transfer the credit risk to our funding partners and their confidence in our credit risk abilities.

You're absolutely right.

The problem by doing this and by doing more of this this is going to definitely impact of our take rate.

This is a natural result of the fact that the financial institutional partners will be taking on the credit risk so of handset they should be getting more reward.

That said, especially that given the fact that this is the new product. If you will and that you need to get more and more partners on board. The pricing can vary if you will because each time and we need to be negotiated and hence you would have a different levels. So lumpy.

Correct.

The more mature funding partner may get one pricing and a less mature funding partner may get a or demand a different type of pricing.

So there's all of these pieces going on but it will definitely have an impact now I think within that context on having said that.

Last year, it was probably something like a 1% difference versus our traditional loan facilitation model. This year we.

We're hoping to the target to lower that so the issue may be the lower this year and also we made a control of the scope that we do the profit sharing to some degree in the sense that it may not grow as rapidly as you saw in particular in the last quarter last year, it will still grow but.

Maybe not at that rate now when we come to the actual modeling of modeling purposes. I think what we may be looking at is maybe something like a 50 to 100 basis points adjustment versus the Oh take rates. So thats, what we would recommend everyone do in terms of the adjustments.

Free tangential, thank you very much.

And our next question today comes from the line of Richard Xu from Morgan Stanley. Please ask your question.

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The watershed amendments you got the Yahoo, you want Goldman towards your goal of favorite in the.

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I know a true toward on that you said.

For the partner you here do you hold on.

Okay.

I guess I have two questions. One is on the client acquisition channels.

The changes from the last year is because you know, there's obviously a lot of regulatory changes that impact of some of these major.

That forms in the industry, whether that has changes.

Impacted the dynamic of the client acquisition channels any strategic changes of where I'm trying to make.

And secondly on the.

The profit sharing model.

What are the key institutions that we're working with and any potential.

Partners in the future. Thanks.

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What kind of quality is always the about potential total focus on the kind of change that on clay.

Element junior in China on the Eagle Ford could of sapiens well than to any of the whole of the same day.

On the Shanghai <unk> medical could've put them on a one time for the other Ito and installation target of Mod Taco margins in Gotta Guava got off on the Union So on women junior and taken on.

Getting into an NPL trade other you've got paid for assets that would've.

Just on women.

<unk> of women that many of you Gotta go on lot of Copa So of woman Chang and good day they built.

Also note down at the end of the.

You go for that.

For me and so you're right on that.

It's important.

Cause the well then the country on the initial GW Yonkers of publicity and then they're going to say you're simply young so of women's.

What kind of feel it should be on Ethernet and so you can sort of you guys.

But just the total.

I don't know what mentioned for CDR funds. So that's on that day.

The other woman charter on Paypal.

The other day without the kinetics of the door because all of them are going to them is on the front door the Asia.

The other oftentimes people search on joining.

Joseph here so of bulk for ITE.

The zip entire woman contango door just are.

Common Palomar.

One on women's and go to Angola, or myself will get out of your potential for.

And that's on it.

So not just on free belden, the whatever types of.

Which I don't know somebody of lot of total cost of the audience. So credit that one kind of the electricity because it didn't drop that day.

He has taught us that looks at other than the other you couldn't Gallup Shang. Okay. So you've got to be a woman cocoa canola as well those are the opinion.

All of them the ease of down the Eagle Ford well, it's almost kind of opportunity on one but that's it on the tender orders for those working on quite a bit so on women tableau of you go yeah.

So why don't you live in the other Eagle.

So the tenure or me, if we don't usually got out of it.

They've got on the OEM can kind of your easiest hurdle.

Yeah, So Richard that's definitely right.

Had some changes when it comes to the customer acquisition.

On the first question. If you look closely at what we did in 2019 and also contrast that to what we did in 2020, you'll see some interesting things now as I think everyone knows in 2019 that was a year, where we spent a lot of money and where we really began to.

Advertise online and we acquired a lot of customers that way.

We set all time records when it comes to our customer acquisition in that year and in 2020, we actually came very close to our numbers in 2019, but we did it greatly reduced sales and marketing costs.

And it had also by reducing greatly our use of online advertising such as with the channels that you mentioned earlier. So we use a lot of innovative and if you will non conventional methods to acquire non standard the traffic and we did basically the same amounts of arguably higher.

For quality.

And a much lower cost. So overall it was actually a very very successful year last year as we switched to these new non conventional non standard channels now as mentioned a lot of this is about strengthening cooperation on working with sources such as QQ music QQ video.

And what we would do sometimes is for example, if they were for a customer to us for all of our card.

And then gave of membership the these platforms. So this is the situation where we can actually go through a bidding auction process as opposed to more standard online advertising and receive much more competitive cheaper of favorable pricing. It is also the situation, where it's actually a win win for all sides of involved.

So hence we have deployed rapidly on this particular front last year.

You can see from the results of that on a monthly basis, we can get 710000, if you will.

New customers from the non conventional channels.

Although the other opinions.

So the impact of the Eagle, Indiana woman channel. So good afternoon to jump on it.

Yeah. So women can you kind of.

Can you go on.

Most of the conduct of hinge so the woman with someone on the Golar.

Total debt.

Pick up on the consultation.

The only of women go on kind of Goldman tongue tier called audiences come on sides and good day Dunbar most of the Xiaomi come on in Gulf of about 10 to the conduct of women's and Thats the kind of the simple function. So that's not true.

The two things the Finjan that'll be on who are you looking for the most of the Paydown of the main thing that will control.

So if I'm on top of it.

That's also the lateral it took a bunch of them, you'll just as all women unions mechanically most of our economy that the audience on boneless ethical motors on the go forward. There are current quarter. So so the euro zone as well.

Well most of the total surgeon panel.

From a totally.

Nigel will take a single Melissa someone mentioned that total that you go to Australia Asia and somehow focus have taken on.

The not come in conditions of quite a bit in Asia other than they say of consensus.

Yeah.

You go you guys EBITDA, so not one that's only kind of on a kind of a.

The women is true about the new most of the lithium will take out whatever it took the teller chances.

You didn't do better that's the one mentioned net.

Yeah that sounds sort of so on.

Luca.

So that's to come in for.

Jen could then go there's always some interest you. They don't go on for the Pimco. So all of the minutes I'm going to spend on Wassa.

It's Jason.

So the momentum that you that total.

The HSE and the sharing of course opened on the most of the tier team with junk team of women and that's again on something.

Let's take the most of the just the woman.

Women with any of your you said you're going in kind of a case of.

Twitching of Thompson, the element to it and good day, you've got the.

Good day.

As a part of the that'd be the hard tissue.

Okay.

Richard So end of double check there a little bit on the numbers.

Right now theres actually over 20.

The financial institution partners that are working with us on the profit sharing but many many more of our very much interest in and one can certainly expect this because many many more of institutions are many of funding partners are very comfortable with our risk levels and have accumulated literally years of data.

On what we have done and the risk that we have generated so there is a very very clear a profile of the risk of our underlying assets and what risk are being generated so hence more and more partners on the pipeline and.

Coming on board being willing to accept the risk and we certainly expect this to increase in scale and ultimately of course.

The main better returns for the funding partners and hence not surprisingly for.

For those partners that are not working with US directly we're in the process of working with us directly yet.

It's safe to say that everyone is interested and is interested in taking a look now in terms of the types of of funding partners that are more active if you will right now it would be silly commercial banks would be consumer finance companies, which perhaps is not surprisingly as they are smaller and if you will more dynamic and can move quick.

<unk>.

And hence we do expect that this.

To gradually shift as well, but these are the types of institutions are more interested right. Now overall, we expect the profit sharing as a whole to increase.

We're also going to seek ways to balance the and to optimize this and also experiment with the new types of funding models to reduce our overall funding cost. It may be profit share maybe non profit sharing maybe some type of mix in between but overall, yes profit sharing is definitely going to go up.

Alright, thank you.

Your next question comes from the line of Alex <unk> from UBS. Please go ahead.

Okay.

Oh, well, yeah, Glenn tier.

Glad you would say you go.

The deep channel.

Now some of that.

The PR.

Maybe two if I can always and some of them a whole shoes that you got that one.

So.

So now switching from.

But no change from kind of shaping.

Yes.

Sorry, what's that.

On the content.

How do you go into the corner you explain most of the top tier.

Great.

It sounds like the tier two pitches sounds you do what you say.

Got you on.

On the team kind of equation.

Okay.

So the kind of eased somewhat.

I Hope you take the most of the two wage for the boy I'm afraid downstream day in Q2 was handed to me you can say.

So I have some question first question is on the on the pricing.

Pricing on new cutting costs.

Sandeep.

Hi.

On a recovery from the.

In Q3, so I'm just wondering.

What's the outlook for the pricing going forward.

What's the current level of operating cost do we have room for whatever.

Of course.

And then my second question is on that.

Takeaway for the recurring model it seems like the taking my phone has declined somewhat from the Q Q3.

So I'm wondering what's the reason.

With the take rate of recover back to the previous day between Q2 and Q3 last year.

Oh, well just that in China.

The second one is on a.

A woman Guy here, Tony on that topic that kind of a day.

The thing you're going to teach out of them even at the current engine somewhat well know many of the merchandising intervention tungsten I kind of yields of the golf in the LNG Nothing had mentioned how does return.

Well many of the yogurt with units into common.

With that she doesn't go to the Eagle <unk>.

The which puts us in the although he took the that you can actually you got user.

Woman Lugo in Manila for cohort cohort of the engine not hinder you talked on the injected high yield yoga for machine that you might be going on well between 'twenty the kind of woman of the weight on two new board that centers on how you think that you guys do you know what you've got the kudos on the Mayo team for the Asia is the Yarchoan one of the way that on G&A, the woman that they're going to either of India. The land way about some of the shelter.

There you go when the amount.

So on pricing I think J wants to emphasize there's two perspectives. The overall one of the world that's a little bit longer term and the second one that's a little bit shorter term so first on rigs.

Guards to the slightly longer term outlook essentially as you know we target a very high quality high growth a good cohort and given that this is a high quality good and high growth cohort of <unk>.

Maturing and improving credit quality over time.

The rates naturally will decline overtime, so hence the over the long term, we fully expect the rates that we charge to our customers over the long term to decrease now short term.

We look at the current situation.

There's no new if you will regulatory requirements of and there is no new guidance in particular on this than I think at least for the current moment you can expect the.

Interest rates that we charge to the relatively stable.

Starting from the and I'll hop off of fair in take rates or day downloaded kind of though.

For those of the U N.

The incumbent on that could easily flip the San Diego shall we call. It here, Doug assets only chance for Colorado Chicken Heathrow dominate on the income.

Now to our U S digital shipyard.

Especially the two minutes at home.

Good day.

Todd I'll do the.

The geological on on how many vehicles of the but don't necessarily out from where LTC I believe on here.

So any tissue that's largely the one shot in the yocum toy on how that's looking.

Which is again the intellectual all day out on the heels the.

The team, we true, which is what you're dragging down the channel.

So I wish all of the Guardian junkies of the income about one <unk> on top of that.

Can you answer if you want me to share if we kind of into much of young has all of the to the future.

Fair enough takeaway that the debt that you can add to the element of favorable net I'm going to be these acute on COVID-19.

John.

Yes for both of your China for China, Taiwan, and the longevity of out on a price of the cheat sheet.

Non interest on the top.

Sure.

Kind of on arbitration on sort of thought that is searching for a new knock on non jgr.

Seeing the up of who are using the <unk>.

Shooting on the hook on for exactly the timing of the meeting.

But what how do you kind of controlled distribution, making losses in the mail.

Males of a deal here.

Two to draw from in Cuba.

From a technology.

The way back.

<unk>, if I may and kind of.

The total book came on the call is that in cash the trial at the end margin, but at the end of Hologic the passion that of Judy.

So regards Alex to your second question on the profit share in take rate I think it's important to note that there is all of these things go against the profit sharing ratio of the takeaways. The negotiations there as well as of course, the underlying cost of capital now for the fourth quarter, our underlying cost of capital.

Probably increased slightly from seven 4% to about seven seven per cent.

In no small part due to our continued strong growth and as we grow.

Of course have to source additional institutional partners and unfortunately in the fourth quarter for a variety of reasons the bigger institutional funding partners.

We've had certain limits or requirements or otherwise if you will so hence the funding was a little bit tighter in the fourth quarter and we had to get other sources, which then impacted our cost of capital. So hence it was for groceries and to be aware of that some of these things occurred now longer term zone.

We fully expect the cost of funding to decrease and in fact, the longer term extent. If you worked at this year. This year, we certainly expect the cost of funding to continue to decrease.

Of course, we have to balance all of this with the profit sharing.

Well, which in turn reduces profitability also of course as we introduce new partners in whether as the funding partner on <unk>.

Relatedly introducing them to the of profit sharing model. This may require additional negotiations when it comes to the economics as they are a new partner in one way or another which of course may mean that we need to give up some of the economics in order to gain them.

And getting their trust initially as a partner so there's all of these types of ongoing balances that we also talked about earlier and also involving the different models. So hence the there's a different complicated things that we were going on in the background, which I think after you heard August you understand fully how.

It can be nuanced and again complex.

On the question Thanks, Brian.

Yeah.

Your next question today comes from the line of <unk>.

And the wine from CLSA. Please.

Please go ahead.

Oh yeah.

So we wouldn't share on Tuesday.

In the east.

Sure.

Okay.

Tom you were talking about pushing some of them come in.

Yes.

Hmm.

Some job losses.

Okay.

Just.

The woman huge.

Hum.

The Apple G.

J P M.

Uh huh.

Hum.

Hum.

Oh God change in bad debt item from finance.

The financial guaranteed royalties.

No she wishes.

The pharmacy.

The challenge.

As you can see it.

Okay.

On the sports as a follow up question on E M T.

Volume because some of this model.

Each of the time on that.

For us to pay the merchants for us.

The full ranch.

The pay later.

The pension risk and maybe two follow ups on banks.

So does that mean, there's things going on.

Model more bang from the future second.

The second question is regarding one 910 months of change in fair value findings of NTT Ltd.

All of it.

The quarter when you look at net debt.

On hacking.

Got it on the hunger.

On the loss in accordance of just wondering what he can do.

Thank you.

For the two equations.

Hopefully pick on it.

Switching wasn't working for you.

The year on because I thought you sort of woman.

So the total and good day, you got to kind of more so so a woman kind of way you gave some of them, which enable the out of the center along with him. He is on on just sort of you.

All of it on tier Euro sounds good.

But I can tell you that's the invented the juncture.

So there's lots of people not just the soldier.

Some cash and until sort of channel magical moments of it doesn't go the dual plays out.

So some of the panel one of them a woman youre picking up I guess on here.

So it took a bit closer per share their credit and let's assume that the materials John whichever empower the team working on that kind of your thought on most of them.

Other than just those are the most of that anybody is on most of the not just the woman.

Tirelessly Sungard Sungard and good day.

Touch on the yard $10. So that's not one but the way so against the luxury and so on so in total China one of the way it's quite a bit.

In the China, So let me be portfolio of concession for Yale credentials. He said you know what you go how much is going by some of the other than good of you got a in total.

Total other another in total on climate and go that's had on sort of also the almost two years ago, but I didn't hear the wavelength. So that's on what mentioned I think of a year or so of Toyota didn't do that.

You got a function of the dose of the Eagle <unk> on the judge of Gulf answer the Mcdonalds on a subway the SNP ample where you're looking at the end of that you could think.

And so on.

So there are kind of other than for getting it actually went down and it goes from here.

So I think I'm eating of the buy now pay later.

The model as we emphasized earlier, but this is very much a new model and the new product. So there is definitely a lot of moving parts and different things going on and also for working inherently with different models of the Wil and.

And right now we're seeing is that we can give the merchants and the vendors are two choices or rather the themselves will take on the two choices. Some merchants of essentially if we direct and have the right customer centered on.

They are totally willing by themselves to take on if you will of the capital requirements. They can basically.

Len for the lack of a better term.

They can upset the installment payment over time by the of customer and I want to emphasize a little bit again, the lack of of better term earlier now other merchants.

They want the cash immediately now but of course of them through this buy now pay later transaction, we generate on account receivable. So hence we can work with various trials financial institutions, otherwise to have the receivables financing or two alternative setup other structures.

Mentioned earlier, the new model, it's very dynamic there's different things going on I do want to emphasize that again and this is the.

Part of about for the lack of a better term.

This is not a financial transaction.

Well a lot of an asset transaction.

Just like after pay et cetera, So there will be no credit record EBITDA well for the customer it's not going to go to a database or anything like that.

Hence, it's something fundamentally very different.

The other ones here.

On a neutral on achieving out of China initiatives, the purchase because you're doing it.

True.

The intention of in fair value of our financial guarantees to hit the street.

Sure Jimmy income good on <unk>.

Sure.

<unk> seen the day long.

The only on what you've drawn on that goes on EBIT on how we'd get held up on the issue.

On the apparel Mitch had no drama on the Eagle equate cash, which will yield on the derivative of guaranteed income from Wall Street again go on media.

So you don't kind of all of them.

That's what you've been doing of the diverting from the Moshe Judy the hit on tier one monthly the academy of named.

Hopefully the collegial.

And the margin.

Yes, so for the 700 million number of Eaton and you're obviously, referring of course for the full year of a number of the change in fair value for the financial guarantee derivatives.

I think basically as you know we have a changing.

Our financing model risk model et cetera, and the model that in the past and the larger modeling sessions withheld for everyone in the path of.

<unk> outlined Hollywood work, so of hence as our funding slash risk models continue to change naturally the mix will change and the line items will change as well.

Are you with if you will the profit sharing lines et cetera.

In the future the launch given that we've done this in the past and it's probably more worthwhile to do it that way more than happy to schedule a more detailed modeling session with you offline to go into how this will work.

Got it on my apology for the Internet.

Thank you for it.

Okay.

Your next question today comes from the line of Stephen Chin from Heiko on International.

Please go ahead.

Hum.

True.

And then go on to ease and change of yourself do you guys see to go for it.

Most of the Nicole I think of a follow up.

So on carried by the ending.

So she thought you'd be able gene and the need from you and the band that's M B E.

Wage he tried to baidu.

Hey, How's your day your Baidu.

Oh tier contract to hit our bottom tier.

The range.

So would you say.

So for me in the.

I'm not sure it holds true at the gene and they go for the knee.

On the B and a take rate the number wouldn't go way Chi the one thing she wants on Joe on Shopko, and Theyre going to choose the shooting at Chico's. She is the D <unk>.

The other day when people were saying no to ease I'll just share.

Other operating income the men. Meanwhile, go Sue you could just go on Utah Pond.

So on why the common <unk>.

So you're the guy been yeah.

Oh, you're going to sort of told you the tangible bay tier I'm quite sure of what I do.

Those are the two terawatt Dunshee woman called Chilean lets you do on tier two city to tone kind of negotiate those of those.

I was trying to go to N G on the old.

Do you assume on when kind of what you see neither of us on which I say punishing the man the Shaw.

Oh, My God of woman that's at the high.

Quantum do you see the G O E M.

The more money Eugenio you go.

So way the campaigns the odds he's the guy.

Thank you James.

Tim on the tenancy channel want or not.

Not from Canada, you answered some of them I know some of it.

And I want to go told you Nancy.

The tier two woman to me you got to do to Yale Jen you told you the tangible.

The second one.

She told you some share of woman to all of you say the chance you Bobby how long how the Tico T doing what most of it was too high.

On balance.

The land quite quite anything I see I assume the woman CEO.

So I'm on to our model the shall I say shelf project goes on.

The way the tangible way of doing that in part a of I have two questions. One is a follow up on the profit sharing model I wanted to clarify two things one are we expecting debt the share of profit sharing for says to you stay at around 50 per cent for 2021, and what piece of our own fault.

The take rate of the profit sharing business will that be stable or declining on.

For increasing in 'twenty, one a second.

Second question is related to you kind of two items. One is the change in fair value of loans at fair value change in fair value of loans and then the other one of these investment related impairment.

We saw that for these two items actually for the past two quarters.

Pam on the Tor negative change in fair value, but in the bad interest rates. We've seen debt you know these two items of indeed, the seasonal you know he's not making money so you'd be able to give you are trying to calculate the impairment.

On the negative change in fair value of games the amount in the balance sheet.

I think that the you know the ratio should be quite large so I would like to understand one of course these negative change of the impairment on those.

Are we going to expect that to recur in 2021. Thank you.

Other clients on until the winter with Asia, one of the anti surge I didn't know they definitely IP, there's on the woman opinion on claim.

A quick on those.

And what you're going to go.

So the Doe Melissa so for me kind of a change other than go to.

And then go on.

Tier one on Iqos because opened on most of the Chico Your total bill.

So there's a woman thing inside of banana is on the <unk> credit.

Wait for the type of window versus all yoga, we'll do that.

Not until that kind of what most of the tier one because he sent the EBITDA now genome woman tier one, but I think it'd be the attention of you're going to wait till the total Allegheny so okay kind of so.

So a woman kind of unfortunate that the afternoon anytime in the other.

You guys. So EBIT in classes of amounts so no woman, Google's, whom you got going and talking to the that kind of the only the nurses have ganji.

No they won't make it I couldn't bullish on the the Columbia now what are the.

The woman depend on I think the that he goes through the.

Lots of them and other takeaway of the somebody of equate to Pee Dee cohort with the assumption that you choose.

Okay.

I think for this year at the home, while we're going to definitely see many many more of funding partners come aboard and accept our profit sharing model.

And we're going to see increasing numbers of that but in light of everything also are also increased scale inside I think at least for the immediate term right now we're expecting the profit sharing to be fairly stable. So maybe at around 50% or so but longer term. We certainly we expect this ratio.

To increase overtime.

And the reason why we're now expecting this to be stable is that we feel that we really need to see better and have a greater clarity on the underlying performance and the profitability of the model and then to make the right choices. When it comes through the balance of these things, but that said, we're pretty confident in the long term.

<unk> direction and the potential of this given that theres going to be more and more of funding partners coming aboard theres more and more of funding available.

All of US there's more of them and hence we should see improvements over time and ultimately improvement in the underlying take rate.

Frank guarantee you're going to go for.

Our value on angle on hygiene backhaul on the continent, Youll share an $80 or total Shanghai and the day the July.

Interest adventure on the entry.

And of that much at all day, all key here just orders requiring the equal of along that holds the time April Thiago.

So are you on.

Relocation the true.

Either you got that quite higher usage.

So on one of that.

No.

The average on each range of Horner imager here of course.

A couple of the Nokia channel, maybe by the pathway Domingo not to hit <unk> on what you hear the Shanghai team recruiting true.

Tell me more half of what we thought but we do it.

The Gulf Congress somewhat challenged again in the heating.

All of them Sheila King will have on the chicken quality die and so on.

Kind of hedging losses, I mean, if you are cutting out.

On the night here, but I think of Citadel will now remain true that having copilot Joshua targeted with the way we may buy side that you can even he kept its eye on believe by email on hydropower income dattilo titles from Hugo you go you're going to the Marc Jacobs will show you got on SEDAR orders. So you could enhance the patio seating.

So I think of for the two price indefinitely, Steven correct us if we're.

We must understood you for the.

The first part.

I believe we address that when it comes to the addressing the change in fair value of financial guarantee derivatives and talking about the different models. So as for similar reasons with regards to the second either of you mentioned.

With regards to the change our rather the investment related items.

This is actually related to a U S company relatively immaterial investment we've made in the past.

On a company in the U S that specializes in making auto loans two of foreign students in the U S and also providing other forms of debt now Unfortunately.

Pandemic has impacted as the company not surprisingly quite dramatically. So as a result, we decided to write off something like half of our investment in the third quarter and to continue to do that in the fourth quarter as well so obviously.

The details of this.

Yes. This is definitely not a long term thing and this is basically a one time item.

For young guns.

Well, you said kind of in country booking tool.

I'll say on Wonder just one do you need good solid the change in fair value of loans Joshi of requests you see 10, she can one assume.

Assume on my mind, some of the Beichuan Sue Cheung Yam on orders.

Maybe on my.

What are your simple, yes, you're going on.

If you could change in fair value of loans.

Oh, sorry of student can translate that for the one.

I appreciate the okay, sorry that maybe.

The non clarify if I didn't.

Any one of them wanted to ask you just about the days of nighttime cold change in fair value of loans, well would you use the Iran 47, mainly in the.

Yeah on negative change in fair value.

If we take a look at the balance sheet.

Of these loans most of them off.

The February.

The months so what has caused the decline.

The negative change in fair, but let me say related to interest rail or something now or do you think related to asset quality problem one from of loans.

Buying from from where.

Uh huh.

The ne partial women's or attach Holland.

In the long, but I in Poland for fair value on that.

The new England.

Yeah, So think of understood that some fair value adjustments to some of the repayments.

Thank you for your time.

It depends on tangible Stacey.

And your next question today comes from the line.

This is yang from the asset management.

Please go ahead.

Where are you calling somebody says the hum on quite a bit of you can bring to the Jewish junior by ingestion of coal quality.

On the transport.

Sure.

I'm sorry.

Turning to the future of beautiful for at all from when they the of course the sound on the call grocery channel chasing parts of if I'm sure.

For example, he's on corn.

The trickled into the memory space.

And the Jin Guy or drive share.

So on the guide.

I guess my question for the management.

About the part of the books I conclude the midstream.

M. Later last year on the management and different occasion briefly mentioned the.

Possible secondary listing back in Hong Kong or trying to mainland the stock market.

I wonder if there's anything that the management can share today or any strategic direction change.

Yeah.

John I'll start with the.

You'll remember the revenue all of them the paper show on Norway, keeping new railcar vehicles, a day for the annual.

Rita.

Gotcha.

We can hear you know of hydrogen.

The type of May or may of tonnage on Mayo.

Yeah.

Yeah, So I think when.

Ask the question in the past, we would say that we'll definitely consider all options and do what's in the best interest.

Of our shareholders as the whole so for obviously.

Many many reasons.

We can't comment too much on too many additional details given the well.

Of the entire nature of the process.

So we have to stick to the official lying on risk.

Sure.

Hi.

I think that we have nice the questions on the line and that does conclude our conference for today.

We thank you all for your participation you may now disconnect.

[music].

Oh.

[music].

Yeah.

[music].

[music].

Ladies and gentlemen, thank.

Thank you for standing by and welcome to the Lexington, Fintech fourth quarter and full year 2020 earnings conference call.

At the time, all participants are in a listen only mode. I must advise you that this conference is being recorded today.

I'll now turn the conference everybody of the Speaker today, Mr. Tony Hawk Senior director of capital markets. Thank you. Please go ahead.

Thank you operator, Hello, everyone and welcome to listen in the fourth quarter and full year of 2020 earnings conference call on the Companys results were issued earlier today and are posted online joining me today on the call on Mr. Jay Shah of founder Chairman and Chief Executive Officer, Mr. Craig Zeng, Our Chief Financial Officer, Mr. Young Sharp, our vice President.

Mr Stanley Doyle, 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 Suzanne will discuss our financial results and Mr. Chow will discuss our credit performance before we continue I refer you to our safe Harbor statement in the earnings press release, which appear.

For this call as we will make forward looking statements.

Also please note that this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains the reconciliation of non-GAAP measures for the most directly comparable GAAP measures.

Finally, please note that unless otherwise stated all figures mentioned during this conference call on let me I will now turn the call over to our CEO, Mr. Shao from I will translate for.

Hello.

All of US in two bank credit card just hold on for sort of well.

Well most of that until a lot of index.

It seems on the Joey zone will function to encourage your desktop.

So it could be other things.

Well the PD is also the other revenue with the for months I don't know of hunger for cookies inside of the he's sitting how could you have fallen in the bulk of it you don't you go on in bundle of all tiers of cities.

So if you look in types of almost total of Chile told.

Want me to send out of them in the us Oh by the time.

Uh huh.

Yeah.

I see it turns on but I'm wondering if I was saying he's hoping the yeah, so even kind of CIT and she thought of it.

So the Chile.

Yeah.

In the fourth quarter <unk> tobacco technology of loan facilitation model achieved significant growth as a percentage of new originations on a risk free terrific service model, which 50% of total new originations for the very first time, we are creating a comprehensive technology service system.

That will all aspects of customer acquisition, and the operation, enabling financial institutions to immediately and seamlessly integrate with our system on the spaces for quarter platform revenues were $720 million, an increase of 232 per cent for the full year of platform revenues reached two <unk>.

Billion, an increase of the 150% and increased as a portion of total revenues for the 17, 5% versus seven 7% from a year ago with unusual income.

This is the one I spoke of the tip of my door yeah. The other a lot recently.

As of the Gullwing I dunno, whereby the sense of I E longer he knew the Chinese.

<unk> two of them at one P M.

Obi centered on top of it and this is.

So all of you about you're familiar with all of the answer.

And on what well see the oil who bought the ocelot so on Saturday of the Cingal. He had the NIM on those.

The other things on the old pool with that are you getting your body told me at the end up but when the dose.

In the fourth quarter of motion generated loan originations of $53 2 billion on non-GAAP net income reached over $600 million and total loan originations last year, which $176 5 billion representing on ear on year increase of 40% revenues were $11 6 billion. We've also.

We recorded our sixth consecutive quarter when the new registered user growth reached $10 million. In addition, quarterly active users reached $8 2 million a new record high for us and as of the end of 2020 lessening as total registered users reached $118 million, representing a year on year of increase of 61 per cent.

So you're talking of it goes without getting too eager for the other you can wipe it off on June woman.

Well machine tells me the time, yet, but it's on women's absolutely true that up with one of the 20 women the signs of the gentlemen.

Could you hear what's going on.

On the turns on the old piece of news the other way.

The senior well quite so of course, the losses on the linker jeopardy of women Didnt on future Yeah. Johns team begin enrollment the hung on either the intent of anyway.

That was the result, I'm pleased to announce to everyone on the face of the complex macro environment, we successfully executed our new consumption of strategy.

Leaving once again good results, our two bank financial Technology services has achieved high quality growth, our two business products the airplane.

<unk> and other new products of rapidly gaining recognition and opening of new Avenue for growth, which will continue to firmly establish our position as the leader in the industry.

Well of minutes, Suzanne Yeah, especially of Shah Joseph Gunnar you should do the tolling opinion of centered on more of the other New York.

Turns out some of the.

And Youll see the women children talk on the phone here, Yeah theory on anybody on the toxicity.

Our asset quality continues to improve our 90 day delinquencies declined from two 6% in third quarter two of 195% in the fourth quarter new loans made in the fourth quarter are currently exhibiting even better levels of credit quality than the loans made in 2018.

You know could you give for quite a little part of that it's also the woman I apologize I think of isn't that change at the board in June Tony The O U.

For those of you think of it and you will find this on 2000 shopping.

One of course, I think of any woman talking Joe also the new Asian shelf as will the could you for what you were seeing him jumped on and I'd say, it's you know could you mean, the Chile, that's useful could mean anything yet so I'm gonna gains of 15 on it you know the times of California Chomping at the Inc.

Couldn't comdata sort of Antioquia.

Even while our financial Technology service business continues its rapid growth and development. We're also establishing a new consumption ecosystem and expanding our potential customer base from the 120 million for the 500 million new consumption consumers our business scope will expand from installment loans to cover the larger.

New consumption market, we will establish ourselves as the new consumption digital technology service provider and we have confidence that on many years of accumulated technology capabilities and operational experience in the financial technology sector will ultimately enable us to find opportunities and succeed in the larger new consumption market.

Yeah. The way you usual pace on go to any of them, but I'm going on well.

Hi, Ian somehow go GA until the hindrance. So those are the haynesville kind of year.

Being based engine so the teach out how you share where it hurts you yet share or show up a ton of useful my own most of the pendulum sundry and so on here well.

Well, maybe the Sunshine, so yeah, Joey talked about which of them I apologize.

So again.

<unk> got the conduct way more of it you got turned on.

Yeah of course, it has already established working relationships with hundreds of merchants, including movie theaters restaurants shopping centers on hotels totaling over 10 different industries and sectors and has been recognized by 17 centered on industry associations and the consumption documents on proposals my is now online and operating within a bunch of other ecommerce platform.

And we estimate that on the first month, we will generate approximately 50 million in <unk> with strong potential growth in the second quarter.

So you can't hold what are you seeing the tussle bushel or may it kind of on the current orders are not in two quick easy doorwoman chunk of that tends on so you ought to do something else yeah, well, maybe it's on couch any of them will be also of the I can sort of I thought until one day either.

Earning enough and good day, you got the arguably more well maybe the downturn.

But I'm just listen loyal.

Following the pandemic. The economy has continued to recover and grow rapidly and we now see even more growth opportunity based on the strong growth on improving asset quality that we are seeing in the first quarter. We are raising our full year 2021 loan origination guidance for $240 under 50 billion representing on year on year of increase of approximately for.

The percent versus our 2020 numbers.

What's the enrolment of the sample all cracks that Goldman franchise out of interest in Asia.

Yeah.

Thank you Jay and Hello, everyone I am pleased to announce other we have once again delivered strong results in the interim.

At the time I will not go over line item by line item of our financials, while more detailed discussion of our fourth quarter on full year plenty of funding results. Please refer to our earning press release.

Other operating revenue reached RMB 11, 6 billion for 2020 on the credit oriented service income reached RMB seven 5 billion platform based service income reached over RMB 2 billion, representing the increase of <unk>, 150% from 2019.

Net income was RMB nine 3 million for 2020 fully diluted adjusted net income for the corner of our ads was RMB two nine per se.

Our operating leverage operating expense as a percentage of average loan balance was $3 one per <unk> for the quarter on and now with.

Tightening marketing advertising G&A and R&D was 7% one 2% for Samsung on the five five of the average loan balance respectively.

As Jay mentioned, we currently have 180 million registered users on our customers with credit line reached $27 7 million.

Up by 43, 2% weighted December 31, 2019, we acquired of nearly $6 1 million new active customers in 2000 in 2020.

For the.

Last quarter, our average tenor was 12 months, our nominal APR was 16, 1%.

Next we will discuss our credit situation.

Well that's the.

Yeah on content.

You've got the other things I hear a woman sorry of unintended.

Women you another day.

All right.

Youll recall, Linda you got you got the Yugo.

You've got a hold of he said when do you buy the tier two on to choose houses the until the year with a new way. So as one of our Council will then close the doesn't go see on order with us.

Took always on so not all of them in the year, where the economies are tied to equity.

I know the triple double of mentioned until the time guarantee of highway the gotcha.

Why don't you go you kind of year well no machine the good as a function.

For the other two.

Uh huh.

I didn't hear sorry women to the plays on that way.

For the kind of existing block.

As of day sales call. It go away and the autoimmune the commodity yeah Youll sedonia. Another good the Eagle gold all of the 10 year type of a bit on total debt and good attach and that's been good for example, I need high yields and good day.

Could you from in the Asia is the thing yet.

And then do you agree that you don't get larger.

On a same Chinese element of the Asia, Felicia one of the Asia, Jim Clemmer.

I'm also pleased to announce a management change right now.

<unk> has now been promoted to senior Vice President in charge of new business initiatives, where he will hand, the various new initiatives as well as overseas business.

We strongly bank Ryan for his service to our company and we feel that based on his personal preference and desires. He will be able to meet the challenges and as new business responsibilities I also like to introduce Mr. Chao.

Who has decades of overseas experience as well as domestic experience and the credit industry and has deep experience and knowhow when it comes to credit scoring risk control and asset management net.

I would like Mr. Young to discuss our current credit situations.

Thank you Jay for the introduction.

Continue our stable credit performance in the quarter in spite of the challenging conditions in the patch here in the market our credit quality continues to be high end with the within expected levels and we fully expect our credit statistics to perform well within expected levels and to improve overtime as Jay mentioned, our 90 day plus delinquency ratio declined for.

On the third quarter to $1 nine 5% in the fourth quarter, and we continue to see stable or improving credit performance as our lifetime charge off ratio has stabilized. In addition, our first payment default rates for new loan originations have been at low had been below 1% for the past five months now and our one market enquiries for our key paths.

Vintages have peaked.

The result, we fully expect our credit performance to remain strong stable and improve in 2021.

With that I conclude our prepared remarks operator. Please proceed with your questions and answer session.

Yeah.

Ladies and gentlemen.

Now begin the question and answer session.

We wish to ask the question. Please press star one on your telephone and wait for an H B announced if you wish to cancel your request. Please press the pound for Husky.

Ask your question in Chinese if he can then Connie repeat the question into English.

Your first question today comes from the line of Jackie <unk> from China Renaissance. Please go ahead.

But you keep.

I'll go with the women's you're waiting on what she Daniel the Subtleties Challenge Gotcha.

The motion, calling you woman the cheap.

Chico guidance, no kind of them in the C&I.

<unk>, we are the production of that vis vis the equal.

She goes on volume that you've got some jobs on the shuttling shall take hold of the Chico's you don't need to.

Ocean on the.

One of you should she goes it's actually the.

Contributing to the whole lot you for the taxi teach all else equal.

Chico's on gross debt you can guide.

The challenge easy to the calendar.

How would you put the money.

Josh.

Think of that business the dream that Chico.

On the view of it from dropped in the operations Yeah.

Yeah hold on one he has helped me Jim glut of switching.

On a condo.

When you touch on children that quality, but Jim glut of honey.

Thank you Paula on Chico's Chico's see some fault zone, Chico chico's muscle function of pronounced it sounded again of hunt shoot for Shlomo If you go downhill.

Quite the woman channel equally Michelle Ah ha.

<unk> got with some of them and they go to Hong Kong for sure.

All of these kind of glad you free on television dominicana ecosystem on the Qualcomm, So you're kind of on their shoes that you should potentially on I'm sure.

Thank you.

<unk> on the ship.

It sounds from what you've got to continue on a woman so actually for the phone call on clubs, which actually don't see quite the equal.

On the T mobile.

The issue.

James on the pinned on box on the bulk of them engineer into each of them have been a swath of the equal mobile.

So I won't translate my questions.

Thanks for taking my questions.

So on for three questions on number one is about the hour.

On gross guidance.

I felt that we are guiding 1% loan growth for this year just wanted to understand the key drivers behind.

And we actually missed our guidance within two months, so just want to check the.

The first quarter of trend regarding cause on gross and also lumpy check on what types of loan balance growth.

According to our 40 per cent the volume guidance.

And second of questions about the <unk>.

Nation, we observed that the recent.

Document regarding E strengthen the regulation regarding of the college zone.

So just wanted to check on what is the impact for us because the.

The documents and she mentioned that the third party cannot.

Direct the college students I think to the licensed financial institutions.

And Sir what changed regarding our asset quality.

Because we mentioned that we tried to maintain a high quality growth this year so on.

Just trying to understand what the what he thought of what is our risk mentioned strategy. This year.

And also what is our vintage small.

Targets.

Thank you.

For the whatever goes on in the.

The tier as well so.

Oh, well, then somehow women and the guidance for you between the woman.

So the Utica if I'm in a M.

Well good day youre going to cause all the types of.

As a kind of one of the Pennsylvania.

Plenty of skill of the technology.

For every one of antenna so the Shelby.

So it remains central to the genius was highlighted sensor since interest on it turns on a timeline so the central Hudson for their use.

Uh huh.

So Tom the two Tom Npls, the only available there most of those I don't know the Iqos of animals for me when we kind of talk to instead of another two diamond because of like what I typically say such as in the.

He said the NY the man Todd Heisler weighted.

So again, what an increase of about what elements of a woman kind of loyalty on woman of the question on most of the chairman of the two.

On the order for that for the woman.

This was on the way.

So to the tune that anyway cutting of hip yeah. So Tony here total of the towards the Oncotype alcohol on a common come into the day, let's end on the Columbia debt was although you didn't the USO.

So one of my interest.

A lot of them that you got to you got me I was one of the other two whaler.

I think the element that I that I assume that does not materially.

On the <unk>.

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Glenn Junior M surgical dichotomy.

Two of those with you the tender the Eagle got 10 of that kind of woman the agenda on the Sudan.

The Tianjin Eni those of <unk>.

So those are all women condo, one minute and good day.

Yes, so again that although that is the the way.

So all of them have that kind of the shock.

Stockholders of new collection, so it's on Tvs and good day, you go sit on the dawn of Beijing.

Hi of women's would you say easier towards the other things on it and got the Chooser threshold of woman.

Colorado.

Kind of on a woman sorry.

Union and then go to tier two.

Two of Talc all of you go down the Hill guidance. So you guys are on it you got to Cleveland.

So James I'll answer Jack on your first couple of questions.

The first question on wire, where you have raised guidance well, it's primarily due to two reasons. One you can say as a macro reason or high level of Lisa. The second one you can say as a micro reason or reasons, specifically attributable to us.

Our performance first on the first waves that we're seeing right now of very very good and positive macro environment and in particular when it comes to the regulations on the regulatory environment that is increasingly stable and also increasingly moving towards a favorable direction. While there may be some announcements that same negative to us.

We do see that as of hope what is happening is that it is primarily impacting the much larger players and it's primarily aimed at eliminating the much larger co lending model for us.

Of the model that we use the loan facilitation model.

We're seeing what we are hearing is actually quite the opposite that it is actually being recognized on increasingly recognized by the regulators as a favorable part of the entire environment and of course that is the only model that we use.

So, hence we see an environment, where the regulatory environment is increasingly stable or even favorable the larger players are in turn also being constrained because of the co lending model and hence this is generating tremendous potential opportunities for us. So hence we feel strongly that there is going to be new additional growth this year.

So that's the macro reason on the micro reasons when we look at on our first quarter numbers on how we have performed thus far in particular compared to the fourth quarter of last year, which by the way it was the record quarter.

And actually we see very very strong growth and not only do we see strong growth. We see in fact year's to date of some of the best growth if not the best growth ever that we have the experience and in fact this extends also to our asset quality, which we can see is among the historical best and May impact even get better so.

For these two reasons, one again, the larger environment or the macro environment, and particularly the regulatory to our own recent performance, we feel strongly about our ability to raise our guidance.

The Hollywood I guess, a woman the entering and bonuses of the genzyme well maybe tier.

The other than other.

Some of it you can calculate that that was the answer.

So with regards to the specific loan balance we feel that it will probably be something like 25% year on year of growth in loan balance.

Adjusted <unk>.

Well I mean, it's really installer channel.

The good of England, the you've got Hamzah, so well look one.

The weighted on not just the do you intend to sort of actual physical points of the that's.

So on women's IGN chairwoman of Yoplait Honda fit on the Jos.

You take a quality issue I think that the data for June will then the equity.

So we are of the claw back of troubles with the once you've got the whole. So other circuits until you see a woman of critical back two months ago come on his own cool well most of it I'd say, it's sort of the linear and Tony on yes. So the auto or do you want to go yeah, Dovetailing saga in the sense of the Asia simple.

<unk>. So let me put the elements of opens and other yield was the political to and Ted on it you're going to be on file so on.

Todd on your income I guess, so amongst Florida because of the loans you got well, maybe if I go on the Coco as Hugo issue, that's sort of half and good day of Hugo show.

No. That's good of you got the <unk>.

So on one day you shipped until the Wassa.

So on the second question that you had Jackie with regards to the student loans and the impact from the recent regulatory announcements well as you know from actually many years of covering US. This is nothing new in particular this is something that has been out there and written in very very similar ways of literally years ago.

And as a result, you can say that we have been preparing since years ago and of course, the banks or the.

Institutions, the actually approve the credit card.

It needs to go through their system and hence we're already compliant in many ways on this so in a lot of ways with regards to the request or the actual details of the proposal and how it's implemented.

Very much within that system and range already now of course, we remain into make some possible adjustments.

But primarily the adjustments will be made on a funding partner side and we will work with them to make these adjustments. However, I think we do want to emphasize that we expect very limited change or impact for our underlying operations as we continue to work with our partners on instituting the appropriate changes.

Okay.

To answer your third question.

As I mentioned in the conference call hours 30 days, plus the 90 day, plus delinquency ratio continue to improve our vintage delinquencies.

<unk> also been decreasing.

Over the past couple of months and our day one delinquency in the collection performance have also continued to improve.

So we believe our current credit performance, it's a very healthy condition and we believe this.

Credit performance walk of support our strategic plan to grow our portfolio. So in the future. We think we will maintain a cautious approach.

Our credit performed well fluctuate within a very controllable and narrow range and as our new business continue to grow will attract on.

Lower risk customers to our portfolio so our.

Portfolio risk will continue to improve so our target.

If I have to give the number I think I would say.

On our vintage loss on target will be around <unk>, 4% for the year 2021.

I'll keep any type of accounting.

I think of engine.

Yeah.

And your next question today comes from the line of Eddie Leung from Bank of America.

Ask the question.

And plenty of time day seeking new indefinitely.

The only on the win T Sharma from <unk>.

The deep of a share quantity.

One woman.

Well, then take the CMI whole food.

Some of them I will share our country to eat all day.

Sure Tom.

<unk> thousand one each on for sure.

Each widen the end.

The Eagle.

I will look like the Bon Jovi pop Guy.

The post op share of cut down a 20 inch it doesn't share my hope.

Quad.

Downhole the AGA.

One key tier one you want more money funds one day, you got market share.

I can tell you it hit all of which I was just to widen the end I E.

Kind of I'm, sorry, it's on the loan growth I pass the true town and country of woman.

Finally on the most of it and I'm talking of woman, that's how I take great Yeah E G.

Curious on when you want to adopt guy.

Jim.

Oh sure women the solar roof.

Tom cash you've got the he is asking for.

I'm, sorry, I thought two fairly quick questions. The first one is about a buy now pay later on model what could be the contribution.

For from <unk>.

<unk> are now.

Now paying later for.

For the full year loan growth guidance, and then secondly about the of public share range model.

All of my debt effect to take rate and hence the outback for new growth for 2021, I think of it.

Yeah.

Although as you hit on what else might compare in exchange of hopefully the Lindsay.

I hope on the Wilmington for us.

We're looking at is obviously the attention of Melissa has the.

South of as I mean share the whole the whole some day life that flow.

Let's we'll pay that down at the time the one woman.

The Guardian of condos. So it took almost sort of woman sounds getting the whole on the wholesale.

So the other yogurt, the finance sales momentum and so sometimes the EBITDA will be doing the negotiations youre going to put mobile.

And what other which I went down the way more.

No.

<unk> had for the assembly of the Goto tier so the woman.

I feel so again I can't think of the year, we're true to the ECS endoscopy on quality and Quad play of Goldman technical sooner than the other either of you hit sort of at a total of yoga.

So women so it's all women female 10 day.

So hopefully within the year without the.

Family of China in equity.

The way you're going to see the attention of Melissa social essentially the feature that most of the thing going to tell you one of the WPS.

Yeah, so the good enough.

The pace of late so the total you've got a patient that had a value so as a woman timetable on when that kind of genius, but on yogurt.

The other Danny we're kind of in the kind of ended the year with the thing.

So.

With regards to your first question on the buy now pay later product on my other products well as you know, it's a totally new models of different kind of model, where there is no charge to the customer, but there is a cost to the business, which no doubt they'll make back and we're obviously very very pleased to see all of the positive.

Action from our customers two of this product, which is why we expect due for the mill.

And <unk> and the very first month now that said this is the new product and this is still very very true.

So it's hard to say what it will do and it also depends on how things develop and depending on how things develop we may deploy certain resources and commit additional resources to this product which of course, then in turn impacts as potential growth. So there's a few things going on here in the.

Hence the it would probably not be appropriate for us right now to give a full year number on this now I think it's also very very important to point out to everyone that this product similar to what you would see if you look at after pay in Australia Slash. The U S. This is not a loan product and that is <unk>.

By definition.

And by definition of actually mean by the regulatory authorities definition. This is not of loan product and so on that sense of.

There is no loan origination theres no loan balance so it is basically very different and hence.

It would not be regarded as if you will of financial product in the sense that you're used to looking at our underlying business.

But we are in the journey is a woman chances for an even.

Top of all our revenue share.

Yeah terminal goes through the <unk>.

Triangle of Jacobs J E T.

T go shoot of that net hit on the leap.

On the NFL on all women kind of way to check on the IV jamba attack on <unk>.

Take rating of <unk>.

Arun <unk> from here if I may have you may begin to amount of contour the sorry, yeah.

Coming away unchanged from 98 of them in Canada.

Come on quickly et cetera garage of leave and go along kind of where you'll go not on switch on the island.

Some of it I assure you of yahtzee and the timing.

Cash flow cattaneo on contextual approach of that is all your share of day. So that the issue shall weighted I think all of them.

So as that channel on kind of dos.

Again, the income on Toyota.

Nothing yet.

Well, you J J, the charcoal, which I would've changed out tier Levi.

I'm wondering if the contract out to kind of cash flow should have thought the weighted on more share that rent control.

Yogesh, if I can tell a lot of should yet so the other connecting and Jay the PDR.

We have put it on the on back of the momentum.

The cost reduction.

Google domains in the Ohio, and Thats, one day pay greater depth of Mcdonnell harken all of them.

Gambled on <unk> share you can travel to assure you book on your on either most of that you've got Javier market great.

So.

On the year of profit sharing our motto.

In the fourth quarter, we were able to do over 50% of our loan originations.

And the profit share and so this was actually very very rapid growth and the demonstrated very clearly our ability to transfer the credit risk to our funding partners and their confidence in our credit risk abilities. So youre absolutely debt by doing this and by doing more of this.

This is going to definitely impact of our take rate. Since this is a natural result of the fact that the financial institution of partners will be taking on the credit risk sort of handset they should be getting more reward.

Now that said, especially that given the fact that this is the new product. If you will and that you need to get more and more partners on board the pricing can vary if you will.

Because each time it would need to be negotiated and hence you would have a different levels so of Lincoln.

Expect that a more mature funding partner may get one pricing and a less mature funding partner may get a or demand a different type of pricing. So hence there is all of these pieces going on but it will definitely have an impact now I think within that context on having said that.

Last year, it was probably something like a 1% difference versus our traditional loan facilitation model this year.

We are hoping to the target to lower that so it should maybe the lower this year and also we made a control of the scope that we do the profit sharing to some degree in the sense that it may not grow as rapidly as you saw in particular in the last quarter last year.

Grow, but maybe not at that rate now when we come to the actual modeling of modeling purposes.

I think what we may be looking at is maybe something like a 50 to 100 basis points adjustment versus the old take rates. So thats, what we would recommend everyone to in terms of the adjustments.

Free tangential, thank you very much.

And our next question today comes from the line of.

Richard Xu from Morgan Stanley. Please.

Please ask your question.

Featuring the hungry for.

On a go to even the do quite well Yeah go ahead of shelving.

John can go you can do you know what your challenge.

Well, let me kind of out of taking the tier one P. M on your P&L.

Gotcha.

Core coach, who do KBR and one of them done anyway.

Uh huh.

Just huge.

You hear more share it with you Sean that we didn't have one here in the dark guy, though taken on the.

But you do hit me and that's one P M.

So with all of the hip BD can be found on schedule. She didn't want new dumps impact on you and Tony I'll get on the Ohio, and the only shifts you'd have that you don't want him on P&I.

Okay.

In June in Chamonix in order of junior Semiannual new ship wanting.

And the woman fab on churn kind of on the Highland <unk> share should go a woman, who don't count towards sort of the telco.

Turning them into a new channel Jacob a favorite of Murcia day quite a challenging day always hydro for well that's one of the.

Most of the two but do.

Do you go about the kind of target or the one hotel.

But those are some amount of that you've got obviously you won't go on the towards your goal of favorably.

Yeah.

On churn kind of I kept quiet taught on the on this yet.

I know of true tore down the ECT.

What are the type I know you share do you called for young.

Gotcha.

I guess I have two questions. One is on the client acquisition channels.

Any changes from last year is because you know there is obviously a lot of regulatory changes that impact of some of these major.

Platforms in the industry, whether that has changes.

Impacted the dynamic of the client acquisition channels any strategic changes of where I'm trying to make.

And secondly on the.

The profit sharing model what are the key institutions that we're working with and any potential.

Partners in the future. Thanks.

Well it does.

What kind of with us either with your portfolio total focus on the kind of changed at all kind.

Elements Union tenure in the Eagle Ford could of sapiens, while maintaining of the Holdco shaping the Shandong media team on that.

The until end of it medical critically them on a one time for the other Asia and the installation target of Mod target margin and Gotta Guava got off on the Union So on women junior and taken on.

Getting into an M. P. Three data you've got to be on parcels of molecules of women children on women that many of you got a lot of Copa So of women Chang and good day.

The new downloads in Ghana.

You go for the truth.

And so you're right on the.

The important.

Because the woman country on the initial GW you won't go to Jade publicly then they're going to say you're simply young so of women's another eagle will kind of feels it would be of other Antonio. So you can sort of you guys on dealer.

Now if you looked at the total I don't know what mentioned Holdco debt funds.

And so thats on the Delta on that day, the woman chart on the other day without kinetics of the door. There is all of them going to them is on the handover of the Asia.

The order of entire visual John joining the <unk>, so a bulk of it.

The history of entire woman contaminant goes or just the.

The common Palomar youll hold kind of on a women's and good day.

I want to get out of Europe, with Venezuela isn't that's on it.

So not just on free belden, the whatever task.

Which I don't know something of a lot of told on kind of the audience. The case that all kind of the virtues of the message isn't done that's of note.

Just kind of as I listen to other than the other you go.

Okay. So you've got to a woman kudos on that.

So those are the federal showing them the ease of done the Eagle Ford zone, So almost kind of opportunity on what does that stay with all the time.

Some of those working on quite a bit so on women capital you're going to the desert.

So why don't you listen to the Eagle cohort, Virginia or me, if I don't usually start out at analyst day.

The other than the OEM competitor you exactly the dog.

Sure.

So Richard.

Definitely right we've had some changes when it comes to the customer acquisition.

On the first question. If you look closely at what we did in 2019 and also contrast that to what we did in 2020, you will see some interesting things now as I think everyone knows in 2019 that was a year, where we spent a lot of money.

And where are we really began to advertise online and we acquired a lot of customers that way.

We set all time records when it comes to our customer acquisition in that year and in 2020, we actually came very close to our numbers in 2019, but we did it with greatly reduced sales and marketing costs.

And we did and also by reducing greatly our use of online advertising such as with the channels that you mentioned earlier. So we use a lot of innovative and if you will non conventional methods to acquire non standard the traffic and we did basically the same amounts of arguably higher.

Quality and much lower for us. So overall it was actually a very very successful year last year as we switched to these new non conventional non standard channels now as mentioned a lot of this is about strengthening cooperation on working with sources such as QQ music QQ video.

And what we would do sometimes is for example, if they refer a customer to us for a loaf of our card.

Then give of membership to these platforms. So this is the situation where we can actually go through a bidding or auction process as opposed to more standard online advertising and receive much more competitive cheaper of favorable pricing. It is also a situation on where it's actually a win win for all sides of the involved.

So hence we have deployed rapidly on this particular front last year.

Can see from the results that on a monthly basis, we can get 710000, if you will new customers from the non conventional channels.

The attendance at the in front of the Eagle, Indiana women more channel. So good afternoon. So the empower you can tell us.

Okay woman Gregg kind of.

The new controller to go on.

Most of the conduct of hinge so the woman with them on Angola.

Pick up on the consultation in the UAE.

The woman.

Momentum chico's audiences from insides and good day Dunbar most of the kind of a comment on Gulf of it on 10 to the kind of out of women's and Thats, the kind of the amount of the option for function so as of.

Thank you.

The change in not only on the wall you either turn column most of the paid on the monthly charge controllers here, so I'm on top of it.

That's also the led towards the goal of onshore you'll just as all women you didn't sustain a glimmer of why you thought that the audience on boneless ethical motors on the lingo for the Rockwell Collins so so.

So the units on as well.

Came from.

On the toll way since your last deal.

It will take the single Melissa someone mentioned that goes on as you go to also Youll HSN somehow focus of they can answer the.

The common condition of the quite a bit in Asia other than they say of consensus on here.

And the other you go you guys EBITDA so in that moment of Arlington of all the kind of woman.

About the new most of the lithium will take out whatever it is to the diligence.

So he didn't you better doesn't want mentioned net.

The other counselor.

Good afternoon.

Hum in the full Gen hooked on go to show you. Some interest you. They don't go for the Pinnacle. So all of the minutes I'm going to spend on Wassa.

JJ and HSN.

So on momentum that virtualization the share of course opened on the most of the let's say of <unk> with young women and once again on some of that.

Let's take the most of the just the woman.

Women with any of you said you are going in kind of a cut of the trenching.

Switching for cancer, the element to it and good day, you got to wait I wasn't going to ease of other.

Part of the that'd be the hottest issue.

Okay.

Richard So end of double checks, there a little bit on the numbers.

Right now theres actually over 20.

The financial institution partners that are working with us on the profit sharing but many many more of our very much interest in and I can certainly expect this because many many more institutions are many funding partners are very comfortable with our risk levels and have accumulated literally years of data.

On what we have done and the risk that we have generated so.

There is a very very clear a profile of the risk of our underlying assets and what risk are being generated so hence more and more partners on the pipeline and.

Coming on board being willing to accept the risk and we certainly expect this to increase in scale and ultimately of course.

The main better returns for the funding partners and hence not surprisingly for.

For those partners that are not working with US directly we're in the process of working with us directly yet.

It's safe to say that everyone is interested and is interested in taking a look now in terms of the types of of funding partners that are more active if you will right now it would be silly commercial banks it will be consumer finance companies, which perhaps is not surprisingly as they are smaller and if you will more dynamic and can move quick.

<unk>.

And hence we do expect that.

To gradually shift as well, but these are the types of institutions that are more interested right. Now overall, we expect the profit sharing as a whole to increase.

Also going to seek ways to balance of this and to optimize it and also experiment with new types of funding models to reduce our overall funding cost. It may be a profit share. It may be non profit sharing maybe some type of mix in between but overall, yes profit sharing is definitely going to go up.

Alright, thank you.

Your next question comes from the line.

<unk> from UBS. Please go ahead.

Yeah.

Okay, Great and then go on.

Oh, Yeah, Glenn tier.

Well you'd say you go deep channel to now on Monday.

The PR, maybe we can always and knowledge from team of whole shoot you got that one so some sort.

Wavelengths of unsold.

But we'll change for you guys from out of shape.

Oh, yes, the whole shebang.

The meal.

Oh no.

How do you go into the client you spent most of the day.

Great.

How do you on so you could see it would be true sounds good.

Got you on please go on.

On the team kind of equation.

Okay great.

For instance.

Your host you take the most of the two wage simple way weighted.

That's true.

She was trying to make the assumption.

And so I have some question first the question is on the outlook for pricing.

Pricing on new cleaning costs.

In the north.

The non API.

On the Calgary from that going on in.

Q3, so I'm just wondering.

What's the outlook for the pricing going forward.

What's the current level of operating cost do we have room for whatever.

A decline from the cost.

The second question is on.

The takeaway for the risk sharing model.

Things like the pigment for midstream has declined somewhat from.

Q3.

So I'm wondering what's the reason.

With the takeaway recover back to the previous day between Q2 and Q3 last year. Thank you.

Well just that in China.

It took him and he is on the.

The menu and Guy, it's only on what's up with that.

The way you're going to finish out with me even at the convention Chunghwa will know may loosen that angle of mentioned tungsten icon cancer, you've got yields of the Gulf in the LNG nothing had mentioned as part of silver.

One of the yogurt, we kind of come up with the tank she doesn't go to EBITDA.

You got it.

<unk>, the which will put us in all the way to go.

You can actually you choose.

Women Lugo of minimal of Orca encounter the enchant not hinder you from kind of injected high yield yoga for machine that you might have gone on Wilmington went on to the kind of woman of the way. It on two new board that centers on iOS and the other geological.

And once you've got the kudos on the Mayo team for the Asia is also one of the way that <unk> of the woman that's been going for you guys in the mainland.

The way about so the shelter either you go when the AMA.

So on pricing I think J wants to emphasize there's two perspective overall.

One of the world, that's a little bit longer term and the second one that's a little bit shorter term. So first with regards to the slightly longer term outlook.

Generally as you know we target a very high quality high growth a good cohort.

And given that this is a high quality goods and high growth cohort of maturing and improving credit quality over time.

Rates naturally will decline over time.

So hence the over the long term, we fully expect the rates that we charge to our customer over the long term to decrease.

Now short term.

We look at the current situation.

There is no new if you will regulatory requirements of there is no new guidance in particular on this than I think at least for the current moment you can expect the.

Interest rates that we charge to be relatively stable.

For our clean from the and I'll hop off of firm takeaway. So day download condo total total.

The UN encumber non that's the diesel will flip the San Diego, Charlie Colligan, Oh, gosh, it's only kind of on accident cheeto dominate the income.

From the <unk> of the outlook.

So should the here's the whole year.

Good day the.

Todd I'll do the.

Do you want to go on on how many vehicles of the put on the trolley out on why don't you see I believe on share.

Our children, so each of that surgical oncology share.

And youre going to weigh on how does the gene.

Which is again the intellectual how that happened.

For the team, which of which which are dragging down the channel. So each other so which all of the Guardian junkies of the income by one week on top of that.

TNT for let me assure if we kind of income of GTR has all of the to the future.

Fair enough takeaway that the debt and tax you can add to one of two one element of for everyone that I'm going to be these acute on COVID-19.

John.

Darren you took on some of your China for Qiagen.

All of them and the.

After the show al on a price of the choose.

The non interest on the top especially in Colorado children on sort of thought that's such an important new knock on non jgr.

We're seeing the up of who are using the <unk> shoot.

On the hook without it.

On the time of the meeting.

But what have you been of course on potential utility in quality of incumbent young males of a deal here.

Hum in Cuba.

From a technology.

Quasi equity more of Libre I think part of me economics total booking on the card are you setting yet cash at home.

At the end margin, but at the end of Hologic of passion that Judy on time.

So regards Alex to your second question on the profit share of intake rate I think it's important to note that there is all of these things against the profit sharing ratio the take rate the negotiations there as well as that of course, the underlying cost of capital now for the fourth quarter, our underlying cost of cash.

Probably increased slightly from seven 4% to about seven 7%. This is in no small part due to our continued strong growth and as we grow of.

Of course have to source of additional institutional partners and unfortunately in the fourth quarter for a variety of reasons the bigger institutional funding partners.

Have had certain limits or requirements or otherwise if you will so hence the funding was a little bit tighter in the fourth quarter and we had to get other sources, which then impacted our cost of capital.

It was for growth reasons of your well that some of these things are curved now longer term zone.

We fully expect the cost of funding to decrease and in fact the.

The longer term extent.

This year. This year, we certainly expect the cost of funding to continue to decrease.

Of course, we have to balance all of this with the profit sharing.

<unk>, which in turn reduces profitability also of course, as we introduce new partners and weather as the funding partner.

Alternatively, introducing them to the of profit sharing model. This may require additional negotiations when it comes to the economics as they are a new partner in one way or another which of course may mean that we need to give up some of the economics in order to gain them.

And getting their trust initially as a partner. So theres also as these types of ongoing balances that we also talked about earlier and also involving the different models. So hence there is a different complicated things that we were going on in the background, which I think after you heard all of this you understand fully how.

It can be nuanced and again complex.

On the equation Thanks management.

Next question today comes from the line of Ethan Wang from CLSA.

Please go ahead.

Excuse me.

Julian the warranty.

G M y.

Finally in the east.

For sure.

On <unk>.

Sure Tom.

Thank you for pushing some common xiang.

Yeah.

Thank you.

Some job losses.

Jordan.

Most of it.

The woman.

Sure.

G M O J.

J P M.

Just wonder if you go on with.

The language you see.

Hum.

To go on change in Baghdad from financial guaranteed royalties.

She knows she should be on partners to share.

She's got Washington, as you can see.

All of the uses.

So I have two questions on this.

Question on the P M modal because on this model.

Most of the time on.

For needs to pay the merchants for us.

The fuel.

The pay maintenance to the pension and day to follow from banks.

In order to do that so does that mean, there's inspiring model more.

For the future second.

Second question is regarding non 910 months of change in fair value of the financials NTT Ltd.

All of it.

Water when you look at net debt.

One on <unk>.

Can you kind of describe the hunger.

On the loss in accordance of just wondering what he can do.

Thank you.

The other acquaintance.

Hopefully the payroll.

Let's switch M wasn't working for you Tony.

Out of the yield is Hitachi so of women 200 per year, where it was so the total and good of you took the number.

So women calculate based.

Non-GAAP margin people.

The panel at the center on with him. He is on them just for the yogurt on tissue Youre. The sounds good I'll touch on it but I can tell you that's invented the downturn.

So the people.

Hold on just a soldier.

Some dascenzo until sort of channel magical moment capital, maybe one of them.

So some of the panel.

One of them on one of your bank financing.

So it is a bit closer push other credit and let's assume that the materials Chunghwa telecom part of that he was on a kind of your thought on wassa.

The other than just a little more so that the mileage on most of the largest the woman.

Tirelessly Sungard sungard.

Ill touch on the $10. So that's not the way so that's the way.

So in total of one 1 billion of shy on that so we can fund the bogo.

You put on session for Yale current so you said you go how much is common southern down at the end.

In total on top of another in total financing golar channels of the pumps on the I'll just under two years ago, but I didn't hear the wavelength. So as a woman the sales I think of a year or so of Tayo, let them do that <unk> got a pulse on the dose of <unk> golf on the Mcdonalds on a subway the.

We have ample of your length of the tender that you guys.

And sometimes you know the general so there's all kinds of other than let's say on got it goes from here.

So I think I'm eating of the whole bye.

Buy now pay later.

Motto as we emphasized earlier of this is very much a new model and a new product. So there is definitely a lot of moving parts and different things going on and also for working inherently with different models of the well.

And right now we're seeing is that we can give the merchants and the vendors are two choices or rather they themselves will take on the two choices some merch and essentially if we direct and have the right customer centered them, they're totally willing by themselves.

To take on if you're aware of the capital requirements. They can basically.

Len for the lack of a better term.

Or they can upset the installment payment over time by the of customer and I want to emphasize a little bit again of the lack of of better term earlier now other merchants.

They want the cash immediately now but of course do this buy now pay later transaction, we generate on account receivable. So hence we can work with.

<unk> financial institutions, otherwise to have the receivables financing or two alternative we are set up other structures.

As mentioned earlier, the new model, it's very dynamic there's different things going on I do want to emphasize that again. This is the part about for the lack of a better term.

This is not a financial transaction.

It will allow for the <unk> transaction.

Just like after pay et cetera. So there will be no credit record. If you will for the customer it's not going to go to a database or anything like that so hence it's something fundamentally very different.

The other one here Jonathan on the neutral on achieving out of China initially for the purchases at all.

Jay.

Intention of in fair value of financial guarantee to hit the <unk>.

Sure Jimmy interim good on <unk> synergy of the OEM.

On what you've drawn on that goes on EBIT on how would you couch on EMEA share.

From the apparel Mitch had no drama on the Eagle Quake ish all in yield on the derivative of guaranteed from Walsh of GDN Global media cargo on canola.

As you can hear the diversion from the moisture GTT hit on tier one monthly the cabinet.

Hopefully the illegal.

What are the margin.

Yes, so for the 700 million number of Eaton obviously.

Obviously, referring of course to the full year of a number of the change in fair value for financial guarantee derivatives.

I think basically as you know we have changing.

Financing model risk model et cetera model of that in the past in the larger modeling sessions withheld for everyone in the past.

<unk> outlined Hollywood work, so of hence as our funding slashed risk models continue to change naturally the mix will change and the line items will change as well because as you'll see with if you will the profit sharing lines et cetera.

In the future the want given we've done this in the past and it's probably more worthwhile to do it that way.

I'm happy to schedule, a more detailed modeling session with you offline to go into how this will work.

Got it on my apologies for that.

Thank you for print.

Yeah.

Your next question today comes from the line of Stephen Chin from Heiko on International.

Please go ahead.

Hum.

Oh go on to use and enjoy yourself do you go to the quantum you Sue.

Most of the Nicole I think of a follow up.

So on carrier.

And then day.

So she thought you'd be able to <unk> NAND.

If on your knee being the time be wage.

Wage he talked a bunch of Wuxi.

Good day you Baidu.

Taking a contract between tier I was going to take range kind of.

When you say risk.

So for me.

I'm not sure you hold true the Jinan and they go for the knee.

On the take rate the number wouldn't go white sheet of one being the highest she wants on Joe on Shopko excuses for Danielle <unk>.

The other thing I don't want to you want wasn't new to you saw the.

A woman to other offerings.

On the menu or leeway Lim <unk> Guan Yu for icon.

So on why the common use of KPN.

It's the way the told you the tangible bay tier that I'm.

Sure Andy the Shaw with the odds of a dose.

On what Dr.

Manuel Chilean lets you do some tier two city to tone kind of linger. So don't see those kind of go to N. G. On the Ot assume on my kind of neither unless it would tie type on.

Sure.

Rockwell Manhattan on woman the tip of the ichor.

G suite of G O T E.

Many of Eugenio.

The campaigns he's the guy behind you do you think of J&J.

Tim on the chance you turn them on those.

The agenda, you answered some of them might have.

Yeah, I don't think that's how old you Nancy.

The tier two woman told me you got to do do yoga and so your total tangible signs.

On one Joe.

How would you want me to share.

Just from a share.

Share of woman to all day.

The tangible be hell of a wall, how the dual wall most of it was too high.

On balance tail on Pi.

I see I see a woman CEO.

So all of them on to our model the sale I should share. It goes all the way the tangible Beijing on pipe.

I have two questions. One is a follow up on the profit sharing model.

I wanted to clarify two things one are we expecting that the share of profit sharing but says to you stay at around 50% for 2021, and what piece of our outlook for the take rate of the property survey business will that be stable or declining or increasing in 'twenty one.

Second question is related to two items. One is the change in fair value of long way of fair value change in fair value of loans and then the other one is the investment related impairment.

We saw that for these two items actually for the past two quarters.

The impairment net of negative change in fair value, but in the bad interest rates. We've seen debt you know these two items of indeed this is not.

But the months, so you'd be able to give you trying to calculate the in Pam and all of them.

On the negative change in fair value of gains.

Our money in the balance sheet.

I think that the you know the.

The ratio should be quite large so I would like to understand one has caused the negative change of the impairment loss.

Are we going to expect that to recur in 2021. Thank you.

Other quite dependent on the winter, we're talking with Asia, one of the interest.

Good afternoon of IP. This on the woman opinion claim.

Quick on the ASO.

Simple chemically via the yellow.

So within the Melissa.

Let me kind of on changed other than sort of the angle.

Tim on like on the could opened on most of the Chico total doesn't.

So as of women inside the banana business on the one <unk> credit.

Wait for the type of window versus what you all of what are the.

Now I'm going to kind of what most of the tier one city center EBITDA now genome.

Women two of them by the GAAP at AT&T, and you're going to wait so the total <unk>. So okay kind of woman kind of on one quarter of that afternoon.

The other than you guys. So EBIT in classes amounts. So no woman new goes whom you can consider that kind of you'll end the nurse's Hong Kong.

No way.

Good luck on bullish on the the Columbia now what do we will then depend on you guys.

The lithium from another takeaway of the somebody equates to PD negligible the sounds similar to any of you choose.

Okay.

For this year.

So while we're going to definitely see many many more of funding partners come aboard and accept our profit sharing model.

And we're going to see increasing numbers of that but in light of everything also are also increased scale inside I think at least for the immediate term right now we're expecting the profit sharing to be fairly stable. So maybe at around 50% or so but longer term. We certainly expect this ratio.

To increase over time and the reason why we're now expecting this to be stable is that we feel that we really need to see better and have greater clarity on the underlying performance and the profitability of.

And then to make the right choices when it comes to the balance of these things, but that said, we're pretty confident in the long term direction and the potential of this given that theres going to be more and more funding partners coming aboard theres more and more of funding available theres fewer of us there's more of them and hence we shall see.

<unk> over time, and ultimately improvements in the underlying take rate.

Grant guarantee of <unk>.

Valeo Naval work on hygiene backhaul on the continent, you'll share in NT dollar total Shanghai and the JV to get the entrance of adventure on lunch.

<unk> non mosquito <unk> key here just orders requiring the equal of them that holds true time equal.

Also non pass through the door.

The question of location the trade either because of that quite high on <unk>.

Shanghai on at that point.

The.

The arbitrage each range of hone <unk> imager here.

Ill go go the Nokia channel, maybe sort of halfway Domingo not to hit <unk> on budget here the shocking routine true.

It has been more half of what we thought but we.

The Gulf Congress somewhat challenged again in the eating.

All of them Sheila King will how much income so it's I.

And you lose all of them kind of hedging losses.

For now again on the right here, but I think the one hour of Maine.

The <unk> Shaw targeted with the way we may buy side that you can use your capital so on <unk> youre not wait I M.

Oh, not too hard for me in terms of the Tmall, so without either of them. Hugo you got you got you Mark Jacob will share you got on SEDAR orders, so you're getting.

The attrition rate.

So I think of for the two parks and definitely Stephen correct Us if we're.

We must understood you for the.

The first part I believe we address that when it came to the addressing the change in fair value of financial guarantee derivatives and I'm talking about the different models for similar reasons with regards to the second either of you mentioned.

With regards to the change our rather the investment related items.

This is actually related to a U S company relatively immaterial investment we've made in the past.

The company in the U S that specializes in making auto loans to foreign students in the U S and also providing other forms of debt now Unfortunately pandemic.

Pandemic has impacted as the company not surprisingly quite dramatically. So as a result, we decided to write off something like half of our investment in the third quarter and to continue to do that in the fourth quarter as well so obviously.

The details of this.

Yes. This is definitely not a long term thing and this is basically a one time item.

For doing that and say well you said Conan contract.

Bookings for Joseph Jolson, I Wonder just reported unique on the change in fair value of loans Joshi of your clients you see 10, she can one assume.

Assume on my mind that some of the Taiwan.

Can we get on order so much on leap in mind what.

What is the more what are you going on.

If you could change in fair value of loans.

Oh, sorry of student can translate that for the one.

I appreciate the okay sorry.

Sorry, maybe I didn't clarify for me I didn't ask for every Penny one of I wanted to ask about the day is an item called change.