Q3 2022 360 DigiTech Inc Earnings Call

Ladies and gentlemen, thank you first ending by and welcome to the 362 did you attack third quarter 2022 earnings conference call.

Please also note today's event is being recorded.

This time I'd like to turn the conference call over to MS. Mandy Dong IR Director. Please go ahead Monday.

Thank you.

Everyone and welcome.

Our third quarter.

Earnings.

We announced.

Earlier today and can be found.

Yes.

Yeah.

Joining me today.

Hi, Joan.

Mr.

Our CFO .

Yes.

Before we begin.

I'd like to remind you.

Our earnings.

Earnings Press release, which also applies to this call. We may refer to forward looking statements based on our current plans estimates and projections.

This call includes certain.

Certain non-GAAP measures. Please refer to our earnings release, Laura conciliation between non-GAAP and GAAP one lakh.

Yes.

Otherwise stated all bigger mentioned I RMB I will now turn the call over to our CEO Mr. Haisheng.

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Thank you gentlemen, and thank you to the edge.

Hello, everyone I'm very happy to report.

During the quarter.

So again, thanks, and good luck gentlemen.

Jonathan This is happening in the Congo.

First off or let me share some recent developments in the market environment.

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Calls with our core denim.

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Hi, guys.

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China's consumer finance industry has reached <unk> brown rapid expansion to quality growth in the past two years.

Thus far at Greenway.

<unk> has achieved substantial gains in preventing systematic risks protecting consumer rights and the benefits driving compliance business operation and promoting failed competition. This has created a healthy ecosystem or the development of the consumer finance market.

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Thank you Tien tsin, one Jamie.

Over the past two years, the industry regulatory framework gradually come into shape.

And the rectification project of the platform economy continued to progress.

Currency the regulatory landscape has settled down.

In an article titled strengthening and improving modern financial supervision population in the guide book of the 20th National Congress of the community Party of China. Mr. <unk>, The chairman of CDI RSV that financial innovation must be conducted under the prime.

<unk> of Prudential supervision.

Your impulse normalized supervision on the financial business of the Internet platform companies and the promote the healthy sustainable development of the platform economy.

This implies that the fintech industry enters into the stage of regular supervision.

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Thank you Michelle.

Since the beginning of 2022.

Macroeconomy and a colleague hometown pet food.

Pressure on China, consumer and SME credit market in terms of market demand and asset quality.

However, the market started to slowly improve in Q3 as we saw credit demand began to gradually recover and as a quality become relatively more stable than Q2.

Meanwhile, financial institutions demand for high quality assets continue to inject liquidity into the industry boosting funding supply efficiency.

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Now moving on to our operations.

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Given the macro environment with complexity and uncertainties, we maintained a prudent operating strategy and the leverage technology to drive quality growth.

Two our practical prudent and the risk management first operating philosophy, our business demonstrated resilience and the strength in several key areas. Despite the macro headwinds.

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Third we achieved solid progress in balancing growth with asset quality.

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The bank's asset quality.

In Q3, total origination and facilitation volume was RMB $110 7 billion.

31, 3% both year on year and Q on Q.

Ending loan balance was RMB 160 billion.

Two zero percent year on year, and 6% Q on Q.

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As a leading brand for credit tax service in China.

Our <unk> brand become more and more well known.

As of the end of June .

Cumulative number of registered user exceeding 200 million for the first time.

So cumulated number of users receiving credit lines and conducted drawdown on credit was approximately 43 million and $26 3 million respectively.

17, 6% and 12, 8% year over year.

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Since the Q3 of 2021 we have proactively reduced the pricing and optimize user structure in response to market and the regulatory change.

The decent progress in these areas effectively mitigate the negative impact of the macro environment.

And our existing loans gradually enriched maturity, our average price decreased slightly bronchials too.

Our asset quality significantly improved <unk>.

Delinquency rate went down to four 5% in Q3 from four 9% in Q2 and is still improving.

The M. One collection rate increased to 86, 4% in Q3 from 85, 2% in Q2.

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For many years.

Johan.

Cushing Johnson. She told me you don't put a semi lucci Doug.

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While upgrading customer base, we continue to optimize business operations on high quality users to increase their lifetime value based on our experience.

High quality users are usually more stable in credit demand and the repayments capability.

Therefore, they generate more considerable long term value for our business in.

In terms of key operating metrics the average liquidity lines per user and average ticket per drawdown in Q3 were more than RMB 14000, and RMB 8000, respectively.

93% and 39, 8% year on year.

The average loan tenor also increased to 12 months in Q3.

Roughly one month longer compared to the same period last year.

We believe that an upgraded customer base will translate into enhanced operating efficiency and a more stable business performance in the long run.

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Thank you Joe.

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On the CASM of ground as we upgraded our customer mix and accumulated batter knowhow about our high quality users with optimized the structure of our customer acquisition channels.

This greatly improved our capability and efficiency to acquire Targa users in.

In Q3, the number of new user with ground a quant July increase to 171 million up by 19, one 9% Q on Q, while our marketing expense remained almost flat compared to Q2.

Acquisition cost per user with granted credit line declined by 15, one 5% from Q2.

Meanwhile, we further expanded and diversified the customer acquisition channels by working with different types of traffic.

Including short and long form videos, social media search engine and boat the labor etcetera.

In addition, we improved our ability to identify users, especially high quality users and enhance the efficiency of user acquisition by upgrading our RTA models and jointly developing models with these partners platform.

Boynton empowered by our upgraded RTI models, our ability to identify device improved to 90% Nigeria present in Q3.

Our ability to identify high quality user improved by more than 20% Q on Q.

This greatly magnified and effectiveness of our online advertising.

We also applied such capabilities to other channels such as App stores.

<unk> will further improve our efficiency in these channels as well.

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We have at hand here with the <unk>.

As we continue to advance our Tam upgrading strategy.

Our capital light and other tap solution business accounted for more portion in Q3.

We are a tax driven company empowered by innovation with Sedbergh security in our DNA and is strong capability in big data and challenges.

We help financial institutions established their credit infrastructure and empowered them in the fall business operational flow with our big data analytics and Tech Solutions, Inc.

<unk> three <unk> related and facilitated under the capital light model and the other tax solutions accounted for 58, 4% of the total loan volume.

By two six percentage points.

As of the end of your weight, we accumulatively partners with 58 financial institutions under the capital light model.

We also refined and upgraded our fintech SaaS product lines.

We transformed our end to end credit systems into module like product based on functionality Adil.

Additionally, we know Ratably support a hybrid cloud model, where financial cloud story and the local deployment Wap site by site.

Featuring their hub of retail credit in breast Dr. Ross Brett in 20 days.

Online and offline coverage and system deployment in bulk compliance.

Our new solutions offer small and medium sized banks, one stop solution of transforming and grow in their retail credit business.

Going forward as we facilitate more transactions for a platform with stable asset quality and good track record.

We will expand our collaboration with financial institutions in depth and breadth.

<unk> will further boost the percentage of our capital light and the tap solution business in the total mix in the long run.

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Moshe.

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Somewhat in that regard.

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Thirdly, our funding structure and abandoned cart both improved significantly.

With ample liquidity in China's financial system this year.

Financial institutions have strong demand for high quality assets.

As a leading credit tax service private lender our assets are in high demand given our strength in scale data and the risk management.

These allow us to optimize the mix of our founding partners of them more flexible funding options and reduced funding costs.

As of the end of Q3, we partner with 141 financial institutions, including more than 10 joint stock Bank and the major ruler and urban commercial bank with over RMB one trillion.

Giving us a highly diversified funding source.

Hi.

All right.

Roughly 30 basis points sequentially to six 5%.

And we expect it to sustain at a low level in Q4.

We issued RMB two 7 billion of ABS in Q3 at an average funding costs up five zero percent.

As we continue to optimize our customer mix, our funding advantage will bring out more.

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Gentlemen.

Switching to Europe GDP Ingram.

Firstly on the regulatory front the recognition pro depth of the platform economy has entered the ending base, we maintain close communication with our regulators as we implemented our recommendation plan.

At the end up here right. We have completed most of the required a rectification of items and have received positive feedback from our regulators.

For the credit aided the reform or centrally and in Chinese we are in.

Implementing the transforming plans together with credit agency and our founding partners Inc.

In Q3, we facilitated the first launch in the new credit rating system and the blend Julien and received recognition from the regulator, we're now proactively implementing the plan.

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Here, let me provide an update on our secondary listing in Hong Kong stock market base.

This morning, we submitted our post hearing information pack ph IP short to the website of the Hong Kong stock exchange, we have taken the interest of our current shareholder into full consideration in pursuing this spacing.

We believe that we will be able to optimize our investors sector and boost our liquidity through the Hong Kong secondary listing.

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When it comes to how you're doing that with me blown to Jim for the survey.

While enhancing our operations, while always keeping in mind, our social responsibility.

Thank you.

Sure.

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Seven zero interest rate in downturns and Youll see all the different.

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Tons of our survey does it shouldn't hang it for strategic reasons.

Our mission is to enable a better life for people by providing safe convenient and inclusive fintech service to consumers and households through technology innovation.

Empowering financial institution, who has built up package solutions powered by our AI and cloud computing.

To improve the quality and efficiency of financial service.

With 10, Fintech services to consumer needs to be understood or.

Or are unmatched, while maintaining the highest vendor of risk management.

Aimed to make financial services accessible to all in a more thorough and efficient manner and to better serve the real economy.

I will mention shortly powerful relationship.

We paid only Samsung thank Jim for.

For you to even formation in them.

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Now Joe.

Jim's only been one year.

Samsung thinking June can shift in Xinjiang.

But bear in mind of our social responsibility by giving back to society and providing support to the disadvantage as part of our effort to drive raw revitalization in our common prosperity in China in September this year, we donated RMB 1 million tool Luo Chen.

And the MEO Autonomous County in NAND Province, the funds will be used to building the content into a demonstration model for raw revitalization.

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Shannon Greene CEO with his vision.

With Shanghai.

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The rundown and rotating the quiver when we're taking them on when they want to continue.

Got to my attention.

Looking back at the past three quarters, we navigated through a constantly changing market by <unk>.

<unk> and our product operating strategy, despite multiple headwinds in the macro environment, we achieved solid growth and improved our risk performance demonstrating the strong resilience of our business key metrics show that our business is on track and we are confident we will meet our guide.

For 2022.

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Good morning, Tom.

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And that dialogue remains with us in the future.

Thank you.

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Should have been that Michelle Stefan who can do that financially.

Going forward, despite the ongoing challenges in the macro environment long timeframe remain unchanged that is promoting financial inclusion.

Core technology to better support a real economy and create more value for society.

There is still tremendous unmet demand for credit from both consumers and the financial institution.

Based on our prudent approach to operations and our risk management, our business can ride through the current business cycle and capitalize on the growing momentum once the market recovers.

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People don't tend to Janssen.

Only under the prudent strategy, we can navigate the fluctuation and actually it's steady and sustainable long term prosperity.

<unk> will continue to generate value for our shareholders through our solid performance.

So I mentioned women our CFO Alex.

So you aren't going to work.

Okay. Thank.

Thank you Michele good morning, and good evening, everyone welcome to our third quarter earnings call.

Before I start my.

Regular update let me first introduce a new member of our capital market team miscarriage J T.

Recently joined Us as our senior director of capital market.

You will be providing valuable insights experience and leadership to our capital market and the IR team.

With our upcoming investing in the Hong Kong stock exchange, we really look forward to having carin and other team members offer better services to our shareholders and the broader investment community.

As John discussed earlier, we delivered another solid quarter.

Ranging micro environment.

From July to September demand for consumer credit through our platform grew sequentially each and every much although the velocity and the magnitude of such improvement or modest.

During the quarter, we continue to push for steady improvement in the overall asset quality.

Further engaging high quality, new borrower base.

Overall day, one delinquency has been steady declining trend months after much so far in 2022.

Against a difficult macro trend early in the year.

It was four 5% for Q3 versus four 9% in Q2 and further declined to four 3% in October .

The continued improvement in day, one delinquency further validate our strategy focus strategic focus on high quality user segment.

30 day collection rate also improved in Q3 and reached the best level in 2022 during the quarter.

We resumed most standard collection activity.

To the pre Covid lockdown level, which drove the improvement of the metrics.

Once again.

We were clear output, we see clear outperformance by new borrowers versus existing borrowers.

Total net revenue for Q3 was $4 1 billion versus $4 2 billion in Q2, and $4 6 billion a year ago.

Revenue from credit driven service capital heavy was $2 9 billion compared to 2.9 billion in Q2, and $2 6 billion a year ago.

The year on year growth was mainly due to growth in on balance sheet loan volume.

More than offsetting the negative impact from decline in average pricing of the loans.

Petro heavy facilitation revenue take rate improved slightly versus Q2, mainly due to lower funding costs and longer long tenure.

Revenue from parking service kept on light was $1 2 billion compared to $1 2 billion in Q2, and 2 billion a year ago. The year on year decline was mainly due to product mix change in platform services and decline of average pricing of capital light.

Loan facilitation.

During the quarter capital light loan facilitation, ICD and other technology solutions combined account for roughly 58% of total loan volume.

Given the still changing macro environment, we continued to increase the portion of loans processed through IC and other technology solutions to further mitigate potential risks.

These solutions normally have different commercial terms compared to the regular capitalized loan facilitation.

In the long run we will continue to pursue tech driven business model, we're striking a balance between various form of non risk bearing solutions based on macro environment and operational conditions.

During the quarter average IRR prices are the loans, we originated <unk> facilitated declined modestly to just below 22% well within the 24% rate cap requirement.

We expect pricing to be relatively stable for the coming quarters.

Sales and marketing expenses increased by <unk>.

Separately, 2% sequentially in Q3.

Slower pace of increase reflect our continued effort to improve the efficiency or effectiveness of our user acquisition system and drive cost efficiencies.

Please note during the quarter, we added approximately $1 7 million new credit line users compared to approximately $1 4 million in Q2.

Unit cost to acquire a new credit line user declined approximately 15% sequentially.

As such average cost per dollar amount your credit line also declined by a similar magnitude Q on Q.

As always we will continue to use lifecycle, ROI and LTV as key metrics to determine the pace and scope of our user acquisition strategy to ensure the sustainability and the profitability of our operations.

Overall risk profile of our loan portfolio continue to improve in Q3 due to the contributions from new loans from higher quality users.

But impact from macro uncertainty and the latest outbreak of Covid case across the nation, we're still somewhat visible.

Although we continue to take a prudent approach in booking provisions against the potential credit loss.

Relation of previous quarter's provision yield sizable write backs at micro condition improved Q on Q.

Total new provisions across four different categories for loans originated in the facility during the quarter was approximately $1 8 billion.

Approximately 300 billion previous provisions were written back.

With strong operating results and the increased contribution from capital light model, our leverage ratio, which is defined as risk bearing lung balance divided by shareholders equity was at historical low of 3.8 times in Q3 compared to four point.

Three times a year ago.

We expect to see rather stable leverage ratio for the time being until capital light contribution grow beyond current wrench bonds in the future.

We generate approximately $1 6 billion cash from operations in Q3 compared to $1 1 billion in Q2.

Significant sequential increase in operating cash flow was mainly driven by better working capital management. If you recall last quarter due to some COVID-19 related administrative procedure delays, we were unable to collect certain receivables in time those receivables or eventually.

Settled in Q3.

Our cash flow.

Total cash and cash equivalents was $10 8 billion in Q3 compared to $11 4 billion in Q2.

Nonrestricted cash was approximately $7 2 billion in Q3 versus 7 billion in Q2.

Last couple of quarters, we took a more conservative approach to deploy to deploy our cash in day to day business, mainly due to macro uncertainty.

Ideally a significant portion of our cash would normally be allocated to support the superior security deposit with our institutional partners or to fund on balance sheet lending in normal business course.

non-GAAP net profit was 1.04 billion compared to 1.12 billion in Q2.

As we continue to generate healthy cash flow from operations. We believe our current cash position is sufficient to support the growth of our business to invest in key technologies to satisfy potential regulatory requirements and to return to our shareholders.

Cortez with the dividend policy approved by our board last year, we declared another quarterly dividend of U S. Dollar 16 cents per ads for Q3.

Finally regarding our outlook for the fourth quarter.

Although we managed to deliver a solid operating and financial results. So far this year in a very challenging macro environment, we still want to maintain a prudent approach to plan our business for the near term, particularly given the recent resurgence of Covid cases nationwide.

And the subsequent restrictive measures taken by local authorities.

At this junction we expect total loan volume for Q4 to be between RMB, One O $2 5 billion.

RMB $112 5 billion, representing year on year growth up 6% to 16% as always this forecast reflects the company's current and preliminary views, which are subject to material change.

With that I would like to conclude my prepared remarks, operator, we cannot take some questions.

Thank you.

Ladies and gentlemen, if you wish to ask a question. Please press zero one on your telephone keypad.

Do you wish to withdraw your question you may do so by pressing zero to two <unk>.

For those who can speak Chinese please kindly ask your question in Chinese first followed by English translation.

In addition in order to have enough time to address everyone on the call. Please keep it to one question and one follow up and return to the queue. If you have more questions once again.

Please press <unk> one on your telephone keypad to ask your question.

Okay.

The first question comes from Jared Lee. Please go ahead.

Yes.

So as a consequence, which is over two <unk>, yes, it will sort of joining one study at all.

Goldman Sachs I'm, calling function.

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Call. It a dark lewinsky sanction and joins us from Coca Cola, Let's say women integration going forward can you work with them to have what's called a darn good job.

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It sounds like you're doing tornado Youll walk is answering you always have behold organically.

I'll just answer you guys out there who want to go out.

I'm sure you do photo for me I went to our total in Nigeria.

So kind of available for you on that.

Generally you're going to be a hard tissue.

Sure.

Okay I'll do the translation part so the first one is about the lowest structure of the origination volume.

So I know I noticed that a wave disclosed our origination volume of the risk management and staff and I was wondering if you could elaborate more about the growth trend and its contribution out of the total in the future and how we balance the contribution between capitalized and the risk management side, when we cooperated with our new.

Financial institution.

The first one and the second one is about the customer acquisition.

You'll notice that our cost control of selling and marketing expenses this quarter been effective and the average customer acquisition cost on the new users with credit line has dropped a lot Tokyo gave us more color on what had been done differently on the customer acquisition strategy. This quarter are compatible with before and what is the trend in the future.

Thanks.

Oh.

Yeah.

Good idea.

Glen.

Yeah.

No.

Hey, guys most of the balance sheet.

And in terms of Indiana DC.

Just on the going to the turnkey downward.

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Nila equalization.

Good morning.

Thank you Tracy.

Canada.

Capital allows moshe.

I'll pass it to Jason.

Moshe.

Thanks for that.

I'm with you.

Jason.

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Now on to him worsening put on memorial weekend.

Mitigating on the sequel.

Thank you.

Okay.

Okay, Let me translate a packed upgrading has always remain our long term strategy for our company in the recent year, we gradually advanced to more tax solution, starting brown capital like two IC two I am sorry models recently.

Going out a high rate new business model that provides both our leading credit tax system and the operation agent Survey.

All of these tax service caters to customers a customized needs of different financial institutions.

Got it.

In energy.

Jimmy on the demands of women.

Okay.

Hugo.

Moshe.

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In the cohort.

Cool.

Women young we shouldn't do it.

You can go to Moshe.

Little.

Quota Goldman alluded to here.

So.

Yeah.

Okay I appreciate that.

Most issue to that total.

In this year, we are exploring different models together with various financial institutions.

Going forward as we.

So it's more of a financial institution customers and transact more long bottoms under this new model.

But all in our our products pursuing higher take rate model and the.

More customers.

One woman turnkey suite with Utah.

Could you Moshe.

The pace it onto the team.

Yeah.

Okay.

See you soon.

Hmm.

I'm wondering maybe sticking with you John .

Okay.

Yes.

Emily.

Yeah.

You bet.

Jim could you most at Jefferies.

Hum.

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I think the accordion.

This new tech model cannot only boost our tap solution business portion.

Ben our business doesn't ability.

But also open additional markets for our long term growth.

Yes.

Declining.

Yeah.

Yes, yes.

Paul.

Yeah.

Yeah.

It's from Jami.

We are thinking that you kind of dig a huge cushion.

Right.

Ian.

Got it.

Sure.

Sounds good.

If you do Miss Jim when we kind of came into the league.

If I missed it.

Sheila Doyle.

The reason to our at the market position.

Effectiveness study around the end of last year, we spent a lot of effort.

Upgrading our infrastructure online customer acquisition, which start to bear fruit recently.

Johannes.

That should all they're doing well.

Yes.

Yeah.

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There's a whole bunch of them.

Yeah.

And what he said.

Asami.

The bulk of that totally.

Yes.

Yes.

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Yeah.

Thank you Michelle.

Moreover, we also further expands and diversifies our customer acquisition.

With different channels right.

Somehow when not only upgrade our online advertising channels, but also apply RTA model own App store channels and also we cooperate with a lot of traffic platforms, including a takeout platform App daus exactly.

In addition, we pay close attention to the market. For example, this year. There are there is a very popular mobile game in Chinese yards, Yeah on Wechat, we closely watch the market place that opportunity to acquire al good quality customer.

Good day.

What he has done well.

Elisa.

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No.

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Julian how are you good either portfolio down there.

Antibody.

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Woman Hudson's healthy.

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Women.

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Gigawatt Jabil jabil.

So in terms of an acronym I see youre going to see a woman.

This will mean civil unions that we will do that yielded a cohort cohort. Thank you Alicia.

Once you tender.

In terms of the judge.

Yeah, David to Bill and how that will be thank you.

Thank you.

Great.

In California.

Yeah Yeah.

Oh boy well continue to take the put that business approach and all.

That's long term.

<unk> value of customer in our operation.

Not only just care about the short term cost cutting.

Got it.

With that good quality customers will bring down cost and create more value.

Okay.

Okay.

Hello.

Uh huh.

Next operator.

Yeah.

Thank you Jim.

Next question comes from Hans <unk> from CLSA. Please go ahead.

I was wondering if you want if you will.

Joining me on the spot.

Sure.

Well that sounds good.

Do you guys see clients I'm going to talk to you Bob.

Yes.

And I'll demonstrate <unk> Atlanta.

Online lender that without equal Congress outfit.

So you guys know.

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Congress is asking me to ask.

Our sponsor.

Great. Thanks, good evening.

Yeah.

The APR Dominican Murphy.

It wasn't that long geopolitics that future, while I see how well you and I can't when he altered and then women eight started treatment with him yeah.

What did you guys utilize that shot.

Which Q1, yes.

Yes.

So I have two questions is spun from two I think the first one is regarding the the.

Hong Kong listing plan.

Congratulation to that because this is the first online lender in ADR of China to go back to Hong Kong for really thing.

Just wondering about the details regarding timelines and also.

Is there any plan to go for primary listing because currency is the factory yeah. So that's the first question. The second one is more about APR.

Currently we have been in the past few quarters, our API has been on a downtrend.

But just wondering what's out there for ADR Oh, sorry, it's APR, if we consider that the demand side and also relates redirection and also our strategy.

Strategy. Thank you very much.

Hum.

Indeed genetics, where he hammer.

Okay sure so for the Hong Kong listing timetable.

You know, we just released appear to IP.

This morning and.

<unk>.

Basically our intention is to follow the.

The normal procedure of the Hong Kong exchange.

To push for the final official prospectus release and then the.

Marketing Road show.

And then the listing so that's our intention in terms of exactly how many days or how long it would take.

You can refer to some other cases I believe are the normal course in the England.

Regular basis somewhere between two weeks timeframe, so that's roughly and.

Secondly is we're about to do.

The two primary listing in the future.

Certainly is the area or the direction, where kind of are looking at seriously.

Because there are certain benefits to become mature primary listing.

Hong Kong, but I guess first you need to finish these secondary listing.

When you meet certain criteria is.

Then you can apply for the dual primary so it was kind of a step by step, saying, we're just right now just to try to finish the first step and somewhere down the road when the condition ready we're pursuing.

Excellent.

Hi, Julien.

Oh.

Yeah.

I wouldn't say suddenly demand.

Arguably.

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Was she sandy Gardiner, Google without sheet feeder.

He was a major acquisition for you guys John Kim.

And Hulu.

JBT here through the end of the ruble.

Well, we generally don't see human phenomenally good.

Could you live.

Got it.

Women are tend to be young junk Ritchie with you.

In Q3, we see the overall pricing got a little bit compared to Q2. This is.

Our existing long gradually ramp.

The maturity going forward as we see the loan mix around our new customers and old customers are relatively stable leasebacks based pricing to remain relatively stable.

Hey, guys.

Thank you very much.

Thank you.

Your next question comes from Dan.

Great from <unk>. Please go ahead.

Hey, guys good.

Why do you think about it.

Oh.

Leon Qi.

Thank you also for any other player.

Yes, your pension detail change always Oh, yes definitely.

Yeah.

Ontologies are smaller machine Pablo that Biogen goes through the Odyssey shallow number number there and go Oh My God.

Thank you Pablo that box Touchy T J shall be artist at Wassa.

About that partnership.

Yep.

Hello, Thiago vintage look why are you seeing that truthful, okay, she's only a jump ball.

Is it all that future will be argued we operationally sure what else you enjoy you've got going on.

Okay, hopefully fill a touchy hit to actually hit the Mildenhall yeah.

The borrower profile that guys.

Good morning.

How long do you think that holds true.

Joe Johnson at all a bunch here, okay, all that Giovanni.

Hi, Thanks management for taking my questions. This is Leon Qi from Daiwa I have two questions regarding the results itself.

First question is regarding the loan pricing.

Just want to know what exactly is the new loan pricing for the launch quantity throughout the third quarter. This year and the second question is regarding the loan demand as Mr. <unk> just mentioned, we've seen better loan demand in the third quarter compared with the second quarter.

So in our view what is the typical borrower profile that is Oh, daemonian more new lines of where all this stuff.

Better loan demand coming from for example, which sectors all segments. Thanks a lot.

Yeah.

Oh.

Uh huh.

Okay.

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And to do that.

Louisiana woman.

Secondly, with him since the with Alabama, and Josh I think that's a good fit future.

Sure.

Yes.

Although our price entailed the way is a little bit lower than 22%.

Tiago is going to go.

The operation.

Two women, who go see so Nathan is a good question.

Showcasing their Christmas shopping season.

Yes.

Uh Huh, yes, where he was on.

Sanjay for sure.

<unk> is obviously the persistent issues are women.

They can do the non Kenosha County.

Two issues or theatre Hulu.

January here we.

Go ahead.

What kind of data here.

Some are not.

One issue.

So the way push if for some reason.

In terms of the business nature actually consumer law is quite non thanks Nicole.

We we see this demand a gradual recovery is come comes from the.

Customers in the area that previously had kids buy clothing.

Okay.

Yeah.

Okay.

Just want to probably add a little bit of color on that so.

Leon to your question really on the consumer side, we don't really particularly tracking.

They are professionals they you know.

Kind of categories and everything so that's that's not the kind of the focus points and then also thats.

And that's kind of a data we can provide in terms of which professional getting better in terms of the improvement.

But just like I mentioned.

Can you sort of you can imagine that.

You know for those areas that being locked down for example in Shanghai during the.

March April and May period.

When the Lockdown get released.

And there will be a pretty notable rebound.

You know in demand so that's kind of driven.

Driven at least in part driven this.

Recovery in the in the third quarter.

Thank you.

Okay understood.

Understood found out yet.

Okay.

Thank you.

Your next question comes from Thomas Chong from Jefferies. Please go ahead.

Why is that.

Steven Wardell.

<unk>, yes.

Please go ahead.

Hum.

EPS.

Sure.

Gotcha.

All right.

Joseph.

How should we stay open wallet.

One one.

One.

Wow.

Alongside that women come down level, but does that ticket size.

Q3 should want to quibble, which we'll send something up and get a whole destocking gubins you'd ask your guangxi woman to date.

I think our guidance.

Since I should use things like that.

I'm, sorry that woman.

Nik George at the low end is the high end of guidance.

The guide you guys on Whatsapp, so much hung probably towards the low end hi. This is Joe Lebel, who is talking about.

Hi.

You can find it and like you said Joe.

Okay.

Thanks management for taking my questions. My first question is about other competitive.

Marlin given that the acreage.

He is traveling bronco.

Fintech companies just wanted to get a sense about how we should think about the landscape in the future and the second question is about.

The ticket size.

My comment about the trend in recent quarters and my third question is about the Q4 guidance.

The pandemic situation.

Well it's dynamic.

Just wanted to get a sense about the high end and the low end of the guidance and.

First.

Under what scenario should we expect it to hit the low end should we expect that mix.

To worsen.

The pilot situation. Thank you.

Uh huh.

We're essentially.

Okay.

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I'm glad you did.

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England Eli.

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Pretty good how quickly can they do it.

First of all from the point of regulatory.

Therefore for.

For 2009 in last year, we believe the 40 plus one.

One that is damage for this meeting are more comparative incomplete views in the future.

Yeah. This is Dan.

So as that goes.

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Hi, Kimberly did that one can't when you don't have it could be an issue.

Attempting kingdom.

Sure.

To go from here.

<unk> Candela, Dan could you grew more would you quantify that.

Sure.

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I've been wishes.

I'm Gonna Museum.

Hey, Kelly.

If you look at the 14 paths one is Andre pointed out number one the credit Mark the credit market is a large market with multiple layers different players may cross over across the different layers, a little bit secondly, Disney.

Yes.

Mass market that we do not see that different players will compete directly head to head.

Yoga online for maintenance and we had to figure out ticket side.

Hum.

Zakaria Helane suite.

Women the ticket tax John .

Boys, who Twilio transit system.

In terms of women.

We saw them, increasing but it's in the <unk> in Denmark.

What kind of a gigawatt sale when we could see.

One of the two.

Washington, Canada installments won't give around kind of eliminate the use of pingo.

So we really like Honeywell user casino woman sorry.

Like cookies to husbands or children can't do that.

Kimball.

There are two factors when we consider ticket number one factor considering the macro environment. Since we took the prudent approach that our risk management strategy will not drive our ticket side.

<unk> point as we are continuously upgrading our customer base. This year, we're seeing the good customers can bring more value create longer long lifetime value and the larger ticket.

And the design go up going into Q4 the outlook.

Hmm.

You unequivocally yes.

We ask that you do so.

Whether you could go to a human years yeah.

A woman can yeah, collyn, the only thing that usual.

Well with that since it continued into women and men Loanda yoga.

Two we are today.

The only real either digger each million so EUR Linda.

From there you get into the gambler.

As for our outlook for Q4.

There are several factors, we take into consideration a.

Number one their radio there is seasonality in funding supply in Q4 due to the operation of banking industry. However, as everyone knows there are sufficient staff in China financial system. This year, we do not see these factor coming to effect this year.

Second reason is the macro environment and our colleagues.

One we think is a major.

A major concern for our guidance.

I assume you can email.

Sure Thomas I, just wanted to add a little bit to your last question regarding the Q4 guidance.

Basically the guidance.

That's our view.

View of the current sort of micro condition. Obviously, you know the you know the Chinese.

Chinese market. These days are very dynamic given the.

The COVID-19 related policy, changing or pending changing as well as a reaction by the local authorities to those kind of the new coverage policies.

Heard a different kind of messages some say the low some certain reason loco areas or more aggressive to kind of a reopening.

Some others are still maintain that kind of restricting kind of stance. There. So it's kind of a change.

Changing dynamic.

But based on what we can see today I think the guidance we provide in the Q4 is within a comfortable level. Then obviously if say for the second half of this quarter seems getting better then you know, we'll probably see a better performance.

<unk>. So that's the only based on information we get today.

Thank you.

Thank you.

Yeah.

Thank you very much there are no more questions.

Management back to you for the conclusion remarks.

Okay. Thank you again, everyone to join US for this conference call.

Any additional questions. Please feel free to contact us offline. Thank you have a good day bye bye.

Ladies and gentlemen. This concludes today's call you may now disconnect.

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Yes.

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