Q3 2022 Lexinfintech Holdings Ltd Earnings Call

Okay.

Okay.

Good day and thank you for standing by welcome to the listing syntax that quarter 2022 earnings conference call.

At this time all participants are in a listen only mode.

After the Speakers' presentation, there'll be a question and answer session.

To answer questions. During the session you will need to press star one one on your telephone you.

We'll then hear an automated message revising your hand its rates. Please.

Please be advised that today's conference is being recorded.

And now I'd like to hand, the conference over to MS. Echo Yan IR director all lessons intact. Thank you. Please go ahead.

Yeah.

Thank you operator, Hello, everyone welcome to the third.

Third quarter 2022 earnings conference call.

On the line today are CEO James.

Probably doesn't Jeremy I'm the CFO .

Before we get started I'd like to remind you that the presentation contains forward.

Forward looking statements, which are based on assumptions as of today. The actual results may differ materially.

Undertaken.

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<unk> will first provide an update on all of our performance.

He will cover the financial results in more detail.

And the loss of MS, Janet Chen who will discuss risk management.

I don't know I'll turn the call over to Joe's remarks, we will be in Chinese and English translation, well before J P.

So it all goes he'll walk away if they send people to give you guys here.

Everyone. It's my pleasure to speak with you again.

Thank you.

The issue audience and Cynthia will tell your other business.

Tony.

Yeah, and Sheila quite it will be off of other peso. So some people that use the <unk> controller, well me against Ultra light usability.

Of course.

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You know so far.

Yes.

You've called it Christa I'm just talking about.

Crusher Macroeconomy to achieve a result, that's not only for southern.

Southern company's front, but also on the call.

Our second and third quarter results, some kidding that abercrombie optical top hat and.

That's sustainable.

Clear change for the better.

So just to show you at all.

<unk> totaled <unk> sensing.

Thank you chip.

Let me say this isn't it.

So the key things that.

Sure.

Thank you.

So how much visibility.

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Yeah Eli.

Thanks, guys.

Guys I'll tell you 1000, so again similar to what I feel good about it.

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So the union any of it. So this is a C and D.

Easy, though that I listed above.

Thank you Luca.

Other loan volume exceeded the previous guidance.

So 8 billion RMB leaching.

Five $6 2 billion for the last quarter, representing a new place a 14% quarter over quarter.

Revenue at $2 7 billion, representing an increase of 12% quarter over quarter net profit at <unk>.

280 million, representing an increase of 65% quarter over quarter overall outstanding loan balance at $94 6 billion, representing an increase of 9% quarter over quarter total registered users up well.

$180 million, representing an increase of 19% year over year since the beginning of this year I've asked that to call. It funding cost on the loan volume improved accordingly.

Providing improvement in our profitability not margin improved steadily from four 8% in the first quarter to 10, 2% in the third quarter.

Macondo so people yeah yeah.

Thank you Padilha.

They look into any of the topics you thought that decision for me.

Got it.

Thank you good morning.

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Wait I suddenly have come up with downtown.

Yes.

Yeah.

Continued in the fourth quarter based on all the confidence you've tried it.

Potential the company repurchase program remains in execution as of September 32022, the company repurchased approximately 20 million as it fell approximately $44 million under this repurchase program, Yeah edition, a new share repurchase program.

<unk> has been also rise under which the company could purchase up to an aggregate of 20 million U S dollars.

Over to Mexico from the 117000 tons.

Yes.

Thank you Doug.

Yes, My question was helpful.

A woman Tencent.

And the team.

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When we talked to a lot of homework I live here.

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Okay.

Please proceed sir.

Tell me what he says.

Thank you.

<unk>.

On the <unk>.

To support our ongoing recovery time is accomplished thanks to asset quality all the time.

That would be a decline in <unk>, Pennsylvania, which is allowing our risk level refining operations and the batting asset quality to the improvement of our profitability in particular, but asset quality, we continue to strengthen our risk management team by introducing several talents in the industry to join us.

This quarter, we have also strengthened our investment in data and the models to continuously improve the accuracy of risk identification and I would like to elaborate more on this subject now.

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Both of the cocoa motion.

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So I don't know if this is simple.

Input lithium content to celebrate this healthy.

Acquisition pump.

We reinforced our online customer acquisition capabilities by expanding the lovely of the use of external data resources and the deepening cooperation bonds with all the other work placement upon the Q generates almost 13 customer acquisition models.

Last quarter.

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Down 14% year over year.

Customer per capita increased by 31% in September compared with that member in joints.

Then I'll go from there.

I talked about user cohort the feature for us.

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Jonathan.

So the cohort table.

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Chocolate housekeeping ulcer, so, we'll just switching golfing youll, especially with <unk> sensors.

In terms of offerings with existing customers, we continue to enhance our capabilities into a more refined operation in customer management by incorporating external data.

With all the old data.

Which contained many years of data.

Doug.

Are you close to already being abandoned by 30%.

The degree of the direct connection of the US all so crabby reports from PB Oc and the derived nearly 400000 risk identification dimensions on top of that we established under perfected a new risk model based on different trading patterns.

Leasing is occupancy by 10%.

On the operational strategy front, we sold one of our priorities in exploring.

Potential of other qualified customers to whom we provide a higher quality of life and the lower interest rate and the boosted.

Their contribution in values throughout their lifecycle. Meanwhile, we are continuing the course of a steady reduction of high risk customers to further stabilize our risk level.

From what I guess, what's the sense at all so San Diego team.

So you seem to enjoy your cohort of Campbell with some lumpy things up but listen to center in Guangzhou, and Java versus where you want others with whom these things out.

The other way.

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Yeah.

Go ahead Josh.

Sure.

Okay.

So do you still follow so that's what we started out the tusa.

Therefore soldiers.

Yes.

Tusa.

These approaches I would ask that structure was improved to the next level for the so called low risk customer loan origination volume.

Volume increased by 17% quarter over quarter and average contribution increased by 44% in the meantime, the op who of our active customers increased by 33% year over year and the incremental scale of loan origination conversion of existing users exceeded 2 billion RMB.

In the third quarter, the 30, plus day delinquency rate was 461% where it can be placed decreased over 24% percentage point quarter over quarter.

Well the 90 plus day delinquency rate was at $2 66 per cent, but they one delinquency rate continued to be decreased quarter over quarter, well. The 30 day collection rate wasn't made 10 at about 90%.

With a steady increase.

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Linda.

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Hey, Joe good to hear whats hurting the I mean as you see it.

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Sent off everything you buy you.

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Yeah.

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Not at all.

How do you celebrate and social Luisa.

This cannot be done without the assistance of the optimization of our data and technology capabilities, which has always been the core driving engine of the development of the company.

Third quarter research and development expenses were at $140 million, a 7% increase year over year continuing to take the lead of the industry. Just not this is engine continued to be relatively upgrade it.

In terms of the system capabilities, we've published Mcnees up.

Systems, such as our user LTV model indicated that Alicia alert and entirely agenda attributions scheme, we increased the coverage of <unk>.

Our business nobody else to 100%, which greatly improve the company's decision, making and operational efficiencies.

So for AI applications.

The exploration application of deep learning to identify use the risks from all dimensions.

And the waste identification ability of new customers has been improved by 20% the serious of marketing models based on federal learning Undertone modeling has improved the marketing conversion of new and existing customers by more than 35%.

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Shop at home here.

Hello, Bob.

So you'll see obviously this won't be there in the south east.

Huge also cohort.

Sundar could you just don't get worse.

Hi.

A little bit on the business ecosystem surrounded by our three main business. That's the double 11 E. Commerce Festival has just passed and all of a sudden filler platform delivered an encouraging performance from October 24th to November 12th total can be increased by 97.

Year over year, and the number of transactions on the users increased by 94% and 70% respectively.

The team from the consumption scenarios after finishing a platform of installment conception snob. It was led by little wildcard reached a 15% increase year over year in transaction volume and a pool of transaction users increased by 30% year over year.

The advantages of consumption scenarios and.

Focusing on high quality customer operations, our new consumption driven local based service business has continued to grow this year.

Okay.

Sure.

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Did you say, you're a few months into la Lucha.

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[laughter] in consumption scenarios.

Core capabilities of data analysis and technology.

Its progress of integrating the business.

Which forms a circular enhancement pass other high frequency consumption, driven local base business put them alerts in.

Advantage of having opportunities to generate more high quality customers, so pretty driven business.

Accumulated technology and risk management experience and capability to yourself.

<unk> driven business allow us to further provide the services to other financial institutions and merchants as well as promote synergetic development of other technology driven platform business.

Static.

Development mix looking connected there's more funding pools and snacks.

The so-called it's not for nothing.

If you take a business ecosystem with three diversified revenue drivers allow us to more robust.

Respond to the complex and the changing external environment.

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Some people woman swisher duty, so we thought well, especially quote unquote. So you Chi.

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Yes.

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Since you don't have something that's very powerful tool.

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Then from there I mean, it got which I'll be talking to you.

Sure.

Sure.

Let me spend a few minutes to update you about.

Corporate social responsibility CSR initiatives in.

The second quarter, we launched a specific program called Jodi and young to help Smes to deal with their cash and liquidity challenges.

And program continues the total amount of small and micro loans was $5 4 billion in the third quarter.

If that means more affected.

By the pandemic resurgence, we took several measures to help them tied over the difficult.

Yeah audition.

Also upgraded customer protection initiatives in the fourth quarter by launching the five us bottling system, which makes full use of AI technology to strengthen data security anti fraud protection safeguards.

Standards intelligence customer service and the strike for come fighting financial Black miles.

All of the five hours to get five assets together allows us to build a comprehensive security firewall for customers.

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Some people restrictions looking into the future, we will stay positive, whereas that optimistic attitude to pursue continued tenable quality development.

We will do that to eight offline stores or even real defense development or otherwise.

One fintech technologies, while providing support to young people and SME, where they'll continue to strengthen the company's underlying capabilities optimize all of our customers.

Fantasia operation strategy, and the improved profitability profitability by reducing the cost well you crazy deficiencies.

Making looking better prepared for any future challenges and uncertainties.

The momentum can be maintained in the fourth quarter and other loan origination is expected to be in line with the volume of this quarter.

Yeah.

So I'll give him a sample set of them.

Let me now hand over the call to our CFO for financial update thank you.

Thank you Jamie good morning, and good evening, everyone. It's my pleasure speaking to you again.

I'm excited to report that despite external uncertainties.

Performance.

<unk> please.

With an upward trend.

Made by our principles of pursuing sustainable and quality growth.

We continue to build off a diversified revenue structure advanced risk identification capabilities and operational efficiencies.

Our never ending efforts on technology innovation and digital transformation.

Also contributed to the achievement of Q3's performance.

Now let me go through some key financial and operational matrix with you.

Total loan originations in the third quarter was $56 2 billion RMB, representing a 14.4 growth quarter over quarter.

The outstanding loan balance stood at $94 6 billion RMB.

Delivering a nine 2% increase compared with last quarter.

If we look at our result at the end of fiscal year 2021 are outstanding loan balance as of Q3 already increased by 10, 1%.

Demonstrating the ongoing resilience of our business.

We're delighted to see that the positive momentum of both our loan origination and outstanding loan balance has continued for two consecutive quarters.

And based on current information it is on course for the rest of the year.

Well driving a solid growth continue already we're keeping a close eye on potential saturation externally.

As COVID-19 resurgence related economic impact.

And are confident to make the corresponding adjustments if needed.

At the current point of time, the management believe quality over quantity is the right approach to sustain a healthy status of our business.

Total operating revenue was $2 7 billion RMB, achieving an 11, 5% increase quarter over quarter.

Revenue from new consumption driven location based services was 525 million RMB, an increase of 31, 3% from the same period of last year.

A modest decrease of two 5% quarter over quarter.

It is worth noting that the June 18th.

<unk> online shopping festival made meaningful contribution to the Q3 revenue.

Revenue from technology, driven platform services with 500 million RMB, representing a 14, 6% increase quarter over quarter.

Revenue from credit driven platform services was $1 7 billion RMB, delivering a 15, 8% increase quarter over quarter.

Yeah.

I'd like to take the opportunity to emphasize again that we have reorganized our revenue segmentation. Since Q1, this year, which we believe better reflect the diversity and resilience of our revenue and the nature of our business.

Once again the contribution from nine credit driven services was about 40% of the total revenue this quarter.

And then it has reached 1 billion RMB.

Cheating, a five 1% increase quarter over quarter.

This is in line with our strategic goal of realizing high quality and complementary revenue structure, which enables us to better overcome future external challenges in the long run.

In line with government guidance.

Loan pricing in Q3 continued to fall and moved closer to 24%.

The mix within 24% APR was above 80% like the last quarter.

Yeah.

Let me move on to the expense side off the third quarter.

Sales and marketing expenses decreased by 11, 1% quarter over quarter and by 35% year over year to 425 million RMB.

This is as intended by the management to maintain a prudent overall spending in view of the uncertain trading condition.

However, we are reaching our customers.

More precisely through various online and offline channels.

Two our digital lives and data driven marketing program.

7.7 per cent quote over quarter 204 million RMB.

Well the loan origination and top line revenue kept their upward trend this year R.

<unk> expenses remain stable and decreased Q on queue basis for two quarters.

I'm, particularly happy to note that the net profit of Q3 was 276 million R&D achieve.

Cheating, a 64 $64, 4% significant increase quarter over quarter.

It is encouraging to see that our profitability has continued its strong recovery trend <unk> basis.

Well, our major risks indicators remained stable.

We expect net profit to be further improved in queue for based on the current external conditions.

March 16th 2022.

Company's board of directors authorized a 50 million U S dollars repurchase program.

As of Q3, the company had repurchased approximately 20 million atheists for approximately 44 million U S dollars under this program.

The Board has also authorized on you 20 million U S dollars repurchase program.

However, prioritizing and concentrating resources on strategic and meaningful performance related initiatives well.

Well be our guiding principle.

We will continue to pursue a sustainable and resilient business approach and well also keep ourselves in the know of any materials science of external changes that may impact our business.

We are very confident that we are well positioned to react quickly and responsibly.

We stopped I will turn the call over to our President Gerald Woo, who is overseeing the risk of department.

Derek please.

She doesn't mean cause O as a whole list of those symptoms.

Thank you for any good morning, good evening, everyone. It is a great pleasure to speak to you all.

So all of you today.

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<unk> some tissue tells us when we can come to a functional father, no that'd be elaborate on the risk management and performance of other business.

Quota without it can be a quota of improvement meet locally.

Meant uncertainties under received will impact of sporadic COVID-19 resurgence. We are witnessing continued Lord So you wanted delinquency rate as of the end of September and other city plans stated it was at four point, 61%.

This quota representing a decrease also zero point 24 percentage points from the last quarter as full over 90 Passe delinquency.

How does how does he believe study at two point, 66% this quarter, which fell into Ava a prediction at up three basis.

And we expect the impact from second quarter's Covid restrictions has been fitted out and offered 90 plastic Quincy has peaked in the third quarter should no interruptions caused by extra no-fault mature happen, we are prudently optimistic to state that I'll repeat it.

Quincy matrix to go along the stable thunk downward trend to reach a more balanced level and I were overall risk level to continue to fill in a more favorable direction.

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And the last quarter.

They're serving high quality usage and boosting the contribution of high quality users was one of the other priorities.

Surroundings, such we extended the depth and breadth of the use of more high quality data resources and boost on strengthening the exploration and application of credit reports from the <unk>.

As well as further upgrading the.

[laughter] refinement motives for defending user settlements. These managers helped us identify high quality uses acura wait till late in the match the words.

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In the last quarter the amount of two point resurgence of the pandemic has in fact impacted I risk management in the front and we can see that the risk of assets in high risk cities rose to some degree but ever seems last year, we started to build a risk of monitoring and target.

Tried any other jazz spend magnesium for pandemic areas. In this system has matured to the point that we are now able to quickly. The just the other tree landed me the landing and opposed landings tragedies. According to this duration each pan dining area, which is one of the important and the mattress was too.

Continue to improve our risk performance in this photo.

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Hi, Michelle so I've only like a woman Jones.

The only like a woman Johnson.

I'm astonished that was horseshit, a diversion too changeable that she's on a woman that was environmentally so as you guys <unk>.

As we continue to devote resources to other risk management section.

Risk management capabilities are the ones the rapidly for the past two quarters.

One hand, we actively brought in several risk management pilots in the industry.

And we have to be offended raping repave.

Repave upgrades of various model of risk management and have the increasing the investment in Bihar resources and motives, which have had a timely effect on refining the identification of how to use a risk.

We have made good progress in all aspects, respectively from customer acquisition to asset management, So I'm, putting like wanting to pricing and the corresponding initiatives in the afore mentioned haven't demonstrated effectively in their oldest paid results in this quarter.

Going forward, we will keep on working supplementing these initiatives to foot or your hands.

Management capabilities and the continuing to improve.

Mix and the risk of performance. Thank you. This concludes our prepared remarks breeder, we are now ready to take questions.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session.

She was a question. Please press star one one on your telephone please stand by while we compiled the Q&A roster.

Our first question comes from the lineup <unk> C. L. S. A please ask a question.

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You will not go into showing she enjoys shop. So do you guys still green Jaguar and your question you woman. She is looking at all did you need US again, if you don't Cook at the Jaguars, especially in Asia, Antic, Chumby, NME, Ottawa, Overdeveloped, Michelle, which and I. Thank God, a change I'm going to finish off the shot you should have done sitting in front of me and actually walk took a Steve when she they're going to you know see quite a moment of APR.

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You mean interest APR hung.

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Jawi lie women's empowerment APR Trisha.

You could be handled the HR to repeat a joke can we begin with <unk>.

<unk>.

Now go into your what's your sign you shop [noise] I got two questions.

First of all of this is the hottest spot San Jose.

Congrats to the improvements in those results on a quarterly basis.

I got two questions. One is on regulation and the other one is on APR. So can you give us some updates regarding the rectification process, especially that the coupling of data feats to the banks.

Especially that's over the recent recent base in weeks, we have noticed some signs of parents in Ah Jonathan texts regulation. So I'm just wondering what's our progress there and number two it's about the APR.

The HCR of our company has been coming down in the past few quarters based on regulatory requirements.

Also are are the judgment of the customer base. So I was just wondering what the absolute Frick APR.

And also what's the exact HR in stark quarter. That's my question. Thank you very much.

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Let me take it to a question.

Yeah first one about the regulations as you know we're not in the.

In the first bunch of the nameless to so kind of until it there's no specific requirements to our company. Yet. However, we are closely watching the situations and.

I would love to get into the ideas of what is the specific requirements to the first band challenge.

Meanwhile, we are maintaining very close communications of his coat on to buy home. These two one does in the industry and we are very aware of the solutions. These two companies and currently we are already.

About the other plans.

I'll ask the requirements from the authorities.

Can be clear under the current conducted plans have been approved we can take a very quickly initiatives to be connected as well.

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You guys are jungle woman <unk> <unk>.

<unk>.

In this quarter Ava a P. R is very close to 24%.

Plenty of 4.3% only a little bit above 24.

And.

Pricing, which is about 24 percentage is very very limited and uhm going forward and will continue to further decreasing over APR and we believe together with the Ah you, Chris percentage off Arbor, a high quality customers and it'd be a huge raise alfalfa asset qualities of a pricing.

<unk> to be decreased some other perspective, we believe the higher quality customers the better quality of the asset management is actually you know I always be afforded the pricing of other APR, we only weighs a better APR, we'd have attracted a higher quality of the customers.

Okay I got Ya. Thank you much.

Great. Thank you.

Next question comes from the line of Frank Chin.

From Credit Suisse. Please ask you a question Frank.

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Teams have minutes.

<unk> SEDAR Edgar team with a shotgun.

That's all the time.

You find yourself.

As Frank from Credit Suisse. Thank you management for giving me the opportunity to ask questions I've got two questions. The first one is on credit quality, we see that in this quarter 90 day.

Capped a flattish quarter on quarter 30 day started to fall already and accompanying suggest that it's likely to improve going forward.

If credit quality continues to improve shall we see some sizable write backs on the provision expenses in the next few quarters.

And the second question is on our funding cost this quarter funding cost improved by 20 basis points. What is the main driver behind this and also recently we have seen some margin on tightening in the luxury market do we expect further optimization on our funding costs in the fourth quarter. Thank you.

Your line is now gone.

Hi, Nick.

Brian provision should pick up with LIBOR today this isn't.

Yes, Hey, John costing a woman can thank you. Thank you.

Gentlemen, thank you Jos and Duncan Tatton, Dave sure.

Sure. Thank you Vishal. Thank you Matt.

<unk> got a provision of <unk> one I wanted to this is a high point I am going to be tricky I Wonder you May know John Peeler Eagle provision you guys have shown.

Throughout the wife would have funding from Glen <unk> someone that you Jason Seidl, Michelle Let me give a high upon Angola agenda.

Hi, Dana women should I know you guys have done that Pasha twins that Cui boarder economy.

<unk>.

<unk> funding cost element, yes.

But that happened in Louisiana.

<unk> funding cost on the <unk>.

Nina Algo percentage on the Yugo Satcom hydraulic gain that you found me I see a woman.

<unk> Dunkin' <unk> senior should we don't call them yet.

If I may on the woman.

<unk>, Rachel Hitachi endothelial update on how the Gwen.

So in our womens Saiga Honda Eagle from one of our economy.

David <unk> from Dundee Legit stock actually jail.

I will translate myself for the English speaking audience for the first question.

We are also very happy to see that our asset quality remained.

Stable and these are going.

Upward trend.

However, we will probably not in a position to say that there will be significant.

Reduction in provision due to the uncertainties of the external environment, particularly the Colgate Colgate resurgence related economic impacts.

Of course, we do see the possibility of such a reduction of the provisions but at the moment, we think that it will remain stable. We will closely we will keep a close eye on it so conditions in the markets.

So at this moment I think there are uncertainties.

And the second questions regarding the drivers of the cost of.

Our founding.

We're also happy to say that we have a 20% basis points reduction for the last quarter and this is of course due to the favorable policies adopted by the government our hands and also thanks to the years of relationship that we have.

<unk> built up with our partners.

Having closed on our close cooperation.

I guess this is a result of both drivers.

Great. Thank you.

First question comes from the line of Alex Ye from UBS. Please ask your question Alex.

Okay.

Okay great.

Okay.

Hi, Daniel.

Nolan can you do it as they go.

Could you make a phone call <unk> be some people.

Okay.

Okay. That's helpful. Also contains a percent negative.

What was it.

Uh huh.

Hi, Thank you guys.

Thank you very much.

Joining Johnson EMEA appeals on the yields at entry.

Hey.

That's M B two women.

I suppose on the LPT.

So I think it will take.

A copy of your thoughts on that.

No.

Alright.

Once it was that way.

If we can take some questions.

JJ I guess sanguine picture.

Sorry, Goldman figure excuse me, what you've just mentioned the great good to put down the one element.

Thanks.

Fortunately, it's a mandate.

Just to put it.

Take a tier two syndrome.

Hi, guys. Its also on how Goldman pardon.

Maybe the takeaway Chumby CECO.

CBA, how they choose to Stifel more.

Changing you can increase was attendee.

So I will try and thanks for my question.

The first one is on our customer mix migration.

I have noticed that our per customer loan volume.

Ticket size has increased thankfully Q on Q, So I would presume.

I assume that was.

I would like to be driven by our customer mix upgrade, but just wanted to get more color on so for example, with the <unk>.

Vintage of our debt.

The high quality customers.

Per our definition and how does the change Q on Q and what's the outlook from here.

Second question is on the take rate so given our ongoing customer mix upgrade so how has been the impact to our take rate.

Specifically want to know more about.

Take rate for this quarter on the renewable volume perspective, and how does it compare to our total take rate from our total portfolio and could we say that we have probably seen a bottom.

Bottom from here. Thank you.

Is it going to work with <unk>, but you did mention intelligent label kind of thing.

That's helpful.

So the label and our yogurt in tier one cities outside of New York.

So all of the other bigger picture.

Women so that sure.

<unk> got Houston woman.

Thank you and guys. Thanks.

Cohort.

So you said also you opened itself with almost all of it.

Good day.

So obviously I cannot say whether its been good.

But youll quarter Youll hear me by the way Youre Golar will not take away the use of interest obviously, that's only other eagle Ford led to the woman.

Our Malaysia how content.

It was all women still without bothering them.

And as you know at our Buffalo Hill.

Woman guys looking to take on other than whether you go Ken.

So I will say that there are certain.

Giggled a hotel with Celgene.

Ltd.

What are you seeing any border yoga.

Other theater.

The Eagle Ford.

Yes.

Well the activity if at all.

As a woman.

Okay.

Tinson Susannah Diego team.

So it's actually a woman.

Okay great.

Yes, especially with us.

Women yen towards the Eagle.

You got more gassy and it's just all Wilmington opinion.

It is not us so well.

Wonder woman would tend to think of them will be on the list.

Yes.

Talking about the premium or high quality customers.

The way it offer customers different dimensions from the risk levels and kind of feeling internally, we mainly focusing on.

Have a wonderful sweet <expletive>.

Our major targeted high quality customers.

We are.

From three dimensions first of all we are.

Understand.

Good performance customers.

So attracted back our original existing customers.

And.

In the future.

Together with further provide better services and better base.

Found a better understanding of our current high quality customers. We're also taking the assets to <unk>.

The limit the high risk customers internally, we define them as the risk level from six to eight.

Together with all of these assets, we believe our overall risk management structure as well as our structures will be continue to be optimized.

Talking about the take rate.

<unk>.

Together with the <unk>.

Further optimization of our risk management and asset structures, we believe articulated won't be also.

Yeah.

<unk> trend in the future and that's the beginning of this year we have overall.

Neil I'll take rate level for the whole year, which is a 3% currently this whole year real is now changed.

Great. Thank you.

As a reminder to ask a question. Please press star one one on your telephone.

Okay.

Alright, there are no further question I would like to turn the call back to the management team for closing remarks.

Thank you all again, everyone for joining us today. If you have further questions. Please contact us well our contact information available on our IR website. Thank you.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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Good day and thank you for standing by welcome to the listing Fintech third quarter 2022 earnings Conference call.

At this time all participants are in a listen only mode.

After the Speakers' presentation, there'll be a question and answer session.

To ask a question. During this session you will need to press star one on your telephone.

And then here an automated message of rising your hand is rates. Please.

Please be advised that today's conference is being recorded.

And now I'd like to hand, the conference over to MS. Echo Yan IR director listen Fintech. Thank you. Please go ahead.

Yes.

Thank you operator, Hello, everyone will come to you.

Third quarter 2022 earnings conference call.

On the line today are CEO James.

President and the CFO .

Before we get started I'd like to remind you that the call and presentation.

Shanghai Tang business also.

Forward looking statements, which are based on assumptions as of today.

Actual results may differ materially and we undertake.

Yes.

This is David.

Jim I'll first provide an update on all of our performance.

Danny will cover the financial results in more detail and lastly, Kevin Zhang who will discuss risk management.

Now I'll turn the call over to Jay.

We will be in Chinese and English translation will be volatile.

Hey, guys. Thanks elements and people would give you that Sir Hello, everyone. It's my pleasure to speak with you again.

Thank you Joe Thanks for the answer.

<unk> will take the other big chunk.

Tony.

Yes, thanks, Sheila quite as well.

So some piece of it.

<unk> controller.

<unk> hi.

Thank you.

Yes.

You bet.

Hey.

Good luck.

Mark will.

To achieve our results.

Second comment also.

Sure.

Our second and third quarter.

Concluded that avid <unk>.

Optical.

And that's sustainable.

All clear change for the better.

Thank you Joe.

Total suite.

Thanks Lisa.

Let me say this isn't it.

As of today.

Tim on your body.

Hey, guys.

So I think youll buy so severely.

So youll note that our Eden Barclay.

This is Joe.

Yes.

Global guys I'll tell you 1000, so again, Tim but I feel good about it.

Hi, John .

You mean any serious user D&B.

You told US this is Jim Bob.

$10.

Thank you Luca.

Other loan volume exceeded the previous guidance.

8 billion RMB rating.

Five $6 2 billion for the last quarter, representing an increase of.

14% quarter over quarter.

With revenue at $2 7 billion, representing an increase of 12% quarter over quarter net profit at 280 million, representing an increase of 65% quarter over quarter overall outstanding loan balance.

$94 6 billion, representing an increase of 9% quarter over quarter total registered users.

$180 million, representing an increase of 19% year over year since the beginning of this year I've asked that call it funding cost and loan volume improved quarter.

Providing improvement in our profitability.

<unk> improved steadily from four 8% in the first quarter to 10, 2% in the third quarter.

So if you go yes, thank you Bob.

Looking at any of the tanks you thought the decision was that due to.

When you go to Google.

Thank you.

Yes. It is.

So to answer that one Nathan on the hydrogen and so it does seem to and if we go to John Wheeler has suddenly.

Alright, Thats helpful. John Kim Let me Hi, Jeff.

Okay.

Continued in the fourth quarter based on all the confidence we've tried it.

Potential the company repurchase program remains in execution as of September 32022, the company had repurchased approximately $20 million.

So approximately $44 million under this repurchase program.

<unk> a new share repurchase program has been also rise under which the company include purchase up to an aggregate of $20 million.

Over the next 12 months from the $117000.

Okay.

Okay. So thank you to all U ducking the question was helpful.

Many women tend to send the team sort of cohort.

Hey, guys. Thanks for your time today.

Do you think you need any youll just have to women.

Women.

And then against the law.

Yes.

Okay.

Please proceed sir.

Thank you Lauren women's team.

On the OTT.

Thanks, Paul.

The ongoing recovery trend is accomplished thanks to asset quality plant all the time.

It is this Pennsylvania, which is lowering our risk level refining operations and backing asset quality to the improvement of our profitability in particular, the asset quality, we continue to strengthen our risk management team by introducing several talents in the industry to join us. This.

We have also strengthened our investment in data and models to continuously improve the agile Lindsay of risk identification and I would like to elaborate more on this subject now.

Okay well thank.

Youre welcome aboard associates team courtesan cohorts with you. Thank you the woman cash highlights.

Helpful.

Good luck on Boardwalk with wood <unk> co.

Cosmos Eagle ocular.

Okay.

Gordon Wilson top or south of the cocoa motion towards women the orca.

Thank you Sir.

Thank you all for you.

<unk> this is Joe.

Sure Lindsay and content Keith Sullivan.

On the acquisition front.

Quarter.

Enforced other online customer acquisition capabilities.

Pending the leverage of the use of external data resources and the deepening cooperation bond with all the other work placement can you generate over 30 customer acquisition model.

Last quarter on the acquisition.

<unk> down 14% year over year.

Customer per capita increased by 31% in September compared with that number in June .

Hello, California.

Can you size how much users.

For the <unk> <unk>.

So Joseph Thank you for women.

Tim will go into wireless with urea.

Good morning.

Okay.

So would you think would work.

Yes.

Olivia Thank you.

Yes. Thank you.

Okay.

So most in terms of when we go again and tell you if we get lucky.

So it seems a little too simple.

Thank you Teresa.

Thanks, Jonathan.

You also the cohort table yoga.

So youre looking at things.

Well done.

Tim associated chocolate housekeeping ulcer.

Switching golfing, youll, especially with <unk>.

In terms of offerings with existing customers, we continue to enhance our capabilities into a more refined operation in customer management by incorporating external data resources with other <unk> data.

Which contains many years of data.

You closed the AMR data abandoned by 30% extended the degree of the direct connection of the use of the credit reports from PB Oc and the derived nearly 400000 risk identification dimensions.

How about that.

Established and the <unk>.

A new risk model based on different trading pattern, increasing its agile lindsey by 10%.

On the operational strategy front, we've followed one of our priorities in exploring the potential of our qualified customers to whom we provide a higher quality of life and the lower interest rate.

And the boosted their contribution in values throughout their lifecycle.

While we are continuing because of a steady reduction of high risk customers to further stabilize our risk levels.

So <unk> San Diego team.

Thanks, Antonio cohort Campbell with <unk>.

Thank you Jonathan.

Okay.

This is Doug.

Yaacov demo ing.

That's helpful.

<unk>.

So this is Tom.

It all starts to tell you to do it.

Okay.

Got it.

Go ahead, Jeff.

Hi, Dan.

The annuity.

Two follow ups.

Tusa.

They're consolidated.

Kevin.

Sure.

Sure.

These approaches our asset structure was improved to the next level for the third quarter Laurie.

No Rick Lewis customer loan origination volume.

<unk> increased by 70% quarter over quarter and average contribution increased by 44% in the meantime, the op who of our active customers increased by 33% year over year and the incremental scale of loan origination conversion of existing users exceeded 2 billion RMB.

In the third quarter, the 30, plus day delinquency rate was 461%, we can displace decreased zero point.

24% percentage point quarter over quarter.

Well, the 90 plus day delinquency rate was at 266%.

Day, one delinquency rate continued to be decreased quarter over quarter, while the 30 day collection rate was 10 at above 90%.

With a steady increase.

Yes.

So even though women.

He is with NPS.

Does have to sell them in lithium.

Good morning, Thank you for.

Hey, guys.

Let me at the number with you.

So if I may.

In Q2.

One woman.

Jonathan ill go to the Morgan Stanley .

So apologies.

Hey, Jonathan.

Yes, yes.

Thank you Bob.

<unk> also.

Hey, Amit.

Women's health kind of a central Pennsylvania.

Pennsylvania token global April Livia, Yoko forehead, simko from tenants would be in any season for us.

The MLC.

Tim.

Can you talk about you know last quarter, you talked about how do you kind of at least ask Luisa.

This cannot be done without the assistance of the optimization of our data and technology capabilities.

<unk> has always been the driving engine of the development of the company in the third.

Third quarter research and development expenses were at $140 million, a 7% increase year over year continuing to take the lead of the industry just mod business engine continued to be relatively upgraded.

In terms of the system capabilities, we've published magnesium.

System, such as our user LTV model indicator, where Alicia alert and <unk>.

Entirely agenda attributions scheme.

With the coverage of <unk>.

The business <unk> to 100%, which greatly improve the company's D. C. We're making on operational efficiency in terms of AI applications.

The acceleration application of deep learning to identify user risks from more dimensions.

And the waste identification ability of new customers has been improved by 20%. The Stevens of marketing models based on federal learning under current modeling has improved the marketing conversion of new and existing customers.

More than 35%.

And as I will just start with the loan core to this obviously.

So it could.

<unk>.

Yes.

With regard.

Thank you <unk>.

So yes, sorry.

These students Angola.

It was achieved.

And are you on coastal <unk>.

So thank you Luca Savi has hung in the title.

Sure.

Hello, Bob.

So you won't get the numbers.

So obviously it won't be done though.

Can you just talk with you also.

You also cohort.

So yes.

Nope.

A little bit on the business ecosystem surrounded by our three main business.

The double 11 E. Commerce Festival has just passed and all of a sudden filler platform delivered an encouraging performance from October 24th November 12th total <unk> increased by 97% year over year and the number of transactions on the users increased by 94% and <unk>.

And 2% respectively.

I'm speaking from the consumption scenarios of the <unk> platform offer installment construction scenario led by lower card reached 15% increase year over year in transaction volume and a pool of transaction users increased by 30% year over year, leveraging the advantages of <unk>.

<unk> scenarios.

Focusing on high quality customer operation of a new consumption driven local based service business has continued to grow this year.

Sure.

Thats useful.

Thank you Tim.

You go to one central annuity bulking donation.

We will then tabulate too.

Okay.

So if you wait till they can also yielded a quick that's.

That's helpful.

Okay.

We will do.

So yes.

This is Jim Bob.

So if I may seem controllers with your hotel.

This exchange ratio.

Okay.

Yes.

Yes.

So, yes, so who did all those things.

Okay.

Julian.

So thank you most of my father.

Hello, Almond and coconut one tender.

Yes.

Let's see.

In consumption scenarios and the core capabilities of data analysis and technology.

Its progress of integrating the business.

Which forms a circular enhancement path.

High frequency consumption driven local base business.

In.

The advantage of having opportunities to generate more high quality customers, so credit driven business okay.

Accumulated technology and risk management experience and the capabilities of credit driven business allow us to further provide the services to other financial institutions and merchants as well as promote synergetic development of other technology driven platform business.

Derek.

Development mix looking connected with more funding pools.

A virtuous circle.

Unless a unique business ecosystem with three diversified revenue drivers allow us to more robust.

Respond to the complex and the changing external environment.

Yes.

Yes.

As you talk to.

So I'll, let you all know bucket so danielle.

But what you see there for silicon shall we say.

As a way to get it to the Aquila.

Women. So this is Lee so we thought it was really.

So <unk>.

Goldman Sachs is both on for closing comments.

Yes, absolutely.

Yes.

Thank you Shelby County, Utah.

So what you see over Neal Hey, I could.

What are your plans for southern copper.

Operator.

I mean it got.

I was hoping to dive into.

That's helpful.

Let me spend a few minutes to update you about.

Corporate social responsibility.

Initiatives.

The second quarter, we launched a specific program called <unk>.

To help Smes to deal with their cash liquidity challenges.

Program continues the total amount of small and micro loans was five 4 billion in the third quarter.

He is more affected.

By the pandemic resurgence, we took several measures to help them cut over the difficult.

In addition.

Also upgraded customer protection initiatives in the fourth quarter by launching the <unk>.

In the system, which makes full use of AI technology to strengthen data security and fraud protection safeguard.

Standard intelligent customer service and the strike for come fighting financial Black miles all of the five hours to get fiber assets together allows us to build a comprehensive security firewall for customers.

Some of them women go when volatility.

34 cities.

Banco <unk> Santo <unk>, so goes to them.

Gotcha.

Hi, John .

Jonathan Thanks helpful.

I think also that you need.

Thank you.

Can you hear me well.

Well, maybe just switching what we're telling you this is duncan.

We will answer your question ill jump out.

Thank you good assumption looking into the future. We will stay positive is that optimistic attitude to pursue continued dependable quality development.

We will do all of it.

Two eight offline stores or even real business development or the one fintech technologies, while providing support to young people and SME.

We'll continue to strengthen the company's underlying capabilities optimize our customer segmentation operations strategy and the <unk>.

<unk> profitability profitability by reducing the cost while increasing efficiency.

Making looking better prepared for any future challenges and uncertainties.

I like the momentum can be maintained in the fourth quarter and other loan origination is expected to be in line with the volume of this quarter.

Hey, Shannon.

So I'll go on the table.

Let me now hand over the call to our CFO for financial update thank you.

Thank you Jamie good morning, and good evening, everyone. It's my pleasure speaking to you again.

I'm excited to report that despite external uncertainties also performance continued with an.

An upward trend.

Lead by our principle of pursuing sustainable and quality growth.

We continue to build up a diversified revenue structure.

Risk identification capabilities and operational efficiencies.

Our never ending efforts on technology innovation and digital transformation.

Also contributed to the achievement of Q3's performance.

Now let me go through some key financial and operational matrix with you.

Total loan origination in the third quarter was $56 2 billion RMB, representing a 14.4 growth quarter over quarter.

The outstanding loan balance stood at $94 6 billion RMB.

Delivering a nine 2% increase compared with last quarter.

If we look at our result at the end of fiscal year 2021 are outstanding loan balance as of Q3 already increased by two 1%.

Demonstrating the ongoing resilience of our business.

We are delighted to see that the positive momentum of both our loan origination and outstanding loan balance has continued for two consecutive quarters.

And based on current information it is on course for the rest of the year.

Well driving a solid growth continue already we're keeping a close eye on potential saturation externally.

As COVID-19 resurgence related economic impact.

And are confident to make the corresponding adjustments if needed.

At the current point of time, the management believe quality over quantity is the right approach to sustain a healthy status of our business.

Total operating revenue was $2 7 billion RMB, achieving 11, 5% increase quarter over quarter.

Revenue from new consumption driven location based services was 525 million RMB, an increase of 31, 3% from the same period of last year.

A modest decrease of two 5% quarter over quarter.

It is worth noting that the June 18.

<unk> online shopping festival made meaningful contribution to the Q3 revenue.

Revenue from technology, driven platform services with 500 million RMB, representing a 14, 6% increase quarter over quarter.

Revenue from credit driven platform services was $1 7 billion RMB, delivering a 15, 8% increase quarter over quarter.

Hi.

I'd like to take the opportunity to emphasize again that we have reorganized our revenue segmentation. Since Q1, this year, which we believe better reflect the diversity and resilience of our revenue and the nature of our business.

Once again the contribution from nine credit driven services was about 40% of the total revenue this quarter.

And then it has reached 1 billion RMB.

<unk>, a five 1% increase quarter over quarter.

This is in line with our strategic goal of realizing high quality and complementary revenue structure, which enables us to better overcome future external challenges in the long run.

In line with government guidance.

Loan pricing in Q3 continued to fall and moved closer to 24%.

The mix within 24% APR was above 80% like the last quarter.

Yeah.

Let me move on to the expense side of the third quarter.

Sales and marketing expenses decreased by 11, 1% quarter over quarter and by 35% year over year to 425 million RMB.

This is as intended by the management to maintain a prudent overall spending in view of the uncertain trading condition.

However, we are reaching our customers more precisely through various online and offline channels. Thanks to our digital lives and data driven marketing program.

Yeah.

Research and development expenses increased by seven 3% year over year to 141 million RMB.

Reflecting our continuous investment in upgrading our technology capabilities.

G&A expenses went down by seven 7% quarter over quarter to 104 million RMB.

Well the loan origination and top line revenue.

Their upward trend this year.

Our G&A expenses remain stable and decrease Q on Q basis for two quarters.

I'm, particularly happy to note that the net profit of Q3 was 276 million RMB occur.

Achieving a 64 64, 4% significant increase quarter over quarter.

It is encouraging to see that our profitability has continued its strong recovery trend.

<unk> basis.

Well, our major risk indicators remained stable.

We expect net profit to be further improved in Q4 based on the current external condition.

On March 16 2022.

The company's board of directors authorized a $50 million share repurchase program.

As of Q3, the company had repurchased approximately $20 million for approximately 44 million U S. Dollar under this program.

The board has also authorized a new $20 million repurchase program.

However, prioritizing.

Concentrating our resources on strategic and meaningful performance related initiatives.

Will be our guiding principle.

We will continue to pursue a sustainable and resilient business approach and we'll also keep ourselves in the know of any material signs of external changes that may impact our business.

We are very confident that we are well positioned to react quickly and responsibly.

With that I will turn the call over to our President Jerry Rulli, who is.

Overseeing the risk department.

Eric Please.

Yes.

Yes.

Oh as a whole what citizens on time charter.

Thank you Tony Good morning, and good evening, everyone. It is a great pleasure to speak to you all.

So all of you today.

Well actually just always happens SMG to year with James Gotcha.

Roger do hunting, you'll shoot or the trading Cheng Cheng Cheng.

So the only thing Glenn if I may.

And that's just one month's alcon Sandoz and listing.

Quality shop, we'll mention the answer from.

Gotcha understood you guys huh.

So you'll get a woman does it sandy.

Unfortunately, I guess Jonathan.

So geoff with under your waste.

Understood.

Saturday to charter.

Joseph job with them you can do to win.

<unk>.

George as you highlight that your suggestions imaging quality, but at times engender forgot what whether you choose.

<unk> talked about that you kind of tend to shy woman they pulled out or you guys aren't Bob.

Logan.

Don't see issue Tom what do you think the shutdowns for use with all <unk>.

Woman essentially half with Aldi.

So I think that you'll see you saw a feature with Scotia.

Consistent shaping John tissue.

Can Congress Franco Nevada, now, let me elaborate on the risk management and performance of our business last quarter resulted to be a quarter of improvement Amit macro environment uncertainties on the residual impact of sporadic Colgate resurgence we are witnessing a continued lower.

Day, one delinquency rate as of the end of September and the other 30 plus day delinquency was at 461%.

This quarter, representing a decrease also zero point 24 percentage points from the last quarter as for our 90 plus day delinquency.

How does that play starting at 266% this quarter, which fell into our prediction at up three basis points and we expect the impact from second quarter is Colgate restriction has been fitted out and 90 plus day delinquency.

Has peaked in the third quarter showed no interruptions caused by external force majeure happen. We are prudently optimistic to state that our delinquency metrics to go on a stable downtrend downward trend to reach a more balanced level and our overall risk level to continue to fill in.

More favorable direction.

Thank you Ginger brew for Wuhan Gotcha.

So Jason.

There's also some will go well.

Youll just want to again, thank Tony and Jeff how nowadays in the house and shows you the Washington.

Just can you put some deal up with an engine that thinking about margin. So just wholesale bondswoman undersea vehicles around the world who've been key pay compete in inkjet.

Maybe tax which other choices.

Got it on your own.

In the last quarter.

Serving high quality users and boosting the contribution of our high quality users was one of our priorities.

So rounding such we expanded the depth and the breadth of the use of more high quality data resources.

Strengthening the exploration and application of credit reports from the PD Oc.

As further upgrading.

Refinement models for different user segments.

Measures helped us identify high quality users accurate tonight and match them away.

Lower interest rates.

So our APR has continued to decline promoting a significant.

Customer unit price of high quality.

Thank you Shimon.

Let's just hit some tissues.

Click on the Gulf War chest, so I'm sure that the Samsung Minsheng, that's awesome and casual women's or using cash.

Using keytruda from Jim Jim Koch filtration.

<unk> certainly tells us so.

<unk>.

And then go country could be huge.

You can get huge quantum question with a total impact your intangibles that hold the toga just as a woman.

Gotcha Thats certainly helpful.

In the last quarter.

The amount of two point resurgence of the pandemic has in fact impacted our risk management front and we can see that the risk off assets in high risk cities those to some degree but ever since last year, we started to build our risk monitoring and a targeted strategy of adjustment mechanism for pandemic.

Areas and this system has matured to the point that we are now able to quickly adjust our pre London, Midland and post lending strategies. According to the situation in each pandemic area, which is one of the important matters for us to continue to improve our risk performance in this quarter.

Sure.

There's a woman junior and sorry, if I take plenty of time for <unk>.

You're welcome thank.

Thank you Jan, especially with a T cell <unk>.

Jean Luc and behind you. The question why do you think.

If I'm an <unk> wondering why it took them alternative SMT Thomas said, some industrial geographically I'm watching the total switching philosophy.

And she's already contain that's really cool.

Couple of questions.

Why do you do that and Jeff maybe you can find your why don't you sort of proposed agenda.

The science was so no.

The only kind of switching so Michele <unk> woman zones. So.

The only like a woman Johnson city unions, and Samsung was Horseshit, Guangdong Shandong <unk> woman, that's what you can find them.

So as you guys answer Sanjay Gupta from James Gotcha, Okay. As we continue to devote resources to our risk management section other side risk management capabilities are the ones to rapidly for the past two quarters.

We actively brought in several risk management talent in the industry on the other hand, we have been accelerating.

<unk> upgrade.

Its model of risk management and have been increasing the investment in data resources and models, which have had a timely effect on refining the identification of our user risk. We have made good progress in all aspects respectively from <unk>.

Acquisition to asset management, so I'm glad you like wanting to pricing.

The corresponding initiatives in the afore mentioned have demonstrated effectively in their early stage results in this quarter.

Going forward, we will keep on working on supplementing these initiatives to further enhance our risk management capabilities and continue to improve our asset mix and the risk performance. Thank you. This concludes our prepared remarks, operator, we are now ready to take questions.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session.

To us It question. Please press star one one on your telephone please standby, while we compile the Q&A roster.

Our first question comes from the line of hedge fund from CLSA. Please ask your question.

Got.

Good morning, Thank you I will I'll take Q1 as you lay out.

So Shannon conference I'm, Andy if that's so would you be on holiday.

Yes, yes.

What do you think youre not going to challenging Josh. So do you guys see Quinn Jim Glenn in your question you want me curious on your thoughts on G&A.

So again, if you don't click into Jim Guerra, so, especially in Asia.

Okay, gentlemen, sham with Shanda I'll take that thank God, it's Jonathan Chang usually that time for you if I may let you take it.

Steve Owen.

Guillaume and the APR.

Interest API know how can you do that.

Sure.

Thank you Tony I'll show Shaw washout in a moment.

Thank you Don mentioned that she is in decline.

To me out.

I will mention a kind of a and <unk> got it to see what you thought you could be an HR therapies should we be I wouldn't be in July .

I've got two questions.

First of all of this is the hottest from San Jose.

Congrats to the improvements in the results on a quarterly basis.

I got two questions. One is on the regulation and the other one is on APR.

So can you just give us some updates regarding the rectification process, especially the decoupling of the data feeds to the banks, especially thats over the recent days and weeks, we have noticed some signs of pivots in China Fintech regulation. So I'm just wondering what's our progress there and number two it's about the APR.

The APR of our company has been coming down in the past few quarters based on regulatory requirements.

So our adjustment of the customer base. So I was just wondering whats the outlook for APR.

And also what's the exact HR in sort of a quarter. That's my question. Thank you very much.

Hello Hello.

So it can be giggling here Jim.

So gentlemen.

Thank you Peter.

Total NIM meals.

Sure.

Thanks Joseph.

Okay great.

Yeah.

And then finally as I said.

I mean today you also about let's say a woman.

Thank you.

Thank you Sir.

So you said your follow up.

Ill product than <unk>.

Well no mortality.

Well welcome Bianca.

Well most of the holiday will help a lot.

It was.

But other than good second quarter.

Luca you say, so look quite as well that you want to answer them.

Thanks again.

Well look way out.

And let's say one.

So the goal quite so much with autonomy Ottawa.

Let me take the question.

The first one about the regulations as you know we're not in the.

In the first bench of the nameless. So currently there is no specific requirements to larger company yet.

However, we are closely watching the estimations and.

Sure.

Got it and the ideas of what is the specific requirements.

To the first financial.

Families.

Meanwhile, we are maintaining very close communications with kudos to buy home. This Q1 that in the industry and we are very aware of the evolution of these two companies and currently we are already.

About all the plans as well as the requirements from the authorities can.

Can be clear on the current conducted plans have been approved we can take a very quick initiatives to be connected as well.

If you are a woman that youre doing.

Thanks, Doug.

Please hold.

Yes.

So.

Cynthia Sullivan, our Sui you saw.

Looking down demand, so you're going to be <unk>. So the other thing too is a woman yes.

Yes.

Thanks, James and good day.

Cohort CAGR, if I'm in Asia.

What's your uncertainties.

I'll take also doesn't go to your guide you got children.

You may all Thai baht is on that.

So yes, it was awesome.

But <unk> is a well deserved.

Woman.

Targa with him.

Sure.

Cohort four should we go all the way to user cohorts analogies.

Okay got it.

So should that shut down.

You mean, Johann and Jonathan Corr total congrats sadako political so don't forget it.

Okay.

Hey, guys, Hi, John Goldman <unk> antibody.

<unk> got a phone call.

This quarter, our APR is very close to 24%.

Only four 3% only a little bit above 24.

Present.

<unk>.

Pricing, which is about 24 percentage is very very limited.

Going forward, we will continue to further decreasing our APR and we believe together with the <unk>.

As a percentage of our high quality customers.

Yeah, Chris off our asset quality as other pricing continue to be decreased some other perspective, we believe.

Higher quality customers the better quality of the asset management is actually in line with be a further decreasing of our APR.

Weighs a better APR, we have attracted a higher quality of the customers.

Yes.

Okay got you. Thank you so much.

Great. Thank you.

Question comes from the line of Frank Chen from Credit Suisse. Please ask your question Frank.

Hi, guys good morning.

We're especially seeing that Jim Hall now.

Once you go to a question requiring.

Critical work easier for me in the oil Sands Jewish a whole Joseph Tim This is chip.

Sure sounds good.

Hello.

Yes sure.

The whole kind of Hawker, Michigan shooter genre.

Rewards card.

Tricia.

Is that how should that should get you to that.

Got a zero.

Is it a provision and then kind of what should be Josh.

I just saw the <unk>, that's the only ones who should be quite good.

I'm Linda so essentially two things have been yeah sure Krish.

John I'll ask with GBM.

Johnson <unk> Johnson.

The other two don't use those are simple they want and then switching want me all the time.

Thanks, Tony you couldn't thank you saw high single shipyard, where the soldiers and Modesto.

That woman Jimmy.

10 minutes.

She got a good team.

Sure.

That's all the time.

Yeah sure.

This is Frank from credit Suisse. Thank you management for giving me the opportunity to ask questions I've got two questions. The first one is on credit quality, we see that in this quarter 90 day.

Capped a flattish quarter on quarter 30 day started to fall already and accompanying suggested it's likely to improve going forward.

Credit quality continues to improve shall we see some sizable write backs on the provision expenses in the next few quarters.

And the second question is on accounting costs. This quarter funding cost improved by 20 basis points. What is the main driver behind this and also recently we have seen some marching on partnering the Monterrey market do we expect further optimization on the funding cost in the fourth quarter. Thank you.

Okay.

Okay.

<unk> Hi mythology.

<unk> provision should be real quickly wanted ecosystem.

Joanna let me ask you halting of women chunky the two countries as Jamba now thank you Josh and done at the time the Gulf on cannot sure Hi, Chuck Young.

<unk> staff with the Johnny you'd go provision of wave one of them do the things that happened I'm going to be the trading hours.

No John Peeler Eagle provision someday.

It also whiteboard funding I'm glad.

Someone that you just can't iden himself on the sale of the Hyatt prolong galvan tender Chi.

So in a woman's here than the English beyond that Pasha twins that we bought a company.

<unk>.

Now do you have one Hana dose your funding cost element you should go should that happen in Louisiana.

Funding cost on the EOG Gardena, AGA percentage, Johnny Satcom and hydraulic gain that you saw me I see a woman Si.

<unk> got just your insomnia.

If I may on the woman.

First of all I'm not sure easing later like how should the endothelial I'll say to a hard one to answer.

A woman sorry go ahead.

You go from one comma, yes, with all the women in Chico's loyalty go dark on Dot com.

Sorry, guys to jail.

I will translate myself.

For the English speaking audience for the first question.

We're also very happy to see that our asset quality remained a.

Stable and these are going.

Upward trend.

However, we will probably not in a position to say that there will be significant.

The reduction in provision due to the uncertainties of the external environment, particularly the call it call it a resurgence related economic impact.

Of course, we do see the possibility of such a reduction of the provisions but at the moment, we think that it will remain stable. We will closely we will keep a close eye on it so.

Conditions in the market.

So at this moment I think there are uncertainties.

And the second question regarding the drivers of the cost of our funding.

We're also happy to say that we have a 20% basis points reduction for the last quarter and this is of course due to the favorable policies adopted by the government on one hand and also thanks to the years of relationship that we have.

It up with our partners.

We are having close on a close call.

Operation.

So I guess this is a result of both drivers.

Great. Thank you.

Next question comes from the line of Alex Ye from UBS. Please ask your question Alex.

Okay.

Okay.

Okay great.

Yes.

Oh, it's Daniel.

Yes.

Kind of a woman can your daughters.

Could you make a phone call greenwashing some people got it got it.

As always I'm just oh.

Okay. That's helpful Duodenal ulcer tens of percent that gets you said no.

Well.

Hi, Thank you guys.

This is John joined Johnson, EMEA Appeals Walnut yogurt entry since I had a good time to women.

<unk> supports all of that will be cheap.

Thank you <unk>.

A copy of your thoughts on the whole.

Uh huh.

Does your T cells.

Yes, we can.

So I'm glad that you said you see JJ I guess when do you see sort.

So a couple of months ago.

Ghansham.

Okay got you put down.

It seems that they go to.

Great.

Thank you John .

So it could be a challenge.

Sundar I think the takeaway I.

Hi, guys its both on how Goldman.

Pardon me the takeaway jumpy.

So Amanda gets CBA.

How do you choose to Stifel.

And you can increase with JMP.

Hello, John Thanks for my question.

First one is on our customer mix. My question. So I have noticed that our customer loan volume.

Sorry.

Increased thankfully Q on Q, so I would presume that with Oh.

I'd like to be driven by our customer mix, but just wanted to get more color on so for example with <unk>.

Vintage of our.

High quality customers.

Our definition and how does the change Q on Q and what's the outlook from here.

Second question is on the take rate so given our ongoing customer mix upgrade so how has been the impact to our take rate.

Simply want to know more about.

Take rate for this quarter on the renewable volume perspective, and how does it compare to our total takeaway from our total portfolio and could we say that we have probably seen a bottom from here. Thank you.

For them, it's going to work with.

And then we'll kind of thing.

No.

A woman.

Some sort of level.

And that you work with.

So all of the other bigger picture.

Womens so sure.

You got to send a woman.

Got it thanks, if I remove the long cohort.

Yeah.

They also Yoko Thats helpful Thats all good.

Got it.

Okay.

You'll recall that you'll see a new sponsor golar.

The takeaway that you would've instantaneously.

The woman.

I want my nature.

It was all women Bobby.

And do you know that buffer.

So if you take a look other than.

Congrats Kevin the other thing too.

Susan Giggled a hotel with us.

Kim.

Please go ahead.

People with us.

So well get it together.

Yes.

Hello, This is a woman.

No doubt.

Okay.

Thiago team.

So it was actually a woman.

Yes.

Yes.

Doug.

Women yen talks.

Good day.

So it's all Wilmington opinion.

If you start off.

What kind of woman would tend to think of them will be ananda, let somebody will be over.

Talking about the premium or high quality customers.

The way it all of our customers in two different dimensions from the risk level.

Thanks Helane.

We mainly focusing on level.

Level 123.

Our major targeted high quality customers.

We are.

From three dimensions first of all we are.

Further understand BR.

Good performance customers.

Attracted back our original our existing customers.

And.

In the future.

Together with further provide better services and better.

We found a better understanding of our recurrent high quality customers. We are also taking the assets to further limit the high risk customers internally, we defined them out is there a risk level from six two.

So together with all of these assets, we believe our overall risk management structure as well as our structures will be continue to be optimized.

Talking about the take rate.

Together with the further optimization of our risk management and asset structures. We believe our take rate will be also.

Yeah.

<unk> trend in the future and that's the beginning of this year we have overall.

Many of our take rate level for the whole year, which is a 3% currently this whole year real is now changed.

Yes.

Alright, thank you.

As a reminder to ask a question. Please press star one one on your telephone.

Okay.

Alright, there are no further questions I would like to turn the call back to the management team for closing remarks.

Thank you all again, everyone for joining us today. If you have further questions. Please contact us well our contact information available on our IR website. Thank you.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.