Q1 2024 Qifu Technology Inc Earnings Call

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Speaker Change: Thank you ladies and gentlemen, thank you for standing by and welcome to the key technology first quarter 'twenty 'twenty four earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press.

Speaker Change: Dowana one on your telephone you will then have an automated message advising Johan just raised.

Speaker Change: Withdraw your question. Please press star one and one again.

Please also note today's event is being recorded.

Speaker Change: At this time I'd like to turn the conference call over to MS. Karen Jacobs Senior director of capital markets. Please go ahead Karen.

Operator: Thank you, operator. Hello, everyone, and welcome to Qifu Technology's third quarter 2024 earnings conference call. Our earnings release was distributed earlier today and is available on our IR website. Joining me today are Mr. Wu Haisheng, our CEO; Mr. Alex Xu, our CFO; and Mr. Zheng Yan, our CRO.

Karen Jacobs: Thank you operator, Hello, everyone and welcome to the Chipotle Technologies third quarter 2024 earnings Conference call. Our earnings release was distributed earlier today and is available on our IR website.

Karen Jacobs: Joining me today are Mr. <unk>, our CEO, Mr. Alex <unk>, our CFO and Mr. Jin Yan Oh.

Operator: Before we start, I would like to refer you to our safe harbor statement in the earnings press release, which applies to this call as we will make certain forward-looking statements. Also, this call includes discussions of certain long-term financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Also, please note that, unless otherwise stated, all figures mentioned in this call are in RMB terms. Today's prepared remarks from our CEO will be delivered in English using an AI-generated voice. Now, I will turn the call over to Mr. Wu Haisheng. Please go ahead.

Karen Jacobs: Before we start I would like to refer you to our safe Harbor statements in the earnings press release, which applies to this call we will make certain forward looking statements.

Karen Jacobs: Also this call includes discussions of certain non-GAAP financial measures.

Karen Jacobs: Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures.

Karen Jacobs: Also please note that unless otherwise stated all figures mentioned in this call are in RMB term.

Speaker Change: Today's prepared remarks from our CEO will be delivered in English using AI generated voice now I will turn the call back to Mr. Watson. Please go ahead.

Karen Jacobs: Yeah.

Haisheng Wu: Hello, everyone. Thank you for joining us today. Starting in the second half of 2023, we have adjusted our business strategy in a timely manner, focusing on quality growth and improving profitability as the company's primary goal over the past few quarters. We have strictly managed risks and enhanced profitability by adhering to a prudent business strategy. All these efforts have enabled us to demonstrate stronger resilience in today's challenging macro environment and deliver solid performance to the market.

Speaker Change: Hello, everyone and thank you for joining us today.

Yeah.

Speaker Change: Starting in the second half of 2023, we have adjusted our business strategy in a timely manner.

Speaker Change: Focusing on quality growth and improving profitability as the company's primary goals.

Speaker Change: Over the past few quarters.

Speaker Change: We have strictly manage risks and enhance profitability.

Speaker Change: By adhering to a prudent business strategy. All these efforts have enabled us to demonstrate stronger resilience in today's challenging macro environment.

And deliver solid performance to the market.

Haisheng Wu: Over the past quarter, we continued to expand the coverage on both ends of our platform, empowering 159 financial institutions to provide credit services to over 52 million credit line users on a cumulative basis. We further tightened our credit standards and streamlined our business structure to enhance the overall health and sustainability of our operation. We also optimized our profitability models through refinements made to our product offerings, risk management, fund structure, user acquisition, and asset distribution capability.

Over the past quarter, we continued to expand the coverage on both ends of our platform.

Speaker Change: Powering 159 financial institutions to provide credit services to over 52 million credit line users on cumulative basis.

In response to macroeconomic headwinds.

Speaker Change: We further tightened our credit standards and streamlined our business structure to enhance the overall health and sustainability of our operations.

Speaker Change: Also optimized our profitability models through refinements <unk> made to our product offerings risk management fund structure user acquisition and asset distribution capabilities.

Haisheng Wu: Revenue during the quarter increased by 15.4% year-over-year to RMB4.2 billion, while our net take rate increased by 54 basis points to roughly 3.5%. Non-GAAP net income increased by 23.4% year-over-year to RMB 1.2 billion and non-GAAP net income per diluted ADS increased by 28% year-over-year to RMB 7.58. ROE reached approximately 22% in the quarter, significantly outperforming the industry peak under Total loan facilitation and origination volume across our platform came in at RMB 99.2 billion in Q1, with further improvements to risk indicators for new loans. Now, let's move on to our key initiatives and the progress we have made this quarter.

Revenue during the quarter increased by 15, 4% year over year.

RMB four 2 billion, while our net take rate increased by 54 basis points to roughly three 5% non.

Speaker Change: non-GAAP net income increased by 23, 4% year over year to RMB, one 2 billion and non-GAAP net income per diluted ads increased by 28% year over year to RMB 758.

Speaker Change: Oh, he reached approximately 22% in the quarter significantly outperforming the industry peers.

Speaker Change: Under more stringent credit standards.

Speaker Change: Total loan facilitation and origination volume across our platform.

Speaker Change: Came in at RMB $99 2 billion in Q1.

Speaker Change: With further improvements to risk indicators for new loans.

Speaker Change: Now, let's move on to our key initiatives and the progress we have made in this quarter.

Haisheng Wu: Our top priority in Q1 was improving asset quality, as we tightened our overall credit standards. We further iterated risk strategies across the loan facilitation and post-credit processes to improve risk. We also revamped our strategy framework to integrate risk segmentation and introduced external data sources from Leading Internet Platforms for Joint Modeling and Scoring, improving our ability to identify and intercept high-risk customer segments. With regard to loan collection, we actively expanded and optimized line resources to increase connection rates, and by enhancing incentive schemes, we gradually boosted our overall collection efficiency. As a result of these measures, our expected vintage loss for new loans in Q1 decreased by roughly 15% sequentially.

Speaker Change: Our top priority in Q1 was improving our asset quality.

Speaker Change: As we tightened our overall credit standards.

Speaker Change: We further deteriorated risk strategies across the loan facilitation credit operation and.

Speaker Change: And post credit processes to improve risk metrics, we also revamped our strategy framework to integrate risk segmentation.

Speaker Change: And introduced external data sources from leading internet platforms for joint modeling and scoring.

Speaker Change: Improving our ability to identify and intercept high risk customer segments.

Speaker Change: With regard to loan collection, Reactively expanded and optimized line resources to increase connection rates.

Speaker Change: Refining collection strategies and enhancing incentive schemes, we gradually boosted our overall collection efficiency.

Speaker Change: As a result of these measures are expected vintage loss for new loans in Q1 decreased by roughly 15% sequentially.

Haisheng Wu: Additionally, the D1 delinquency rate and 30-day collection rate of the overall loan portfolio improved by 14 basis points and 19 basis points, respectively. We expect to make further gradual improvements to our risk metrics in Q2. With ample liquidity in the financial system during the quarter, demand from financial institutions for consumer credit assets remained robust.

Speaker Change: Additionally day, one delinquency rates and 30 day collection rate of the overall loan portfolio improved by 14 basis points and 19 basis points respectively.

Speaker Change: We expect to make further gradual improvements to our risk metrics in Q2.

Speaker Change: With ample liquidity and the financial system during the quarter.

Speaker Change: Demand from financial institutions for consumer credit assets remained robust.

Haisheng Wu: Our industry-leading risk management capabilities placed us in a competitive position in collaboration with financial institutions. Leveraging our stable asset performance, we stepped up ABS issuance efforts and actively worked with financial partners to reduce funding costs. During the quarter, we issued roughly RMB 5.3 billion worth of ABS, representing an increase of 130% year over year, with issuance costs falling by roughly 150 basis points year on year. Notably, we issued the first domestic exchange traded ABS with a AAA international rating valued at RMB 1 billion.

Speaker Change: Our industry, leading risk management capabilities placed us in a competitive position in collaboration with financial institutions, leveraging our stable asset performance.

Speaker Change: Stepped up ABS issuance efforts and actively worked with financial partners to reduce funding costs.

Speaker Change: During the quarter, we issued roughly RMB five 3 billion worth of ABS is representing an increase of 130% year over year with issuance costs falling by roughly 150 basis points year on year.

Speaker Change: Notably.

Speaker Change: We issued the first domestic exchange traded ABS with a AAA international rating valued at RMB 1 billion.

Haisheng Wu: The ABS program attracted subscriptions from global professional investors, which significantly expanded our funding channels globally. Driven by both a higher percentage of low-cost capital like ABS in our funding mix and a further reduction in funding costs for loan facilitation, our overall funding costs decreased by over 70 basis points sequentially during the quarter.

Speaker Change: The ABS program attracted subscriptions from global professional investors, which significantly expanded our funding channels globally.

Speaker Change: Given by both a higher percentage of low cost capital like ABS and our funding mix.

Speaker Change: And a further reduction in funding costs for loan facilitation.

Speaker Change: Our overall funding costs decreased by over 70 basis points sequentially during the quarter.

Haisheng Wu: We expect to maintain our advantage in funding costs throughout the remainder of the year. We also adopted a more prudent marketing strategy to further optimize customer acquisition channels and bolster acquisition efficiency of major channels. In the quarter, our acquisition cost per credit line user decreased by roughly 12% sequentially.

Speaker Change: We expect to maintain our advantage in funding costs throughout the remainder of the year.

Speaker Change: We also adopted a more prudent marketing strategy further optimized customer acquisition channels and bolster acquisition efficiency of major channels.

Speaker Change: In the quarter, our acquisition cost per credit line user decreased by roughly 12% sequentially.

Haisheng Wu: The percentage of new users with approved credit lines from our embedded finance business increased to 36.4% from 34.9% last quarter. We continue to maintain our edge across leading embedded finance channels in terms of user conversion rate and loan volume, by leveraging our user identification and risk control capabilities. Through differentiated operations, we have continued to optimize risk and unit economic models in Q1.

Speaker Change: The percentage of new users with approved credit lines from our embedded finance business increased to 36, 4% from 34, 9% last quarter, we continued to maintain our edge across leading embedded finance channels in terms of user conversion rate and loan volume.

Speaker Change: Leveraging our user identification and risk control capabilities.

Through differentiated operations, we have continued to optimize risk and unit economic models.

Haisheng Wu: Credit Performance and Operational Efficiency of the Embedded Finance Channel were further optimized, and the ROA of new loans from this channel increased by 115 basis points from Q4. As we improve the accuracy of user identification and profiling. We have been able to onboard a more diverse pool of financial institution partners. Strengthening Our Ability to Serve Various Loan Asset Segments. By aligning assets with the risk appetites of different institutions, we improved asset allocation efficiency and increased overall returns on our loan portfolio. Through a more precise match between loan assets and funding partners, we achieved better risk performance and overall profitability. As a result, during the quarter, the percentage of our on-balance sheet loan volume increased to 28%.

Speaker Change: In Q1.

The credit performance and operational efficiency of the embedded finance channel will further optimize.

Speaker Change: Oh, a of new loans from this channel increased by 115 basis points from Q4.

Speaker Change: As we improve the accuracy of user identification and profiling.

Speaker Change: We have been able to onboard a more diverse pool of financial institution partners strengthening our ability to serve various loan asset segments.

Speaker Change: By aligning assets with the risk appetites of different institutions.

Speaker Change: We improved asset allocation efficiency and increased overall returns on our loan portfolio through a more precise match between loan assets and funding partners, we achieved better risk performance and overall profitability.

Speaker Change: During the quarter the percentage of our on balance sheet loan volume increased to 28%.

While the percentage of our loan facilitated under the IC model increased to 21%.

Haisheng Wu: While the percentage of our loan facilitated under the ICE model increased to 21%, the take rate of the ICE model increased by 76 basis points compared to the same period last year. Our extensive user base has always been the bedrock of our operation to cater to users' diverse needs. We have offered differentiated value-added services through a loyalty program to boost user retention and engagement. Going forward, we aim to further enrich the value propositions of our product offerings and will implement differentiated user operations to enhance user satisfaction and drive long-term growth in LTV.

Speaker Change: Meanwhile, the take rate of ICD model increased by 76 basis points compared to the same period last year.

Speaker Change: Our extensive user base has always been the bedrock of our operations.

Speaker Change: To cater to users' diverse needs. We have offered differentiated value added services through our loyalty program to boost user retention and engagement going forward. We aim to further enrich the value propositions of our product offerings and will implement differentiated user operations to enhance.

Speaker Change: <unk> user satisfaction and drive long term growth and LTV.

Haisheng Wu: We continue to invest in cutting-edge technology, with a strong focus on expanding the application of AI and large language models in the fintech sector to elevate the user experience and improve operational efficiency. We integrated large language models into our core capabilities and developed a standardized Qifu AI co-pilot system that has been deployed across key segments of our business, including risk management, telemarketing, loan collection, and customer service. The system enables intelligent human-computer interaction through Automatic Speech Recognition Technology, or ASR. It has currently achieved a recognition accuracy rate of 97% in our own collection scenarios, leading the financial industry standards. Additionally, through the use of voice print recognition capabilities.

Speaker Change: We continue to invest in cutting edge technologies with a strong focus on expanding the application of AI and large language models in the fintech sector to elevate user experience and improve operational efficiency.

Speaker Change: We integrated large language models into our core capabilities and developed a standardized chief you AI co pilot system that has been deployed across key segments of our business, including risk management telemarketing loan collection and customer service the system enables.

Speaker Change: Intelligent human computer interaction through automatic speech recognition technology or a S. R.

Speaker Change: It is currently achieved a recognition accuracy rate of 97% in our own collection scenarios, leading the financial industry standards.

Speaker Change: Additionally.

Speaker Change: Through the use of voice recognition capabilities.

Haisheng Wu: We have achieved a remarkable 95% accuracy rate in identifying blacklisted customers, helping us effectively prevent asset losses and malicious complaints. Finally, we also rolled out an AI development tool, UZAI, and applied it across various stages of our development cycle, including requirement communication, solution design, coding, and testing. With an adoption rate of 20% for AI-generated codes, we achieved a 30% improvement in development efficiency in the applied field.

Speaker Change: We have achieved a remarkable 95% accuracy rate in identifying black listed customers, helping us effectively prevent asset losses and malicious complaints.

Speaker Change: Finally, we also rolled out an AI development tool.

Speaker Change: Usually AI and applied it across various stages of our development cycle, including requirement communication solution design coding and testing.

Speaker Change: Within adoption rate of 20% for AI generated codes, we achieved a 30% improvement in development efficiency and the applied fields.

Haisheng Wu: Our technology solutions business continued to make steady progress. During the quarter, we entered into partnerships with two additional financial institutions, bringing the total number of financial partners for our end-to-end technology solutions to seven. These partnerships cover different categories, including internet, private, and municipal banks, as well as consumer finance companies. Through our end-to-end tech solutions, the daily average loan volume reached RMB 11 million in April 2024. As financial institutions take on an increasingly prominent role in the consumer credit market, we remain committed to assisting financial institutions in advancing their digital transformation and sharing the benefits of their long-term growth.

Speaker Change: Our technology solutions business continued to make steady progress.

Speaker Change: During the quarter we.

Speaker Change: We entered into partnerships with two additional financial institutions, bringing the total number of financial partners for our end to end technology solutions to seven.

Speaker Change: These partnerships cover different categories, including Internet private and municipal banks as well as consumer finance companies.

Speaker Change: Through our end to end Tech solutions Daily average loan volume reached RMB 11 million in April 2024.

Speaker Change: As financial institutions take on an increasingly prominent role in the consumer credit market, we remain committed to assisting financial institutions and advancing digital transformation and sharing the benefits of their long term growth.

Haisheng Wu: Moving on to the Outlook, despite the marginal improvements in our risk indicators and initial positive signs of a macroeconomic recovery during the quarter, we will remain patient and continue to prioritize risk performance and operational efficiency until we see clearer signs of a recovery in credit demand. In the meantime, we also recognize the vast market potential there is, with a substantial base of unmet user needs and inefficient connections between financial institutions and end users.

Speaker Change: Moving onto the outlook.

Speaker Change: Despite the marginal improvements in our risk indicators and initial positive signs of a macroeconomic recovery during the quarter, we will remain patient and continue to prioritize risk performance and operational efficiency until we see clear signs of a recovery in credit demand.

Speaker Change: In the meantime, we also recognize the vast market potential there is with a substantial base of unmet user needs and inefficient connections between financial institutions and end users.

Haisheng Wu: With more than 52 million cumulative users with credit lines, we have developed deep user insights and industry-leading capabilities in online customer acquisition and profiling. Moving forward, we will actively explore a more open platform model. Starting with user needs, we aim to facilitate more efficient connections between users and financial institutions and work with financial partners to offer a broader spectrum of products that address user credit needs throughout the lifecycle.

With more than 52 million cumulative users with credit lines, we have developed deep user insights and industry, leading capabilities in online customer acquisition and profiling moving forward, we will actively explore a more open platform model.

Starting with user needs, we aim to facilitate more efficient connections between users and financial institutions and work with financial partners to offer a broader spectrum of products that address the use of credit needs throughout the lifecycle.

Haisheng Wu: Since 2024, we have significantly optimized capital allocation by stepping up share buyback efforts while ensuring stable returns through a dividend policy. The US $150 million share repurchase program announced in June 2023 was successfully completed at the end of March this year, three months ahead of schedule. Starting on April 1st, 2024, we have been actively executing our new share buyback plan of up to US $350 million. We have full confidence in the long-term development of our company. Through ongoing buybacks and dividends, we aim to further boost capital allocation efficiency, optimize shareholder structure, and enhance long-term shareholder returns. With that, I will now turn the call over to Alex Xu.

Speaker Change: Since 2024, we have significantly optimized capital allocation by stepping up share buyback efforts, while ensuring stable returns through a dividend policy.

The U S $150 million share repurchase program announced in June 2023 were successfully completed at the end of March this year three months ahead of schedule.

Speaker Change: Starting on April one 2024, we have been actively executing our new share buyback plan of up to use $350 million.

Speaker Change: We have full confidence in the long term development of our company.

Through ongoing buybacks and dividends, we aim to further boost capital allocation efficiency optimize shareholder structure and enhance long term shareholder returns.

Speaker Change: With that I will now turn the call over to Alex Hu.

Zuoli Xu: Thank you, Haisheng. Good evening and good morning, everyone.

Thank you hi, good evening and good morning, everyone welcome to our first quarter earnings call.

Zuoli Xu: Welcome to our first quarter earnings call. Despite the still uncertain microenvironment in the first quarter, we made good progress to optimize our operations and further trim exposures to underperforming assets and deliver solid financial results. Total Net Revenue for Q1 was $4.15 billion, versus $4.5 billion in Q4 and $3.6 billion a year ago. Revenue from its credit-driven service Capital Heavy was $3.0 billion in Q1, compared to $3.2 billion in Q4 and $2.6 billion a year ago.

Speaker Change: Despite the still uncertain macro environment in the first quarter, we made good progress to optimize our operations and further trend exposure to underperforming assets and delivered solid financial results.

Speaker Change: Total net revenue for Q1 was $4 one 5 billion.

Speaker Change: Versus $4 5 million in Q4, and $3 6 billion a year ago.

Jim: Revenue from pardon me Jim is serviced capital heavy was three point opening in Q1 compared to $3 2 billion in Q4, and $2 6 billion a year ago.

Zuoli Xu: The year-on-year growth was mainly due to growth in on-balance sheet loans and contribution from other value-added services, although partially offset by declining in offset in all balance sheet loans. On balance sheet loans account for around 28% of the total loan volume. Overall funding costs further declined over 70 basis points sequentially and over 100 basis points year-over-year, with the help of our strong relationship with financial institutions, partners, and record-high ABS issuance. Revenue from platform service capital light was $1.1 billion in Q1 compared to $1.2 billion in Q4 and $969 million a year ago. The year-on-year growth was mainly due to strong contribution from ICE and other value-added services.

Jim: Year on year growth was mainly due to growth in on balance sheet loans and contribution from other value added services, partially offset by declining in offset in off balance sheet loans.

Jim: On balance sheet loans account for around 28% of the total loan volume.

Jim: Overall funding cost further declined over 70 basis point sequentially and over 100 basis point year over year was the help our strong relationship with financial institutions partners and record high ABS issuance.

Jim: Revenue from platform service capital Light was $1 1 billion in Q1 compared to $1 2 billion in Q4, and 969 million a year ago.

Jim: Growth was mainly due to strong contribution from ICD and other value added services.

Zuoli Xu: Substantially offsetting the decline in capitalized loan facilitation. As we try to strike an optimal mix between risk-bearing and non-risk-bearing assets in an uncertain micro-environment, we are also gradually cutting back loans that generate marginal returns. In Q1, we saw continued sequential improvement in revenue take rates for both cap-heavy and cap-light operations. During the quarter, average IRR of the loans we originated and facilitated was 21.5%, compared to 21.3% in the prior quarter. Looking forward, we expect pricing to fluctuate in a narrow band around this level for the coming quarters as we further optimize our loan portfolio in response to macro uncertainty.

Substantially offsetting the decline in capital light loan facilitation.

Jim: As we try to strike at an optimal mix between risk bearing and non risk bearing assets in an uncertain macro environment.

Jim: Also gradually cutting back loans that generate marginal returns.

Jim: In Q1, we saw continued sequential improvement in revenue take rates for both cap heavy and kept light operations.

Speaker Change: During the quarter average IRR of the loans, we originated and the facility that was 21, 5% compared to 21, 3% in prior quarter.

Speaker Change: Looking forward, we expect pricing to be fluctuated in a narrow band around this level for the coming quarters as we further optimize our loan portfolio in response to the macro uncertainties.

Zuoli Xu: Sales and marketing expenses decreased 25% year-on-year and 2% year-on-year, as we intentionally controlled the pace of user acquisitions in an uncertain environment. We added approximately 1.45 million new credit line users in Q1 versus 1.7 million in Q4. Unit cost to acquire new credit line users decreased significantly to 285 from 326, mainly due to our more disciplined approach and the Chinese New Year seasonality. We will make timely adjustments to the pace of new user acquisition based on micro conditions from time to time and further diversify our user acquisition channel.

Speaker Change: Sales and marketing expenses decreased 25% Q on Q and 12% year on year as we intentionally control the pace of user acquisitions in the uncertain environment we.

Speaker Change: Added approximately 1.45 million new credit on users in Q1 versus $1 7 million in Q4.

Speaker Change: Unit cost to acquire new credit on users decreased significantly Q on Q2, 285 from 326, mainly due to a more disciplined approach and the Chinese new year seasonality.

Speaker Change: We will make timely adjustments to the pace of the new user acquisition based on micro conditions from time to time and further diversify our user acquisition channels.

Zuoli Xu: Meanwhile, we will continue to focus on re-energizing the existing user base as repeat borrowers historically contribute the vast majority of our business. The 90-day delinquency rate was 3.35% in Q1. This ratio was calculated by dividing the outstanding balance of on and off balance sheet loans that were three months past due with the total outstanding balance of on and off balance sheet loans across our platform on March 31. During the quarter, we purposely cut our exposure to certain risk-bearing assets and reduced the total outstanding balance of on- and off-balance sheet loans by approximately 16.5% sequentially.

Speaker Change: Well, we will continue to focus on re energizing existing user base as repeat borrowers historically contribute vast majority of our business.

Speaker Change: 90 day delinquency rate was 3.35% in Q1.

Speaker Change: This ratio was calculated by dividing outstanding balance of on and off balance sheet lungs that was three months passed do you what.

Speaker Change: What is the total outstanding balance of on and off balance sheet loans across our platform.

Speaker Change: On March 31st.

Speaker Change: During the quarter, we purposely cut our exposure to certain risk bearing assets and reduce the total outstanding balance of on and off balance sheet loans by approximately 16, 5% sequentially as such the 90 day delinquency rate was mathematically inflate.

Zuoli Xu: As such, the 90-day delinquency rate was mathematically inflated by roughly 16.5%, which is somewhat misleading. Furthermore, as we always know, this matrix is backward-looking in nature and provides little value to help investors understand our asset quality trend.

Speaker Change: <unk> by roughly 16, 5%.

Speaker Change: Which is somewhat misleading.

Speaker Change: Furthermore, as we always known this matrix this backward looking in nature and provide little value to help investors understand our asset quality trends.

Zuoli Xu: We strongly recommend investors focus on key leading risk indicators such as day one delinquency and 30-day collection rate. In fact, we start to see modest improvement in asset quality in Q1. Day one delinquency was 4.9% in Q1 versus 5.0 in Q4. The 30-day collection rate was 85.1% in Q1 versus 84.9% in Q4. The improvement was more noticeable among new loans issued in Q1, as tightening risk management measures started to show benefits in the quarter.

Speaker Change: We strongly recommend investors focus on key leading indicators such as day, one delinquency and 30 day collection rates in.

Speaker Change: In fact, we start to see modest improvement in asset quality in Q1 day, one delinquency was four 9% in Q1 versus five point, though in Q4 30 day collection rate was 85, 1% in Q1 versus 84, 9% in Q4.

Speaker Change: The improvement was more notable among new loans issued in Q1 as tightening risk management measures start to show benefit in the quarter.

Zuoli Xu: As Haisheng mentioned, expected vintage loss for new loans issued in Q1 declined by roughly 15% sequentially, and the 30-day collection rate further recovered to nearly 86% in April. We have further optimized our risk management model and applied more restrictive standards.

Speaker Change: As Ashok mentioned expect to vintage loss for new loans issued in Q1 declined by roughly 15% sequentially and 30 day classroom rate further recovered to near the 86% in April.

Ashok: We have further optimized our risk management model and applied more restrictive standards to new applications.

Zuoli Xu: [inaudible] On new applications to mitigate potential risks throughout the quarter, we also proactively adjusted our business mix to further reduce our exposure to higher-risk assets. Although economic conditions remain uncertain, we believe overall risk performance of the loan portfolio should gradually improve throughout 2024. As micro uncertainty persists and credit quality fluctuates, we will continue to take a prudent approach to book provisions against potential credit loss. Total new provisions for risk-bearing loans in Q1 were approximately $1.4 billion versus $2 billion in Q4, and the writebacks of the previous provisions were marginal in Q1.

Ashok: All new applications to mitigate potential risks throughout the quarter. We also proactively adjust our business mix to further reduce our exposure to higher risk assets.

Ashok: Economic conditions remain uncertain, we believe overall risk performance of the loan portfolio should gradually improve throughout 2024.

Ashok: As macro uncertainty persists and the credit quality fluctuates.

Ashok: We will continue to take prudent approach to book provisions against potential credit loss total and your provision for risk bearing loss in Q1 were approximately $1 4 billion versus 2 billion in Q4.

Ashok: And the write backs of the previous provisions were marginal in Q1.

Zuoli Xu: The significant sequential decrease in new provisions was mainly due to the substantial queue-on-queue decline in off-balance sheet capital-heavy loan volumes. However, the new provision booking ratio remained relatively stable. The decline in write-back was due to the expected risk of existing loans remaining stable and the micro uncertainties persist. Provision coverage ratio, which is defined as total outstanding provisions divided by total outstanding delinquent asset-heavy loans, loan balance between 90 and 180 days, or 414 percent in Q1 compared to 481 percent in Q4.

Significant sequential decrease in new provisions was mainly due to the substantial Q on Q decline in off balance sheet capital heavy loan volume.

Ashok: Well, the new provision booking ratio remained relatively stable.

Ashok: The decline in write back was due to expect the risk of existing loans remain.

Ashok: Table and micro uncertainties persist.

Speaker Change: Provision coverage ratio, which is defined as total outstanding provisions divided by total outstanding delinquent asset heavy loss.

Speaker Change: Loan balance between 90, and 180 days or 414% in Q1 compared to 481% in Q4.

Zuoli Xu: The provision coverage ratio was still well within our historical range. Non-GAAP net profit was $1.2 billion in Q1 compared to $1.15 billion in Q4, and the effective tax rate for Q1 was 23.3% compared to our typical ETR of approximately 15%. Net profit and ETR were negatively impacted by $130 million withholding tax provision related to a significant tax distribution from onshore to offshore for dividend payment and share repurchase program during the quarter, with solid operating results and higher contribution from capitalized models.

Speaker Change: The provision coverage ratio was still well within our historical range.

Speaker Change: non-GAAP net profit was $1 2 billion in Q1 compared to 1.15 billion in Q4.

Speaker Change: The effective tax rate for Q1 was 23, 3% compared to our typical ETR of approximately 15%.

Speaker Change: Net profit and ETR was negatively impacted by 130 million withholding tax provision related to significant cash distribution from onshore to offshore for dividend payment and share repurchase program during the quarter.

Speaker Change: With solid operating results and higher contribution from capital light models.

Zuoli Xu: Our leverage ratio, which is defined as risk-bearing loan balance divided by shareholders' equity, was 2.8 times in Q1, at a historical low. We expect to see leverage ratios fluctuate around this level in the near future. We generated approximately $1.96 billion in cash from operations in Q1, compared to $2.35 billion in Q4. Total cash and cash equivalents were $8.3 billion in Q1, compared to $7.8 billion in Q4. Non-restricted cash was approximately $5.3 billion in Q1, compared to $4.2 billion in Q4.

Speaker Change: Our leverage ratio, which is defined as risk bearing long balance divided by shareholders equity was two five.

Speaker Change: Sorry, two eight times in Q1 at historical low we expect to see leverage ratio fluctuate around this level in the near future.

Speaker Change: We generated approximately $1 96 billion cash from operations in Q1 compared to $2. Three 5 billion in Q4 total cash and cash equivalents was $8 3 billion in Q1 compared to seven eight.

Speaker Change: $8 billion in Q4, non restricted cash was approximately $5 3 billion in Q1 compared to $4 2 billion in Q4.

Zuoli Xu: As we continue to generate IOC cash flow from operations, we believe our current cash position is sufficient to support our business development and to return to our shareholders. On June 20, 2023, we announced a share buyback program to repurchase up to $150 million over a 12-month period. In Q1, we bought approximately 16 million worth of ADS in the open market under the 2023 repurchase plan. As of March 28, 2024, we have completed substantially all of the 150 million 2023 share repurchase plan.

Speaker Change: As we continue to generate healthy cash flow from operations. We believe our current cash position is sufficient to support our business development and to return to our shareholders.

Speaker Change: On June 22023, we announced a share buyback program to repurchase up to $115 million.

Speaker Change: Over a 12 months period.

Speaker Change: In Q1, we bought a process late 16 minting wassa about ABS in the open market under the 2023 repurchase plan.

Speaker Change: As of March 28, 2024, we have completed substantially all of the 115 million in 2023 share repurchase plan.

Zuoli Xu: On March 12, 2024, we announced a new share repurchase plan to purchase up to 350 million worth of ADRs over a 12-month period starting April 1, 2024. As of May 17, 2024, we had in aggregate purchased approximately 3.4 million ADS in the open market for a total amount of approximately 65 million, inclusive of commission, at an average price of 19.3 US dollars per ADS under the 2024 share repurchase plan. The pace of the repurchase is faster than scheduled.

Speaker Change: Our March 12, 2024, we announced a new share repurchase plan to purchase up to 315 million worth of Adi's over 12 months period, starting April 1st 2024.

As of May 17, 2024, we had in aggregate purchased approximately $3 4 million avs in the open market for a total amount approximately 65 million inclusive of commissions at an average price of $19 three U S dollar.

Speaker Change: Per avs under the 2024 share repurchase plan the pace of the repurchase is faster than time schedule.

Zuoli Xu: Proactive execution of a share repurchase plan further demonstrates management confidence and commitment to the future of the company, and management intends to consistently use share repurchase plans to achieve additional EPS accretion in the long run. With the full execution of the new share repurchase program and the dividend plan, we are generating the highest combined yield on a recurring basis among Chinese ADRs for our shareholders. Finally, regarding our business outlook, we will continue to focus on enhancing profitability and efficiency of our operation under current micro-conditions.

Speaker Change: The proactive execution of our share repurchase plan further demonstrated management's confidence and commitment to the future of the company and the management intends to consistently use share repurchase plan to achieve additional EPS accretion in the long run.

Speaker Change: With the full execution of the new share repurchase for a repurchase program and the dividend plan, we are generating highest combined yield on the recurrent basis, among Chinese ADR is to our shareholders.

Speaker Change: Finally regarding our business outlook, we will continue to focus on enhancing profitability and efficiency of our operation.

Speaker Change: On the current macro conditions for the second quarter of 2024, the company expect to generate non-GAAP net income between RMB 122 billion and RMB 128 billion, representing a year on year growth between 6% to 12%.

Zuoli Xu: For the second quarter of 2024, the company expects to generate non-gap net income between RMB 1.22 billion and RMB 1.28 billion, representing a young-year growth between 6 to 12 percent. This outlook reflects the company's current and preliminary view, which is subject to material changes. Operator, we can now take some questions.

Speaker Change: This outlook reflects the company's current and preliminary view, which is subject to material changes.

Speaker Change: With that I would like to conclude our prepared remarks, operator, we can now take some questions.

Operator: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. For those who can speak Chinese, please start your question in Chinese, followed by an English translation. To allow enough time to address everyone on the call, please keep it to one question and one follow-up and return to the queue if you have more questions. Thank you. We will now take our first question. This is from the line of Chia Huang from Morgan Stanley. Please go ahead.

Speaker Change: Thank you to ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.

Speaker Change: As you can speak Chinese please start your question in Chinese followed by English translation.

Speaker Change: Allow enough time to address everyone on the call. Please keep it to one question and one follow up and return to the queue. If you have more questions. Thank you.

Speaker Change: We will now take our first question.

Speaker Change: This is from the line of Jeff Wang from Morgan Stanley. Please go ahead.

Chia Huang: I have two questions. First, what is your opinion on the growth of this year's loan volume? Considering the current situation of demand and risk, do you think there will be any changes compared to the beginning of the year? Second, how confident are you about increasing the take-away rate for the whole year? We can see that technology 1 continues to progress.

Speaker Change: Okay.

John.

Speaker Change: <unk> did you guys require you Glenn.

Speaker Change: Nelson.

Speaker Change: Some will come back.

Speaker Change: Colin Dunn with Genzyme analogy.

Can you kind of outline interim chunky soil.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay great.

Speaker Change: In particular, you thought out about all of them kind of although you do choose to.

Speaker Change: Yes, it's actually issued.

Chia Huang: So basically, two questions. One is regarding the loan volume outlook, especially given the demand and the risk situation we see right now. How is management's view changing from the beginning of the year? And the second question is on the outlook for take-away improvement. Just wondering how confident management is about improving take-away for the full year 2020? And has the view changed compared to the beginning of the year? Thank you.

So you can see the Missoula.

Speaker Change: We don't get them, the training and takeaway T cell that kind of got it all right.

Speaker Change: So you can tell on your P&L.

Speaker Change: So basically two questions one is regarding the loan volume outlook, especially given the demand and the risk situation. We see right now how does management view changing from beginning of the year and second question is on the outlook on take rate improvement just wondering how confident is management about improving take grateful.

Speaker Change: For the full year 2024 and has the view changed.

Speaker Change: Baird to beginning of the year. Thank you.

Haisheng Wu: Okay, thank you. Let me answer the question. Everyone should be aware of the risk of demand. I think everyone is interested in this method, so I'll talk about it in general.

Speaker Change: Well that.

Speaker Change: Hum.

Speaker Change: Thank you guys.

Sure sure sure.

Speaker Change: Particularly now you're going to be they're going to agree with John.

Haisheng Wu: Let's talk about the demand side first. Since this year, demand for consumer loans has not recovered. ??, Unknown Executive, 360 Finance, Inc. [inaudible] If we don't consider the impact of the Spring Festival, the user registration rate for the first four months of this year is relatively stable, but it will be slightly lower in March and April. So if you compare it to the same period last year, it should be said that the demand for users is lower than last year.

Speaker Change: Uh huh.

Speaker Change: Sure.

Speaker Change:

Thank you Neil.

Andrew: Great. Thanks, Andrew.

Andrew: Oh, you are not eager.

Andrew:

Andrew: Okay.

Speaker Change: Uh huh.

Speaker Change: Finally from an integrated shashi rely on.

Speaker Change:

Speaker Change: You will see some relief here.

Speaker Change: And women neighborhood, how you're good to go.

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: How do you think the Caribbean.

Speaker Change: That woman.

Speaker Change: There's a good chance to be here.

Speaker Change: Yeah.

Speaker Change: Dilutive as you do now.

Speaker Change: Has it been documented.

Speaker Change: Finally, you can see from the learner to reduce it.

Speaker Change: Briefly on for Puneet.

Speaker Change: We see demand that you guys want it.

Speaker Change: Degree of you know who they are.

Speaker Change: Seasonal.

Speaker Change: So it should be.

Haisheng Wu: We observed that our demand and the overall national macro data remained relatively consistent. We saw that in the first quarter, the overall balance of household consumption loans was [inaudible] In April, there was a decline in the return rate, a decline of 19.9 billion yuan.

Speaker Change: Peter.

Speaker Change: Oh no.

Speaker Change: Contango Giga.

Speaker Change: When do you get a foothold in there who is a good thing.

Speaker Change: Because surely has approximately.

Speaker Change: And when you do not.

Thank you Joe.

Speaker Change: Sure.

You go to lunch and Super easy to shut down.

Speaker Change: Oh.

Speaker Change: Assume that theory.

Speaker Change: <unk> sat down theory, you can imagine.

Haisheng Wu: And this is the first time in the past two years that there has been a return on investment growth. This also shows that the overall demand for new cars still has some ups and downs. ,,,,, 24 So, on this basis, we should say that our risk performance has continued to improve. [inaudible] I expect it to be 15% better than last year's quarter. At the same time, we can see that Dapang's investment and 30-day recovery have also had an editorial effect this quarter.

Speaker Change: Okay.

Speaker Change: Great.

Speaker Change: Uh huh.

Speaker Change: Thank you.

Speaker Change: 100 <unk>.

Speaker Change: It's coming together.

Speaker Change: Thank you Susan Susan how should the year it should be good.

Speaker Change:

Speaker Change: I guess as usual.

Speaker Change: Altogether.

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Speaker Change: Johan.

Speaker Change: Bulk of them in silicon and integrated puberty.

Speaker Change: You, who want to go do it as one of your clients.

Speaker Change: <unk>.

Speaker Change: It is a good time to achieve.

Speaker Change: And Oh, you mean the social.

Three nine.

Speaker Change: Just to comment on women.

Speaker Change: Sure sure.

Speaker Change: Honda.

Speaker Change: Free tickets diluted.

Speaker Change: Vintage loss.

Speaker Change: And you could be.

Speaker Change: Can you go back and do a superiority Johan.

Speaker Change: And tourism.

Speaker Change: Got it.

Speaker Change: And a real treat to advance agenda, so and I think it would be two nine years.

Haisheng Wu: And this trend will continue in April and May of the second quarter. So I should say that our risk optimization work is still meeting some expectations. So we should continue to maintain the current standard for wind and air and maintain a very stable overall state.

At that time.

Speaker Change: Thank you Susan and.

Speaker Change: Arguably the three of them.

Speaker Change: Hugh.

Speaker Change: So you got home Fujian Johansson.

Speaker Change: Sure.

Speaker Change: I know you for how you see the film in that way.

Thank you Wei Qing.

Speaker Change: Hum.

Speaker Change: Thank you <unk>.

Haisheng Wu: Unknown Executive, 360 Finance, Inc. [inaudible] I want to talk about a point that we have been trying to express in the past few quarters. Since last year, we have started to adjust the company's development strategy to pursue quality growth and profitability. Unknown Executive, 360 Finance, Inc. [inaudible] Unknown Executive, 360 Finance, Inc. We will continue to invest in those with quality and healthy profit indicators. We will continue to invest ,, For example, we are still the focus of our growth today in the direction of in-depth finance.

Speaker Change: I'm going to go.

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Speaker Change: Richard.

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Speaker Change: Matt.

Speaker Change: Women to Wichita.

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Speaker Change: Regional you're good to go to a degree.

Speaker Change: Your room.

Speaker Change: 10, we're just seeing them get them on hands out woman.

Haisheng Wu: ?????????????????????, We have repeatedly increased the amount of money in the channels of the two top rankings by 8% and 12% ????????????????, Because the big plate did some optimization for some of the addresses. In addition, the ROA of 360 Finance has been optimized and increased by 1% this quarter, for you. So we will continue to deepen and increase our investment in these quality channels. We will copy these patterns to more traffic platforms. ??????????,????????????,?????????????????????,??????????????????????, ??????????????,????????????????????,?????????????????????????,???????????????????,???????????????????????????????????,???????????????????,?????????????????????,??????????? ???????????????????,?????????????????? This is the first one, so let me translate it first.

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Speaker Change: Yeah.

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Speaker Change:

Sean: Sure Sean.

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Speaker Change: I got you.

Speaker Change: And then can you give me a kind of like.

Speaker Change: We can put together for them to tell you. We're just going to go you're not having to get 10.

Speaker Change: If there was anything that you can find it and do it and continue to deal with it we can do it.

Speaker Change: With that I think are you pushing him uhm.

Speaker Change: We feel that they don't get onto the full suite C will be kind of thing.

Speaker Change: You Didnt talk with you again.

Speaker Change: Well she missed it did you quantify did them I'm going to be sure that they don't they don't.

Speaker Change: You said that you don't do it yourself.

Speaker Change: Do you feel you can find you.

Speaker Change: Yes.

Haisheng Wu: Okay, I will do the translation. We understand everyone is concerned about our credit risk and loan growth. Since the beginning of 2024, consumer credit demand has still been yet to recover, especially since late March, when demand has been weaker than we expected. This is reflected in the user initiation rate on our app. Excluding the impact of the spring festival, the user initiation rate in the first four months of last year was relatively stable.

Speaker Change: Yeah.

Speaker Change: Okay, I will do that.

Speaker Change: Cancellation.

Speaker Change: And then everyone gets concerned about tableau cutting.

Haisheng Wu: However, the initiation rate in March and April this year is slightly lower than the previous two months, so the user credit amount is weaker than the same period last year. The changes in our user demand are basically consistent with this year's macroeconomic trend. In the first quarter, CPI still maintained a relatively low growth rate, and the balance of household short-term consumer loans decreased by RMB 271 billion quarter-on-quarter. The social financing scale in April also decreased by RMB $199 billion sequentially, marking the first negative growth on a sequential basis in the past two years.

Speaker Change: And loan growth.

Speaker Change: Since the beginning of 2020 for consumer credit demand is still yet to the correct, especially since late March whereby demand has been weaker than we expected.

Speaker Change: This is reflected in J D.

Speaker Change: <unk>.

Speaker Change: Our app.

Speaker Change: Excluding the impact of discrete basketball you the initiation of <unk> in the first four months of last year. It was relatively stable however in it.

Speaker Change: Jason late in March and April this year.

Speaker Change: Slightly lower than the previous two months.

Speaker Change: So the use of credit demand is weaker than the same period last year.

The changes in our user demand are basically consistent with macro economic trends.

Speaker Change: First quarter EPS do you maintain a relatively low growth rate and the pattern of household shutdown consumers.

Speaker Change: Decreased by RMB 271 billion.

Speaker Change: The social financing scale in April also decreased by RMB 199 billion sequentially, marking the first negative eight.

Speaker Change: Sequential basis in the past two years.

Haisheng Wu: This data also confirms that the credit amount is yet to recover. In terms of credit risk, we have taken a lot of action in the past two quarters, including tightening the approval rate. Optimizing Credit Limits and Contracting Long-Term Assets of Over 24 Months, On this basis, the risk performance of our new loans has been continuously improving since November 2023, and the vintage loss in this quarter is expected to decline by about 15% compared to Q4.

Speaker Change: These data also confirms that high demand.

Speaker Change: Okay.

Speaker Change: In terms of.

Speaker Change: Credit there.

Speaker Change: We have taken a lot of action in the past.

Speaker Change: Including tightening approval.

Speaker Change: Optimizing credit limit and a contracting long term asset of over 24 months.

Speaker Change: On this basis the mix.

Speaker Change: Performance of our new loan has been continuously improving since November 2023, and the vintage loss in this contract is expected to decline by about 15% compared to Q4.

Haisheng Wu: At the same time, it can be seen that the day one delinquency rate and the 30-day collection rate of our overall loan portfolio have also improved marginally in this quarter, and the momentum will continue in April and May. At present, the risk optimization work is on track, so we will maintain current credit standards, which will be largely stable going forward. Here, we would like to emphasize that since the second half of 2023, we have been very clear that our company's strategy is to pursue quality growth.

Speaker Change: At the same time it can be seen that day, one delinquency rate and a 30 day collection of our overall loan portfolio has also improved.

Speaker Change: And then one more on that.

Speaker Change: And we'll continue in April and May.

Speaker Change: At present this optimization work is on track.

Speaker Change: So we will maintain current credit standing.

Speaker Change: It'll be largely stable going forward.

Speaker Change: Here, we would like to emphasize that in second half of 2023, we have been very clear that our company strategy is to pursue quality growth.

Haisheng Wu: Under this strategy, we will not take the overall growth rate of our loan volume as the primary goal, but rather pursue quality growth as our goal. For ineffective loans, or loans with negative or marginal returns, we will optimize those kinds of loans.

Speaker Change: And it is <unk>, we will now take the overall growth rate.

Speaker Change: Our loan volume as the primary metric.

Speaker Change: Could you quantify at all four affecting loan along with leveraging our Martino makes sense, we will optimize those kind of known for business.

Speaker Change: With healthy profit will continue to invest for growth.

Haisheng Wu: For businesses with healthy profits, we will continue to invest in growth. For example, embedded finance will continue to be a focus of our growth this year. The loan volume of the top two channels for embedded finance in Q1 increased by 8% and 12%, respectively, sequentially, which is far higher than the overall loan volume growth. At the same time, the ROA of our embedded finance model also improved by about one percentage point in Q1.

Speaker Change: For example, if I embedded financing will continue to focus our partner yet the low volume of the top huge channel for embedded finance in Q1 increased by 8% and 12%.

Speaker Change: With respect to make a question.

Speaker Change: Which is far higher than the overall loan volume growth and I think trying to al.

Speaker Change: He added finance model also improved by about one percentage point in Q1 sequentially.

Haisheng Wu: We will continue to deepen cooperation with quality channels and replicate the embedded finance model to more traffic. Through this structured growth, though low volume will fluctuate, our profitability will be steadily enhanced, and we are confident in fulfilling our profit guidance. Recently, we have seen the government introduce a series of policies to support the real estate industry. We believe it will play a positive role in stabilizing the real economy, and it's also helpful to the gradual recovery of users' confidence. So we will continue to observe the trends of macroeconomics and user demand and adjust the loan pace in a timely manner.

Speaker Change: Continue to deepen our cooperation with our quality channels and replicate embedded finance model.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Hi.

Speaker Change: So low volume wells.

Speaker Change: Our profitability will be Stephanie.

Speaker Change: And then we are confident in fulfilling our profit guidance.

Speaker Change: We didnt like we have seen the government introduced a series of policies to support the real active <unk>. We believe it will play a positive delta in stabilizing the economy and it also helps what schuh gladly accommodate new debt company.

Speaker Change: We will continue to offset that chunk of macro economy and end user demand and adjust the low okay.

Speaker Change: Terminate manner.

Speaker Change: Uh huh.

Speaker Change: Thank you rich.

Haisheng Wu: [inaudible] I would like to share a few points with you. Unknown Executive, 360 Finance, Inc. After adjusting our company's development strategy to quality growth and quality profitability, Take the rate from 3.2% in Q4 to 3.5% in Q1. If we deduct the expected income tax that we expect from the dividend repurchase here, the operating profitability should be said to have a more obvious increase. Next, we expect that Q2's take rate will have room for further optimization.

Speaker Change: Sure.

Speaker Change: Oh, I don't pretend to know.

Haisheng Wu: Unknown Executive, 360 Finance, Inc., and our new release, Vintage Loss, is expected to be around 15% better than our 4th quarter. [inaudible] The second is about the optimization of funding costs. This year, the funding side is still very relaxed.

Speaker Change: From 'twenty Hillman.

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Speaker Change: For you to then integrate your museum families or whatnot.

Speaker Change: As a woman.

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Speaker Change: What if you could share with us.

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Speaker Change #100: Uh huh.

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Speaker Change #101: Is it with a passenger funding.

Speaker Change #101: Until you go about it.

Speaker Change #101: A woman who.

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Speaker Change #101: The city and county courtyard to find that it's a good thing.

Speaker Change #101: Sure.

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Speaker Change #101:

Speaker Change #101: And again I know women.

Speaker Change #101: Your woman Chiara together it deteriorated on a highway.

Speaker Change #102: Ticketing for the Johan <unk>.

Speaker Change #102:

Speaker Change #103: What youre doing with you because I mean, if you go to Youtube.

Speaker Change #103: And do you do it is a good.

Speaker Change #103: It's a good future for tomorrow.

Speaker Change #104: Okay. Good.

Speaker Change #105: So some of them and they don't tend to do so.

Speaker Change #106: Yeah, we're not.

Speaker Change #106: Turnkey is it good for Cambodia.

Speaker Change #106: I figure you're good.

Speaker Change #106: Easy to woman Xinjiang continental bigger vintage luxury.

Speaker Change #106: You would be or Mississippi, where youll have happened to Sherwin Williams.

Josh: Josh a woman.

Speaker Change #108: Uh huh.

Speaker Change #108: That woman I hope I'm good I'm.

Speaker Change #108: On Johan Sverdrup and the woman.

Speaker Change #108: They already do that.

Speaker Change #108: Hum.

Speaker Change #109: Well you got to me.

Speaker Change #110: Uh huh.

Speaker Change #110: Now the honest music freedom Pembina Johan.

Peter: Sure Peter.

Haisheng Wu: At the same time, we have also increased our efforts to issue ADRs. We issued 5.3 billion yuan in the first quarter. Unknown Executive, 360 Finance, Inc. [inaudible] We expect to continue to issue more ADRs in the second quarter to optimize the funding cost of our loan. The overall cost of the second quarter should be said to have room for further reduction. Thirdly, in terms of our overall asset distribution, we have introduced more financial institutions, and based on their different risk preferences and ability preferences, we have matched different asset classifications to improve the conversion rate of our overall assets.

Peter: Now coming to a woman.

John: John I'll, let be degree ABS vacuum integrated.

Speaker Change #114: You don't know in fact hilla.

Speaker Change #113: Well, what you're saying.

Speaker Change #113:

Speaker Change #113: Yeah.

Speaker Change #115: Okay. Good.

Speaker Change #115: So that is because the incumbent.

Speaker Change #115: Are you going to distribute it shut down.

Speaker Change #116: Now Oh Sharon.

Speaker Change #117: Woman easy to find.

Speaker Change #118: Sure John just took a BP.

Speaker Change #119: A woman.

Speaker Change #119: So the woman argued to tissue if I can do the ABS it.

Speaker Change #119: And to get to that degree I think it's incumbent.

Speaker Change #120: <unk> argued to the sensitivity between some of the natural higher eager.

Speaker Change #121: Do you know if we can do that particular question.

Speaker Change #122: Defendants woman Digger Vinci.

So I'm glad to hear from you.

Well you can do the do you know when you go in China.

Speaker Change #122: Yeah.

Speaker Change #122: When she came home when the mid channel.

Speaker Change #122: Hey.

Speaker Change #122: No.

Speaker Change #122: Yes, Phil actually some of them didn't you do this.

Haisheng Wu: At the same time, it can also improve our overall profitability. We can see that this quarter, our confidence in the amount of payment has improved further. At the same time, the take rate of our executive business is 76% better than the same period last year. Transcript by Rev.com Page of. We should be able to maintain this level in the second quarter.

Speaker Change #122: And did it they don't come in Hollywood.

Speaker Change #122: And Unfortunately, you do create she goldman's Instagram issue.

Speaker Change #122: Are you kind of on a 62 women.

Speaker Change #122: And is it your.

Speaker Change #122: <unk>.

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Speaker Change #123: A woman has a good position here with the take rate.

Speaker Change #124: <unk> she's Luca.

Speaker Change #124: Hum argued with.

Speaker Change #124: Hudson and good wishes that negotiations are something that will continue which is where youll have.

Haisheng Wu: We will further optimize. On the fourth aspect, we also use AI technology to enrich our business. For example, we use AI to help our engineering team to improve coding writing efficiency. Today, 20% of the code in our company is written by AI. We should say that the efficiency of our development has also been increased by 30%. In terms of business, we also use the capability of large models to make up for the reduction in sales and marketing.

Speaker Change #124: Just think of how many women.

Speaker Change #124: We wanted them to go.

Speaker Change #124: Yeah.

Speaker Change #124: Total funding.

The woman that you and beautiful woman and Twingo digger.

Speaker Change #124: Yeah, I did it for them and bundle them in their conclusion pantry. She she all the time and I think a.

Speaker Change #124: You're adding human didn't see considered that might not be good.

Speaker Change #125: Oh sure that'd be good.

Speaker Change #126: C U E.

Speaker Change #127: Oh Man you guys, what kind of how does it get shorter.

Speaker Change #128: I mean, essentially you got to do something now tell you, which I'm element.

Speaker Change #128: So what that game genre.

Speaker Change #128: Human tissue damage and that you don't know me laughing them.

Haisheng Wu: It also improves the communication efficiency of our users. In terms of phone sales and sales reduction, it should be said that there is also a comparable improvement in effect. In the future, we will continue to invest in this direction to improve the overall efficiency of our business. Based on the above work, we should say that this year's TechGrid will work harder to optimize on the basis of 3.5, Karen. Okay. Okay.

Speaker Change #129: The woman.

Speaker Change #130: Dugard because when you show it to you.

Speaker Change #130: I wasn't allowed to do consistently show Chunghwa.

Speaker Change #130: Yeah.

Speaker Change #130: You can cook could be how do you guys see yourself with it.

Speaker Change #131: And I really don't want to jump way tissue that frankly are not huge tissue match.

Susan: Thank you Susan.

Susan: Is that.

Speaker Change #133: From an integration leader.

Speaker Change #134: Oh Gee is this you can do on a woman.

Speaker Change #135: Shimon, Virginia, and that's a good to great fanfare.

Speaker Change #136: So new strategic channel reach.

Speaker Change #137: Should you need to choose Genuity Johan.

Speaker Change #137: Karen.

Haisheng Wu: Okay, I will do the translation. Regarding the take rate, I want to share some color with you. Since the second half of the last year, we have made adjustments to our business strategies, emphasizing more the overall profitability of our business, and we have achieved good results. Our take rate has increased from 3.2% in Q4 to 3.5%. If we exclude the impact of the withholding on dividends and buybacks, the increase in the operating profit margin is even greater.

Speaker Change #137: Okay.

Speaker Change #138: Okay I'll do the calculation.

Speaker Change #139: Regarding the take rate our Ta she has some kind of idea since the second half of last year, we have made adjustments to our business strategy emphasizing more on the overall profitability of our business and have achieved that.

Speaker Change #139: Our take rate has increased.

Speaker Change #139: Three 2% in Q4 to three 5% if we exclude the impact of the withholding tax on dividend and buyback the increase in the operating profit margin even more.

Haisheng Wu: Next, we expect the takeaway in Q2 to be better optimized, with the main driving factors being the first one being risk optimization. By cutting back business with lower or negative margins, we enhance the profitability of the overall loan portfolio. The vintage loss of new loans in Q1 is expected to be roughly 15% optimized compared to Q4. In addition, we will continue to improve the efficiency of the collection process, and we expect further optimization of the risk indicators in Q2.

Speaker Change #139: We expect to takeaway in Q2 to be better optimized.

Speaker Change #139: The main driving factor.

Speaker Change #139: The first one.

Speaker Change #139: Optimization.

Speaker Change #140: By cutting back business.

Speaker Change #140: <unk> margin, we enhance the profitability of the overall loan portfolio immediate loss of new loans in Q1 is actually to be roughly 15% optimized.

Speaker Change #141: Q4, yes.

Speaker Change #142: We will continue to improve efficiency of the collection process and we expect media optimization of David indicated in Q2 second line is the Fannie Hot market.

Haisheng Wu: The second one is the funding cost. This year, market liquidity is still ample, and we have increased the issuance of the ABS. This quarter, we issued 5.3 billion ABS. At the same time, our funding cost for cap-heavy loan facilitation continues to decline. With these two factors combined, our funding cost in Q1 has decreased by about 70 biggest points sequentially. We expect to further reduce our funding cost by issuing more ABS and optimizing our funding structures going forward. The third one is about asset distribution.

Speaker Change #142: Market liquidity is ample.

Speaker Change #142: And we have increased issuance of the ATM is.

Speaker Change #142: This quarter, we issued five 8 billion.

Speaker Change #142: At the same time.

Speaker Change #142: Multiple caps have even certification continues to decline.

Speaker Change #142: These two factors combined are fully on in Q1 has decreased.

Speaker Change #142: About a 70 basis point sequentially, we expect to further reduce our funding costs by issuing more.

Speaker Change #142: Optimizing our funding structure going forward.

Haisheng Wu: By introducing more financial institutions and matching different assets according to their risk appetite to enhance the overall conversion rate, while also improving our own probability, this quarter, the loan volume of IPE has further increased, and the take rate of IPE has also been optimized by 76 basis points compared to the same period last year. It is expected to maintain at this level in the future and going forward. We also empower the business through artificial intelligence, such as our AI development tools, with a code adoption rate of 20%, which can improve our development efficiency by roughly 30%.

Speaker Change #142: And third one is about distributions by introducing more financial institutions and imagine if an asset according to that.

Speaker Change #143: To enhance the overall conversion rate, while also improving our own profitability.

Speaker Change #143: This quarter at the low volume of IP.

Speaker Change #144: <unk> Creek and the takeaways of IV has also been optimized by 76 basis points compared to the thank you had last year.

Speaker Change #145: Do you expect it to maintain at this level in Q2 and going forward.

Speaker Change #145: We also empowered to.

Speaker Change #145: Artificial intelligence such as our AI can add.

Speaker Change #146: Let's talk with a code adoption rate of 20%, which you can't improve our development efficiency by roughly 30%. We have also used like language model to empower our staff in the collection and telemarketing operations to improve the efficiency.

Haisheng Wu: We have also used large-language models to empower our staff in the collection and telemarketing operations to improve efficiency in user communication. We have seen some benefits in these testing areas, and we will continue to invest in these directions in the future to continuously improve our operational efficiency. Based on the work we have been doing so far, we expect the take-away to be further optimized on the basis of 3.5% in the future. Thank you.

Speaker Change #147: User communication, we have seen some benefit in the testing area and it will.

Speaker Change #147: We'll continue to lean back in each direction.

Speaker Change #147: To continuously improve our operational efficiency.

Speaker Change #147: Based on what we have been doing so far we expect that the takeaway to be optimized on the bagel, 315% in the future.

Thank you.

Speaker Change #147: Thank you.

Operator: We will now take our next question. Standby, this question is from the line of Emma Xu from Bank of America. Please go ahead.

Speaker Change #148: Well now take our next question.

Please standby.

Speaker Change #149: Next question is from the line of <unk> from Bank of America. Please go ahead.

Emma Xu: Thank you for giving me the opportunity to ask this question. I have two questions. The first question is about the quality of assets. We see some leading indicators, such as Day 1 Delinquency Rate and 30-Day Collection Rate, are all stable in the first quarter. In the second quarter, can we maintain this trend, or can we see a more significant improvement? And just now, Mr. Xu also talked about the 90-day expected rate. The reason why the expected rate has risen a lot in this quarter is that the corresponding balance has fallen by 16.5%.

Emma Xu: But even after we considered this factor, the 90-day expected rate still seems to have a significant rise. Although we also know that this is a later indicator, in fact, investors will still pay attention to this indicator. So I would like to ask when we think we can see this trend? The second question is about return on investment. Just now, Mr. Xu also mentioned that the current return on investment is running faster than expected. Can we maintain this trend in the future? So I have two questions.

Speaker Change #150: So again, if you want to do.

Operator: The first one is about your asset quality. Some of your leading indicators have already stabilized in the first quarter. How can we continue to see such a trend or even more significant improvement in the second quarter? About the 90-day delinquency rate, you explained earlier that the significant increase is possibly driven by a lower loan balance. However, even excluding these factors, the 90-day delinquency rate still increased quite significantly. So when will we see improvement in this metric? The second question is about your buyback. You mentioned earlier that you execute the share buyback plans at a pace faster than the time schedule. So do you expect to continue to maintain at such a repurchase pace?

Speaker Change #151: What do you mean, all around the world.

Operator: Okay, thank you. Let's ask our CIO Zhen Yan and CFO Alex to answer these two questions.

Go ahead al.

Speaker Change #151: Hello.

Speaker Change #151:

Speaker Change #151: With your anchor or 30 day collection rates you got that.

Speaker Change #152: Uh huh.

Speaker Change #153: Thank God.

No it's all about that yourself.

Speaker Change #154: No go ahead.

Speaker Change #155: Oh gosh.

Speaker Change #155: Sure.

Joseph: So logical Joseph yes.

Speaker Change #157: Thank you Tito.

Speaker Change #157: Sure.

Speaker Change #157: The unusual way.

Speaker Change #157:

Speaker Change #157: Yes, yes.

Speaker Change #157: Yeah.

Speaker Change #157: Oh cool.

Thank you Judy.

Speaker Change #157: So I'm sure that sounds all down there.

Speaker Change #157: I think that's it.

Speaker Change #158: Yes sure.

Speaker Change #158: Oh Wow.

Speaker Change #159: Oh, Gee Balmy element you adopt <unk>.

Speaker Change #160: D C Michelle Holland on golf.

Speaker Change #160: Yes.

Speaker Change #161: Now you're going to use it that way Jackie golf like Oh.

Speaker Change #162: Allow me.

Speaker Change #163: Thank God.

Speaker Change #164: So I'm looking at Mike.

Speaker Change #164: Like what do you what do you seem to be quite high.

Speaker Change #164: Oh Gosh, you got yourself.

Speaker Change #165: So I have two questions first one is about your asset quality. So some of your leading with indicators have already stabilized.

Speaker Change #166: So can we continue to see such trend or even more significant improved improvement in the second quarter and about a 90 day delinquency rate ill expand explained earlier that.

Speaker Change #167: The significant increase is partly driven by low loan balance however exclude.

Speaker Change #167: Excluding.

Speaker Change #167: These factors the 90 day delinquency rate steel increased quite significantly so.

Speaker Change #168: We see that improvement in this metric and the second question is about your buyback.

Speaker Change #169: You mentioned that you are taking share buyback and at a pace faster than the time that you. So do you expect to continue to maintain such repurchase pace. Thanks.

Speaker Change #170: Uh huh.

Speaker Change #171: Hmm is human liver cells and younger example, sometimes work with that language.

Unknown Executive: Haisheng Wu, Xiaoxiong Ye, Yan Zheng, Zuoli Xu, Yada Li, Unknown Executive, 360 Finance, Inc. ADR Class A Haisheng Wu, Xiaoxiong Ye, Yan Zheng, Zuoli Xu, Yada Li, Unknown Executive, 360 Finance, Inc. ADR Class A ADR Class A [inaudible]

Speaker Change #171: Okay.

Speaker Change #171: Second question when you do have some headwinds on.

Speaker Change #172: In our Mercury fund when did you last.

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Speaker Change #176: Hi, Sue.

Speaker Change #177: Let me tell Ya <unk>.

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Speaker Change #178: You've seen them.

Speaker Change #178: So the Alexa Gafisa medallion.

Speaker Change #179: So that I believe one in Colombia.

Speaker Change #180: Thanks <unk>.

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Speaker Change #182: Design partners.

Speaker Change #182: We lost the Switzerland of mirror suddenly DSO.

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Tim: Until I see something on the <unk>, maybe one on EMEA.

Speaker Change #184: The loose yourself assets is up <unk>.

Speaker Change #184: They definitely see similar Stefan <unk> from BNP.

Speaker Change #185: So the cohort C and Johan familiar Barcelona solution.

Speaker Change #185: Soliciting.

Unknown Executive: Okay, I will do the translation. As Haisheng just mentioned, the vintage loss has declined by roughly 15% sequentially in Q1. As for the overall loan portfolio, the 30-day migration rate, or days past due 30 plus, for Q1 has been a 4% reduction compared to Q4. With our continuous efforts in April and May, it is expected to be further optimized by more than 8% in May on the basis of Q1. The main work driving the optimization of our early risk indicators, including the following three aspects.

Speaker Change #185: Okay.

Speaker Change #186: Okay I'll do the translation.

Speaker Change #186: I'll just mention that the vintage loss.

Speaker Change #186: Slide by roughly 15% in Q1 sequentially.

Speaker Change #186: Okay.

Speaker Change #186: The 30 day migration rate all day past due 30, plus well Q1 has been a has been.

Speaker Change #186: A 4% reduction compared to Q4 with our continuous efforts in April and May it is expected to be better optimized supply.

Speaker Change #186: More than 8% in may on the basis of Q1 that maybe was driving the optimization of our early indication including the following.

Unknown Executive: First, the risk strategy and the credit line optimization. By building the models in conjunction with third parties, we have improved the performance of the risk models to identify high-risk transactions. Second, in the post-loan operation, we established new self-operating principles and procedures and a collection partner management method in March.

Speaker Change #187: One strategy.

Speaker Change #187: Strategy and credit line optimization by building the model in conjunction with <unk>.

Speaker Change #188: We have <unk> debt.

Speaker Change #188: Our risk model.

Speaker Change #188: This is why hybrid connection.

Speaker Change #188: Second in the postal operation, we established a new operating principles and practices and.

Unknown Executive: We optimized the case collection algorithm and the commission mechanism for different collection teams, promoting the internal and external collection teams to invest in higher quality collection resources to improve the collection rates for both front-end and back-end. It is expected that the 30-day collection rate will improve by 80 to 100 basis points in April and May, compared to 85.1% in Q1. Third, we're focusing on upgrading the post-loan repayment infrastructure. We have made lots of optimizations in both the front and back ends, including externally expanding the news deduction channels and a method to improve the coverage and the success rate of the repayment deduction. And internally, we have also optimized the polling algorithm and the time limit of the repayment deduction. In this way, we have ensured better collection efficiency while maintaining our customer experience.

Speaker Change #188: And attraction economies management method in March we optimized get paid the collection operation and emission mechanic in four different collection T <unk>.

Speaker Change #188: Promoting the internet internal and tunnel patching thing to invest in higher quality packaging VITAS to include the collection rates for both.

Speaker Change #188: Front end and backend it is expected that the 30 day collection rates were increased by 80 to 100 basis points in April and May.

Speaker Change #188: Compared to 85, 1% in Q1.

Speaker Change #188: Oh.

Speaker Change #188: Focusing on.

Speaker Change #188: Upgrading the whole slow the PMA interconnection, we have made lots of optimization in both defense and buckhead, including externally extending use detection channel and the methods to improve the coverage and the success rate of debt payments the payments detection and internally we have also optimized it.

Speaker Change #188: Polling algorithm and 10 minutes of debt the payment protection.

Speaker Change #188: Wait we have ensured that our collection efficiency while maintained.

Speaker Change #189: A customer here.

Unknown Executive: In addition, we have also achieved good results in the back-end supply chain, especially in terms of the expansion and application of resources and applications in the way of legal fees, such as fees, bail, and litigation. Overall, our back-end reserve assets have increased by about 1.7 billion yuan compared with four months ago, and we will further increase our investment in legal fees resources this year. Overall, I think that our Q2 market quality will continue to improve as a result of a series of efforts to optimize and build capabilities and invest in resources.

Speaker Change #190: So I don't want Mathias Santos and Sheila.

Speaker Change #189: Yes.

Speaker Change #191: She says she tell too much too soon.

Speaker Change #192: Such a facility in Philadelphia, he wasn't yet janssen is slower than.

Speaker Change #193: <unk> intends to go there can be some insurance.

Speaker Change #193: So timna.

Speaker Change #194: It is T J, yeah, no we're not seeing any of her team will achieve Qatar.

Speaker Change #195: I know you get home Metairie.

Speaker Change #195: Sure.

So you see there on the deal up in the lithium so Sami D a C and D.

Speaker Change #195: Yeah.

Speaker Change #195: Zambia, where Macquarie.

Speaker Change #196: Please proceed with that center.

Unknown Executive: Okay. In addition, we have also achieved good results in backhand collection, especially in the application of legal collection methods, such as litigation, property preservation, and lawsuits, which resulted in an actual recovery amount of 170 million RMB in the first four months of this year compared to the same period last year. We have further increased investment in legal collection resources this year. Regarding the increase in the 90-plus overdue rates this quarter, the core reason is that, in the process of de-risking, we will guide the tail-end customers out, which leads to a 16.5% decrease in the denominator of the statistics.

Speaker Change #196: Okay.

Speaker Change #196: In addition, we have also achieved a good result in that kind of collection, especially in the application of legal collection method such as litigation.

Speaker Change #197: <unk> transformation in the last year, which has resulted in an actual nikolay amato additional 170 million RMB in.

Speaker Change #197: Martha compared to the same here.

Speaker Change #197: Last year, we also had an increased investment in legal collection recycling. This year regarding the increase in the 90 plus overdue rate is quite high.

Unknown Executive: The decrease in the denominator directly caused the ratio to jump up. Since the indicator is mismatched and delayed in time, it doesn't reflect the real-time trend of our risk performance, and we recommend that we pay less attention to it. If we continue to do this action, it will lead to a further fluctuation in the denominator, and the 90 plus overdue rate will fluctuate as well. But the actual result is that we are doing the de-risking, and our risk performance is improving. So we suggest focusing more on indicators such as the day one delinquency rate, the 30-day correction rate, and the 30-day migration rate that can truly reflect the current risk situation, which is all continuously improving.

Speaker Change #197: Okay.

Speaker Change #197: We believe that in the process of Derisking, we look at the tail end customer ads, which leads to a 16% 16, 5% decreasing the denominator the statistic.

Speaker Change #197: The decreasing the denominator of that plus the ratio to jackpot indicated mismatch and the delay in China. It doesn't reflect a real 10% of our risk performance and deliver record.

Speaker Change #197: One is that we can.

Speaker Change #198: Pay less attention to me is really continuing to do the action it will lead to a better expectation that denominator.

Speaker Change #198: The Nike plus overdue rate will fluctuate as well.

Speaker Change #198: The actual results, we are doing that Elise king and our performance is improving.

Speaker Change #198: We suggest focus more indicators such as that day, one delinquency rate 30 day production rate and the 30 day migration rate that's truly the flattish kind of situations, which are continuously improving.

Zuoli Xu: Okay. And regarding the share buyback, as we mentioned in the prepared remarks, we are ahead of schedule. If you do the math, $350 million buyback program, over 250 trading days for a year, which averages about $1.6 million US per trading day. So far, we are running at about $1.9 million US per trading day. So, about 20% ahead of schedule right now. And the reason we do that more proactively is that we still view this as a very attractive valuation. We still believe this is a good investment for our cash, and at least for the time being, we will continue to maintain a relatively faster pace than the market. Thanks. Next question, please.

Speaker Change #199: Okay, and then regarding the share.

Speaker Change #199: Share buyback as we mentioned in the prepared remarks, we are ahead of our schedule. If you do the math, it's 350 million buyback program over a 250 trading days for a year, which average about one 6 million U S per day per trading day. So.

Speaker Change #199: So far we're running at about one point close to $1 9 million U S. Dollar per trading day. So about 20% are ahead of our schedule right now and the reason why we do that to more proactively just because.

Speaker Change #199: We still view this as a very attractive valuation we still believe this is a good.

Speaker Change #199: Our investment for our for all cash.

Speaker Change #199: And at least for the time being we will continue to maintain a relatively faster.

Speaker Change #199: Pace than the time schedule.

Speaker Change #200: Thanks next question please.

Speaker Change #201: Thank you.

Speaker Change #202: Well now take our next question.

Operator: We'll now take our next question. This is from the line of Alex Yee from UBS. Please go ahead.

Speaker Change #203: This is from the line of Alex <unk> from UBS. Please go ahead.

Xiaoxiong Ye: Okay, thank you. I have two follow-up questions. The first one is about funding costs. You just mentioned that there is room for further reduction in the second quarter. I would like to ask further, especially in terms of rental funding costs. We see that there was no decrease in RPR in the first quarter, so such a significant decrease in funding costs is mainly due to the supply and demand of financial institutions.

Speaker Change #204: Uh huh.

Speaker Change #205: Hey, Julien.

Speaker Change #206: T D.

Thanks.

Speaker Change #207: So you don't use <unk>.

Speaker Change #208: Boucher identical.

Speaker Change #208: Hum.

Speaker Change #208: Okay.

Speaker Change #209: Inside that.

Speaker Change #209: Some of the client.

Speaker Change #209: Kind of if you do it in the mail.

Speaker Change #209: The shoretel.

Speaker Change #209: No.

Speaker Change #209: So the things I'm going to shut down.

Speaker Change #209: Uh huh.

Speaker Change #209: So you're going to see Congress slingshot.

Xiaoxiong Ye: So I would like to ask, if we do not consider the issue of ABS issuance, just looking at the cost of housing, how much room will there be in the second quarter? Is it actually a little bit smaller than the first quarter?

Speaker Change #209: She knows that a woman who called me I guess I should think.

Speaker Change #209: So as a consequence, let's say quite that led you to kind of highway you tossed out there.

The Los Angeles.

Speaker Change #209: When she says lidar.

Xiaoxiong Ye: So the second question I would like to ask is the issue of the pre-payment rate, because there was a more obvious jump in the first quarter of last year. At the moment, the demand is also relatively weak; I don't know if that will also affect this area. [inaudible] In terms of magnitude, how much should we expect the funding cost to improve in the second quarter? And then, secondly, in terms of the early prepayment ratio, it increased quite a bit in Q1 last year.

Speaker Change #209: Yeah.

Speaker Change #209: Do you have one chance it does that need to buy anything like generic launches in Europe can you say.

Speaker Change #209: Telephone.

Speaker Change #210: You would think especially at the appeal blah blah blah blah.

Speaker Change #211: Number one champions will be treated at home she assignment.

Speaker Change #212: My first question is on the funding cost outlook. So my estimation debtors.

Speaker Change #213: Continued room for improvement in the second quarter. So I'm just wondering.

Speaker Change #214: In terms of the magnitude how much should we expect.

Speaker Change #214: The funding.

Speaker Change #214: Cutting cost to improve in the second quarter and then secondly in terms of the early prepayment ratio.

Speaker Change #215: It increased quite a bit.

Xiaoxiong Ye: And now, given credit demand appears to be relatively weak at the moment, does it have any impact on your prepayment ratio as well? How is your current prepayment running compared to last year and last quarter?

Speaker Change #216: Q1 last year and now given the quantity might appear to be relatively weak at the moment. So does it have any impact on your prepayment ratio as well.

Speaker Change #217: How is the current dependency ratio.

Speaker Change #218: Compared to last year and last quarter. Thank you.

Speaker Change #218: Okay.

Unknown Executive: As for the cost of capitalization, I mentioned it earlier because the overall market is still very scarce for a consumer asset like ours. So the demand is still very high, and so the competition is still fierce on the cost. At the same time, we will continue to strive for more on the issuance of ABS. So if these two factors add up, the overall cost of capitalization still hopes to go down further. As for the remittance rate, the remittance rate of residents of the society this year has been guided more by the central bank.

Speaker Change #218: Oh.

Speaker Change #219: The income that came in.

Speaker Change #219:

Speaker Change #219:

Speaker Change #219: Tom.

Speaker Change #220: Do you want me to do them syndrome servicing at the time the depreciation question.

Speaker Change #220: Is it a few times a degree juices Jeffrey shipyard monitoring.

Speaker Change #220: Hum.

Speaker Change #221: 301 undergrad degree.

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Julia: Bunch of womens everything for.

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Speaker Change #223: You can see into Manhattan, She went on which he would shoot shot John.

Speaker Change #223: Interesting.

Speaker Change #224: Claims you agree that you don't want to you.

Speaker Change #225: Junior in Geneva.

Speaker Change #226: I'm doing good.

Speaker Change #227: Do you mean the degree.

Speaker Change #227: I know you said it.

Unknown Executive: Last year, there was a significant increase in the first quarter. So today, the central bank is also guiding the market in a balanced way. Today's crown is better than last year's in terms of advance payment. For us, we have made a lot of measures to control this kind of action.

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Speaker Change #227: Do you.

Speaker Change #227: You get offered a degree or two songs with unions and Keith are young.

Speaker Change #227: Two little kink in humans.

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Tom: Sure beats Union country your heart to some degree you don't want to go stand and do you want.

Tom: That's all I can do it at home.

Speaker Change #229: Unfortunately, I couldn't treat them differently.

Unknown Executive: For example, for active users, we will also make some software controls. We will also make some models to predict users in advance to see who may have more advanced payment. We will use this kind of prediction to manage users in advance. According to the data, the 7-day and 30-day pre-evaluation rate of the first quarter of this year is basically the same as last year's Q4, which is about 15% lower than the same period last year. Unknown Executive, 360 Finance, Inc.

Speaker Change #229: These women she didn't do integral quealy, Oakland, Alameda, which situations at home.

Speaker Change #229: An integrated and getting them to do them.

Speaker Change #229: Country.

Speaker Change #229: Do you want me equates weekend, even Washington, let you didn't use her own cool country anyway.

Speaker Change #229: You can do the degree to which ones you don't use <unk>, who didn't integrate it was from Macquarie.

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Speaker Change #229: And do you need or would it be good she tank with sensory Deanna do you want you're not keeping jankovich an integral capital.

Speaker Change #229: Capital with it might be seen it I'm not even sure sure can do that.

Speaker Change #229: But it just shows what you.

Speaker Change #229: Generic woman's human domain pathway of credit box, you can see I'm happier with Genesis.

Speaker Change #230: That's correct.

Unknown Executive: Okay, I will do the translation. First, it's about our funding costs. As I discussed earlier, the demand for assets from financial institutions remains very strong this year, and we remain competitive on the funding side. We expect that the cost of funds in Q2 will continue to decline due to, on the one hand, our funding cost for cap-heavy loan facilitation and ADS issuance will continue to decrease, and on the other hand, the proportion of ADS in the fund will be further increased. Second, it is about early repayment. This year, the central bank has placed greater emphasis on guiding the balanced allocation of credit, enhancing the stability and sustainability of the overall growth of credit.

Speaker Change #231: Okay I'll do the translation is about our funding cost as I discussed earlier.

Speaker Change #231: The demand for assets from financial institutions, They may kind of Congress and we remain competitive as final site.

Speaker Change #231: We expect that to the cost of power in Q2 continued to decline due to our funding forecast heavy loan facilitation and avian issue, we're continuing to decrease and on the other hand desktop a proportion of <unk> in a thought will be increased.

Speaker Change #232: Second is about early with peanuts, and the Central Bank has placed a greater emphasis on guiding the balanced allocation of credit enhancing the stability and sustainability of the overall growth.

Unknown Executive: So the market environment has a better impact on repayment than the same year last year. We have also taken many measures to control the early repayment ratio. First, we control the issuance of turnover funds for active users in terms of our operation. Second, we also predict users' early repayment tendency based on our algorithm and enhance our product offering in a timely manner to manage the early repayment ratio. Therefore, the 7-day and 30-day repayment rates in Q1 this year are basically the same as Q4 last year but have decreased by approximately 15% compared to the same period last year. And we expect our early repayment ratio will remain stable going forward.

Speaker Change #233: Their credit so the market environment has a better impact under the 10 minute treatment and I think you asked here.

Speaker Change #233: We have also taken many measures to control.

Speaker Change #233: Tim elevation, firstly, one we are in and we control the issuance of 10 all of that will actually use it.

Speaker Change #233: First of all our operations.

Speaker Change #234: Secondly, we also predict you did early repayment, Tennessee based on our overhead and enhance our product offering on a timely manner to manage that labor accumulation. Therefore, the seven day.

Speaker Change #234: 30 day payment Mick.

Speaker Change #234: In Q1 this year are basically the same.

Speaker Change #234: To point out that.

Speaker Change #234: That would have decreased by approximately 15% compared to the same period last year, and we expect our <unk> ratio will maintain stable going forward.

Speaker Change #235: Thank you Okay, operator, let's take the final question for the day.

Operator: Thank you. Okay. Operator, let's take the final question for the day.

Speaker Change #236: Thank you.

Operator: One moment, please. The final question is from the line of Yada Li from CICC. Please go ahead.

Speaker Change #237: Well amendment place.

Speaker Change #238: And our final question is from the line of Yodlee from CLSA. Please go ahead.

Yada Li: Hello, management team. Thank you for giving me this opportunity to ask questions.

Speaker Change #240: Oh go ahead Hopkins who's going to go to you on that too, but can you hear some sound quality toso glioma with somewhat more selective with friends or something about the union you don't feel like huh.

Yada Li: Today, I would like to ask the management team about the choice of our future payment mode. At the end of this year and in the long term, the platform mode will see the difference in the price-to-asset ratio between the light-asset-medium loan and the ICE, as well as the difference in the price-to-asset ratio between the guarantee-medium loan and the self-subsidized mode in the credit-driven payment mode. Let's take a look at how the company balances its bottom line and the reasons behind it.

Speaker Change #239: Most of them don't.

Speaker Change #241: Without I C W.

Speaker Change #242: Does that assume once you're done with Philadelphia, where most of the drilling done what would that cause most of their W. Twos it would be a problem.

Speaker Change #243: And amongst in Carnegie inclusive culture telecom boom or should it be a hold I totally agree with you I will tell you about it.

Yada Li: Thank you, Manager Guan. Then, I'll do the translation. My question today is regarding the loan structure. By the end of this year and going forward, can you give us more color on the breakdown of volume percentage for capital line and ICE in platform services, and furthermore, how to view the mixed change for guaranteed and self-funded models in credit-driven services, respectively? In addition, what are the causes for the potential change?

Speaker Change #244: I'll do the translation on my question is regarding the loan structure.

The end of this year are kind of going forward, Okay will give us more color on the breakdown of volume percentage for a capital light and I see no platform services and Furthermore, how to view the mix change for guaranteed and cell phone the model.

Speaker Change #244: Driven services respectively.

Unknown Executive: And that's all. Thank you.

Speaker Change #245: What are the causes border potential change and that's all thank you.

Unknown Executive: Okay, Yada. I'll say it. First of all, I would like to share our fundamental thinking on the proportion of light and heavy assets. Under today's scale, we no longer set a specific goal for the company.???? The goal is to optimize our dynamic structure to balance our risk and profitability. Unknown Executive, 360 Finance, Inc.

Speaker Change #244: Yeah.

Speaker Change #246: Oh, Yeah sure.

Speaker Change #246: Sergio.

Speaker Change #247: And for any of them.

Speaker Change #248: Kindred at times it could be either you guys.

Speaker Change #247: Hum.

Speaker Change #249: Just curious I didn't hear <unk>, she knows the kind of degree.

Vishal: Greenwood Vishal woman.

Vishal: But that should weaken for soybean and you've got to put in the mobile.

Richard Xu: G Richard.

Speaker Change #252: We don't do that anymore.

Speaker Change #253: Sure as you buy them, we'll be arguing anytime soon.

Speaker Change #253: Hum.

Speaker Change #253: You have you don't see it go.

Speaker Change #254: Leigh came from women and their function.

Speaker Change #255: The Union issue.

Speaker Change #255: Hum.

Speaker Change #255: Good things going on like you said, one woman that tension.

Unknown Executive: Therefore, at different stages, in different market environments, we will choose different combinations. We should say that we have maintained a relatively balanced structure. In this way, we generally think that we will be relatively healthy.

Speaker Change #255: Take rates.

Speaker Change #255:

Speaker Change #255: Good job on that but it gives you some funding on that when we put them through.

Speaker Change #256: Uh huh.

Speaker Change #257: Hmm, which in English sheep actually you guys Sandy Qin company, you're good to go.

Speaker Change #257: And then one on women.

Speaker Change #257: Didn't you sound really only if we can tend to be at genco can be branded by doing 301 for now.

Unknown Executive: Our risk will be better than 100% heavy-asset companies. Our profitability will be better than those companies that are basically all light assets. According to this quarter, we have increased the amount of money we give out. This is because we distributed more ABS. In this quarter, our ABS increased by 130% compared to last year. And the ABS funding cost is significantly lower than the cost of the rental part of the model.

Speaker Change #257: We can call the champions yeah.

Speaker Change #257: And you bring them to a degree the channel she chooses chemicals now women their degree of freedom.

Speaker Change #257: No.

TJ: TJ, what they could do less one woman and typically.

Speaker Change #259: Typically you do English and suddenly you can imagine that you go to somebody else to take the if I'm right now.

Speaker Change #260: I don't think there's human woman talk on I couldn't do that.

Speaker Change #260: Evs at cigarettes.

Speaker Change #260: Because you're doing and maybe as it can be shinhan fitting.

John: And John the balance of your bet some.

John: Yes.

John: And to the degree woman <expletive> <expletive> too that we're going to get more sugar figured somebody in.

Unknown Executive: Therefore, the increase in this part of the ratio will greatly benefit the overall take rate. In addition, this quarter, we have also had a significant increase in our ICO model. Our main work is to attract more financial institutions to our company and to optimize the efficiency of our overall asset distribution. The income of our ICO business, the take rate, should be said to have increased by 70%. Therefore, the increase in the share of our SE business has had a positive impact on our overall profitability. In the future, we will continue to implement this strategy to improve the efficiency of operations under different structures and adjust it dynamically to better balance the company's risks and profits.

Now when people are going to compete with it is in Oh Gee, you choose a woman and she the take rate.

John: And then <unk>.

John: Seamless.

John: So I think that's it with another woman.

John: You get immediate attention.

Speaker Change #261: We are the consortia.

Speaker Change #261: No one can do that because you know once you go to your left.

Speaker Change #262: Hello woman Vinci, that's the time from father shoulder.

Speaker Change #263: I see yeah.

Speaker Change #263: So rude to grid and that you've got for your food to meet you soon.

Speaker Change #263: Instant woman incident woman.

Speaker Change #263: He had a great year with the attempted that you send them to them in Vinci.

Speaker Change #264: Yes, 310th Amendment.

Speaker Change #265: Ah you're relying upon woman natural highways shoot tissue.

Speaker Change #265: Like I said, you should see some put them there.

Speaker Change #266: Chico's had a.

Speaker Change #266: Jean Michel you can you talk about your competitive shootout the lag in how the pendulum considering for example E G.

Speaker Change #266: Sure.

Unknown Executive: Okay, I will do the translation. Okay, I will do the translation.

Speaker Change #266: Okay.

Speaker Change #266: Nation.

Unknown Executive: I want to share some of our considerations on the asset mix. Regarding the asset mix, we do not have a specific target, but instead, we want to balance our risk and profitability by optimizing the asset mix. At the same time, we want to enhance our takeaway by improving the efficiency of asset distribution. At different stages and under different market conditions, we choose different asset portfolios.

Speaker Change #266: Oh.

Speaker Change #267: Okay I'll do the translation I want to share some of our consideration on the SME.

Speaker Change #267: Regarding the asset mix, we do not have a specific target. It is that we want to balance risk and profitability by optimizing the SME.

At the same time, we want to enhance our patronage by improving efficiency of assay.

Speaker Change #267: Distributions at a different stage and they're different market condition, we choose different asset portfolio that havent.

Unknown Executive: Currently, we maintain a relatively balanced asset structure, which makes our business healthier, with better risk performance compared to the companies that are 100% asset heavy, and better profitability compared to the companies that are completely asset light. This quarter, we increased the proportion of unbalanced loans, mainly driven by more ABS issuance. Our ABS rose by 130% compared to the same period last year, and the cost of funds for ABS is significantly lower than capital-heavy loan facilitation.

Speaker Change #267: We maintain a relatively balanced as extraction, which makes our business healthier.

Speaker Change #267: With better performance compared to the company that are 100% as a habit and that's a capability compared to the company that's a complete today.

Unknown Executive: Therefore, increasing the proportion of unbalanced loans is beneficial for improving our overall take rate. Additionally, our ICE model has also increased this quarter, mainly because we introduced more financial institutions and optimized the efficiency of asset allocation. Our take-away from ICE has increased by more than 70% year-on-year, so the increase in ICE's proportion has a positive impact on our profitability. Going forward, we will continue this. Strategy for Asset Allocation, Improving Operational Efficiency in Different Models, and a Better Balanced Risk and Return by Dynamically Adjusting the Asset Structure. Thank you.

Speaker Change #268: I like this.

Speaker Change #268: This quarter, we increased the proportion of on balance sheet loans, mainly driven by more atheists issuing our yield by 130% compared to the same period last year and a cost of about four <unk>.

Speaker Change #268: Essentially lower than the capital heavy loan facilitation, therefore, increasing the question of on balance sheet is beneficial for improving our overall take rate.

Speaker Change #268: Additionally, our LTE model has also increased this quarter, mainly because we introduced a more financial institutions and optimize the efficiency of asset allocation or takeaways on LTE has increased by more than 70% year on year. So the increase in IC E propulsion has positive impact.

Speaker Change #268: Our private entity.

Speaker Change #268: Going forward, we will continue to be.

Speaker Change #269: Got it and as far as allocation, improving operational efficiency and expense model and a better balanced risk and return dynamically adjusting the asset structure.

Speaker Change #268: Yeah.

Operator: Okay, thank you everyone for joining us for this conference call. And if you have additional questions, please, you know, contact us offline. Thank you very much. Have a good day.

Speaker Change #270: Okay. Thank you everyone to join US for this conference call and if you have additional questions. Please.

Speaker Change #270: Contact us offline. Thank you very much have a good day.

Operator: Thank you. That does conclude the conference for today. Thank you for participating.

Speaker Change #271: Thank you that does conclude the conference for today. Thank you for participating and you may now disconnect.

Speaker Change #271: Yeah.

Speaker Change #271: [music].

Speaker Change #271: Yeah.

Speaker Change #271: Okay.

Speaker Change #271: [music].

Speaker Change #271: Okay.

Speaker Change #271: [music].