Q2 2023 FinVolution Group Earnings Call

August 29, 2023

Speaker 1: to your host, Jimmy Tan, head of investor relations for the company. Jimmy, please go ahead.

Head of Investor Relations for the company Jimmy Please go ahead.

Speaker 2: Hello everyone and welcome to our second quarter 2023 earnings conference call. The company results with issue via news via services earlier today and are posted online. You can download the earnings release and sign up for the company email alerts by visiting the IRR section of our website at ira.tv.group.com. Mr. T.A. Gen Lee, our Chief Executive Officer and Mr. Gyae, our Chief Financial Officer, will start the call with their preparing marks and conclude with a Q&A session.

Hello, everyone and welcome to our second quarter earnings Conference call. The company results were issued via Newswire services earlier today and I posted online.

You can download the earnings release and sign up for the company email alerts by visiting the IR section of our website at IR at <unk> Dot com.

<unk>, our Chief Executive Officer, and Mr. Zhao Yang our Chief Financial Officer will start the call with that prepared remarks, and conclude with a Q&A session.

Speaker 2: During this call, we will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with US GAAP.

During this call we will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the final straight information compressed.

And presented in accordance with U S GAAP.

Speaker 2: For information about these non-GAAP measures and reconciliation to GAAP measures, please refer to our earnings press release. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. private securities litigation reform Act of 1995. bring any progress you may make toward the

For information about these non-GAAP measures and reconciliation to GAAP measures. Please refer to our earnings press release before we continue. Please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 19 modified.

Speaker 2: Forward-looking statements involve inherent risks and uncertainties. As such, the company results may be materially different from the views expressed today.

Forward looking statements involve inherent risks and uncertainties as such the company results may be materially different from the views expressed today.

Speaker 2: Further information regarding this and other risks and uncertainties are included in the company's following with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under a particular law.

Further information regarding these and other risks and uncertainties are included in the company's filings with the U S. Majorities in Exchange Commission. The company does not assume any obligation to update any forward looking statements, except as required under applicable law.

Speaker 2: Finally, we post the slide presentation on our IR website providing details of our results for the quarter. I will now turn the call over to our CEO , Mr. Pierre-Jean Lee. Please go ahead, sir.

Finally, we post a slide presentation on our IR website, providing details of our results for the quarter I'll now turn the call over to our CEO , Mr. Pierre generally biscuit itself.

Speaker 3: Thanks, Jimmy. Hello, everyone. And thank you for joining our earnings call. This is Jie Zhengli, CEO of Involution Group. We are happy to speak with you today.

Jamie Hello, everyone and thank you for joining our earnings call. This is Jody <unk> evolution.

Yeah happy to speak with you today.

Speaker 3: Since our expansion into the Indonesian market back in 2018, we have continued to execute our local focus global outlook strategy in the Pan-Asian region with under-weaving determination.

Since our expansion into the Indonesian market back in 2018, we have continued to execute our local forecast global outlook strategy in the Pan Asia region be the under we re determination.

Speaker 3: Today, we have accumulated a blade served over 28 million followers in China, Indonesia, and the Philippines.

To date, we have accumulatively served over 28, maybe borrowers in China, Indonesia, and the Philippines.

Speaker 3: By integrating our local business focus with an international perspective, we are able to leverage our expertise and insights derived from diverse markets to drive growth and foster innovation within our organization.

By integrating our local Peyton is for Chris.

International her pregnancy to yeah.

We are able to leverage our expertise and insights derived from diverse markets.

Drive girls and foster innovation between our work organization.

Speaker 3: We expect this strategy to produce further benefits as we expand into additional countries and the strengthen our presence in our existing markets. As a China transition in...

Yeah.

This stretch J to produce further benefits as we expand into additional countries and to strengthen our present in our existing markets.

Is it China or transitions into the post Covid era.

Speaker 3: A recent July microeconomic data continued to be challenging with pockets of improvement in certain areas.

So a great sense of dry macroeconomic.

Data continued to be trading gene b, the pockets of improvement in the certain errors.

Speaker 3: However, microeconomic data from the ESSI markets in which we operate currently paints a more positive picture.

However market micro economic data from the markets in which we operate currently paints a more positive picture.

Speaker 2: which forBoik teen, girls across different operational matrix. How to????????? 4 4 5

For like King growth across deeper into operational matrix matrix.

Speaker 2: Given these circumstances, we are adopting a strategy of progressive growth in the China market, while pursuing right-paid growth in

Given thesis.

Cynthia we are adopting a stretching a progressive girls in the China market well.

Well pursuing rapid growth in the international market.

Speaker 2: While we await the domestic microenvironment recovery from the current challenges, we have been continuously weighted.

They'll be of eight domestic and micro environments recovery from their car when they tried to challenges.

We have been continuously investing in R&D.

Speaker 2: We have substantially enhanced our technology enabling us to streamline our processes. Upgrade our customer experience and achieve improvements across the various markets in which we operate.

We have such potentially enhance our technology, enabling us to streamline our processes and upgrade our customer experience and achieve improvements across the worst markets in which we operate.

Speaker 2: We are pleased to share that FIMOlution's total transaction volume in the second quarter increased to RMB 47.3 billion.

We are pleased to share that evolution total transaction volume in the second quarter increased to RMB 47.3, beating.

Speaker 2: Well, our outstanding loan violence reached RMB 603.7 billion.

Well, our outstanding loan balance reached RMB $683 7 billion.

Speaker 2: up 14% and 13% respectively year over year.

14% and 13% respectively year over year.

Speaker 2: This growth validates our company's ability to evasion the lead of adapt to the challenging economic landscape. We are continuing to meet the needs of our customers across our markets in the planned Asian region.

This girls validates our company's ability to your patients they like adapt to the challenging economic landscape.

<unk> to meet the needs of our customers across our markets in the Asia region.

Speaker 2: Technological innovation continues to be the call of our mission and the primary source of our competitive advantage.

Technological innovation continues to be the call of our mission and the primary source of our competitive advantage.

Speaker 2: into life. We have states that eighth film solution technology curve competition.

In July we hosted the eighth theme illusion technology tough competition.

Speaker 2: Our annual event showcasing and cultivating technological talent and creativity.

Our annual event, showing case, showcasing and cultivating technology co pilot and the creativity.

Speaker 2: This year's event focused on the development of automobiles might take speech recognition, AISR, to improve the technology's grip of Chinese dialects and the language.

This year's event focused on the development of autumn might take up the beach reclamation, Hey, I sought to improve the tiger.

Technology, Great Gripes off the Chinese state likes and their language.

Speaker 2: aiming to increase chatbot's efficiency and accuracy, then communicating with customers from different regions.

I mean to increase trade, both efficiency and courtesy they can take communicating with customers from deeper into regions.

Speaker 2: Our commitment to innovation was recently recognized at the 2023 World Artificial Intelligence Conference.

Our commitment to innovation was recently recognized the 2020 straight word artificial intelligence culprit.

Speaker 2: where the C6 we divided in the cooperation with the University of Georgia. Job message unified in random jobings for growth neural networks was known nominated for the outstanding C6 award.

Right. So the thesis we've debated in the cooperation with Georgia with University of Georgia.

Drop in message unifying random joking for graph neural networks, while the known nominated for the Outstanding Seafood Award.

Speaker 2: Our investment in AI and machine learning began years ago, with R&D spanning across different product categories such as self-help services, chatbots, data analytics, and credit risk assessment.

Our investment in AI and machine learning because years ago visa R&D spanning across different product categories, such as soap health services tied to both data analytics and the cry data risk assessment.

Speaker 2: Over the past several years, we have been training our model utilizing billions of dollars of transaction data, started to increase their accuracy.

Oh, it's a positive or a yes, we helping training our model.

Billings of $1 off the transaction data.

Why did they increase their accuracy.

Speaker 2: We currently employ a fully automated loan approval process. The

The currently employed a fully automated loan approval well per se.

Is that all of our funding partners.

Speaker 2: And our automated chat bot resolves about 80% of customer inquiries on average.

And our automated chatbot yourselves about 80% of customer inquiries.

Bridge.

He can say stimulate embrace new technologies and deployed into our daily operation to deliver our Mo puts night puts them that lights and tailored experience for our users.

Speaker 2: We consistently embrace new technologies and deploy them into our daily operation to deliver a more personalized and tailored experience for our users.

Speaker 2: Blown with the use of treadboards in customer service and to address early-day dealings in the loan collection process.

Along the ease of use of trade boats in customer service and to address early days delinquencies in the loan collection precise.

Speaker 2: We have also upgraded to an streamlined user experience by automating self-op.

We have also upgrade attitude and a streamlined user experience by automating step up.

Speaker 2: That's self-help functions and providing instant responsible hour users.

Self-help functions and providing instant responsible our users.

Speaker 2: In addition, we have incorporated AIGC into our advertisement for our overseas business, increased our campaigns, audience targeting, accuracy, and achieving greater visibility on leading social media platforms such as Facebook, Instagram, and TikTok.

They shouldn't we have incorporated aig's eat into our advertisement for our overseas business in.

Increase our campaign audience targeting accuracy and achieving greater visibility on leading social media platform, such as Facebook Instagram right and that he could talk.

Speaker 2: As a result, during the month of July , our followers and TikTok groups to around 700,000, our followers on Facebook and Instagram reached 900 and 67,000 and 220,000 respectively.

As a result during the month of July our followers on peak power.

Girls to around 700, so that well followers on Facebook and Instagram reached 900 independent things.

So the end of 220 fold into respectively.

Speaker 2: Furthermore, we strove to a balance hour.

Furthermore, we strove to advance our work.

Speaker 2: commitment to promoting financial inclusion during the quarter.

Commitment to promoting financial inclusion during their culture.

Speaker 2: aligning our ESG efforts with this business goal through better borrowing rates.

Aligning our ESG efforts, we visited Coke zero biter borrowing rate.

Speaker 2: The further optimized average volume range in China to 22.3%. Ensuring our service accessible and affordable for our borrowers.

The further optimized our average borrowing rates in China are 222, plus 3%.

Ensuring our service.

Accessible and affordable for our borrowers.

Speaker 2: On our related note, I would like to share some updates on our ESG progress.

On a related note I would like to share some updates on our ESG progress.

Speaker 2: We recently published our 2022 YET Street report. The fifth in our company's case.

We recently published our 2022, yet to report so our faith in our company's history.

Speaker 2: demonstrating our dedication and the transparency and the sustainability.

Demonstrating our dedication and the transparent to transparency and this doesn't count.

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Speaker 2: With some responsible ES3 reporting, allow us to choose.

Okay.

Responsible yesterday, you're putting a lot.

That's true.

Speaker 2: showcase our strong governance practices and our actions addressing the environmental and social issues affecting our industry.

[noise] showcase our strong governance practices.

And our actions addressing environmental.

They were mental and social we see affecting our industry.

Speaker 2: They are also empowering us to design effective future initiatives.

Well also empowering us to design effective future initiatives for you.

Speaker 2: For instance, since the launch of our entry-free loan for eligible small business owners in China, we have cumulatively supported over 11,000 small business owners in pursuit of offer territory.

Since the launch of our interest free loan for you liked about small business owners in China.

We have accumulated the so called hate to over 11000 small business owners in pursuit of their dreams.

Speaker 2: Our subsidiaries in the Indonesian and Philippine markets are also proactively engaging in ESG work, such as conducting cost management workshop, to educate borrowers and launching a large-scale agricultural training project to improve people's livelihoods in their local community, along other activities.

Our subsidiary in Indonesia, and the Philippine markets also proactively engaging in ESG work such as conducting culture, My named Chairman workshop to educate birth and the launching of large scale like roof tree planting project to improve People's livelihoods.

In their local community among other activities.

Speaker 2: We formally believe that allowing our ESG and the business goal will ultimately create long-term value for our stakeholders while achieving a positive social societal impact.

The formulate believe that align our ESG and the bids and they go well ultimately.

Long term value for all our stakeholders, well, achieving a positive with social societal impact.

Speaker 2: Before we move on to additional operational and financial metrics with our sample, I'd like to share that the solutions to celebrate its 16th anniversary during the second quarter. A milestone that defaults.

Before we move onto additional operational and financial matrix meets our CFO I'd like to share. It that's been evolutions celebrated its 16th and your worst rate during the second quarter.

A milestone set a false.

Speaker 2: As to a glimpse of our future outlook as an enterprise with a certain level growth.

As to a glimpse of our future outlook as our enterprise business.

Then they both girls.

Speaker 2: As we have grown and built the business throughout the years, we have accumulated a suite of technologies, skill sets, and capabilities that enable us to navigate and succeed in all the markets in which we operate. We will remain committed to our vision of leveraging innovative technology to make financial services better.

And we have built the business throughout the years, we have accumulated a suite of technologies skill sets and capabilities that enable us to navigate and succeed in all the markets in which we operate.

We remain committed to our vision of leveraging innovative technology to make financial services better.

Speaker 2: Propiling the evolution, long-term sustainable growth along the way.

Propelling theme elution long term sustainable growth along the way.

Speaker 2: Visit, every now turns a call over to our CFL. Javian Xu, to be discussed our operational and financial results for a year.

These that I will now turn the call over to our CFO , Joe <unk>, who will discuss our operational and financial results for yacht.

Speaker 4: Thank you Lee and hello everyone. Welcome to our second quarter, 2023, an eighth course.

Thank you, Andy and Hello, everyone.

Welcome to our second quarter tiny tiny three a nice club in.

Speaker 2: In the interest of time, I will not go through all of the financial items on this call. Please refer to our latest release for further details.

In the interest of time I will not go through all the financial line items on this call.

Please refer to our news release for further details.

Speaker 2: As Lee mentioned, the domestic microenvironment continue to be challenging with pockets of improvements in certain areas.

As Lee mentioned that.

Domestic macro environment continued to be challenging with pockets of improvements including Harris.

Speaker 2: The official manufacturing purchase manager's index can mean at 49.3 points in July compared to 49 points in June and 48.8 points in May.

The official manufacturing purchasing Managers' index came in at 14, nine plus three points in July compared to 14 nine points in June and 48 eight points in May.

Speaker 2: According to data released by the National Bureau of Statistics on July 31, 2023,

According to data released by the National Bureau of Statistics out your likes what he wouldn't 'twenty to 'twenty three.

Speaker 2: Meanwhile, total social financing data in July increased by just on the 5.28 billion below market expectations.

Meanwhile, total social side I think data in July increased by just under <unk>, five country, and 28 billion below market expectation.

Speaker 2: Total retail consumption in July only increased by 2.5% compared with the same period last year.

Total retail consumption in July only increased by two 5% compared with the same period last year.

Speaker 2: However, despite the challenging micro-environment, we are encouraged by the strong operational and the financial results we delivered in the second quarter of 2020.

However, despite of the challenging macro environment. We are encouraged by the strong operational and financial results. We delivered in the second quarter of tiny tiny suite.

Speaker 2: During our stable and batter quality balleray base, we achieved solid operational metrics in the second quarter in the China market.

Driven by our stable and a better quality borrower base, we achieved a solid operational metrics in the second quarter or even the China market.

Speaker 2: Comulatively, we have served over 24 million followers in China.

Cumulatively, we have saved over 24 million borrowers in China.

Speaker 2: with the number of unique followers at around 2.3 million of 5% sequituring.

With the number of unique borrowers at two plus 3 million or 5% sequentially.

Speaker 2: Additionally, our China Transaction Volume reached and the 145.5 billion while our outstanding low balance reached and the 62.6 billion as of June 30, 2023. Both are 12% and a year over year-based.

Additionally, our tried and their transaction volume reached RMB 14, five 5 billion well offsetting loan balance reached RMB 62 players 6 billion as of June City 2023, both up 12% year over year basis.

Unknown Executive: Over to your host, Jimmy Tan, head of investor relations for the company. Jimmy, please go ahead.

Jimmy Tan: Over to your host, Jimmy Tan, head of investor relations for the company. Jimmy, please go ahead. Hello everyone and welcome to our second quarter, 2023 earnings conference call.

Speaker 2: Mostly by our prudent approach to risk management with proven fraudic detection technologies. We have maintained

Both stated by our prudent approach to risk management with a pool and fraud detection technologies.

Jimmy Tan: Hello everyone and welcome to our second quarter, 2023 earnings conference call. The company results with issue via news via services earlier today and are posted online. You can download the earnings release and sign up for the company email alerts by visiting the IRR section of our website at ir.finvgroup.com.

We have maintained a stable risk level.

Unknown Executive: The company results with issue via news via services earlier today and are posted online. You can download the earnings release and sign up for the company email alerts by visiting the IRR section of our website at ir.finvgroup.com.

Speaker 2: In the second quarter of 2023, our day went the liquid rate was around 5.6%. And the vintage of the liquid rate is expected to be around 2.3% for the court.

In the second quarter I'll tell you 23 hour. They went in it was a race with a relative five 6%.

And the vintage delinquency rate is expect to be a route to plus 3% for the quarter.

Speaker 2: Finally, thanks to our loan collection team's impressive efforts, our loan collection recover rate to maintain stable at around 90%.

Finally, thanks to our loan collection teams in pricing efforts, our loan collection recover rate to maintain stable at around 19%.

Jimmy Tan: Mr. Tiezheng Li, our Chief Executive Officer, and Mr. Jiayuan Xu, our Chief Financial Officer, will start the call with their prepared remarks and conclude with a Q&A session. During this call, we will be referring to several non-get financial measures to review and assess our operating performance. These non-get financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with US gap.

Unknown Executive: Mr. Tiezheng Li, our Chief Executive Officer, and Mr. Jiayuan Xu, our Chief Financial Officer, will start the call with their prepared remarks and conclude with a Q&A session. During this call, we will be referring to several non-get financial measures to review and assess our operating performance. These non-get financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with US gap. For information about these non-get measures and reconciliation to get measures, please refer to our earnings press release.

Speaker 2: As we continue to founten our strategy of serving bad quality boroughs, our proportion of category A and B boroughs in the China market further expanded to 80% of our total boroughs in the second quarter.

As we continue to fine tune our strategy, all feeling bad quality borrowers our proportion of category, a and b borrowers in the China market, Firstly, expanding to 80% of our total borrowers in the second quarter.

Jimmy Tan: For information about these non-get measures and reconciliation to get measures, please refer to our earnings press release. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US private securities litigation reform act of 1995. Forward-looking statements involve inherent reads and uncertainties. As such, the company results may be materially different from reviews expressed today. For the information regarding these and other reads and uncertainties, I included in the company following with the US securities and exchange commission. The company does not assume any obligation to update any forward-looking statements except as required under a bit of a loss.

Speaker 2: compared with 17.4% in the same period last year.

Compared with 17, 4% in the same period last year.

Speaker 2: Furthermore, our transaction to better quality borrowers helps us to further optimize our funding cost during the court.

Furthermore, our transaction to better quality borrowers helped us to further optimize our funding costs during the quarter.

Unknown Executive: Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US private securities litigation reform act of 1995. Forward-looking statements involve inherent reads and uncertainties. As such, the company results may be materially different from reviews expressed today. For the information regarding these and other reads and uncertainties, I included in the company following with the US securities and exchange commission. The company does not assume any obligation to update any forward-looking statements except as required under a bit of a loss.

Speaker 2: We have also expanded our number of accumulating funding partners to 82 financial institutions.

We have also expanded all the number of accumulating founding partners to 18 to financial institutions.

Speaker 2: and our pipeline of potential partners remains robust.

And our pipeline of potential ponderosa remains robust.

Speaker 2: or these operational improvements enable as to maintain a healthy take rate of around 3.1% during the second course.

All of these operational improvements enable us to maintain a healthy take rate of around three 1% during the second quarter.

Speaker 2: As a company deeply committed to social responsibility, we continue to support more beingless owners during this challenge period.

As a company deeply committed to social responsibility, we continue to support its more business owners during this challenging period.

Jimmy Tan: Finally, we pose a slight presentation on our IRR website providing details of our results for the quarter.

Unknown Executive: Finally, we pose a slight presentation on our IRR website providing details of our results for the quarter.

Speaker 2: We have also noticed that our small being in this owner's segment has been recovering at a healthy pace.

We have also noticed that all small business owners segment has been recovering at a healthy pace.

Tiezheng Li: I will now turn the call over to our CEO, Mr. Tiezheng Li, please go ahead. Thanks, Jimmy. Hello, everyone. And thank you for joining our earnings call. This is Tiezheng Li, CEO, Evolution Group. We are happy to speak with you today.

Speaker 2: Most of the followers from this segment are focusing on wholesale retail food and the beverage

Most of our borrowers from the settlement are focusing all wholesale retail food and beverage is disappearing.

Speaker 2: During the quarter, we still get around 415,9,000 small-beeners owners and the faceties are in the 11.5 billion of longs for them.

During the quarter, we still have around 400, and the 15 nice solid and small business owners and the FSA T. J I N D 11, 5 billion of loans for them.

Tiezheng Li: Since our expansion into the Indonesian market back in 2018, we have continued to execute our local focus global outlook strategy in the pioneering region with the under-rearing determination. Today, we have accumulated a place served over 28 million followers in China, Indonesia, and the Philippines. By integrating our local patronage focus with an international per-packed tip, we are able to leverage our expertise and insights derived from diverse markets to drive growth and foster innovation within our organization.

Speaker 2: representing an increase of around 11% compared with the same period last year and up 12% increased administration eggs.

Representing an increase of 11% compared with the same period last year and up 12% sequentially.

Speaker 2: Now I'd like to share some additional details on our international expansion F.

Now I'd like to share some additional details on our international expansion efforts.

Speaker 2: Indonesia, our largest overseas market recorded continued growth in its macro economy during the second

Indonesia, our largest overseas market recalled you to continue the growth in U S macro economy during the second quarter.

Speaker 2: Notably, on a monthly basis, the manufacturing PMI grew by 2.2 points to 15.2.5 points, and the business confidence index reached 99%.

Notably on a monthly basis, the manufacturing PMI grow by 2.2 points to 15, two five points and that the business confidence index reached 19, 9%.

Tiezheng Li: We expect this strategy to produce further benefits as we expand into additional countries, and the strengthen our presence in our existing markets. As a China transition into the post-COVID era, a recent July micro-economic data continued to be challenging with pockets of improvements in certain areas. However, micro-economic data from the ICM markets in which we operate currently depends on a positive picture. Reflecting growth occurs different operational metrics. Given these circumstances, we are adopting a strategy of progressive growth in the China market.

Speaker 2: Indonesia economy continue to remain robust in the second quarter and has maintained growth of 5% over the past several quarter.

Indonesia economy continued to remain robust in the second quarter and the highest maintain growth of 5% over the past several quarters.

Tiezheng Li: As a China transition into the post-COVID era, a recent July micro-economic data continued to be challenging with pockets of improvements in certain areas. However, micro-economic data from the ICM markets in which we operate currently depends on a positive picture. Reflecting growth occurs different operational metrics. Given these circumstances, we are adopting a strategy of progressive growth in the China market. Group. While pursuing rapid growth in the international market, while we await the domestic micro-environments recovery from the current challenges, we have been continuously investing in R&B.

Speaker 2: going forward and the NECA economy is expected to maintain growth of around 5% in 2023.

Going forward and then ECA economy is expected to maintain growth of around 5% in 2020 three.

Speaker 2: We anticipate that the domestic consumption will remain robust.

We anticipate that domestic consumption will remain robust.

Speaker 2: We're excited about the progress through her mating, our overseas marquees across multiple operational and financial metrics.

We're excited about the progress we have made in our overseas market across multiple operational and financial metrics.

Speaker 2: Cominatively, we have served over four million followers in Indonesia and the Philippines and continue to demonstrate significant goals in this country.

Cumulatively, we have saved over 4 million borrowers in Indonesia, and the Philippines and have continued to demonstrate significant growth in these countries.

Tiezheng Li: Group. While pursuing rapid growth in the international market, while we await the domestic micro-environments recovery from the current challenges, we have been continuously investing in R&B. We have substantially enhanced our technology enabling us to streamline our processes. Upgrade our customer experience and achieve improvements across the world's markets, in which we operate. We are pleased to share that FinVolution's total transaction volume in the second quarter increased to R&B 47.3 billion, while our outstanding low-violence reached R&B 68.7 billion.

Speaker 2: with a number of unique borrowers served during this quarter reaching a new high-end 780,000 and 86,000 of 22% from the same period as us.

With the number of unique borrowers silver during this quarter, reaching a new high at seven country and a T 6000 up 22% for all of the same period last year.

Tiezheng Li: We have substantially enhanced our technology enabling us to streamline our processes. Upgrade our customer experience and achieve improvements across the world's markets, in which we operate. We are pleased to share that FinVolution's total transaction volume in the second quarter increased to R&B 47.3 billion, while our outstanding low-violence reached R&B 68.7 billion. Up 14% and 13% respectively year over year. This growth validates our company's ability to efficiently adapt to the challenging economic landscape. We are continuing to meet the needs of our customers across our markets, in the planned Asian region.

Speaker 2: International transaction volume sold by 100% year over year during the second quarter. Reaching RMB 1.8 billion while we set a new record in our outstanding long balance at RMB 1.1 billion up to 113.31% year over year.

International transaction volume sold by one country per se year over year during the second quarter, reaching RMB, one 8 billion, while we set a new record in all Standalone bad is at RMB, One 1 billion up a 131% year over year.

Speaker 2: Our operations in the Philippines have also exhibited stronger, the expected growth across numerous operating measures.

Our operations in the Philippines have also exhibited stronger expected growth across numerous operating metrics.

Tiezheng Li: Up 14% and 13% respectively year over year. This growth validates our company's ability to efficiently adapt to the challenging economic landscape. We are continuing to meet the needs of our customers across our markets, in the planned Asian region. Technical innovation continues to be the core of our mission and the primary source of our competitive advantage.

Speaker 2: Alayye over here basis, the number of unique ballwords, transaction volume and outstanding long balance all grouped by several times compared with the same period.

Although year over year basis, the number of unique borrowers transaction volume and outstanding loan balance all grew by several times compared with the same periods of last year.

Speaker 2: Alongside these impressive operational metrics, international revenue maintained is the reverse the growth trajectory reaching time be five-quindry and three-minute. An increase of one-hundred and a 12% year-over-year.

But outside of that is impressive operational metrics international revenue maintained its robust growth trajectory, reaching I'm be five country and a $3 million, an increase of 100 and a 12% year over year.

Tiezheng Li: Technical innovation continues to be the core of our mission and the primary source of our competitive advantage. In July, we hosted the eighth FinVolution technology curve competition. Our annual event showcasing and cultivating technology called Thailand and the Creativity. This year's event focused on the development of automatic speech recognition AISR to improve the technology's graphs, graphs of Chinese dialects, and language. Aiming to increase childbirth efficiency and accuracy, we can take communicating with customers from different regions.

Speaker 2: and it contribute around 16% of total revenue in the second court.

And the contribute around 16% of total revenue in the second the culture.

Tiezheng Li: In July, we hosted the eighth FinVolution technology curve competition. Our annual event showcasing and cultivating technology called Thailand and the Creativity. This year's event focused on the development of automatic speech recognition AISR to improve the technology's graphs, graphs of Chinese dialects, and language. Aiming to increase childbirth efficiency and accuracy, we can take communicating with customers from different regions. Our commitment to innovation was recently recognized as the 2020 World Art Facial Intelligence Conference, where the C6 we've divided in the competition with the University of Georgia.

Yeah.

Speaker 2: We have consistently strengthened our relationships with both local traditional financial institutions such as Bank Pomata and the OCBC Bank, as well as innovative internet banks that trust bank Jaggle and the C-Bank.

We have consistently strengthen our relationships with both local tradition, no financial institutions, such as bank of Palmetto and the Otp C bench as well as innovative internet banks, they trace back Joggle NSE back.

Speaker 2: Thanks to these sponsoring partnerships and our partners' validation of our technologies and operational capabilities.

Thanks to DS flourishing partnerships and our partners to validation of our technologies and the operation know capabilities our percentage of loans in the second quarter was let's say a T T to buy at these institutions to reached 16 16, 5% compared with the team that I presume.

Speaker 2: Our percentage of loans in the second quarter for the treaty by these institutions reached 16, 165%, compared with 39% in the same period last year.

Tiezheng Li: Our commitment to innovation was recently recognized as the 2020 World Art Facial Intelligence Conference, where the C6 we've divided in the competition with the University of Georgia. Job message, unifying random job info graph neural networks was nominated for the outstanding C6 award. Our investment in AI and the machine learning begins years ago, with R&B spanning across different product categories such as self-health services, chatbots, data analytics, and credit risk assessment. Over the past several years, we have been training our model utility thing, buildings of dollars of transaction data, steadily increase their accuracy.

In the same period last year.

Speaker 2: Going forward, we will further deepen our relationships with these institutions to increase our proportion of facilitation by local institutions and expand our network of local partners in the region.

Going forward, we will further deepen our relationships with these institutions to increase our proportion of explicit of teaching by local institutions and expand our network of local partners in the region.

Tiezheng Li: Job message, unifying random job info graph neural networks was nominated for the outstanding C6 award. Our investment in AI and the machine learning begins years ago, with R&B spanning across different product categories such as self-health services, chatbots, data analytics, and credit risk assessment. Over the past several years, we have been training our model utility thing, buildings of dollars of transaction data, steadily increase their accuracy. We currently employ a fully automated loan approval process with our founding partners, and our automated chatbot resolves about 80% of customer inquiries on average.

Yes.

Speaker 2: Driven by our ongoing investments in technology and our strategy shaped towards building bad quality borrowers our natural revenues for the second quarter rose to RMB 3.1 billion upper 15% year over year that income for the second quarter reached RMB 500 at the 19 minute of 1% year over year

Driven by our ongoing investments in technology, and our strategy shaped towards there'll be bad quality borrowers our net revenues for the second quarter. It also to RMB, three 1 billion up 15% year over year.

Net income for the second quarter reached RMB five country at the $90 million.

Yeah, well yeah.

Speaker 2: Our leverage ratio, which is defined as risk bearing loans divided by shareholder's equity, remains stable at 4.3 times.

Our leverage ratio, which is defined as risk bearing loans divided by shareholders equity remains stable at four three times.

Tiezheng Li: We currently employ a fully automated loan approval process with our founding partners, and our automated chatbot resolves about 80% of customer inquiries on average. We can consistently embrace new technologies and deploy them into our daily operation to deliver a more personalized and tailored experience for our users. Along with the use of chatbots in customer service and to address early-day dealings in the loan collection process. We have also upgraded to an streamlined user experience by automating self-help functions and providing instant response for our users.

Speaker 2: There is a time of uncertainty. Our strong balance sheet and liquidity position continue to provide the confidence to all our stakeholders and support the business growth for all our markets.

Is the times of uncertainty our strong balance sheet and the liquidity position continue to provide a competence to all our stake holders and to support the business growth for all our marquise.

Tiezheng Li: We can consistently embrace new technologies and deploy them into our daily operation to deliver a more personalized and tailored experience for our users. Along with the use of chatbots in customer service and to address early-day dealings in the loan collection process. We have also upgraded to an streamlined user experience by automating self-help functions and providing instant response for our users. In addition, we have incorporated AIGC into our advertisement for our overseas business, increase our campaign audience targeting accuracy and achieving greater visibility on leading social media platforms such as Facebook, Instagram, and TikTok.

In particular, our cash positioning remains robust with O M. B, a one 2 billion of cash and short term liquidity as of the end of June 2023.

Speaker 2: In particular, our cash position remains robust with over RmbA.2 billion of cash and the short-term liquidity as of the end of June 2023.

Speaker 2: representing an increase of 58% year over year and the 6% court over court.

Representing an increase of 58% year over year, and 6% quarter over quarter.

We also remain committed to optimizing shareholder value through our new dividend policy and the share repurchase policy.

Speaker 2: We also remain committed to optimizing shareholder value through our annual dividend policy and share repurchased policy.

Speaker 2: We believe the current micro-environment offers an attractive opportunity to retain value to share hold it.

We believe the current macro environment offers an attractive opportunity to return value to shareholders.

Tiezheng Li: In addition, we have incorporated AIGC into our advertisement for our overseas business, increase our campaign audience targeting accuracy and achieving greater visibility on leading social media platforms such as Facebook, Instagram, and TikTok. As a result, during the month of July, our followers and TikTok grew to around 700,000, while followers on Facebook and Instagram reached 900,000, 6,700,000, and 220,000 respectively.

Speaker 2: And as such, during the first half of the year, we deployed around US 1460 million to repurchase our stock from secondary market.

And as such during the first half of the year, we deployed around the U S 14, 6 million to repurchase our stock while the secondary market.

Speaker 2: As of June 30, 2023, we have collectively returned the US 400 and the 191 million to our shareholders through our dividend and the stock repurchase program.

As of June 30, 'twenty to 'twenty three we have accumulatively returned the U S.

Tiezheng Li: As a result, during the month of July, our followers and TikTok grew to around 700,000, while followers on Facebook and Instagram reached 900,000, 6,700,000, and 220,000 respectively. Furthermore, we strove to advance our commitment to promoting financial inclusion during the culture. Aligning our ESG efforts with the specific goals through Biter-Borion rates. We further optimized our average volume reach in China to 22.3%, ensuring our service accessible and affordable for our followers.

$491 million to our shareholders through our dividend and stock repurchase programs.

Yeah Dishing, our board of Directors has also approved a new share repurchase program of USD $150 million, reflecting our strong commitment to enhancing shareholder value.

Speaker 2: Here, Dixing, our Board of Directors has also approved a new share repurchase program of USD 150 minutes, reflecting our strong commitment to enhancing shareholder value.

Tiezheng Li: Furthermore, we strove to advance our commitment to promoting financial inclusion during the culture. Aligning our ESG efforts with the specific goals through Biter-Borion rates. We further optimized our average volume reach in China to 22.3%, ensuring our service accessible and affordable for our followers.

Speaker 2: On a related note, our chairman, CEO and other senior management have also expressed their confidence in the company through personal shares repurchase totaling around 630,000 ADS in the first half of 2023.

On a related note our chairman CEO and other senior management have also expressed today our confidence in the company. So a clip of those shifts you approaches totally around 606 country and the 13th solved in a D. S. In the fourth half of 2020 three.

Speaker 2: Given favorable macroeconomics, conditions in all international markets and the progress we have made across numerous operational metrics for our international business.

Give us a favorable macro economy.

Tiezheng Li: On a related note, I would like to share some updates on our ESG progress. We recently published our 2022 ESG report, the fifth in our company's history. Demonstrating our dedication and the transparency and sustainability. Without responsible ESG reporting, allow us to showcase our strong governance practices and our actions addressing the environmental and social issue affecting our industry. We are also empowering us to design effective future initiatives, for instance, since the launch of our entry for a loan for eligible small business owners in China.

Conditions in our international market and the progress we have made across numerous operational metrics Huawei International business.

Speaker 2: The company has increased its international transaction volume guidance for the full year of 2023 to MV7.7 billion, representing year-over-year growth of around 80%.

The company has increased its international transaction volume guidance for the full year of <unk> 23 to RMB seven 7 billion.

Representing year over year growth of around 80%.

Speaker 2: Taking the current China microenvironment into consideration.

Taking the carbon to China macro environment into consideration the.

Speaker 2: The company is 2023 guidance for its China market remains unchanged at between R&B 100 and the 18-9 billion to R&B 200 and a 5 billion, representing year-over-year growth of between 10% to 20%.

The company is tied to your <unk> guidance for China market remains unchanged at between RMB, one country and the 18 that bidding to be 205 billion representing year over year growth of between.

10% to 20%.

Speaker 2: Before I conclude my remarks, let me provide some additional color on our daily outlook for the third quarter of 2023.

Before I conclude my remarks, let me provide some additional color on our business.

Tiezheng Li: We have accumulated over 11,000 small business owners in pursuit of their dreams. Our subcinderies in the Indonesian and Philippine markets are also actively engaging in ESG work, such as conducting cost management workshop, to educate borrowers, and launching a large-scale record-trade planting project to improve people's livelihoods in their local community, along other activities. We formerly believed that aligning our ESG and the business goal will ultimately create long-term value for our state coders, while achieving a positive social societal impact.

For the third quarter of 2023.

Speaker 2: Disapplied some incinerating the microenvironment of a BNS trajectory remand solid.

Despite some uncertainties in the macro environment, our business trajectory remains solid.

Speaker 2: We expect our transaction volume in China for the third quarter of 2023 to be around I'm B-49 Bidium representing an increase of around 10.4% year-over-year.

We expect our transaction volume in China for the soda culture, all the 'twenty to 'twenty three to be at around RMB 14, 9 billion, representing an increase of around 10, 4% year over year.

Speaker 2: We expect our transaction volume in international markets for the third quarter to be around on the 1.9 billion representing an increase of around 73%.

We expect all the transaction volume in international markets for the third quarter to be around RMB, one 9 billion, representing an increase of around.

73% year over year.

Speaker 2: In summary, our outstanding performance in the second quarter of 2023 underscores our dynamic business model.

In summary, our outstanding performance in the second quarter off of tonnage in history.

In the schools.

Dynamic business model.

Tiezheng Li: Before we move on to additional operational and financial metrics with our several, I'd like to share that the solutions celebrate its 16th anniversary during the second quarter. A milestone that affords us to a glimpse of our future outlook as an enterprise with such a tangible growth. As we have grown and built the business throughout the years, we have accumulated a field of technologies, skillsets, and capabilities that enable us to navigate and succeed in all the markets in which we operate. We will remain committed to our vision of leveraging innovative technology to make financial services better, providing solutions, long-term sustainable growth along the way.

Speaker 2: Technology code NOHAL and dedication to advancing our international initiative.

Knowledge of Cold No hall, and the dedication to at the mounting our international initiatives.

Speaker 2: Entering into the second half of 2023. We remain focused on reviring our risk assessment and the management framework.

Entering into the second half of 'twenty to 'twenty three we remain focused on retiring our risk assessment and the management framework.

Speaker 2: spanning our kLC customer base and optimizing our product mix.

Spanning our KFC customer base, and optimizing our product and mixed.

Speaker 2: Looking ahead, we believe that we are well positioned to capitalize on the massive opportunities in both China and the international markets.

Looking ahead, we believe that we are well positioned to capitalize on the massive opportunities in both China and international markets.

Speaker 2: And driving goes while creating greater value for our customers. Share holders and all of our stakeholders.

<unk> goal is to while creating greater value for our customers shareholders and all of our stakeholders.

Tiezheng Li: We will remain committed to our vision of leveraging innovative technology to make financial services better, providing solutions, long-term sustainable growth along the way.

Speaker 2: With that, I will conclude my prepared remarks. We will now open the door to the questions. Operator, please.

With that I will conclude my prepared remarks, we will now open the call to your questions. Operator. Please continue.

Jiayuan Xu: Besides, every now turns a cow over to our CFV, Jiayuan Xu, we will discuss our operational and financial results for a year.

Speaker 1: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, we ask the you please kindly repeat your question in English. At this time, we will pause momentarily to assemble a rough.

We will now begin the question and answer session. The Alaska question. You May Press Star then one on your telephone keypad, if you're using a speakerphone. Please pick up your handset before pressing the keys.

Jiayuan Xu: Thank you, Li, and hello everyone. Welcome to our second quarter, 2023, an ACE call.

Jiayuan Xu: Besides, every now turns a cow over to our CFV, Jiayuan Xu, we will discuss our operational and financial results for a year.

Let's go to your question. Please press Star then two for.

For the benefit of all participants on today's call. If you wish to ask your question to management in Chinese we ask that you. Please kindly repeat your question in English.

Jiayuan Xu: Thank you, Li, and hello everyone. Welcome to our second quarter, 2023, an ACE call. In the interest of time, I will not go through all of the financial life items on this call. Please refer to our initial release for further details. As Li mentioned, the domestic micro-environment continued to be challenging with pockets of improvements in certain areas. The official manufacturing purchase measures index coming at 49.3 points in July compared to 49 points in June and the 48.8 points in May.

Jiayuan Xu: In the interest of time, I will not go through all of the financial life items on this call. Please refer to our initial release for further details. As Li mentioned, the domestic micro-environment continued to be challenging with pockets of improvements in certain areas. The official manufacturing purchase measures index coming at 49.3 points in July compared to 49 points in June and the 48.8 points in May. According to data released by the National Bureau of Statistics on July 31, 2023, meanwhile, total social financing data in July increased by just on the 520 and the 28 billion below market expectation. Total retail consumption in July only increased by 2.5% compared with the same period last year.

At this time, we will pause momentarily to assemble our roster.

Okay.

Speaker 1: Our first question will come from Yada Lee of credits of the I.

Our first question will come from young Li of credit.

Please go ahead.

Speaker 5: bye good goods thanks for given me the opportunity to I have two questions today to start meeting forward the first is please strongly tell us the among about the company or slightly before the

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Jiayuan Xu: According to data released by the National Bureau of Statistics on July 31, 2023, meanwhile, total social financing data in July increased by just on the 520 and the 28 billion below market expectation. Total retail consumption in July only increased by 2.5% compared with the same period last year. However, despite the challenging micro-environment, we are encouraged by the strong operational and financial results we delivered in the second quarter of 2023. During our stable and better quality borrower base, we achieved solid operational metrics in the second quarter in the China market.

Speaker 5: It you know, don't many going them. You can Al you atch, do some to be on send way sho.

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Jiayuan Xu: However, despite the challenging micro-environment, we are encouraged by the strong operational and financial results we delivered in the second quarter of 2023. During our stable and better quality borrower base, we achieved solid operational metrics in the second quarter in the China market. Commitatively, we have served over 24 million borrowers in China, with the number of unique borrowers at around 2.3 million of 5% sequentially. Additionally, our China transaction volume reached on the 45.5 billion while our outstanding loan balance reached on the 62.6 billion as of June 30, 2023.

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Speaker 5: Then I'll do my translation. Hello management, thanks for taking my question. This is Yada with GSEC. And my first question today is about the FI quality trend.

Oh, then they'll do my translation.

Hello management. Thanks for taking my question. This is yoga with TICC and I suppose the question today is about asset quality trends well considering the current macroeconomic condition what is the latest shao.

Jiayuan Xu: Commitatively, we have served over 24 million borrowers in China, with the number of unique borrowers at around 2.3 million of 5% sequentially. Additionally, our China transaction volume reached on the 45.5 billion while our outstanding loan balance reached on the 62.6 billion as of June 30, 2023. Both of our 12% are a year-over-year basis. Most data by our prudent approach to risk management with proven fraudic detection technologies. We have maintained a stable risk level.

Speaker 5: Considering the current micro-economic condition, what is the latest trend of leading indicators like day one and eventative inquisity in July and August ? And what can we expect going forward and how to affect our provision strategies?

Leading indicators like day, one that I've been to a delinquency in July and August and what can we expect going forward and how to affect that will provision strategies and my second question is related to the international business and could you. Please give us more color on the updated such as the progress of business expansion into new countries.

Speaker 5: My second question is related to the international business. And could you please give us more color on the updates such as the progress of business expansion in new countries, business model, and long-term strategic focus. Thanks.

Jiayuan Xu: Both of our 12% are a year-over-year basis. Most data by our prudent approach to risk management with proven fraudic detection technologies. We have maintained a stable risk level. In the second quarter of 2023, our day-winds-delinquency rate was around 5.6%, and the vintage-delinquency rate is expected to be around 2.3% for the quarter. Finally, thanks to our loan collection team's impressive efforts, our loan collection recovery rate maintained stable at around 90%. As we continue to fountain our strategy of serving bad quality borrowers, our proportion of category A and B borrowers in the China market further expanded to 80% of our total borrowers in the second quarter.

Excuse me its model and our long term strategic focus thanks.

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Jiayuan Xu: In the second quarter of 2023, our day-winds-delinquency rate was around 5.6%, and the vintage-delinquency rate is expected to be around 2.3% for the quarter. Finally, thanks to our loan collection team's impressive efforts, our loan collection recovery rate maintained stable at around 90%. As we continue to fountain our strategy of serving bad quality borrowers, our proportion of category A and B borrowers in the China market further expanded to 80% of our total borrowers in the second quarter.

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Jiayuan Xu: Group. Compared with 74% in the same period last year. Furthermore, our transaction to better quality borrowers helps us to further optimize our funding costs during the quarter. We have also expanded our number of cumulative funding partners to 82 financial institutions and our pipeline of potential partners remains robust. All these operational improvements enable us to maintain a healthy take rate of around 3.1% during the second quarter. As a company deeply committed to social responsibility, we continue to support more being less owners during this challenging period.

Speaker 2: Looking from the perspective of our contemporary Visa, the Tod-??ang smartening is not going down as well as a negative view on that. Thirdly, new?-setting for empathy, the ability to reach our audience, re Options. Should not campaign for existing media is allowing us to momentarily interpret as one of our violkids's Creative X ingredient.

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Jiayuan Xu: We have also noticed that our more being less owner's segment has been recovering at a healthy pace. Most of our borrowers from this segment are focusing on wholesale retail food and the beverage industry. During the quarter, we still get around 459,000 more being its owners and the faceties are in the 11.5 billion of loans for them. Representing an increase of around 11% compared with the same period last year and up 12% sequentially.

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Speaker 6: Ayatatis is extremely let me do the translation for Alexis. Your first question is related to our recent assessment performance. As mentioned, I will be in touch.

Yeah. Todd This is Jimmy let me do the translation for Axis.

First question is related to our risk assessment performance as mentioned our vintage.

Speaker 3: Delinquency's performance is around 2.3% and it has always been around at 2.3% levels over the past few years. And our 30 days long collection recovery rate is around 90% and over the last few quarter, this metric has been relatively stable.

Delinquencies performance is around two 3% and it has always been around two 3% levels over the past few years, and our 30 days <unk> collection and recovery rate is around 90% and over the last few weather. This metric has been relatively stable.

Jiayuan Xu: Now, I'd like to share some additional details on our international expansion efforts. Indonesia, our largest overseas market recorded a continued growth in its macroeconomy during the second quarter. Notably, on a monthly basis, the manufacturing PMI grew by 2.2 points to 15.2.5 points and the business confidence index reached 99%. In Indonesia, economy continued to remain robust in the second quarter and has maintained growth of 5% over the past several quarters. Going forward, Indonesia economy is expected to maintain growth of around 5% in 2023.

Speaker 3: And our particular delinquencies has is at 1.68% which is also at a low level.

And our current delinquencies has is at 168%, which is also at a low level.

Speaker 3: From observation, the Carromaco environment is relatively weak with the recovery below expectation.

From observation the current macro environment is relatively weak with recovery below expectation.

Speaker 3: And from observation, the credit market is doing okay and we expect that it is going to maintain stable going forward with risk performance staying stable as well. We have been through multiple credit cycles, including the COVID and the lockdowns. And we have proved that throughout all these cycles, we have successfully navigate them and succeed after all these cycles.

And from observation the credit market is doing okay, and we expect that it is going to maintain stable going forward.

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<unk> been through multiple credit cycles, including the Kobe and the Lockdowns and we have proved at.

Oh, the Cyprus, we have successfully navigate and succeed.

Jiayuan Xu: We anticipate that its domestic consumption will remain robust. We are excited about the progress we have made in our overseas market across multiple operational and financial metrics. Commitatively, we have served over 4 million borrowers in Indonesia and the Philippines and continue to demonstrate significant growth in these countries. With the number of unique borrowers served during this quarter, reaching a new high-end 7,000 and 86,000, up 22% from the same period last year.

After all these cycles.

Jiayuan Xu: We are excited about the progress we have made in our overseas market across multiple operational and financial metrics. Commitatively, we have served over 4 million borrowers in Indonesia and the Philippines and continue to demonstrate significant growth in these countries. With the number of unique borrowers served during this quarter, reaching a new high-end 7,000 and 86,000, up 22% from the same period last year. International transaction volume sold by 100% year-over-year during the second quarter, reaching on the 1.8 billion, while we set a new record in our outstanding loan balance at 1.1 billion, up 113.1% year-over-year.

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Jiayuan Xu: International transaction volume sold by 100% year-over-year during the second quarter, reaching on the 1.8 billion, while we set a new record in our outstanding loan balance at 1.1 billion, up 113.1% year-over-year. Our operations in the Philippines have also exhibited stronger expected growth across numerous operating metrics. On a year-over-year basis, the number of unique borrowers, transaction volume, and outstanding loan balance all grew by several times compared with the same period last year.

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Jiayuan Xu: Our operations in the Philippines have also exhibited stronger expected growth across numerous operating metrics. On a year-over-year basis, the number of unique borrowers, transaction volume, and outstanding loan balance all grew by several times compared with the same period last year. A long-sighted is impressive operational metrics, international revenue maintained is reverse the growth trajectory reaching time be five-quindry and three-minute, and increase of one-hundred and twelve percent year-round. And contribute around sixteen percent of total revenue in the second quarter.

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Jiayuan Xu: A long-sighted is impressive operational metrics, international revenue maintained is reverse the growth trajectory reaching time be five-quindry and three-minute, and increase of one-hundred and twelve percent year-round. And contribute around sixteen percent of total revenue in the second quarter. We have consistently strengthened our relationships with both local traditional financial institutions such as Bank Pomata and the OCBC Bank, as well as innovative internet banks such as Bank Jaggle and the C Bank. Thanks to these refreshing partnerships and our partners' validation of our technologies and operational capabilities, our percentage of loans in the second quarter for the data by these institutions reached sixteen five percent compared with thirteen nine percent in the same period last year.

Speaker 2: This group is very compatible with some consumer scenarios, such as mobile phones. So we are now exploring a way to cooperate with some local well-known mobile phone brands and stores to provide a consumer division for such users.

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Jiayuan Xu: We have consistently strengthened our relationships with both local traditional financial institutions such as Bank Pomata and the OCBC Bank, as well as innovative internet banks such as Bank Jaggle and the C Bank. Thanks to these refreshing partnerships and our partners' validation of our technologies and operational capabilities, our percentage of loans in the second quarter for the data by these institutions reached sixteen five percent compared with thirteen nine percent in the same period last year.

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Speaker 3: Hello Yana, let me do the translation for Alexis. As you know, we are already in leading positions in the Indonesia and the Philippines market. And apart from these two countries, we are also looking at opportunities in other countries in the Southeast Asia and also looking at for high growth opportunities in countries such as the Africa and Latin America.

Hello, Yeah. So let me do the translation for Alexey as.

As you know we are we.

We are already in leading positions in the Indonesia and.

The Philippines market and apart from these two countries. We are also looking at opportunities in other countries in southeast Asia and also looking at for high growth opportunities in countries, such as Africa, and Latin America.

Speaker 3: Our business model is not only restricted to online.

Our business model is not restricted to online.

Lending.

Speaker 3: We are also looking at opportunities, for example, we are also looking at opportunities in Indonesia for offline consumption scenarios. And as you know, the populations in Indonesia is young and we are looking with leading mobile phone operators in the Indonesia market.

We are also looking at opportunities for example, we also looking at opportunities in Indonesia for offline consumption scenarios and as you've known the populations in Indonesia is young and we are working with leading mobile phone brand dose.

Jiayuan Xu: Going forward, we will further deepen our relationships with these institutions to increase our proportion of facilitation by local institutions and expand our network of local partners in the region. Driven by our ongoing investments in technology and our strategy shaped towards building bad quality borrowers, our natural revenues for the second quarter rose to R&B 3.1 billion of a fifteen percent year-over-year. Net income for the second quarter reached R&B five-quindry at the ninety-minute of one percent year-over-year.

Indonesia market.

Speaker 3: target these borrowers for mobile offline mobile phone consumption.

To target. This ballroom was for mobile offline mobile phone consumptions.

Okay, Yeah that do you have any further questions.

Okay.

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Jiayuan Xu: Our leverage ratio, which is defined as risk-bearing loans divided by shareholder equity, remains stable at 4.3 times. There is a time of uncertainty, our strong balance sheet and liquidity position continue to provide the confidence to all our stakeholders and support the business growth for all our market. In particular, our cash position remains robust with over R&B 8.2 billion of cash and the short-term liquidity as of the end of June 2023. Representing an increase of 58 percent year-over-year and the sixth percent quarter-over-quarter.

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Speaker 3: On the second point, you can see that in the overseas countries, we are not the earliest countries in the world. But because we are in the technology, technology and human rights, we have a very good kitchen, and we have been able to do well with the market and cooperation work.

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Jiayuan Xu: We also remain committed to optimizing shareholder value through our annual dividend policy and the share repurchase policy. We believe the current macro-environment offers an attractive opportunity to return value to shareholders. As such, during the first half of the year, we deployed around US 46 million to repurchase our stock from secondary market. As of June 30, 2023, we have collectively returned the US 491 million to our shareholders through our dividend and the stock repurchase programs.

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Jiayuan Xu: In addition, our board of directors has also approved a new share repurchase program of USD 150 million, reflecting our strong commitment to enhancing shareholder value. Our related notes, our chairman, CEO, and other senior management have also expressed their confidence in the company through personal shares, repurchase, totaling around 660,000 and 30,000 ADS in the first half of 2023. Given favorable macroeconomics, conditions in all international markets and the progress we have made across numerous operational metrics for our international business.

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Speaker 2: Yadala me translate for Mr. Team. As you know, the revolution was established 16 years ago and we are very experienced in different business models such as online offline and

Let me translate for Mr. Kim <unk>.

As you know evolution was established 16 years ago, and we are very experienced in different business models, such as online offline and.

Speaker 2: have very good working relationships with different partners. Some of the business models might not work in China market, but these are very useful experiences for us when we penetrate into other countries.

Very good working relationships with different partners some of their business models might not work in China market, but these are very useful experience for us one we penetrate into other countries.

Speaker 2: As you know, we are also not the earliest company to venture into overseas market, but we are in leading positions in Indonesia and the Philippines because of our capabilities, our operational capabilities, and also we have a huge base of talent pools. With these advantages, we are able to leverage capabilities and assess in our overseas market and going forward, we are competing for the success in all these international markets.

As you know we are also not the earliest company debenture into overseas market, but we are in leading positions in Indonesia, and the Philippines because of our capabilities our operational capabilities and also we have a huge base of talent pools and with these advantages we are able to leverage capabilities and.

Jiayuan Xu: Given favorable macroeconomics, conditions in all international markets and the progress we have made across numerous operational metrics for our international business. The company has increased its international transaction volume guidance for the full year of 2023 to MV7.7 billion, representing year-over-year growth of around 80%. Taking the current China micro-environment into consideration. The company has 2023 guidance for its China market to remain unchanged at between MV100 and the 89 billion to MV200 and the 5 billion, representing year-over-year growth of between 10% to 20%.

Jiayuan Xu: The company has increased its international transaction volume guidance for the full year of 2023 to MV7.7 billion, representing year-over-year growth of around 80%. Taking the current China micro-environment into consideration. The company has 2023 guidance for its China market to remain unchanged at between MV100 and the 89 billion to MV200 and the 5 billion, representing year-over-year growth of between 10% to 20%.

Yes in our overseas market and going forward, we are confident.

But our success in all of these international markets.

Speaker 4: Okay, thanks Yada and operator please continue. Pfft!

Okay.

And the operator please continue.

Okay.

Speaker 1: Our next question will come from Frank Zang of Credit Tweet.

Our next question will come from Frank Meng of Credit Suisse.

Speaker 2: Thank you for your time. The first question is about the future of the Chinese market. From a central perspective, for example, a year, we can see the impact of the Chinese market.

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Jiayuan Xu: Before I conclude my remarks, let me provide some additional comments on our business outlook for the third quarter of 2023. Despite some uncertainties in the micro-environment, our business trajectory remains solid. We expect our transaction volume in China for the third quarter of 2023 to be around MV149 billion, representing an increase of around 10.4% year-over-year. We expect our transaction volume in international markets for the third quarter to be around MV1.9 billion representing an increase of around 73% year-over-year.

Speaker 2: If we then ask for appropriate information in the domestic market, can we give a recommendation for quality data with the highest risk? Even if it isstarted with Chapter 48 than Afterbelly total standard market wait card

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Speaker 2: Thank you, Mattrin, for giving me the opportunity to ask questions. The first one is the follow-up on the international market. From a medium-term perspective, for example, one year's time, how would you foresee the profitability of international market operations? And the second question is on domestic markets. Do we have plans to further tap into prime customers with APR less than 18% in order to further expand the volume as well as improve the risk?

Thank you management for giving me the opportunity to ask questions. The first one is a follow up on the <unk>.

National market from a medium term perspective for example, a one year's time, how would you see the profitability of international market operations and our second question is all done. This market do we have says to further tap into prime customers with NPR, that's 18% in order to.

Jiayuan Xu: In summary, our outstanding performance in the second quarter of 2023 underscores our dynamic business model. Technology code know-how and the dedication to advancing our international initiatives. Entering into the second half of 2023, we remain focused on reviring our risk assessment and the management framework, expanding our KLC customer base and optimizing our product mixed. Looking ahead, we believe that we are well positioned to capitalize on the massive opportunities in both China and international markets. Driving goals are while creating greater value for our customers, shareholders and all of our stakeholders.

Further expand the volume as well as improved the risk performance. Thank you.

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Speaker 3: He is the master of this moon, so the captain of this boat will do a taste of it.

Jiayuan Xu: With that, I will conclude my prepared remarks.

But the AGA and addresses day to go quite a change from here.

Unknown Executive: We will now open the call to the questions. Operators, please continue. We will now begin the question and answer session. To ask a question, you make a star then one on your telephone keypad. If you are using a speaker phone, please pick up your handsets before pressing the keys. To withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, we ask the please kindly repeat your question in English.

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Unknown Executive: At this time, we will pause momentarily to assemble a rough.

Jimmy Tan: Our first question will come from Yada Li of credits of the ICC. Please go ahead. [inaudible] climate climate climate climate climate climate climate climate climate climate Hi Yada, this is Jimmy.

And let me do the translation for Alex This spring.

Speaker 2: Okay, in the midterm right, regarding our international market's profitability, our international business is already profitable in the second quarter, but it is still relatively small compared to the China market. There are several reasons for this. Number one, it is affected by the rapid growth for our international business as we need to.

Okay in the meantime.

Right.

Regarding our international market profitability.

National business is already profitable in the second quarter, but it is still relatively small compared to with the China market.

Our gas several reasons for this number one it is affected by the rapid growth for our international business as we need to.

Speaker 2: invest continuously. For example, our percentage of new borrowers in the Indonesia market is around 37%. And also, it is being affected by the deferred revenue because all these loans are conducted in instalment loans.

Invest continuously for example.

But our percentage of new borrowers can get into niche market is around 37% and also it is being affected by the deferred revenue because all of these loans are conducted installment loans.

Hmm.

Speaker 3: Secondly, in terms of population, we have improved the second quarter by 22.3%

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Speaker 3: In fact, the change in the average price shows the change in the structure and exploration of the population. The main reason for the decline is that the proportion of the population below 18 is increasing.

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Speaker 3: How do we look at this? I think we have to look at the historical data and our past experience. We found that the fixed price still has an impact on our high-quality users. A more appropriate fixed price will attract high-quality users, increase the age of old customers, and improve the life cycle of loans. This will be very helpful.

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Speaker 3: As you know, we have always been leading in ROA. If you look at the ROA of ROA, it is around 3.71.

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Speaker 3: At the same time, we still have a lot of room in terms of cost optimization. For example, in the first quarter, we optimized the cost of the funds by 30%, and in the second quarter, we continue to optimize it by 20%.

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Speaker 2: Hello friends, let me translate for Alex's for this question. In the second quarter, we further optimise our pricing to 22.3% from 22.7% in the first quarter. As you have seen, we are continually trying to explore to acquire better quality boroughs. Through our historical experience, lower pricing helped us to attract better quality boroughs and better quality boroughs with a higher level of thickness on our platform.

Hello, Frank let me translate for Alex's for this question in the second quarter, we further optimized our pricing to 22, 3% from 22, 7% in the first quarter.

As you have seen we are continually.

Trying to explore to acquire better quality borrowers to our historical experience lower pricing help us to attract better quality borrowers and better quality borrowers will have a higher level of stickiness on our PEPFAR.

Speaker 2: And if you observe, we have also, our ROA is also higher compared to the industry average. And in the second quarter, our ROA from our reported earnings was about 3.7 percent. And we have also optimized our funding cost structure by around 30 BIPs in the second quarter. And going forward, we will consider a balance between pricing and our ROA. Thank you.

And.

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Jimmy Tan: Let me do the translation for Alexis. Your first question is related to our research assessment performance. As mentioned, our vintage delinquency performance is around 2.3% and it has always been around at 2.3% levels over the past few years and our 30 days long collection recovery rate is around 90%. And over the last few quarter, this metric has been relatively stable and our particular delinquencies has is at 1.68%, which is also at a low level.

Our reported earnings was about three 7% and we have also optimized our funding cost structure by around 30 bps.

30 bps in the second quarter and going forward, we will consider a balance between pricing and our AOI.

Okay.

Okay, Brett do you have and as a follow up question.

Okay.

Speaker 9: No, that's not thank you very much.

No. That's all thank you very much.

Jimmy Tan: From observation, the current macro environment is relatively weak with the recovery below expectation. And from observation, the credit market is doing okay and we expect that it is going to maintain stable going forward with risk performance staying stable as we have been through multiple credit cycles including the COVID and the lockdowns and we have proved that throughout all these cycles, we have successfully navigated them and succeeded after all these cycles. [inaudible] that we are already in leading positions in the Indonesia and the Philippines markets.

Okay. Thanks.

Speaker 1: The next question will come from Alex Yeh of UVF.

The next question will come from Alex ye of UBS.

Okay.

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Speaker 10: So my question is on the shareholders return, so we are happy to see management announce 150 million your dollar of share buyback plan, which shows case management focus on improving shareholder value. So if we go back to your chart record on this buyback, how should we consider your pace on deploying such...

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Speaker 9: Focat going forward. Should we consider the 150 million Focat to be deployed over to year horizon as indicated by your authorization period and also if you're need.

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Speaker 9: Pay our ratio if you take into account both your dividend and buy back.

Our ratio.

Taking into account both dividend and buyback. Thank you.

Speaker 3: beautiful The results of the wind flow are in the past few years. It's been 18 years since we've done the wind flow and flow. The data has been introduced. The wind flow is now 2.6 times more than the wind flow. Then the wind flow is 2.3 times more than the wind flow. The wind flow is 5 times more than the wind flow.

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Jimmy Tan: And apart from these two countries, we are also looking at opportunities in other countries in the Southeast Asia and also looking at for high growth opportunities in countries such as the Africa and Latin America. Our business model is not only restricted to online lending. We are also looking at opportunities for example, we are also looking at opportunities in Indonesia for offline consumption scenarios and as you know, the populations in Indonesia is young and we are looking with leading mobile phone operators in the Indonesia market to target these borrowers for mobile offline mobile phone consumption.

Speaker 3: if we look into it a year, we can see that our compete between eight measures is close to 30%. Every day terms are fair, and the ground needs to be clear. The key of this competition should exist through Mixstone and the network centuries ahead.

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Jimmy Tan: Okay, Yada, do you have any further questions? I'm sorry, I have no other questions. Xiaoxiong Ye, Yada, do you have any other questions? The second point is that you can see that in the overseas countries, we are not the earliest ones in the country. But because we are in the technology, technology, and talent, we have a lot of good kitchen equipment and we have a lot of good market and business partners and business partners. [inaudible] All right.

Speaker 3: Last year, we had a payout ratio of 18.5. Roughly speaking, I think this year's return will only be slightly higher than in the past five years.

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Yada Li: I'm sorry, I have no other questions. Xiaoxiong Ye, Yada, do you have any other questions? The second point is that you can see that in the overseas countries, we are not the earliest ones in the country. But because we are in the technology, technology, and talent, we have a lot of good kitchen equipment and we have a lot of good market and business partners and business partners.

Yeah.

Hello, Alex let me do the translation.

Unknown Executive: [inaudible] All right.

Speaker 2: Our shared repotrace and buyback programs began in 2018 and we already have a few years of track record. And cumulatively, we have returned about US dollars 260 million in the form of dividend to our shareholders.

Well share repurchase and buyback programs began in 'twenty eating and we already have a few years of track record and cumulatively. We have returned about USD $260 million a form of capital to our shareholders.

Speaker 2: and 230 million for shared-repeach cases. In total, it is about $500 million returned to our shareholders. And the payout ratio, if you calculate, is around 30 to 40%. In terms of absolute amount, we are ahead of our peers. In the first half of 2023, our buyback amount is close to 50 million. And the payout ratio for our annual dividend was 80.5%.

And 230 million for share repurchases in dollar it is about $500 million returned to our shareholders and the payout ratio. If you calculate is around 30% to 40%.

In terms of absolute amount. We are ahead of our peers in the first half of 'twenty and treat our buyback amount is close to $50 million and the payout ratio.

And would you be doing was 80 point, 85%.

Speaker 2: So the payout ratio for 20, 20, 3 is slightly to be higher than our average historical years. And as long as the market conditions allows and is favorable, we will continue to return value to our shareholders as validated by our past historical performance. Okay, Alex, is it okay for you?

So the payout ratio for 2020.

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Our average historical years and as long as the market conditions allow us and his favorite favorable, but we will continue to return value to our shareholders as validated by our past historical performance.

Okay.

Is it okay for you.

Yeah.

How about that.

Okay. Thank you.

And our next question will come from tonnage Chong of Jefferies.

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Frank Zheng: Our next question will come from Frank Zheng of Credit Tweets.

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Speaker 10: Thanks for my attention, and I'll be taking my questions. My question is about the competitive landscape.

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Speaker 10: in OPC's market. Communication shared your thoughts about the future outlook and on marketing, spending, given a read talk about Facebook is one of our channel. Can you comment about?

In overseas Mop.

Can management share your thoughts about the future outlook and on marketing spending.

Given that we talk about our Facebook you spun off our channel can you comment about.

Speaker 9: The cut from our acquisition cost in overseas versus domestic market. Thank you.

The customer acquisition cost in overseas versus domestic market.

Frank Zheng: Thank you, Mattrin, for giving me the opportunity to ask questions. The first one is the follow-up on the international market. From a medium-term perspective, for example, one year's time, how would you foresee the profitability of international market operations?

Thank you.

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Frank Zheng: And the second question is on domestic markets. Do we have plans to further tap into prime customers with APR less than 18% in order to further expand the volume as well as the improved risk performance?

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So you need a GDP yet how should that G&A should CPG too soon to tell whether that's into 'twenty you wish it up in June .

Unknown Executive: Thank you. Thank you, Mattrin.

Could it be and it's always you don't usually you'll see it doesn't sound that you got some swaps with Hudson going a whole lot you shipped with Twitter.

Unknown Executive: The first question is about our international market. The second question is about our international market. The third question is about our international market.

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I thought she see what more we put on the table.

Unknown Executive: [inaudible] In terms of the transformation of the peace, we are talking about the transformation of human rights and the result of the transformation, because Xiaoxiong Ye is the main reason for 18-18-year-old human rights war. Let's take a look at this matter. I think one of the reasons why we have to communicate with history is that we have experienced a lot. It is more appropriate for us to maintain the connection of the human rights and the connection of human rights.

It seems you're flagging that India Cushing idea that whole shorten that I don't think that's a good engender Johnny could kiwi.

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Speaker 3: So, now the Japanese government has already included the internal?? to implement the issues of the Japanese automatedputer

The whole.

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Speaker 3: In the second quarter, the total import-export investment in the overseas market was about 80 million RMB.

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Speaker 3: In addition to Facebook, we are also cooperating with other major headlines, such as TikTok.

The 12 month, Facebook and you watch this a warmer yay.

So you got Tobu that she should deal with that little off here, so shallow shashank tick tock huh.

Speaker 3: I think in the future, these will become very important channels for new customers to come to our hospital.

I'm not sure what you will at all which have official until we all the time because you can call out again to John's usage at all.

Speaker 2: Hello Thomas, let me do the translation. As you have known.

Hello, Thomas Let me do the translation.

As we have known.

Speaker 2: Our operations are mainly in the Indonesian and Philippine market and the macro environment in these countries are relatively positive. For example, in Indonesia, the GDP growth has been growing at over 5% for the last 7 quarters and in 2023, the GDP growth is expected to maintain at around 5%. The Philippine market is slightly slower compared to the Indonesia market but the GDP growth is still growing at around 4.3%.

Our operations, I mean, the Indonesia, and Philippines market and the macro environment. In these countries are relatively positive for example, Indonesia.

You've got good GDP growth has been growing at over 5% for the last seven quarters and in brain pine tree that GDP growth is expected to maintain at around 5%.

Philippines market is slightly slower compact.

The Indonesia market.

P group is still growing at around four 3%.

Speaker 2: And the reason why we are able to maintain our leading status positions in these countries are because we have deployed our technology capabilities and operational capabilities into this country.

And the reason why we are able to.

Maintain our leading status positions in these countries because we have deployed our technology and operational capabilities into these countries and in the second quarter. Our number of unique borrowers has also reached a new high at 786000, and we are constantly among the top three players.

Speaker 2: In the second quarter, our number of unique borrowers has also reached a new high at 786,000 and we are constantly among the top 3 players.

Speaker 2: These markets, Indonesia and Philippines, are huge markets and are at early stages for us.

Unknown Executive: On the other hand, we will also evaluate the transformation and the transformation of human rights. This is what we are talking about. We have always been in the position of a relatively new position. If you take a look at the report, we will see that the two of us are in the third year. At the same time, we are still in a lot of space. For example, in the process of transformation, we are in the process of transformation.

This marquee, Indonesia, and Philippines are huge market and early stages for us. So we will continue to invest and maintained leading positions into these countries as supported by our technology and operational capabilities. Our efforts and capabilities has also been recognized by local financial institutions for example.

Speaker 2: So we will continue to invest and maintain leading positions into these countries as supported by our technologies and operational capabilities. Our efforts and capabilities has also been recognised by local financial institutions.

Speaker 2: For example, this can be validated by the increase in the proportion of loans funded by local partners from 65% in the second quarter compared to only 39% in the same period last year.

These can be validated by the increase in the proportion of loans funded by local partners from 65% in the second quarter compared to only 39% in the same period last year.

Speaker 2: For sales and marketing, from the amount we spend is around 80 million RMB has been invested into sales and marketing in the second quarter. And apart from Facebook, we are also investing into TikTok. We believe all these information-based China will be good China for us to acquire our new borrowers going forward.

For sales and marketing.

The amount we spend is around 80 million RMB has been investing into sales and marketing in the second quarter and apart from Facebook we are always looking.

Unknown Executive: [inaudible] Thank you.

Investing into talk we believe all this information piece China's will be X.

It would be good China's for us to acquire our new borrowers going forwards.

Okay.

Speaker 3: Shayo Liu Fightgr so we are then in our situation.

Do you have any other questions.

Uh huh.

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Our prepared remarks.

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Speaker 3: Thank you. Thanks a lot for picking my second question. My question is about AI. In the prepare remarks, we talk about the, we have been investing in AI for many years and apply AI in difference in marial.

Our offense management for taking my second question. My question is about AI in.

In the prepared remarks, you talk about.

We have been investing in AI for many years and apply AI in different scenario.

Speaker 3: Given ROM, the search for a hot topic in the Internet sector, these days, and people talk about ROM or industry ROM, just want to get some thoughts for management with regard to this area, whether we are thinking of developing our own ROM or we are seeking a partnership with the top players. Thank you.

Justin.

Hello, Ann you such a hot topic in the Internet space and people talk about Oh am or industry.

Just want to get some more management with regard.

To this area.

We are thinking of developing our own.

We actually came in a partnership with the top peers. Thank you.

Speaker 6: Okay, thanks a ton when you are practicing so hard.

Sure Thomas.

Well I don't view when he is unclear.

Speaker 6: To be frank, I don't think the general public model is a good opportunity for a company like ours. I think this is a form of investment that requires a huge amount of investment at the national level, and requires a lot of data and a lot of talent. So for us, the general public or large-scale industry model is not something we want to look at in this area.

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Speaker 6: and productivity improvement. This has always been the focus of our attention. On the other hand, we will continue to explore the opportunities in certain areas such as the opportunity to provide AI-based services and model data analysis. We will continue to explore these areas. To a certain extent, after we have completed our own application scenario, we will continue to explore more opportunities for cooperation between industries and companies.

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Speaker 2: Hello Thomas, let me do the translation for Mr. Tim.

Hello, Thomas Let me do the translation from the team.

Speaker 2: Honestly, the general big data model is not for a company of our size as it needs to be at a country level where huge resources are required for development.

Honestly, the general Big data more if not for a company of our size as it needs to be at a country level, whether it be huge resources are required for development.

Unknown Executive: Alex, first of all, let's take a look at the results of our past few years. We have been doing this for 18 years. In the past few years, we have been doing this for 2.6 billion yen, and we have been doing this for 2.3 billion yen, and we have been doing this for 5 billion yen. [inaudible] Okay, Alex is it okay for you?

Speaker 2: Our focus is on the implementation of AI models into our operations and to our daily operations in order in an attempt to increase our efficiency. And also, we will be looking at specific opportunities that are suitable for us for deployment into our business where we can also consider to work with other partners to increase our efficiency.

Our focus is on the implementation of AI models into our operations and to our daily operations in order in an attempt to increase our efficiency and also we will be looking at specific opportunities.

Unknown Executive: Okay, thank you.

Speaker 2: for us for deployment into our business where we can also consider to work with other partners to increase our efficiency. Thank you. Okay. Here, thanks. The next question will come from Cindy Wang of China Renathon. on the

Suitable for us for deployment into our business, where we can also coincident with other partners to increase our efficiency.

Okay.

Speaker 11: Yes, sir. Okay. Thank you.

Okay.

Thanks.

Yes.

Speaker 1: The next question will come from Cindy Wang of China Renathon.

And the next question will come from Cindy Wang of China Renaissance.

Yeah.

Speaker 12: The other one is the global foundation of the LIMA in fato.

Okay.

No.

Yeah, Hey, guys a bunch of questions guys.

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In the consensus.

I'm John Ketchum.

Hum.

Sure.

With that I'll turn it back into the country.

And one thing Scott.

Oh, no I think all of them.

Paul do you have to go country by country.

She's a ship, Washington, Oh, how should should take I wouldn't pin that down.

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Actually in downtown Nashville, and we'll come back to the property that India has shut off the job sometimes.

Sometimes things just don't ship about Nashville.

So as long as you want them to shop with them can you kind of touched upon.

Oh yeah.

Yeah.

Sure Sheila.

Thank you Chuck.

No I wasn't quite sure.

So one smartphone for taking my question does come from China.

Speaker 12: Thanks, my friends, for taking my question. This is from China Remembrance. So I have two questions. The first question is related to the overseas institution of funding. So we've seen the institutional funding.

I have two questions. The first question.

Okay.

Attrition of funding.

So we've seen more attrition of funding.

Speaker 12: passing going up pretty quickly. So in the meantime, what's the percentage contribution or would be contributed from the institutional funding? The second question is related to provisions. So we see the asset quality has been improving in second quarter. However, the provisions compared to the first quarter has been slightly up.

Things are going up pretty quickly.

In the meantime, what's that percentage contribution okay.

Contributions from the institutional funding.

Second question is related to your publishing so I always see that asset quality has been improving.

Improving in second quarter, how that bad debt provisions compared to first quarter.

Uh huh.

Speaker 12: So can we talk about what the difference between here and whether we have any right back in the second quarter and how to read or see the prediction in the second half of the year? Thank you.

So can we I'll talk about that so two things patrons, yet that whether we had write backs in the second quarter and how do you foresee that provision.

Mhm second hop off just yet.

Sure.

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Speaker 4: The second question is our animated system. My ?? point is, the theory of the Part Wah, the curriculum in traveling has one of its part-time veiled samples.

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Thomas Chong: And our next question will come from Thomas Chong, get it. [inaudible] I am the CEO of Xiaoxiong Ye, I am the CEO of Xiaoxiong Ye, I am the CEO of Xiaoxiong Ye,[inaudible] I am the CEO of Xiaoxiong Ye, I am the CEO of Xiaoxiong Ye, I am the CEO of Xiaoxiong Ye,[inaudible][inaudible] Thank you, Thomas. I will ask you a few questions.

Thomas Chong: And our next question will come from Thomas Chong, get it.

Unknown Executive: [inaudible] I am the CEO of Xiaoxiong Ye, I am the CEO of Xiaoxiong Ye, I am the CEO of Xiaoxiong Ye,[inaudible] I am the CEO of Xiaoxiong Ye, I am the CEO of Xiaoxiong Ye, I am the CEO of Xiaoxiong Ye,[inaudible][inaudible] Thank you, Thomas. I will ask you a few questions.

Could you talk to but you should you be when you have to wait.

Speaker 4: Theirs are strange sometimes

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Speaker 4: At the moment, the situation in China is not as good as expected. I think the risk performance is basically consistent with the expectation after the 1.7. So we don't have any further recovery or expansion plans. Whether there will be additional opportunities will depend on the external environment

Sure. So if we have got you know what you would've had to go to easily hold it would help a lot.

C J O b.

Neil to keep with that just don't quibble with that Johnny here.

Hey Chi.

Oh shoot.

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I can't let you go.

Uh huh.

I am Cindy let me do the translation.

Speaker 2: As mentioned, we have around 65% of funds in, 65% of the loans in Q2 was funded by local Indonesian partners in the second quarter, and we expect this amount to be around 80% by the end of the year. Going forward, we still think that there is opportunity for us to further increase this proportion, but our next focus will be on the funding course where we need to do some optimization on our funding course for the international monkeys.

We have as mentioned we have around 65% of funds in 65% of the loans in Q2 was funded by local <unk>.

Indonesian partner in the second quarter, and we expect this amount to be around 80% by the end of the year.

Going forward, we still think that there is opportunity for us to further increase this proportion, but our next focus will be on the funding costs, where we need to do some optimization on our funding costs in the international market.

Going to the next question.

Speaker 2: When we take a look at the provisions, we need to divide into domestic and international provisions. The main reason is because right international business is growing at a very rapid rate. This is the reason for the provisions levels to be higher. In the first quarter, there was a right back.

When we take a look at the provisions we need to divide into domestic and international prohibitions. The main reason is because of our international business is growing at a.

Doug.

This is the reason for the provisions like this to be higher in the first quarter.

It was a write back.

Speaker 2: And now if we take a look at the domestic China recovery, the recovery is still weak and

And now if you take a look at the domestic China recovery the recovery is weak and b.

Speaker 2: Be slightly below expectations. So we don't have any plans for ride back at the moment. But all this will change when the economy is recovering at a faster pace and there we believe there will be opportunities for rightide back going forward. Okay, ex.

Slightly below expectations. So we don't have any plans for a buyback at the moment, but all these will change when the economy is weak.

Covering at a faster pace and that we believe there will be opportunities for write back going forward.

Okay. Thanks Cindy.

Uh huh.

Oh.

Thank you Cindy.

Okay.

Yeah.

Speaker 1: At this time, I would like to turn the call back over to the company for closing room.

At this time I would like to turn the call back over to the company for closing remarks.

Speaker 2: Thank you once again for joining us today. If you have further questions, please feel free to contact me or my Investor Relations team. Thank you so much.

Thank you once again for joining US today. If you have further questions. Please feel free to contact me or my Investor Relations team. Thank you so much.

Speaker 1: This concludes this conference call. You may now disconnect your line. Thank you.

This concludes this conference call you May now disconnect. Your line. Thank you.

Okay.

Unknown Executive: I need to be honest, I think it's a great opportunity to have a big investment in the country and to have a large amount of data and a lot of people invest in such a situation. [inaudible] I would like to ask you a few questions, a few questions, a few questions, a few questions, a few questions. Honestly, the generic data model is not for a company of our size as it needs to be at a country level where the huge resources are required for development.

Unknown Executive: Honestly, the generic data model is not for a company of our size as it needs to be at a country level where the huge resources are required for development. Our focus is on the implementation of AI models into our operations and to our daily operations in order in an attempt to increase our efficiency. Also, we will be looking at specific opportunities that are suitable for us for deployment into our business where we can also consider to work with other partners to increase our efficiency.

Unknown Executive: Our focus is on the implementation of AI models into our operations and to our daily operations in order in an attempt to increase our efficiency. Also, we will be looking at specific opportunities that are suitable for us for deployment into our business where we can also consider to work with other partners to increase our efficiency.

Unknown Executive: Thank you.

Cindy Wang: The next question will come from Cindy Wang of China Renaissance. Thank you.

Cindy Wang: The first question will come from Cindy Wang of China Renaissance. [inaudible] The first question will come from Cindy Wang of China Renaissance. The first question will come from Cindy Wang of China Renaissance.

Cindy Wang: The second question will come from Cindy Wang of China Renaissance. [inaudible] Thank you. Thank you.

Unknown Executive: At this time, I would like to turn the call back over to the company for closing remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact me or my investor relations team. Thank you so much.

Unknown Executive: Thank you so much.

Unknown Executive: This concludes this conference call. You may now disconnect your line. Thank you.

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