Q2 2024 Yiren Digital Ltd Earnings Call

Speaker Change: Good day and welcome to the year-end digital second quarter 2024 earnings conference call.

Operator: All participants will be in listen-only mode. Should you need assistance, please call 1-877-422-4232. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch tone phone.

Operator: 2024 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero.

Operator: 2024, Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal the conference specialist by pressing the star key followed by zero.

Na Mei: Yes.

Speaker Change: all participants will be in listen only mode should you need assistance please signal conference specialist by pressing the star key followed by zero

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a, question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two.

Speaker Change: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch-tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded.

Operator: To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Keyao He, Investor Relations Officer. Please go ahead.

Operator: Please note this event is being recorded.

Keyao He: I would now like to turn the conference over to Keyao He, Investor Relations Officer. Please go ahead.

Keyoha Andinvesest: I would now like to turn the conference over to Keyao He, Investor Relations Officer. Please go ahead.

Keyao He: Thank you, operator. Good morning, good evening, everyone. Today's call features a presentation by our founder, chairman, and CEO, Mr. Ning Tang, and our CFO, Ms. Na Mei. Our new CFO, Mr. Yu Ning Feng, will also attend the Q&A session and prepare remarks. So before beginning, I would like to remind you that discussions during this call contain forward-looking statements made under the safe harbor provision of U.S. Private Securities Legislation Reform Act of 1995.

Speaker Change: Good morning, good evening everyone. Today's call features a presentation by our Founder, Chairman and CEO , Mr. Ning Tang, and our CFO , Ms. Na Mei.

Speaker Change: Our new CFO , Mr. Yu Ningfeng, will also attend the Q&A session after remarks.

Keyao He: Such statements accept risks, uncertainties, and factors that can cause actual results to differ materially from those contained in any such statement. Further information regarding future risks, uncertainties, or factors is included in the findings with the U.S. Securities and Exchange Commission. We do not undertake any obligation to update any forward-looking statements as required under the relevant law. During the call, we will be referring to certain non-GAAP financial measures and fundamental measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. GAAP.

Speaker Change: the vocation like to remark the discussions during this call contain forward-looking statements made another istic have a provision of u s private securities lead cation reformact of thousand nety five that it must are subjectto risks ascertainate and better that can cause actual results to differ mataterially from the contain in any such statements

Unknown Attendee: from those contained in any such statement.

Unknown Attendee: Studying for major regarding future risks and identities of factors is included in the meeting with the U.S. Securities and Exchange Commission.

Speaker Change: studing the major regarding fwuredirect as syes of factor is included in openings with the u s securities and exchange commission would do now undertake any obligation to update any forward-looking statements as required another relevant law

Unknown Attendee: Would you now undertake any application to update any four looking statements required under the relevant law? During the call, we will be referring to certain man-gap financial measures and certain mental measures to review an assessment of operating performance. These man-gap financial measures are now intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. gap.

Speaker Change: During the call, we will be referring to certain NAM GAAP financial measures and fundamental measures to review and assess our operating performance.

Speaker Change: These non- GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. GAP. For information about these non- GAAP measures and related complications to GAAP measures , please refer to our early speculation link.

Unknown Attendee: For information about this man-gap measures, I would like to suggest this complete ancient gap measure. Please refer to it unintentionally.

Keyao He: For information about these non-GAAP measures and related complications to GAAP measures, please refer to our early spreadsheet. I will now pass it to Nate for opening remarks. Thank you all for joining our earnings conference call today. Despite the evolving market environment. We are pleased to report another solid quarter with strong unique economy, reflecting the resilience of our business structure and operational strategy, as well as our commitment to quality control to quality growth over mayor expansion.

Keyao He: I would now like to name for opening remarks. Thank you all for joining our earnings conference call today. Despite the evolving market environment, we are pleased to report another solid quarter with strong unit economics, reflecting the resilience of our business structure and operational strategies, as well as our commitment to quality control, to quality growth over mere expansion. Additionally, our strategic investments in AI and the seamless integration of technological innovation into our operations have fostered dual growth in both technological advancements and operational efficiency. Our strategic direction positions us well to evolve into a leading AI driven platform, paving the way for groundbreaking solutions and setting new industry standards.

Operator: I would now

Na Mei: Thank you.

Operator: like to turn the conference over to Keyao He, Investor Relations Officer.

Na Mei: Please repeat.

Speaker Change: I will now pass it to Ning for opening remarks.

Speaker Change: Thank you all for joining our earnings conference call today.

Operator: Please go ahead.

Na Mei: Thank you.

Speaker Change: Despite the evolving market environment, we are pleased to report another solid quarter with strong unique economics.

Keyao He: Thank you, operator.

Na Mei: Okay, now I will repeat.

Speaker Change: reflecting the resilience of our business structure and operational strategies.

Speaker Change: as well as our commitment to quality control to quality growth over mayor expansion.

Keyao He: Additionally, our strategic investments in AI and the seamless integration of technological innovation into our operation, have fostered dual growth in both technological advancements and operational efficiency. Our strategic direction positions us well to evolve into a leading AI-driven platform, paving the way for groundbreaking solutions and setting new industry standards. Now I would like to go through our business highlights for this quarter. First, our financial services.

Speaker Change: Additionally, our strategic investments in AI and the seamless integration of technological innovation into our operations

Speaker Change: have fostered dual growth in both technological advancements and operational efficiency.

Speaker Change: our strategic direction positions us well to evlogve into a leading ai-driven platform

Speaker Change: Paving the way for groundbreaking solutions and setting new industry standards.

Keyao He: Now, I would like to go through our business highlights for this quarter. First, our financial services business. The second quarter of 2024 saw a static growth, with total loan volume reaching RMB 12.9 billion, marking a 59 percent increase year-over-year and maintaining a resilient consecutive quarterly growth despite an industry slowdown. The momentum is largely driven by the concrete growth of our new customers with higher credit quality, as we continue to optimize our asset quality of long portfolios. Since the second half of 2023, one of the entire industry experienced substantial credit risk fluctuations. We started to proactively upgrade our customer mix and diversify our online acquisition channels.

Keyao He: Good morning, good evening, everyone.

Na Mei: Cash items and also our international business, yeah, market.

Keyao He: The second quarter of 2024 saw a steady growth, with total loan volume reaching RMB 12.9 billion, marking a 59% increase year over year, and maintaining a resilient consecutive quarterly growth despite an industry slowdown. The momentum is largely driven by the concrete growth of our new customers with higher credit quality, as we continue to optimize our asset quality of loan portfolios. Since the second half of 2023, when the entire industry experienced substantial credit risk fluctuation.

Keyao He: Today's call features a presentation by our founder, chairman, and CEO, Mr. Ning Tang, and our CFO, Ms. Na Mei.

Speaker Change: Now, I would like to go through our business highlights for this quarter.

Keyao He: Our new CFO, Mr. Yu Ning Feng, will also attend the Q&A session after remarks.

Na Mei: Yeah, I'm going to explain our investment cash flow, the reason why we increased so much in the fiscal year. And as I mentioned, as you remember that last year we purchased a new financial, company to our financial service segment purpose.

Na Mei: And for this year, the management is still going on to implement a financial license, to purchase for our financial service business, like the AMC, SS company and the micro small lending companies and other financial companies. So for this financial companies, before the formal come to the formal operations, the repurchase process, based on the communications status, we should replace the investment amount to our partners to lock the acquisition target.

Speaker Change: First.

Speaker Change: our financial services business.

Keyao He: Before beginning, I would like to remind you that discussions during this call contain forward-looking statements made under the Safe Harbor Provision of the U.S.

Na Mei: So you can say our investment cash flow is really the cash out that most of our, investment payment to our potential financial needs target.

Speaker Change: The second quarter of 2024 saw a steady growth, with total loan volume reaching RMB 12.9 billion.

Keyao He: Private Security's Legislation Reform Act of 1995.

Keyao He: Such statements accept risks, uncertainties, and factors that can cause, actual results to differ materially from those contained in any such statement.

Keyao He: Further information regarding future risks, uncertainties, or factors is included in your findings with the U.S. Securities and Exchange Commission.

Keyao He: We do not undertake any obligation to update any forward-looking statements as required under the relevant law.

Keyao He: During the call, we will be referring to certain non-GAAP financial measures and supplemental measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. GAAP.

Na Mei: Hope my question is answered.

Speaker Change: marking a 59% increase year-over-year and maintaining a resilient consecutive quarterly growth despite an industry slowdown.

Speaker Change: The momentum is largely driven by the concrete growth of our new customers with higher credit quality.

Speaker Change: As we continue to optimize our asset quality of loan portfolios.

Speaker Change: Since the second half of 2023, when the entire industry experienced substantial credit risk fluctuations. Thank you.

Keyao He: We started to proactively upgrade our customer mix and diversify our online acquisition channel. The strategy has proven effective, leading to secure growth and improved asset quality. Meanwhile, we have refined our proprietary RTA credit model for borrower equity, which has notably enhanced our overall credit approval efficiency. In this quarter, the number of borrowers served increased by 47% year over year to 1.5 million.

Speaker Change: we started to proactively upgrade our customer mix and that versify our online acquisition channels

Keyao He: The strategy has proven effective, leading to secure growth and improved asset quality. Meanwhile, we have refined our proprietary RTA credit model for borrower acquisition, which has notably enhanced our overall credit approval efficiency. In this quarter, the number of borrowers served increased by 47% year-over-year to 1.5 million. Moreover, our long facilitation platform continues to gain popularity, with monthly active users rising by 88% year-over-year to 4.5 million in the second quarter of this year, showcasing strong customer engagement and loyalty. As we maintain our focus on attracting high-quality borrowers and note that existing high-value borrowers repeatedly use our revolving loan products, we expect this growth momentum to continue throughout the year.

Speaker Change: The strategy has proven effective.

Speaker Change: leading to secure growth and improved asset quality.

Speaker Change: Meanwhile, we have refined our proprietary RTA credit model for borrower acquisition.

Speaker Change: which has notably enhanced our overall credit approval efficiency.

Keyao He: For information about these non-GAAP measures and related configurations of GAAP measures, please refer to our earnings financial links.

Na Mei: My question and my answer is ask your question.

Speaker Change: In this quarter, the number of borrowers served increased by 47% year-over-year to 1.5 million.

Keyao He: I will now pass it to Ning for opening remarks.

Na Mei: Yes.

Keyao He: Moreover, our loan facilitation platform continues to gain popularity, with monthly active users rising by 88% year over year to 4.5 million in the second quarter of this year, showcasing strong customer engagement and loyalty, as we maintain our focus on attracting high-quality borrowers and note that existing high-value borrowers repeatedly use our revolving loan products. We expect this growth momentum to continue throughout the year. Meanwhile, our international business is showing exciting progress. The total loan volume overseas nearly doubled in the second quarter of 2024 compared to the prior quarter, in the Philippines.

Speaker Change: Moreover, our loan facilitation platform continues to gain popularity.

Speaker Change: with monthly active users rising by 88% year over year to 4.5 million in the second quarter of this year.

Ning Tang: Thank you all for joining our earnings conference call today. Despite the evolving market environment, we are pleased to report another solid quarter with strong unit economics. Reflecting the resilience of our business structure and operational strategies, as well as our commitment to quality control – to quality growth over mayor expansion.

Na Mei: Do you see the cash used plateauing or continuing to grow greatly?

Speaker Change: showcasing strong customer engagement and loyalty.

Na Mei: Yeah, I think you can see for the cash from the operating we'll keep the housing and the, stable cash flow.

Na Mei: And also, we have used the cash to other investment opportunities, no matter the internal financial license or the international over the business development.

Speaker Change: As we maintain our focus on attracting high-quality borrowers and note that existing high-value borrowers repeatedly use our revolving loan products, we expect this growth momentum to continue throughout the year.

Keyao He: Meanwhile, our international business is showing exciting progress. The total loan volume oversees nearly doubled in the second quarter of 2024, compared to the prior quarter. In the Philippines, monthly loan volume facilitated exceeded R&B 20 million milestone, with the growth rate remaining robust as we move into the second half of the year. Moreover, as our business continues to grow, we are benefiting from economic upscale. With customer acquisition costs decreasing by 18% quarter-over-quarter, in June 2024, our business in the Philippines achieved a positive net profit margin. It was mentioning that our rapid growth is closely tied to our AI development and integration.

Speaker Change: Meanwhile, our international business is showing exciting progress.

Speaker Change: The total loan volume overseas nearly doubled in the second quarter of 2024 compared to the prior quarter.

Keyao He: Monthly loan volume facilitated exceeded RMB 20 million milestone, with the growth rate remaining robust as we move into the second half of the year. Moreover, as our business continues to grow, we are benefiting from economics of scale, with customer acquisition costs decreasing by 18% quarter over quarter. In June 2024, our business in the Philippines achieved a positive net profit margin. It's worth mentioning that our rapid growth is closely tied to our AI development and integration.

Speaker Change: In the Philippines, monthly loan volume facilitated exceeded RMB 20 million milestone, with the growth rate remaining robust as we move into the second half of the year.

Speaker Change: Moreover, as our business continues to grow, we are benefiting from economics of scale.

Speaker Change: with customer acquisition costs decreasing by 18% quarter over quarter.

Speaker Change: In June 2024, our business in the Philippines achieved a positive net profit margin.

Ning Tang: Additionally, our strategic investments in AI and the seamless integration of technological innovation into our operations have fostered due growth in both technological advancements and operational efficiency.

Na Mei: Also, in our AI strategy, we also have many cash expenditure.

Ning Tang: Our strategic direction positions us well to evolve into a leading AI-driven platform, paving the way for groundbreaking solutions and setting new industry standards.

Na Mei: But in our forecast, we still have the confidence in our cash and the cash, batch equivalent balance.

Na Mei: We think a very strong status in the next quarter.

Speaker Change: It's worth mentioning that our rapid growth is closely tied to our AI development and integration.

Keyao He: Our proprietary large-language models have been implemented across various operations, including customer acquisition, customer service, risk management, and as a management. For instance, in our international operations, our anti-broad AI models have processed over 10 different types of identification documents this quarter. Achieving a 93% accuracy rate and significantly enhancing our risk management efficiency. Additionally, to standardize our services, our large language models are used in our overseas call centers to translate local languages, detect sensitive words, and analyze service quality and assurance, thereby boosting customer satisfaction. As more data are processed, we expect continued enhancements of our models in both accuracy and their applicability to a wider range of scenarios and uses.

Keyao He: Our proprietary large-language models have been implemented across various operations, including Customer Acquisition, Customer Service, Risk Management, and Asset Management. For instance, in our international operation, our anti-fraud AI models have processed over 10 different types of identification documents this quarter, achieving a 93% accuracy rate and significantly enhancing our risk management efficiency. Additionally, to standardize our services, our large language models are used in our overseas call centers to translate local languages, detect the sensitive words and analyze service quality and assurance, thereby boosting customer satisfaction.

Ning Tang: Now, I would like to go through our business highlights for this quarter.

Speaker Change: Our proprietary large-language models have been implemented across various operations.

Ning Tang: First, our financial services business.

Speaker Change: including customer acquisition, customer service, risk management, and asset management.

Na Mei: Thank you, and our international business covers the Philippines and Mexico and we are also looking to expand to certain other markets in Southeast Asia and other parts of the world.

Speaker Change: for instance

Speaker Change: In our international operations, our anti-fraud AI models have processed over 10 different types of identification documents this quarter.

Speaker Change: Achieving a 93% accuracy rate and significantly enhancing our risk management efficiency.

Na Mei: Thank you.

Operator: Again, if you have a question, please press star then one on a touchtone phone.

Operator: Is the first gentleman back?

Operator: Yes, we have him now.

Operator: Okay, we will cover the AI investment implementation part.

Speaker Change: Additionally, to standardize our services, our large language models are used in our overseas call centers to translate local languages, detect sensitive words, and analyze service quality and assurance.

Keyao He: As more data are processed, we expect continued enhancement of our models in both accuracy and their applicability to a wider range of scenarios and uses. Turning into asset quality, delinquency rates continue to show an encouraging trend as assets from upgraded borrowers increase. Specifically, the 15 to 89 day delinquency rate for the second quarter of 2024 declined to 3.8% down 10 basis points, the FPD 30 plus delinquency rate decreased by the third consecutive quarter, and that the M1 collection rate for the second quarter of 2024 increased by 290 basis points quarter over quarter to a historic high.

Ethan Yu: Hi, Ethan again.

Ethan Yu: Can you hear me now?

Speaker Change: thereby boosting customer satisfaction.

Speaker Change: As more data are processed, we expect continued enhancement of our models in both accuracy and their applicability to a wider range of scenarios and uses.

Keyao He: Turning into asset quality, delinquency rates continue to show an encouraging trend as assets from upgraded borrowers increase. Specifically, the 15 to 89 date delinquency rate for the second quarter of 2024 declined to 3.8%, down 10 basis points. The FPD 30 plus delinquency rate decreased for the third consecutive quarter, and the M1 collection rate for the second quarter of 2024 increased by 290 basis points quarter over quarter to a historic high. We expect a sustained improvement in asset risk performance in the second half of this year as we continue to optimize our customer mix and the retune our credit risk models.

Ning Tang: The second quarter of 2024 saw a steady growth, with total loan volume reaching RMB $12.9 billion, marking a 59% increase year-over-year and maintaining a resilient consecutive quarterly growth despite an industry slowdown. The momentum is largely driven by the concrete growth of our new customers, with higher credit quality as we continue to optimize our asset quality of loan portfolios.

Ethan Yu: Yes, I can hear you very clearly.

Ning Tang: Since the second half of 2023, when the entire industry experienced substantial credit risk, fluctuations, we started to proactively upgrade our customer mix and diversify our online acquisition channels. The strategy has proven effective, leading to secure growth and improved asset quality. Meanwhile, we have refined our proprietary RTA credit model for borrower acquisition, which has notably enhanced our overall credit approval efficiency.

Ning Tang: Actually, as I reported at the beginning, we use AI extensively in our operations.

Ning Tang: We also try and leverage the technology capabilities developed internally for potential external opportunities.

Speaker Change: Turning into asset quality, delinquency rates continue to show an encouraging trend as assets from upgraded borrowers increase.

Speaker Change: butulically the fifteen to eighty nine date delinqueny rate for the second quarter of two thousand and twenty four declined to three point eight percent down ten basis points

Speaker Change: The FPD 30-plus delinquency rate decreased by the third consecutive quarter.

Speaker Change: And then the M1 collection rate for the second quarter of 2024 increased by 290 basis points quarter over quarter to a historic high.

Keyao He: We expect a sustained improvement in asset risk performance in the second half of this year as we continue to optimize our customer mix and re-tune our credit risk model. Now, on Funding Cards. Our effort in building an efficient funding management system is showing results. In the second quarter of this year, our funding cost decreased by 82 basis points quarter over quarter, reaching a historic low and exceeding our internal target. The downward trend will continue in the third quarter.

Ning Tang: We have fintech partners, financial institutions that are interested in our solutions.

Ning Tang: I hope we will see some results later this year or first half of next year.

Ning Tang: At the same time, we try and build a strategic investment and partnership infrastructure ecosystem.

Speaker Change: We expect a sustained improvement in asset risk performance in the second half of this year as we continue to optimize our customer mix and re-tune our credit risk models.

Keyao He: Now, on funding cost, our effort in building an efficient funding management system is showing results. In the second quarter of this year, our funding cost decreased by 82 basis points quarter over quarter, reaching a historic low and exceeding our internal target. The downward trend will continue in the third quarter. Moreover, given the current market funding condition, we are strategically increasing our long volume and the risk-taking model to better balance risk management and profitability.

Ning Tang: We have made a couple of small, but in my view, hopefully, very promising investments in the AI space, but their contributions are very tiny.

Speaker Change: Now, on funding cost.

Speaker Change: Our effort in building an efficient funding management system is showing results.

Ning Tang: Going back to our AI use cases internally, for example, we use AI in customer acquisition, customer service.

Ning Tang: We use robots and large language models for incoming, outbound calls.

Speaker Change: In the second quarter of this year, our funding cost decreased by 82 basis points quarter over quarter, reaching a historic low and exceeding our internal target.

Keyao He: Moreover, given the current market funding conditions, we are strategically increasing our loan volume under the risk-taking model to better balance risk management and profitability, regarding our insurance foreclosure business. We have focused more on property insurance and expanded our customer acquisition channels to hedge against the ever-changing regulatory environment and uncertainties in the life insurance sector. In the second quarter, gross return premiums totaled RMB 1.1 billion, reflecting a year-over-year decrease of 20% and a quarter-over-quarter increase of 16%. The annual decline was primarily due to the impacted life insurance business, which experienced the limited sales of first year premiums as a result of product changes and the new regulation.

Speaker Change: the downward trend will continue in the third quarter moreover given the current market funding conditions we have strategically increasing our loan volume under under the risk taking model to better balance risk management and profitability

Keyao He: Regarding our insurance brokerage business, we have focused more on property insurance and expanded our customer acquisition channels to hedge against the ever-changing regulatory environment and uncertainties in the live insurance sector. In the second quarter, growth retail premiums totaled RMB 1.1 billion, reflecting a year-over-year decrease of 20% and a quarter-over-quarter increase of 16%. The annual decline was primarily due to the impacted life insurance business, which experienced the limited sales of first-year premiums as a result of product changes and the new regulations. The quarter-over-quarter growth in premiums is largely attributable to the property insurance business. We are premiums reached the $557 million, marking a 19% increase from the previous quarter and setting a new record.

Ning Tang: When we detect a customer's emotion change, it's time to switch to a human operator.

Speaker Change: Regarding our insurance foreclosure business, we have focused more on property insurance and expanded our customer acquisition channels to hedge against the ever-changing regulatory environment and uncertainties in the life insurance sector.

Ning Tang: We will do that.

Speaker Change: In the second quarter, gross return premiums totaled RMB1.1 billion, reflecting a year-over-year decrease of 20% and a quarter-over-quarter increase of 16%.

Speaker Change: The annual decline was primarily due to the impacted life insurance business.

Speaker Change: which experienced limited sales of first-year premiums as a result of product changes and the new regulations.

Keyao He: The quarter over quarter growth in premiums is largely attributable to the property insurance business, where premiums reached $557 million, marking a 19% increase from the previous quarter and setting a new record. Going forward, we will continue to focus on three key areas in our insurance business. First, strengthening channel partnerships and expanding the scale of property insurance, optimizing our product mix and continuously increasing the proportion of higher profitability products, such as liability insurance.

Speaker Change: The quarter over quarter growth in premiums is largely attributable to the property insurance business.

Speaker Change: where premiums reached $557 million, marking a 19% increase from the previous quarter and setting a new record.

Keyao He: Going forward, we will continue to focus on three key areas in our insurance business. First, strengthening channel partnerships and expanding the scale of property insurance, optimizing our product mix, and continuously increasing the proportion of higher profitability products, such as liability insurance. Second, in life insurance, we will focus more on high net worth clients addressing their comprehensive protection needs for retirement and savings. Thirdly, we will enhance online customer acquisition by utilizing AIGC2 to improve market outreach and boost sales volume. In our consumption and lifestyle service segment, our GMB increased by 40% year over year to R&B 554.6 million.

Keyao He: Second, in life insurance, we will focus more on high net worth clients. Addressing Their Comprehensive Protection Needs for Retirement and Savings, Thirdly, we will enhance online customer acquisition by utilizing AIGC tools to improve market outreach and boost sales volume, in our Consumption and Lifestyle Service section. Our GMB increased by 40% year over year to RMB 554.6 million. However, due to the high penetration rate of these services among our current customer base, we are observing a moderation in growth rate.

Ning Tang: Also, the machine can interact with a customer up to the right point to switch to the human, and so on.

Speaker Change: Going forward, we will continue to focus on three key areas in our insurance business.

Ning Tang: Of course, we use voice recognition technology.

Speaker Change: First, strengthening channel partnerships and expanding the scale of property insurance.

Unknown Attendee: 2024, Earnings Conference Call. All participants will be in listen only mode.

Unknown Attendee: 2024, Earnings Conference Call. All participants will be in listen only mode. Should you need assistance, please signalling conference specialist by pressing the star key followed by zero.

Speaker Change: optimizing our product mix and continuously increasing the proportion of higher profitability products.

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Ning Tang: Also, I gave the example of our large language models used in the Philippines.

Ning Tang: I can do a great visual recognition algorithm because in the Philippines, IDs, personal identification, like paperwork, is really paper.

Ning Tang: It's not very digital, and it takes quite some skills to detect risk.

Speaker Change: such as liability insurance.

Unknown Attendee: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star than one on a touch-tone phone. To withdraw your question, please press star than two.

Ning Tang: AI plays a key role there, and so on.

Speaker Change: Second, in life insurance,

Speaker Change: We will focus more on high-net-worth clients.

Speaker Change: Addressing their Comprehensive Protection Needs for Retirement and Savings.

Ning Tang: Basically, we use AI extensively in our own operations, and some technologies are really welcomed by outside partners, prospects, and buyers.

Unknown Attendee: Please note this event is being recorded.

Keyao He: I would now like to turn the conference over to Keyao He, Investor Relations Officer. Please go ahead, from those contained in any such statement. Studying for major regarding future risks and identities of factors is included in the meeting with the U.S. Security and Exchange Commission. Would you now undertake any application to update any four looking statements required under the relevant law? During the call, we will be referring to certain man-gap financial measures and certain mental measures to review an assessment of operating performance. These man-gap financial measures are now intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S, gap.

Speaker Change: Thirdly, we will enhance online customer acquisition by utilizing AIGC tools to improve market outreach and boost sales volume.

Ning Tang: Customers will try to monetize these technologies as well.

Speaker Change: in our Consumption and Lifestyle Service segment.

Speaker Change: Our GMB increased by 40% year-over-year to RMB 554.6 million.

Keyao He: However, due to the high penetration rate of these services among our current customer base, we are observing a moderation in growth rates. Moving forward, the company will focus on acquiring new customers and refining customer profiles to better understand and address their comprehensive needs.

Speaker Change: However, due to the high penetration rate of these services among our current customer base, we are observing a moderation in growth rate.

Keyao He: Moving forward, the company will focus on, at acquiring new customers and refining customer profiles to better understand and address their comprehensive needs, more with the aim to enhance shareholder returns and boost market confidence. We are pleased to announce that the board has approved a new dividend policy. Under this policy, the board plans to declare dividends amounting to no less than 10% of the company's anticipated net income after tax for each half year, starting from the first half of this.

Speaker Change: Moving forward, the company will focus on

Speaker Change: As with acquiring new customers and refining customer profiles to better understand and address their comprehensive needs.

Keyao He: Moreover, with the aim to enhance shareholder returns and boost the market confidence, we are pleased to announce that the board has approved a new dividend policy. Under this policy, the board plans to declare dividends among two, no less than 10% of the company's anticipated net income after tax for each half year, starting from the first half of this year. The cash dividend for the first half of 2024 set at US$0.2 per American debt policy share is expected to be paid on or about October 15, 2024, to holders of the company's ordinary shares and ADS of records as of the close of business on September 30 of 2024, Hong Kong time and New York time, respectively.

Speaker Change: More, with the aim to enhance shareholder returns and boost market confidence. We are pleased to announce that the board has approved a new dividend policy.

Speaker Change: Under this policy, the board plans to declare dividends amounting to no less than 10% of the company's anticipated net income after tax for each half year.

Keyao He: For information about this man-gap measures, I would like to suggest this complete ancient gap measure, please refer to it unintentionally.

Keyao He: The cash dividend for the first half of 2024 set at U.S. dollars 0.2 per American depository share, is expected to be paid on or about October 15, 2024, to holders of the company's ordinary shares and ADS of record as of the close of business on September 30, 2024, Hong Kong time and New York time, respectively. We would like to express our gratitude to our shareholders and investors for their ongoing support. Finally, we have a management change to announce. First, let me introduce our newly appointed CFO, Mr. Yu Ningfeng. Yu Ning possesses over a decade of experience in venture capital investment. Unknown Attendee.

Speaker Change: starting from the first half of this year.

Keyao He: I would now like to name for opening remarks. Thank you all for joining our earnings conference call today. Despite the evolving market environment, we are pleased to report another solid quarter with strong unit economics, reflecting the resilience of our business structure and operational strategies, as well as our commitment to quality control, to quality growth over mere expansion. Additionally, our strategic investments in AI and the seamless integration of technological innovation into our operations have fostered dual growth in both technological advancements and operational efficiency. Our strategic direction positions as well to evolve into a leading AI driven platform, paving the way for groundbreaking solutions and setting new industry standards.

Speaker Change: The cash dividend for the first half of 2024 set at U.S. dollars 0.2 per American depository share.

Unknown Attendee: After today's presentation, there will be an opportunity to ask questions.

Unknown Attendee: To ask a question, you may press star than one on a touch-tone phone.

Speaker Change: is expected to be paid on or about October 15, 2024.

Speaker Change: to holders of the company's ordinary shares and ADS of record as of the close of business on September 30, 2024, Hong Kong time and New York time, respectively.

Keyao He: We would like to express our gratitude to our shareholders and investors for their ongoing support.

Speaker Change: we would like to express our gratgrate our gratitude to our shareholders and investors for their ongoing support

Keyao He: Finally, we have a management change to announce. First, let me introduce our newly appointed CFO, Mr. Yuning Feng. Yuning possesses over a decade of experience in venture capital investment, investment banking, and financial control. Before joining us, he was a partner at C Innovation Capital, where he led investments in FinTech, enterprise solutions, and AI sector. Part of that, Yuning was also served as an investment banker at China Ransung and a financial controller at Goldman Sachs and UBS. We are confident that Yuning's extensive experience and proven track record will enhance our global strategy and AI focus, and we look forward to the positive impact this will bring.

Na Mei: Before joining us, he was a partner at CE Innovation Capital, where he led investments in fintech, enterprise solutions and AI sector, prior to that. Yu Ning was also served as an investment banker at China Renaissance and a financial controller at Goldman Sachs and UBS. We are confident that Yuning's extensive experience and proven track record will enhance our global strategy and AI focus, and we look forward to the positive impact this will bring.

Speaker Change: Finally, we have a management change to announce.

mr namephone: First, let me introduce our newly appointed CFO , Mr. Yu Ningfeng.

Speaker Change: Yu Ning possesses over a decade of experience in venture capital investment.

Speaker Change: imagland banking and the financial control before joining us she was a partner at sea innovation capital where he led investment in syincact enterprise solutions and ai sectors

Unknown Attendee: To withdraw your question, please press star than two.

Keyao He: Now, I would like to go through our business highlights for this quarter. First, our financial services business. The second quarter of 2024 saw a static growth with total loan volume reaching RMB 12.9 billion, marking a 59 percent increase year-over-year, and maintaining a resilient consecutive quarterly growth despite an industry slowdown. The momentum is largely driven by the concrete growth of our new customers with higher credit quality, as we continue to optimize our asset quality of long portfolios.

Unknown Attendee: Please note this event is being recorded.

Keyao He: I would now like to turn the conference over to Keyao He, Investor Relations Officer.

Speaker Change: Prior to that, Yu Ning was also served as an investment banker at China Renaissance and a financial controller at Goldman Sachs and UBS.

Speaker Change: We are confident that Yuning's extensive experience and proven track record will enhance our global strategy and AI focus, and we look forward to the positive impact this will bring.

Unknown Attendee: Please go ahead, from those contained in any such statement.

Keyao He: Also, on behalf of the board, I would like to extend our deep gratitude to Na for her significant contributions and outstanding work during the past years.

Na Mei: Also, on behalf of the board, I would like to extend our deep gratitude to Na for her significant contributions and outstanding work during the past years. With that, I will pass it to Na, who will go through the financial performance for this quarter. As this marks her final earnings call with us, we once again thank her for her leadership and wish her continued success. Thank you, Ning, for all the kind words and support. Hello, everyone.

Speaker Change: Also, on behalf of the board, I would like to extend our deep gratitude to Na for her significant contributions and outstanding work during the past years.

Na Mei: With that, I will pass it to Na, who will go through the financial performance for this quarter.

Unknown Attendee: Studying for major regarding future risks and identities of factors is included in the meeting with the U.S.

Keyao He: Since the second half of 2023, one of the entire industry experienced substantial credit risk fluctuations, we started to proactively upgrade our customer mix and diversify our online acquisition channels. The strategy has proven effective, leading to secure growth and improved asset quality. Meanwhile, we have refined our proprietary RTA credit model for borrower acquisition, which has notably enhanced our overall credit approval efficiency. In this quarter, the number of borrowers served increased by 47% year-over-year to 1.5 million.

Ning Tang: In this quarter, the number of borrowers served increased by 47 percent year-over-year to 1.5, million.

Pathy: With that, I will pass it to Na, who will go through the financial performance for this quarter. As this marks her final earnings call with us, we once again thank her for her leadership and wish her continued success.

Na Mei: As this marks her final earnings call with us, we once again thank her for her leadership and wish her continued success. Thank you for all the 10 words and the support.

Ning Tang: Moreover, our loan facilitation platform continues to gain popularity, with monthly active users rising by 88 percent year-over-year to 4.5 million in the second quarter of this year, showcasing strong customer engagement and loyalty.

Unknown Attendee: Security and Exchange Commission.

Na Mei: Hello everyone, on this card, I will only focus on our key financial highlights, and the union will draw us for the Q&A section after the preparation marks. First of all, we are glad to deliver a solid quarter with the health and preferability. In the second call of this year, our total revenue reach RMB 1.5 billion, a 30% increase year-over-year. In the financial service segment, total loan facility, CO2 gross styling, which RMB 12.9 billion are 59% year-over-year. This is the meeting drawn by the growing number of our new powers and the strong demand of our smaller growing low products.

Na Mei: On this call, I will only focus on our key financial highlights, and Yu Ning will join us for the Q&A section after the prepared remarks. First of all, we are glad to deliver a solid quarter with a healthy profitability. In the second quarter of this year, our total revenue reached RMB 1.5 billion, 30% increase year over year. In the financial service segment, total loan facility continue to grow strongly, reaching RMB 12.9 billion, up 59% year over year.

Helle: Thank you Ning for all the kind words and support. Hello everyone, on this call I will only focus on our key financial highlights and Yu Ning will join us for the Q&A section after the prepared remarks.

Ning Tang: As we maintain our focus on attracting high-quality borrowers and note that existing, high-value borrowers repeatedly use our revolving loan products, we expect this growth momentum to continue throughout the year.

Unknown Attendee: Would you now undertake any application to update any four looking statements required under the relevant law?

Ning Tang: Meanwhile, our international business is showing exciting progress. The total loan volume overseas, nearly doubled in the second quarter of 2024 compared to the prior quarter.

Ning Tang: In the Philippines, monthly loan volume facilitated exceeded RMB 20 million milestone, with the growth rate remaining robust as we move into the second half of the year.

Na Mei: This is mainly driven by the growing number of our new powers and a strong demand of our small rewarding loan products. Revenue from financial service business increased to 46% year over year, to RMB 851 million. The momentum remains strong throughout the year. In the insurance sector, our gross renting premium was RMB 1.1 billion, a decrease of 20% year over year, but increase of 15% compared with the prior quarter. The year-on-year decline was driving by a substantial drop in our life insurance sales following local regular change.

Ning Tang: Moreover, as our business continues to grow, we are benefiting from economics of scale, with customer acquisition costs decreasing by 18 percent quarter-over-quarter.

Speaker Change: First of all, we are glad to deliver a solid quarter with a healthy profitability.

Ning Tang: In June 2024, our business in the Philippines achieved a positive net profit margin. It's worth mentioning that our rapid growth is closely tied to our AI development and integration. Our proprietary large-language models have been implemented across various operations, including customer acquisition, customer service, risk management, and asset management. For instance, in our international operations, our anti-fraud AI models have processed over 10 different types of identification documents this quarter, achieving a 93% accuracy rate and significantly enhancing our risk management efficiency. Additionally, to standardize our services, our large language models are used in our overseas call centers to translate local languages, detect sensitive words, and analyze service quality and assurance, thereby boosting customer satisfaction.

Unknown Attendee: During the call, we will be referring to certain man-gap financial measures and certain mental measures to review an assessment of operating performance.

Ning Tang: As more data are processed, we expect continued enhancement of our models in both accuracy and their applicability to a wider range of scenarios and uses.

Ning Tang: Turning into asset quality, delinquency rates continue to show an encouraging trend as assets from upgraded borrowers increase. Specifically, the 15 to 89-day delinquency rate, for the second quarter of 2024 declined to 3.8%, down 10 basis points. The FPD 30-plus delinquency rate, decreased for the third consecutive quarter, and the M1 collection rate for the second quarter of 2024 increased by 290 basis points quarter over quarter to a historic high.

Ning Tang: We expect a sustained improvement in asset risk performance, in the second half of this year as we continue to optimize our customer mix and retune our credit risk models.

Speaker Change: In the second quarter of this year, our total revenue reached RMB 1.5 billion, 30% increase year-over-year. In the financial service segment, total loan facilities continue to grow strongly, reaching RMB 12.9 billion, up 59% year-over-year. This is mainly driven by the growing number of our new powers.

Keyao He: Moreover, our long facilitation platform continues to gain popularity with monthly active users rising by 88% year-over-year to 4.5 million in the second quarter of this year, showcasing strong customer engagement and loyalty. As we maintain our focus on attracting high quality borrowers and note that existing high-value borrowers repeatedly use our revolving loan products, we expect this growth momentum to continue throughout the year.

Na Mei: When we move from financial service business, increase to 46% year-over-year to RMB 851 million. The momentum remains strong throughout the year. In the insurance sector, of course, RMB 1.5 billion, a decrease of 20% year-over-year, but an increase of 15% compared with the private culture. The year-on-year decrease was driving by a substantial drop in our land insurance sales following local regular change. During the same period last year, sales of life insurance products with a cap 3.5% interest rate burdened before being withdrawn from the China market due to the new regulation. Therefore, the primary the second powder of last year was 17 high, making sharp contrast to the decrease of the second powder this year.

Speaker Change: and a strong demandt our smaller woring lower product

Speaker Change: Revenue from financial service business increased to 46% year-over-year to RMB 851 million. The momentum remains strong several years.

Speaker Change: In the insurance sector, OCR's renting premium was only 1.1 billion, a decrease of 20% year-over-year but an increase of 15% compared with the prior quarter.

Speaker Change: The year-on-year decline was driving by a substantial drop in our line insurance sales.

Keyao He: Meanwhile, our international business is showing exciting progress. The total loan volume oversees nearly doubled in the second quarter of 2024, compared to the prior quarter. In the Philippines, monthly loan volume facilitated, exceeded R&B 20 million milestone, with the growth rate remaining robust as we move into the second half of the year. Moreover, as our business continues to grow, we are benefiting from economic upscale. With customer acquisition costs decreasing by 18% quarter-over-quarter, in June 2024, our business in the Philippines achieved a positive net profit margin.

Na Mei: During the same period last year, sales of life insurance products with a cap 3.5% interest rate surge before being withdrawn from the China market due to the new regulation. Therefore, the primary, the second quarter of last year was 17 high, making sharp contrast to the decline of the second quarter this year. Meanwhile, the quarterly growth in our total premium was mainly driven by the expansion of our property insurance business. Consequently, the portion of property insurance in our overall primary needs increased, translating into a lower average rent-to-take rate due to the lower commission fee rate compared with the life insurance product.

Speaker Change: following local regular change.

Speaker Change: During the same period last year, sales of life insurance products

Speaker Change: with a cap 3.5% interest rate surge before being withdrawn from the China market due to the new regulation. Therefore, the primary and the second quarter of last year were centering high, making a sharp contrast to the decline of the second quarter this year.

Na Mei: Meanwhile, the collected growth in our total Grammy was mainly drawn by the expansion of our property insurance business. Consequently, the part of our property insurance in our overall primary needs increase, translating into a lower average when you take a rate, due to the lower commission-free rate, compared with the life insurance product. In the second powder of this year, revenue for our insurance settlement reached RMB 91.5 billion, down 73% year-over-year. Going forward, we have had to count your growth in our property insurance business in the first-go-future, and gradually target our life insurance products along with the market trend.

Speaker Change: see why the cost of growth in our total premi was main jorawed by tension of our proptty insurres business consequent to me the part our far insurance in our overall permeary need increase

Speaker Change: Translating into a lower average revenue ticket rate due to the lower commission fee rate compared with the life insurance products. The second quarter of this year, revenue for our insurance segment reached $91.5 billion, down 77% year-over-year.

Na Mei: The second quarter of this year, revenue for our insurance segment reached RMB 91.5 billion, down 77% year over year. Going forward, we expect continual growth in our property insurance business in the foreseeable future and gradually cover our life insurance products along with the market trend. In the consumption and lifestyle segment, the total GMV for this quarter reached $555 million, an increase of 40% year-over-year but a decline of 11% quarter-over-quarter. As mentioned by Ning, as the penetration rate of services and products in this segment grows into a substantial level, we expect growth rate of this segment will continue to moderate. On the expense side, sales and marketing expense increased 21% year-over-year to RMB 285 million.

Keyao He: It was mentioning that our rapid growth is closely tied to our AI development and integration. Our proprietary large-language models have been implemented across various operations, including customer acquisition, customer service, risk management, and as a management. For instance, in our international operations, our anti-broad AI models have processed over 10 different types of identification documents this quarter. Achieving a 93% accuracy rate and significantly enhancing our risk management efficiency. Additionally, to standardize our services, our large language models are used in our overseas call centers to translate local languages, detect sensitive words and analyze service quality and assurance, thereby boosting customer satisfaction. As more data are processed, we expect continued enhancements of our models in both accuracy and their applicability to a wider range of scenarios and uses.

Speaker Change: Going forward, we plan to continue growth in our property insurance business in the foreseeable future and gradually cover our life insurance products along with the market trend.

Na Mei: In the consumption of last year's segment, the total GMV for this culture reached RMB 455 million, an increase of 40% year-over-year by the decrease of 11% culture over-culture. As mentioned by you, as the penetration rate of theories and products in this segment grows into a substantial level, with past growth rate of this segment will continue to moderate. On the expense side, sales and marketing pens increased 21% year-over-year to R&D 218.5. This growth was made in fuel by the first pension of our financial segment and the enhanced marketing efforts focused on revenue and high-quality customers as it will continue to redefine our customer base.

Speaker Change: In the consumption and lifestyle segment, the total GNV for this quarter reached $555 million, an increase of 40% year-over-year but a decline of 11% quarter-over-quarter.

Speaker Change: As mentioned by Ning, as the penetration rate of service and products in this segment grows into a substantial level, WISPAC's growth rate of this segment will continue to moderate.

Speaker Change: On the expense side, sales and marketing expense increased 21% year-over-year to RMB 285 million. This growth was mainly fueled by the swift expansion of our finance service segment and enhanced marketing efforts focused on trusting new and high-quality customers.

Na Mei: This growth was mainly fueled by the swift expansion of our finance service segment and enhanced marketing efforts focused on trusting new and high-quality customers, as we continue to redefine our customer base. Research and development expense increased to 69% year-over-year to RMB 156 million, due to our ongoing investment in AI enhancements and technological advancements. Our internal and service costs decreased to 29% year-over-year to RMB 247 million.

Ethan Yu: My second question is, there is a continual rise in your R&D costs.

Na Mei: Research and development increased to 69% year-over-year to R&D 156. It was made due to our ongoing wisdom in AI enhancements and the technology of the enhancements. Original and service costs increased to 29% year-over-year to R&D 247.5. This is finally introduced to the deep-linked short-business wallet, especially the sharp decrease in the first permeah for our life insurance products, which light will low-channel base and relevant settlement costs. Our G&A cost increased to 8% year-over-year to R&D 168.7 million, the main largely stable. The launch for control assets and the receivable to R&D 123 million for this culture, a R&D and 52% year-over-year increase, and 20% culturally growth.

Speaker Change: As we continue to redefine our customer base, research and development expense increased 69% year-over-year to RMB $15.6 million due to our ongoing investment in AI enhancements and technological advancements.

Ethan Yu: Could you share with us more about how these costs have been used?

Na Mei: This is primarily attributed to the deeply insurance business volume, especially the sharp decrease in the first trimester for our life insurance products, which lied to a low channel rebate and a relevant settlement cover. Our G&A cost increased 8% year-over-year to RMB 38.7 million, remaining largely stable. The launch for contract assets and the resealable was RMB 123 million for this quarter, a 152% year-over-year increase and 20% quarterly growth. The increase was mainly driven by the growth in total loan volume facilities.

Speaker Change: oninal and the service co qu to twenty-nine percent the over year to re the two hundred of forty thousand meeting this is finally attribute to the decling insurance business volume

Ning Tang: Yeah, so for our like AI, like large language model development, yeah, we take like open-sourced, like a model combined with our own data and business algorithm to develop our, yeah, proprietary models.

Ning Tang: And we purchase hardware and, yeah, develop software and so on.

Keyao He: Turning into asset quality, delinquency rates continue to show an encouraging trend as asset from upgraded borrowers increase. Specifically, the 15 to 89 date delinquency rate for the second quarter of 2024 declined to 3.8% down 10 basis points. The FPD 30 plus delinquency rate decreased for the third consecutive quarter and the M1 collection rate for the second quarter of 2024 increased by 290 basis points quarter over quarter to a historic high. We expect a sustained improvement in asset risk performance in the second half of this year as we continue to optimize our customer mix and the retune our credit risk models.

Speaker Change: Especially the sharp decrease in the foster premia for our life insurance products, which lie to a low channel rebates and irrelevant settlement costs.

Speaker Change: Our G&A cost increased 8% year-over-year to RMB38.7 million, remaining largely stable.

Speaker Change: The launch for contract assets and the receivables was really 123 million for this quarter, a 152% year-over-year increase and 20% quarterly growth. The increase was made in joint by the growth in total loan volume facility.

Na Mei: The increase was made in July by the girls in total loan volume facility. My order, for very long-for-tongued reliability in this culture, increased to R&D 278.9 million for a R&D 2.0 million in the same period of last year. This is due to our rapid red apple in loan volume facility by our risk-taking model, which leads to a significant up-front perverian and a chiral accounting policy. However, over time, this perverian will appear to be transferred to G&A 3.0. Actually, in the second quarter of this year, the revenue from G&A 3.0, which the R&D 38.9 million, more than 4.10 of died in the same period of last year.

Na Mei: Moreover, provision for TongTJ liability in this quarter increased to RMB 278.9 million from RMB 12 million in the same period of last year. This is due to a rapid rate-up in loan volumes facilitated by our risk-taking model, which led to a significant upfront provision and a careful accounting policy. However, over time, this provision will periodically transfer to Guaranteed Service Day. Actually, in the second quarter of this year, the revenue from Guaranteed Service reached RMB 178.9 million, more than four-tenths of that in the same period last year. Now, on the bottom line, our net income decreased 22% year-over-year to RMB 400 times million this quarter due to three reasons. Firstly, overprobability in the insurance business declined, as mentioned above.

Speaker Change: Moreover, provision for TongTJ liability in this quarter increased to RMB 278.9 million from RMB 12 million in the same period of last year.

Speaker Change: This is due to a rapid rate-up in loan volumes facilitated by our risk-taking model, which led to a significant upfront provision under current accounting policy.

Keyao He: Now, on funding cost, our effort in building an efficient funding management system is showing results. In the second quarter of this year, our funding cost decreased by 82 basis points quarter over quarter, reaching a historic low and exceeding our internal target. The downward trend will continue in the third quarter. Moreover, given the current market funding condition, we are strategically increasing our long volume and the risk taking model to better balance risk management and profitability.

Ning Tang: And so in the second quarter, I believe, yeah, it was about 56 million RMB. Yeah.

Speaker Change: However, over time, this provision will periodically transfer to Guaranteed Service Day. Actually, in the second quarter of this year, the revenue from Guaranteed Service reached the RMB78.9 million, more than four-tenths of that in the same period last year.

Ning Tang: So I think this is money well spent.

Ning Tang: And yeah, so I think our investment in AI has been prudent, but yeah, strategic for the future.

Ning Tang: Now, on funding cost, our effort in building an efficient funding management system is showing results. In the second quarter of this year, our funding cost decreased by 82 basis points quarter over quarter, reaching a historic low and exceeding our internal target.

Ning Tang: Thank you, Mr. Tom.

Na Mei: Now, on the bottom line, our night income decreased 22% year-over-year to R&D 400-time million in this culture due to three reasons. Firstly, our probability is the insurance business declined as mentioned above. Secondly, market stance increased due to our ongoing wisdom in trying to new high-quality powers for our financial service business. Thirdly, substantial upfront perverian has been accrued as we red up our loan volume under the risk-taking model. Currently, our profit margin reached the 23.4% still high in level in the industry. Regarding the tax flow, the general probability is $300.59 million cash from our operations is this culture, remaining housing and the strong.

Ning Tang: The downward trend will continue in the third quarter.

Speaker Change: Now, on the bottom line, our net income decreased 22% year-over-year to RMB400 times million this quarter due to three reasons.

Ethan Yu: I have another question about your, yeah, yeah.

Ethan Yu: Can I ask one more question about your overseas business?

Na Mei: Secondly, market expense increased due to our ongoing investment in attracting new high-quality borrowers for our financial service business. Thirdly, substantial upfront provision has been accrued as we rate up our loan volume under the risk-taking model. Currently, our profit margin reached 27.4%, still the highest level in the industry. Regarding the cash flow, we generally profit RMB 369 million net cash from our operation in this quarter, remaining healthy and strong. On the balance sheet side, our balance sheet remains strong with RMB 5.5 billion in cash and cash equivalent as of the end of this quarter, and we are exploring diversified ways to enhance our shareholder returns.

Ethan Yu: Sure.

Speaker Change: short tonight our probability the insurance business declaed as national above secondly marke has inquest due to our ongoing w you try to new high quality powers while financial servourice business

Ning Tang: Moreover, given the current market funding conditions, we are strategically increasing our loan volume under the risk-taking model to better balance risk management and profitability.

Ning Tang: Regarding our insurance foreclosure business, we have focused more on property insurance and expanded our customer acquisition channels to hedge against the ever-changing regulatory environment and uncertainties in the life insurance sector. In the second quarter, gross return premiums totaled RMB 1.1 billion, reflecting a year-over-year decrease of 20% and a quarter over quarter increase of 16%.

Speaker Change: Thirdly, substantial upfront provision has been accrued, as we rate up our loan volume under the risk-taking model. Currently, our profit margin reached 27.4%, still highest level in the industry.

Ning Tang: The annual decline was primarily due, to the impacted life insurance business, which experienced the limited sales of first-year premiums as a result of product changes and the new regulations.

Ethan Yu: Yes.

Ning Tang: The quarter over quarter growth in premiums, is largely attributable to the property insurance business, where premiums reached 557 million, marking a 19% increase from the previous quarter and setting a new record.

Ethan Yu: Can I know what is the total loan volume facilitated overseas in second quarter 2024?

Ning Tang: Going forward, we will continue to focus on three key areas, in our insurance business. First, strengthening channel partnerships, and expanding the scale of property insurance, optimizing our product mix and continuously increasing the proportion of higher profitability products, such as liability insurance.

Keyao He: Regarding our insurance brokerage business, we have focused more on property insurance and expanded our customer acquisition channels to hedge against the ever-changing regulatory environment and uncertainties in the live insurance sector. In the second quarter, growth retail premiums totaled RMB 1.1 billion, reflecting a year-over-year decrease of 20%, and a quarter over quarter increase of 16%. The annual decline was primarily due to the impacted life insurance business, which experienced the limited sales of first-year premiums as a result of product changes and the new regulations. The quarter over quarter growth in premiums is largely attributable to the property insurance business. We are premiums reached the $557 million, marking a 19% increase from the previous quarter and setting a new record.

Ethan Yu: I'm impressed with the growth rate achieved in the Philippines.

Ning Tang: Second, in life insurance, we will focus more on high net worth clients, addressing their comprehensive protection needs for retirement and savings.

Ethan Yu: And also you have mentioned that, you have made another progress in Mexico.

Ning Tang: Thirdly, we will enhance online customer acquisition, by utilizing AIGC tools to improve market outreach and boost sales volume.

Speaker Change: Regarding the catch law, we generally probably reduce 369 million net catch from our operation in this quarter, remaining healthy and strong.

Na Mei: On the balance sheet side, our balance sheet remains strong with R&D 5.5 billion in cash and the cash equivalent, as of the end of this culture, and where it's point that worth by worth to your house or shareholder returns.

Speaker Change: On the balance sheet side, our balance sheet remains strong with RMB 5.5 billion in cash and cash equivalent as of the end of this quarter, and we are exploring diversified ways to enhance our shareholder return.

Na Mei: As Niamh just introduced, we are pleased to announce a semi-dividend plan with no less than 10% of our after-tax income for the prior six months distributed to our shareholders. The pet dividend of 0.2 US dollars of American dispensary shares is expected to be paid on about October 5, 2024, for holders of the company's alternate shares and ADS, of record as of closed business on September 13, 2024.

Na Mei: I see new checks introduced. We are pleased to announce a family dividend plan with no less than 10% of our after-test income for the prior six months is attributed to our shareholder. A debt dividend of $0.02 US dollars American deposits share is depended to be paid on about October 6, 2024. The holders of the company's out-and-share and the ADS of records as of close business on September 13, 2024. Moreover, we are still doing share buybacks in the concurs of this year to allocate $4 million US dollars to your purchase shelves in the monthly market. We are total dependent for the shareholder purchase per coin to $13.5 million US dollars by June 13, 2024.

Jacks: As Ning just introduced, we are pleased to announce a 7 dividend plan with no less than 10% of our after-tax income for the prior 6 months distributed to our shareholders.

Speaker Change: the pty within of a zero b two u s dollars american is faster share is pented to be paid about october fix two thousand and twenty four for holders of the company's out shelf and the adi of record as of growth business on september thirteenth two thousand and twenty four

Na Mei: Moreover, we are still doing share buybacks. In the second quarter of this year, we allocate 4 million US dollars to your purchased shares in the public market. We owe total deployment for the share repurchase foreclosed to 13.5 million US dollars by June 13, 2024. Lastly, our business outlook is our assessment and core business and the marketing condition. We stand our value for the third quarter of 2024 to stand between 1.4 billion to 1.5 billion with the highest land profit margin. It represents our current and preliminary assessment, which may be subject to change and uncertainty.

Speaker Change: Moreover, we are still doing share buyback. In the second quarter of this year, we allocate 4 million US dollars to purchase shares in the public market.

Keyao He: Going forward, we will continue to focus on three key areas in our insurance business. First, strengthening channel partnerships and expanding the scale of property insurance, optimizing our product mix, and continuously increasing the proportion of higher profitability products, such as liability insurance. Second, in life insurance, we will focus more on high network clients addressing their comprehensive protection needs for retirement and savings. Thirdly, we will enhance online customer acquisition by utilizing AIGC2 to improve market outreach and boost sales volume.

Speaker Change: We owe total department for the shell re-purchase burqa to 13.5 million US dollars by June 13, 2024.

Ning Tang: In our consumption and lifestyle service segment, our GMV increased by 40% year over year to RMB 554.6 million.

Ethan Yu: And what is the driving rate achieved in Philippines?

Na Mei: Lastly, our business outlook is our seismic and car business and marketing condition. We stand our venue for the third culture of 2024 to stand be to the 1.4 billion to the 1.5 billion with the housing and power of a margin. This represent our car and the pretty minute of seismic, which may be subject to change and uncertainty.

Ning Tang: However, due to the high penetration rate of these services, among our current customer base, we are observing a moderation in growth rates.

Ning Tang: Moving forward, the company will focus on, acquiring new customers and refining customer profiles to better understand and address their comprehensive needs.

Ning Tang: Moreover, with the aim to enhance shareholder returns, and the boost of market confidence, we are pleased to announce that the board has approved a new dividend policy. Under this policy, the board plans to declare dividends, amounting to no less than 10% of the company's anticipated net income after tax for each half year, starting from the first half of this year. The cash dividend for the first half of 2024, set at U.S. dollars 0.2 per American depository share is expected to be paid on or about October 15th, 2024 to holders of the company's ordinary shares and ADS of record as of the close of business on September 30th, 2024, Hong Kong time and New York time, respectively.

Speaker Change: Lastly, on our business outlook, with our seismic and core business and marketing condition, we stand our value for the third quarter 2024 to stand between RMB1.4 billion to RMB1.5 billion with the highest land profit margin.

Speaker Change: This represents our current and preliminary assessment, which may be subject to change and uncertainty. This concludes our remarks. Operator, now we are open for questions.

Na Mei: That's concurs our remarks.

Operator: That concludes our remarks. Operator, now we are open for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1, on your touch-tone phone. If you are using a speakerphone, Please pick up your handset before pressing the key.

Ethan Yu: Say it again.

Operator: Operating now, we are open for questions. Thank you.

Ning Tang: We would like to express our gratitude, to our shareholders and investors for their ongoing support.

Ethan Yu: Sorry.

Ning Tang: Finally, we have a management change to announce.

Ethan Yu: The last part.

Ning Tang: First, let me introduce our newly appointed CFO, Mr. Yu Ningfeng. Yu Ning possesses over a decade of experience, in venture capital investment, investment banking, and the financial control. Before joining us, he was a partner, at CE Innovation Capital, where he led investments in fintech, enterprise solutions, and AI.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two.

Speaker Change: We will now begin the question and answer session.

Ethan Yu: Yeah.

Speaker Change: To ask a question, you may press star, then 1.

Speaker Change: on your touch tone phone.

Ethan Yu: What is the driving this growth and what's your outlook for the revenue generated from, overseas business and profit in, let's say, second half 2024 or the coming 2025?

Speaker Change: If you are using a speakerphone,

Keyao He: In our consumption and lifestyle service segment, our GMB increased by 40% year over year to R&B 554.6 million. However, due to the high penetration rate of these services among our current customer base, we are observing a moderation in growth rates. Moving forward, the company will focus on acquiring new customers and refining customer profiles to better understand and address their comprehensive needs.

Speaker Change: Please pick up your handset before pressing the keys.

Ethan Yu: I see.

Speaker Change: If at any time your question has been addressed and you would like to withdraw your question,

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

Operator: If at any time your question has been addressed and you would like to withdraw your question, Please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Ethan Yu with First Trust Group Inc. Please go ahead. Hi, hi, good evening.

Speaker Change: please press star than two

Ning Tang: Well, yeah, the growth rate has been phenomenal largely because the base is too, small.

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

Ethan Yu: The first question comes from Ethan Yu with First Trust Group Inc. Please go ahead.

Ning Tang: Yeah.

Ethan You: The first question comes from Ethan Yu with First Trust Group, Inc. Please go ahead.

Ning Tang: So we really hope to grow the base.

Ethan Yu: Hi, good evening. Thanks for taking my question. I can write on under your solid product. My first question is about your AI development. As distilled in your ESC report, the company has developed a range of AI systems regarding your AI strategy. Have there been any notable developments in AI applications or research? Can you share more details about AMA's specific investment in the AI sector? And also, have there been any significant rituals in our AI project commercialization?

Ethan Yu: Thanks for taking my question. My first question is about your AI development. As disclosed in your ESG report, the company has developed a range of AI systems regarding your AI strategy. Have there been any notable advancements in AI applications or research?

Selenia: Hi. Hi. Good evening. Thanks for taking my question. Congrats on another solid project. My first question is about your AI development.

Keyao He: Moreover, with the aim to enhance shareholder returns and boost the market confidence, we are pleased to announce that the board has approved a new dividend policy. Under this policy, the board plans to declare dividends among two no less than 10% of the company's anticipated net income after tax for each half year, starting from the first half of this year. The cash dividend for the first half of 2024 set at US$0.2 per American debt policy share is expected to be paid on or about October 15, 2024 to holders of the company's ordinary shares and ADS of records as of the close of business on September 30 of 2024, Hong Kong time and New York time respectively.

Speaker Change: As disclosed in your ESG report.

Speaker Change: A company has developed a range of AI systems regarding your AI strategy. Have there been any notable advancements in AI applications or research? Can you share more details about any specific investments in the AI sector?

Ethan Yu: Can you share more details about any specific investment in AI sector? and also have there any been significant breakthroughs in our AI product commercialization? Excuse me, Ethan. I'm sorry, you're not coming through clearly. Is it possible to move the microphone closer to you and repeat, please? I got the majority of the question and it's about AI development, investment, commercialization, right? Yes. Okay, he accidentally disconnected, just a moment, we'll...

Speaker Change: and also have there any been significant breakthroughs in our AI product commercialization? Excuse me, Ethan. I'm sorry, you're not coming through clearly. Is it possible to move the microphone closer to you and repeat, please?

Operator: Excuse me, Ethan. I'm sorry. You're not coming through clearly. Is it possible to move the microphone closer to you and repeat, please? I got the majority of the question, and it's about AI development, investment, commercialization, right? Yes? Okay, he accidentally disconnected. Just a moment; he must have pressed something accidentally. So, would you like to go to the next question and have him come back? Okay, follow you. Would you like me to have the next questioner ask, and then when? Yes, I think yes.

Speaker Change: I got the majority of the, yeah, question and it's about AI, development, investment, commercialization, right?

Speaker Change: yes

Speaker Change: Okay, he accidentally disconnected. Just a moment.

Operator: He must have pressed something accidentally, so we will, would you like to go to the next question and have him come back? follow you. Would you like me to have the next questioner ask and then when, Unknown Attendee, Mei Zhao, Na Mei, Ning Tang, Lydia Yu, Yirendai, Let's go to the next question. Thank you. Okay, the next question is from Bruce Oren with Black Lab Fund. Please go ahead.

Keyao He: We would like to express our gratitude to our shareholders and investors for their ongoing support.

Speaker Change: he must have up pressed something accidentally so we will would you like to go to the next question and have him come back

Keyao He: Finally, we have a management change to announce. First, let me introduce our newly appointed CFO, Mr. Yuning Feng. Yuning possesses over a decade of experience in venture capital investment, investment banking and financial control. Before joining us, he was a partner at C Innovation Capital, where he led investments in FinTech, enterprise solutions, and AI sector. Part of that, Yuning was also served as an investment banker at China Ransung and a financial controller at Goldman Sachs and UBS. We are confident that Yuning's extensive experience and proven track record will enhance our global strategy and AI focus, and we look forward to the positive impact this will bring.

Speaker Change: Would you like me to have the next questioner ask?

Operator: Let's go to the next question. Thank you.

Speaker Change: Thank you. Okay, the next question is from Bruce Oren with Black Lab Fund. Please go ahead.

Bruce Orin: Okay, the next question is from Bruce Orin with Black Lab Fund. Please go ahead.

Bruce Orin: Yes, hello. I'd like to express appreciation to the board for the new dividend. I think that's a good move.

Bruce Oren: Yes, hello. I'd like to express appreciation to the board for the new dividend. I think that's a good move.

Bruce Orin: Yes, hello.

Ning Tang: I would like to extend our deep gratitude to Na for her significant contributions and

Bruce Orin: I'd like to express appreciation to the board for the new dividend. I think that's a good move.

Bruce Oren: I'd also like to congratulate and thank, Na Mei for helping to build an extraordinary company under circumstances that were often difficult. I have two questions. The first is, could you add some insight? into the large second quarter increase. Net cash used in investing activities and net cash used in financing activities.

Bruce Orin: I'd also like to congratulate and thank Mrs. Name for helping to build an extraordinary company under circumstances that were often difficult. Thank you.

Speaker Change: I'd also like to congratulate and thank Mrs.

Ning Tang: outstanding work during the past years.

Mrs. Mayer: Na Mei for helping to build an extraordinary company under circumstances that were often difficult. Thank you.

Bruce Orin: I have two questions. The first is could you add some insight into the large second quarter increase in net cash used in investing activities and net cash used in financing. and my second question is, where is most of the international business growth? Thank you.

Bruce Oren: And my second question is, Where is most of the international business growth? Can Na please cover them first? Yeah, as my mind is clear, for our capital, for our operating business, we can earn a nice income up to about... As we mentioned before, to the purpose of our financial service segment, the measurement is a financial lensing opportunity to pay. Unknown Attendee, And that's all from us today. Thank you. Going unprisoned, Y- [inaudible] I cannot hear you very clear now. Now it's better. I'm close to the phone now. It's better now.

Ning Tang: With that, I will pass it to Na, who will go through the financial performance for this quarter.

Na Mei: As this marks her final earnings call with us, we once again thank her for her leadership and wish her continued success.

Operator: Yes. Thank you. Please repeat.

Na Mei: Thank you, Ning, for all the kind words and support.

Na Mei: Hello, everyone.

Speaker Change: I have two questions.

Speaker Change: The first is, could you add some insight?

Na Mei: On this call, I will only focus on our key financial highlights, and Ning will join us for the Q&A section after the prepared remarks.

Na Mei: First of all, we are glad to deliver a solid quarter with a healthy profitability.

Na Mei: In the second quarter of this year, our total revenue reached RMB 1.5 billion, 30% increase year-over-year.

Speaker Change: into the large second quarter increase in net cash used in investing activities and net cash used in financing activities.

Keyao He: Also, on behalf of the board, I would like to extend our deep gratitude to Na for her significant contributions and outstanding work during the past years.

Speaker Change: and my second question is where is most of the international business growth thank you

Unknown Attendee: These man-gap financial measures are now intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S, gap.

Na Mei: With that, I will pass it to Na, who will go through the financial performance for this quarter.

Na Mei: Can Na please cover them first? Yes, my name is Yimai.

Speaker Change: And now please cover them first.

Unknown Attendee: For information about this man-gap measures, I would like to suggest this complete ancient gap measure, please refer to it unintentionally.

Na Mei: As this marks her final earnings call with us, we once again thank her for her leadership and which her continued success. Thank you, you for all the 10 words and the support.

Na Mei: Before I talk about our operating business, we can ask a nice income opportunity to ask. I think my answer is for the purpose of our financial service. The management is from our financial reasoning; opportunity to pick likely our company is impacted. Going on, poison, yokch. I cannot hear you very clearly now. Now it's better? I'm close to the phone now. Yes, it's better now. Yes, please repeat. Thank you. Please repeat. Thank you.

Speaker Change: he

Speaker Change: Yes, as you might recall, for our capital, for our operation business, we can earn a nice income of about $10,000.

Unknown Attendee: I would now like to name for opening remarks.

Na Mei: Hello everyone, on this card, I will only focus on our key financial highlights and the union will draw us for the Q&A section after the preparation marks. First of all, we are glad to deliver a solid quarter with the health and preferability. In the second call of this year, our total revenue reach RMB 1.5 billion, 30% increase year-over-year. In the financial service segment, total loan facility, CO2 gross styling, which RMB 12.9 billion are 59% year-over-year.

Na Mei: In the financial service segment, total loan facilities continue to grow strongly, reaching RMB 12.9 billion, up 59% year-over-year. This is mainly driven by the growing number of our new powers and the strong demand of our small rewarding loan products.

Na Mei: Revenue from financial service business increased to 46% year-over-year, to RMB 851 million.

Speaker Change: yes

Na Mei: The, momentum remains strong throughout the year.

Na Mei: In the insurance sector, our gross renting premium was RMB 1.1 billion, a decrease of 20% year-over-year, but increase of 15% compared with the prior quarter.

Na Mei: The year-on-year decline was driving by a substantial drop in our line of insurance sales, following local regular change.

Speaker Change: As we mentioned before, to the purpose of our financial service segment, the measurement is a financial lensing opportunity to pick a likely.

Na Mei: During the same period last year, sales of life insurance products with a capped 3.5% interest rate surged before being withdrawn from the China market due to the new regulation.

Unknown Attendee: Thank you all for joining our earnings conference call today.

Na Mei: Therefore, the primary and the second quarter of last year were sampling high, making sharp contrast to the decline of the second quarter this year.

Na Mei: Meanwhile, the quarterly growth in our total premium was mainly driven by the expansion of our property insurance business. Consequently, the portion of property insurance in our overall primary needs increased, translating into a lower average revenue ticket rate due to the lower commission fee rate compared with the life insurance products.

Na Mei: The second quarter of this year, revenue from our insurance segment reached RMB 91.5 billion, down 77% year-over-year.

Na Mei: Going forward, we expect to continue growth in our property insurance business in the foreseeable future and gradually cover our life insurance products along with the market trend.

Na Mei: In the consumption and lifestyle segment, the total GMV for this quarter reached RMB 555 million, an increase of 40% year-over-year, but a decline of 11% quarter-over-quarter. As mentioned by Ming, as the penetration rate of services and products in this segment grows into a, substantial level, we expect growth rate of this segment will continue to moderate.

Unknown Attendee: Despite the evolving market environment, we are pleased to report another solid quarter with strong unit economics, reflecting the resilience of our business structure and operational strategies, as well as our commitment to quality control, to quality growth over mere expansion.

Na Mei: On the expense side, sales and marketing expense increased 21% year-over-year to RMB 285 million. This growth was mainly fueled by the swift expansion of our finance service segment and, enhanced marketing efforts focused on trusting new and high-quality customers, as we continue to redefine our customer base.

Speaker Change: companies is the omestive

Speaker Change: going on private notch

Na Mei: This is the meeting drawn by the growing number of our new powers and the strong demand of our smaller growing low products. When we move from financial service business, increase to 46% year-over-year to RMB 851 million. The momentum remains strong throughout the year. In the insurance sector, of course, RMB 1.5 billion, a decrease of 20% year-over-year, but increase of 15% compared with the private culture. The year-on-year decrease was driving by a substantial drop in our land insurance sales following local regular change.

Speaker Change: I cannot hear you very clear now.

Speaker Change: a no better i'm close to the phoneund is better now yes i ple rific bir

Na Mei: Okay, I want to ask items and also our international business market. I'm going to explain our investment catch flow, the reason why we increase the so much in the space culture. As my mentioned, as you remember that last year, we purchased a new financial guarantee company, Chongqing-Tingtong, to our financial service segment purpose. For this year, the management is still going on to improve our financial license to purchase for our financial service business, like the M.C.S company and the micro-small lending companies and other financial guarantee companies for this particular purpose. So for this financial license company, before the formal operation, the repair process process, based on the communications status, we should replace the investment amount to our partners to lock the acquisition target.

Na Mei: Thank you. Unknown Attendee, Mei Zhao, Na Mei, Ning Tang, Lydia Yu, Yirendai, Yirendai, Yiren, Yeah, I'm going on to explain our investment cash flow, the reason why we increased so much in the fifth quarter. And as I mentioned, as you remember that last year we purchased a new financial guarantee company, Chongqing Tingtong, to our financial service segment purpose. And for this year, the management is still going on to implement a financial license to purchase for our financial service business, like the AMC, SS company, and micro, small lending companies, and other financial guarantee companies for business development purpose.

Speaker Change: Thank you. Please repeat.

Speaker Change: Thank you.

Speaker Change: it's about now i would af items and also our international business market

Na Mei: Research and development expense increased 69% year-over-year to RMB 56 million during, our ongoing investment in AI enhancements and technological advancements.

Speaker Change: i' going on the is playing our unlife ment cat lawlow reason why we incre so much the face culture and as my mioned as you remember that last year away purchers a new financial guarante company from toone to our financial sage seaggment purpose

Na Mei: Our general and service costs decreased 29% year-over-year to RMB 247 million. This is primarily attributed to the deeply insured business volume, especially the sharp, decrease in the first trimester for our life insurance products, which led to a low channel rebate and relevant settlement costs.

Na Mei: Our G&A costs increased 8% year-over-year to RMB 38.7 million, remaining largely stable.

Na Mei: The launch for contract assets and the receivable was RMB 123 million for this quarter, a 152% year-over-year increase and 20% quarterly growth. The increase was mainly driven by the growth in total loan volume facility.

Na Mei: Moreover, provision for term TG liability in this quarter increased to RMB 278.9 million, for RMB 12 million in the same period of last year. This is due to our rapid rate up in loan volume facility by our risk-taking model, which led, to a significant upfront provision and a careful accounting policy.

Na Mei: However, over time, this provision will periodically transfer to guaranteed service days.

Na Mei: During the same period last year, sales of life insurance products with a cap 3.5% interest rate burdened before being withdrawn from the China market due to the new regulation. Therefore, the primary the second powder of last year was 17 high, making sharp contrast to the decrease of the second powder this year. Meanwhile, the collected growth in our total Grammy was mainly drawn by the expansion of our property insurance business. Consequently, the part of our property insurance in our overall primary needs increase, translating into a lower average when you take a rate, due to the lower commission-free rate, compared with the life insurance product.

Speaker Change: And for this year, the management is still going on to implement a financial license to purchase for our financial service business, like the AMC asset company and the micro-small lending companies and other financial guarantee companies for business development purposes. So for these financial license companies, before the formal come to the formal operations the repurchase process, based on the communication status, we should replace the investment amount to our partners.

Na Mei: So for this financial license companies, before the formal come to the formal operations repurchase process, based on the communications status, we should replace the investment amount to our partners to lock the acquisition target. So you can say our investment cash flow is really the cash out that most of our investment payment to our potential financial risk target. I hope my answer is asking a question. Yes. Do you see the cash used plateauing or continuing to grow?

Na Mei: In the second powder of this year, revenue for our insurance settlement reached RMB 91.5 billion, down 73% year-over-year. Going forward, we have had to count your growth in our property insurance business in the first-go-future, and gradually target our life insurance products along with the market trend. In the consumption of last year's segment, the total GMV for this culture reached RMB 455 million, an increase of 40% year-over-year by the decrease of 11% culture over-culture.

Na Mei: So you can see our investment catch flow is really catch out. That's most of our investment payment to our potential financial service target. I hope my question is answered. My question, and I think it's a good question. Yes, do you see the cash used plateauing or continuing to grow greatly? Yes, I think you can see for the catch from the operating will keep the housing and the stable catch flow, and also we have used the catch to add a small opportunity, no matter the internal financial license or the international overseas business development, also in our AI strategy.

Speaker Change: to lock the acquisation target so you can say our envestment c flow is remaining catch out that that moner of our investment payment to our potential financial taracket

Speaker Change: I hope my question is answered. My question and my answer is ask a question.

Speaker Change: Yes, do you see the cash used plateauing or continuing to grow greatly?

Na Mei: As mentioned by you, as the penetration rate of theories and products in this segment grows into a substantial level, with past growth rate of this segment will continue to moderate. On the expense side, sales and marketing pens increased 21% year-over-year to R&D 218.5 This growth was made in fuel by the first pension of our financial segment and the enhanced marketing efforts focused on revenue and high-quality customers as it will continue to redefine our customer base.

Na Mei: Yeah, I think you can see for the cash from the operating, we'll keep the healthy and stable cash flow. And also we have used the cash to other U.S. opportunities, no matter the internal financial licenses or the international overseas business development, also in our AI strategy.

Speaker Change: it

Speaker Change: i think you can say for c from operating housy and the stable c fullaw also we have caac to to v opportunity my that internal financial lices international over the business you want p also in our a i strategy would also have manu ces foundation but our forecast still have the confidence cure land viance ice g strong state as counter

Na Mei: We also have many catch expectations, but in our forecast, we still have the confidence that our catch and catch by equivalent balance to ways that gave us strong space for us and the next to caught up. Thank you.

Na Mei: We also have many cash expansion, but in our forecast, we still have the confidence in our cash and cash balance, we think a very strong status in the next quarter, yeah. Thank you. Unknown Attendee, Mei Zhao, Na Mei, Ning Tang, Lydia Yu, Yirendai, Yirendai, Yirendai, Yirendai, in Southeast Asia and other parts of the world.

Na Mei: Research and development increased to 69% year-over-year to R&D 156. It was made due to our ongoing wisdom in AI enhancements and the technology of the enhancements. Original and service costs increased to 29% year-over-year to R&D 247.5. This is finally introduced to the deep-linked short-business wallet, especially the sharp decrease in the first permeah for our life insurance products, which light will low-channel base and relevant settlement costs. Our G&A cost increased to 8% year-over-year to R&D 168.7 million, the main largely stable.

Unknown Attendee: Additionally, our strategic investments in AI and the seamless integration of technological innovation into our operations have fostered dual growth in both technological advancements and operational efficiency.

Na Mei: Once again, our internal business covers the Philippines and Mexico, and we're also looking to expand to certain other markets in Southeast Asia and other parts of the world. Thank you.

Speaker Change: thank you

Speaker Change: once again our internnational now business covers the philippines and mexico and the way re also looking to expand to uncertain other markets

Speaker Change: in souththeast asia and are the parts of the world

Operator: Thank you. Again, if you have a question, Please press star, then 1, on a touch-tone phone. Is the first, uh, uh, uh, yeah, yes, back. Yes, we have him now.

Operator: Again, if you have a question, please press star, then one on a touch-tone phone. It is the first, yeah, gentle back. Yes, we have him now.

Speaker Change: thank you again if you have a question

Speaker Change: please press star then one on a touchtone phone

Na Mei: The launch for control assets and the receivable to R&D 123 million for this culture, a R&D and 52% year-over-year increase, and 20% culturally growth. The increase was made in July by the girls in total loan volume facility. My order, for very long-for-tongued reliability in this culture increased to R&D 278.9 million for a R&D 2.0 million in the same period of last year. This is due to our rapid red apple in loan volume facility by our risk-taking model, which leads to a significant up-front perverian and a chiral accounting policy.

Speaker Change: is the first yeah yes dental back yes we have him now

Unknown Attendee: Okay, we cover the AI investment implementation part. Yes. Yeah, yeah.

Speaker Change: okay we cover the the ai investment implementation part yes

Operator: Okay, we cover the AI investment implementation part. Yes. Yeah, yeah. Hi, Ethan again. Can you hear me now?

Ning Tang: Hi, Ethan again. Can you hear me now? Yes, I can hear you very clearly. Actually, as I reported the beginning, we use AI extensively in our operations. And we also try and leverage the technology capabilities developed internally for potential like external opportunities. Like, you know, we have intact partners, financial institutions that are interested in our solutions. And, yeah, I hope we'll see some results later this year or, yeah, first half next year.

Ethan Yu: Yes, I can hear you very clearly. Actually, as I reported at the beginning, we use AI extensively in our operation, at Keyao He, Unknown Attendee, Mei Zhao, Na Mei, Ning Tang, Lydia Yu, Yirendai, Wu, Yirendai, Yeah, we use AI extensively in our own operations and some, like, yeah, technologies are really welcomed by outside, like, partners, prospect, like, buyers. Yeah, so customers. So we'll try to monetize these technologies as well. Okay, thanks, Tom.

Na Mei: Actually, in the second quarter of this year, the revenue from guaranteed service reached, RMB 38.9 million, more than four-tenths of that in the same period last year.

Na Mei: Now, on the bottom line, our net income decreased 22% year-over-year to RMB 400 times million, this quarter due to three reasons.

Speaker Change: yeah yeah hi ' again clear your me now

Na Mei: Firstly, overprobability in the insurance business declined, as mentioned above.

Na Mei: Secondly, market expense increased due to our ongoing investment in new high-quality, borrowers for our financial service business.

Na Mei: Thirdly, substantial upfront provision has been accrued, as we rate up our loan volume, under the risk-taking model.

Speaker Change: Yes, I can hear you very clearly. Actually, as I reported at the beginning, we use AI extensively in our operations.

Na Mei: Currently, our profit margin reached 27.4%, still the highest level in the industry.

Na Mei: Regarding the cash flow, we generally profit RMB 369 million net cash from our operation, in this quarter, remaining healthy and strong.

Na Mei: On the balance sheet side, our balance sheet remains strong with RMB 5.5 billion in cash, and cash equivalent as of the end of this quarter, and we are expanding it word-by-word to enhance our shareholder return.

Na Mei: As Ming just introduced, we are pleased to announce a semi-dividend plan with no less, than 10% of our after-tax income for the prior six months distributed to our shareholders. A pet dividend of 0.2 U.S. dollars of American dispensary share is intended to be paid on, about October 5, 2024, to holders of the company's alternate shares and ADIs, of record as of closed business on September 13, 2024.

Na Mei: Moreover, we are still doing share buyback.

Na Mei: In the second quarter of this year, we allocate 4 million U.S. dollars to your purchased shares, in the public market. With our total deployment for the share repurchase foreclosed to 13.5 million U.S. dollars by, June 13, 2024.

Na Mei: However, over time, this perverian will appear to be transferred to G&A 3.0. Actually, in the second quarter of this year, the revenue from G&A 3.0, which the R&D 38.9 million, more than 4.10 of died in the same period of last year. Now, on the bottom line, our night income decreased 22% year-over-year to R&D 400-time million in this culture due to three reasons. Firstly, our probability is the insurance business declined as mentioned above.

Na Mei: Lastly, our business outlook.

Na Mei: With our assessment and current business and marketing condition, we stand our value for, the third quarter of 2024 to stand between RMB 1.4 billion to RMB 1.5 billion, with the highest net profit margin. This represents our current and preliminary assessment, which may be subject to change, and uncertainties.

Na Mei: That concludes our remarks.

Operator: Operator, now we are open for questions.

Operator: Thank you.

Operator: We will now begin the question and answer session.

Speaker Change: and we also try and young leverage

Operator: To ask a question, you may press, star then 1 on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

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

Speaker Change: the technology capabilities developed internally

Speaker Change: for potential like external like opportunities like you know we have intact partners financial institutions that are interested in our

Operator: The first question comes from Ethan Yu with

Operator: First Trust Group, Inc.

Ethan Yu: Please go ahead.

Ethan Yu: Ethan Yu, First Trust Group, Inc. Hi, good evening.

Ethan Yu: Thanks for taking my question.

Ethan Yu: My, first question is about your AI development.

Na Mei: Secondly, market stance increased due to our ongoing wisdom in trying to new high-quality powers for our financial service business. Thirdly, substantial upfront perverian has been accrued as we red up our loan volume under the risk-taking model. Currently, our profit margin reached the 23.4% still high in level in the industry. Regarding the tax flow, the general probability is $300.59 million cash from our operations is this culture, remaining housing and the strong. On the balance sheet side, our balance sheet remains strong with R&D 5.5 billion in cash and the cash equivalent, as of the end of this culture, and where it's point that worth by worth to your house or shareholder returns.

Speaker Change: solutions and yeah i hope we'll see some results later this year or yeah first half next year

Ning Tang: At the same time, we try and build a strategic investment and partnership infrastructure-like ecosystem. And so we've made a couple of small, but in my view, hopefully, yeah, very promising investment in the AI space. But their contributions are very tiny. And as I, yeah, going back to our like the AI, like the use cases internally, you know, for example, like, yeah, we use AI in customer like acquisition, customer service, like we use robots, like, yeah, and the large language models, yeah, for like incoming outbounding costs, like say, when we detect customer like emotions, yeah, change, yeah, it's time and to switch to like human, like, yeah, operator will do that.

Speaker Change: At the same time, we...

Speaker Change: try and build a strategic investment and

Speaker Change: a partnership infrastructure, like ecosystem. And so we've made a couple of, yeah, small, but in my view, hopefully, yeah, very promising investment.

Speaker Change: in the ai space yeah but their are contributions are very tiny

Ethan Yu: As disclosed in your ESG report, the company has developed a range of AI systems regarding your AI strategy.

Ethan Yu: Have there been any notable advancements in AI applications or research?

Speaker Change: And as I, yeah, going back to our, like the AI, like the use cases internally, you know, for example, like, yeah, we use AI in customer, like acquisition, customer service, like we use robots, like, yeah, and the large language models, yeah, for, like, incoming outbounding costs, like, say, when we detect customer, like emotions, yeah, change.

Na Mei: I see new checks introduced. We are pleased to announce a family dividend plan with no less than 10% of our after-test income for the prior six months is attributed to our shareholder. A debt dividend of $0.02 US dollars American deposits share is depended to be paid on about October 6, 2024. The holders of the company's out-and-share and the ADS of records as of close business on September 13, 2024. Moreover, we are still doing share buybacks in the concurs of this year to allocate $4 million US dollars to your purchase shelves in the monthly market. We are total dependent for the shareholder purchase per coin to $13.5 million US dollars by June 13, 2024.

Ethan Yu: Can you share more details about any specific investments in the AI sector?

Ethan Yu: And also, have there been any significant breakthroughs in our AI product commercialization?

Operator: Excuse me, Ethan.

Operator: I'm sorry, you're not coming through clearly.

Operator: Is it possible to move the microphone closer to you and repeat, please?

Operator: I got the majority of the question, and it's about AI development, investment, commercialization, right?

Speaker Change: Yeah, it's time to switch to, like, a human, like, yeah, operator. We'll do that.

Ning Tang: And also, yeah, the machine can interact with, yeah, customer up to the right point to switch to the human so on. And of course, we use like voice recognition, like technology. And also, I gave the example, like, yeah, we are a large language models, yeah, used in the Philippines, right? I can do like a great, like a visual recognition algorithm, like because in the Philippines, like IDs, personal identification, like a paperwork is really paper. So it's not very digital, and it takes quite some skills to detect risk. So AI plays a key role there, and so on.

Na Mei: Lastly, our business outlook is our seismic and car business and marketing condition. We stand our venue for the third culture of 2024 to stand be to the 1.4 billion to the 1.5 billion with the housing and power of a margin. This represent our car and the pretty minute of seismic, which may be subject to change and uncertainty.

Speaker Change: and also yeah the machine can interact with a customer up to the right point

Speaker Change: to switch to the human is soalong and of course we use like boys' recognition like

Na Mei: That's concurs our remarks. Operating now, we are open for questions. Thank you.

Speaker Change: technology. And also, I gave the example like, yeah, we, our large language models, yeah, used in the Philippines, right, can do like a great, like a visual.

Unknown Attendee: We will now begin the question and answer session. To ask a question, you may press star than one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys.

Speaker Change: recognition algorithm, like because in the Philippines, like IDs, personal identification

Unknown Attendee: If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster.

Speaker Change: like a paper work is' really paper su p so it's not a very digital and it takes quite as some skills to deteackct the risk

Ethan Yu: The first question comes from Ethan Yu with first trust group Inc. Please go ahead.

Speaker Change: So, AI plays a key role there, and so on. So, yeah, basically,

Ning Tang: So, yeah, basically, yeah, we use AI extensively in our own operations and some, like, yeah, technology is really welcomed by outside, like partners, prospect, like buyers, yeah. So customers, so we'll try to monetize these technologies as well.

Unknown Attendee: Hi, good evening. Thanks for taking my question. I can write on under your solid product. My first question is about your AI development. As distilled in your ESC report, the company has developed a range of AI systems regarding your AI strategy. Have they been any notable developments in AI applications or research? Can you share more details about AMA's specific investment in AI sector? And also, have there any been significant rituals in our AI project commercialization?

Speaker Change: yeah we use ai sensively in our own operions and the su like technologies are really welcomed by outside like

Unknown Attendee: Our strategic direction positions as well to evolve into a leading AI driven platform, paving the way for groundbreaking solutions and setting new industry standards.

Speaker Change: partners, prospect, like buyers, yeah, so customers. So we will try to monetize these technologies as well.

Unknown Attendee: Now, I would like to go through our business highlights for this quarter.

Unknown Attendee: First, our financial services business.

Ning Tang: Okay, thank you.

Ethan Yu: My second question is, there is a continual rise in your R&D costs. Could you share with us more about how these costs have been used? Yeah, so for our, like, AI, like, large language model development, yeah, we take, like, open source, like, a model combined with our own data and business algorithm to develop our, yeah, proprietary models.

Ning Tang: My second question is, there is a continued rise in your R&D culture. Could you share more color about how this cost has been used? Yeah, so for our AI, large language model development, we take open source model combined with our own data and business algorithm to develop our proprietary models, and we purchase hardware and develop software so on, and so in the second quarter, I believe, yeah, it was about 56 million R&B. Yeah, so I think this is a money wild span and yeah, so I think our investment in AI has been prudent, but yeah, strategic for the future.

Speaker Change: okas thanks for my second question is there isn t continue r your ond cost could you share more color about how this costs have been used

Unknown Attendee: Excuse me, Ethan. I'm sorry. You're not coming through clearly. Is it possible to move the microphone closer to you and repeat, please? I got the majority of the question and it's about AI development, investment, commercialization, right? Yes? Okay, he accidentally disconnected. Just a moment, he must have pressed something accidentally. So, would you like to go to the next question and have him come back? Okay, follow you. Would you like me to have the next questioner ask and then when? Yes, I think yes.

Unknown Attendee: Let's go to the next question. Thank you.

Speaker Change: Yeah, so for our, like, AI, like, large language model development, yeah, we take, like, open source, like, a model combined with our own data and business algorithm to develop our, yeah, proprietary models,

Ning Tang: And we purchase hardware and, yeah, develop software, so on. And so in the second quarter, I believe, yeah, it was about 56 million RMB. Yeah. So I think this is a money well spent. And yeah, so I think our investment in AI has been prudent. But yeah, strategic for the future.

Speaker Change: and we purchase hardware and yeah i ve developed software so long and so in the second quarter i believe yeah it was about

Speaker Change: fifty six million and rb

Speaker Change: so i think this is a money wildspan and yes so i think an our investment in ai has been prudent but strategic for the future

Ning Tang: Thank you, Mr. Tang.

Ning Tang: Thank you, Ms. Tom. I have another question about your... Yeah, yeah. Can I ask one more question about your overseas business? Sure. Unknown Attendee Yeah. Can I know what is the total loan volume facilitated overseas in the second quarter of 2024? I'm impressed with the growth rate achieved in the Philippines. And also you have mentioned that you have made another progress in Mexico. And what is the driving rate achieved in the Philippines? The oldest one.

Ning Tang: Okay, the next question is from Bruce Orin with Black Lab Fund. Please go ahead. Yes, hello. I'd like to express appreciation to the board for the new dividend. I think that's a good move. I'd also like to congratulate and thank Mrs. Name for helping to build an extraordinary company under circumstances that were often difficult. Thank you. I have two questions. The first is could you add some insight into the large second quarter increase in Netcash used in investing activities and Netcash used in financing, and my second question is, where is most of the international business growth?

Ethan Yu: Say it again, sorry. The last part. Yeah, what is driving this growth?

Unknown Attendee: I have another question about your, can I ask a more more question about your overseas business? Sure. Yeah, can I know what the total loan volume is?

Speaker Change: thank you miss r i have an another question about your can i ask a moment more questionions about your overse bem

Ethan Yu: And what's your outlook for the revenue generated from overseas business and profit in, let's say, second half of 2024 or the coming 2035? Unknown Attendee, Mei Zhao, Na Mei, Ning Tang, Lydia Yu, Yirendai, Now you have this number. Okay, okay, our... For our Philippine business, due to the acquisition cost is based on our new customer acquisition strategy. And based on the current data in this quarter, about one person is around $5 or $10 a one unit person.

Speaker Change: sure

Unknown Attendee: Okay, I selected overseas in second quarter, second quarter. I'm impressed with the growth rate achieved in Philippine, and also you have mentioned that you have made another program in Mexico, and what is the driving rate achieved in Philippine? You have to say it again, sorry, the last part. Yeah, what is driving these growth, and what's your outlook for the revenue generated from overseas business and profit in, let's say, second half, 24 or the coming 2025? I see.

Speaker Change: yes oh

Speaker Change #100: and i know what the total lo volume ok so it's overseing second cord ton on the i'm impressed we the gth rate achieve being ating and also you have mentioned that you have made made another proper in mexico and what is the driving rate achie being cliing

Unknown Attendee: The second quarter of 2024 saw a static growth with total loan volume reaching RMB 12.9 billion, marking a 59 percent increase year-over-year, and maintaining a resilient consecutive quarterly growth despite an industry slowdown. The momentum is largely driven by the concrete growth of our new customers with higher credit quality, as we continue to optimize our asset quality of long portfolios.

Speaker Change #101: all afraid right is

Speaker Change #102: 'll strayight again sorry the lot part

Speaker Change #103: yeah well what is the driving growth and what's your outlook for the revenue general wrong obviously business and profit in let's say second a half plana for all the coming china y five

Ning Tang: Thank you. Can Na please cover them first? Yes, my name is Yimai. Before I talk about our operating business, we can ask a nice income opportunity to ask. I think my answer is for the purpose of our financial service. The management is from our financial reasoning, opportunity to pick likely our company is impacted. Going on, poison, yokch. I cannot hear you very clearly now. Now it's better? I'm close to the phone now.

Ning Tang: Well, yeah, the growth rate has been phenomenal, largely because the base is too small, yeah, so we really hope to grow the base and so yeah, the second quarter, like a loan volume, was R&B 63 million, and so yeah, and we expect to do like an over 100 million in this quarter, we hope to maintain, yeah, relatively high growth rate, like yeah, for the foreseeable future, just because the base is small and also you ask about the growth driver, I mean the citizens and some other countries in South Asia and also in Latin America, you know, they are large countries, yeah, with population of over like 100 million, and also the target customer base is very, yeah, which we like very much, and so they have really strong demand for like a convenient credit, yeah, like but the market certainly lacks such, yeah, opportunities, yeah, it means, so we are there to, yeah, leverage the capabilities we've developed in mainland China, and yeah, so I think this is a very big opportunity, frankly speaking, for us to do like a credit tax outside of mainland China in these like large population, young markets, like where digital finance is still in very early days and the booming, yeah.

Ning Tang: And so, yeah, the second quarter, like a loan volume was RMB 63 million.

Speaker Change #103: to

Speaker Change #104: isee well what great has been been ominal largely because the b is to tool too small we i really hope to grow the base and soyeahthe second quarter like long volume was sixty three

Unknown Attendee: Since the second half of 2023, one of the entire industry experienced substantial credit risk fluctuations, we started to proactively upgrade our customer mix and diversify our online acquisition channels.

Unknown Attendee: The strategy has proven effective, leading to secure growth and improved asset quality. Meanwhile, we have refined our proprietary RTA credit model for borrower acquisition, which has notably enhanced our overall credit approval efficiency.

Ning Tang: And so, yeah, and we expect to do like an over 100 million in this quarter.

Speaker Change #104: Meeting, and so yeah.

Speaker Change #104: and we expect to do like an over 100 meeting in this quarter. We hope to maintain, yeah, a relatively high.

Ning Tang: We hope to maintain, yeah, a relatively high growth rate like, yeah, for the foreseeable future just because the base is still, yeah, small.

Speaker Change #104: world rate like yeah for the phil future just because the base is to small and also you ask about

Ning Tang: Yes, it's better now. Yes, please repeat. Thank you. Please repeat. Thank you. Okay, I want to ask items and also our international business market. I'm going to explain our investment catch flow, the reason why we increase the so much in the space culture. As my mentioned, as you remember that last year, we purchased a new financial guarantee company, Chongqing-Tingtong, to our financial service segment purpose. For this year, the management is still going on to improve our financial license to purchase for our financial service business, like the M.C.S company and the micro-small lending companies and other financial guarantee companies for this particular purpose.

Ning Tang: And also you asked about the growth driver.

Speaker Change #105: the growth driver i mean the philippines and some other countries in south asia and also in latin america you know they are large countries

Ning Tang: I mean, the Philippines and some other countries in South Asia and also in Latin America, they are large countries, yeah, with population of over like 100 million.

Speaker Change #105: yeah with population of over like one hundred million and also the target customer base is very young which we like very much

Unknown Attendee: In this quarter, the number of borrowers served increased by 47% year-over-year to 1.5 million.

Speaker Change #105: and so they have really flong demand for like a convenient credit yeah like but the market certainly lacks

Speaker Change #105: start yeah opportunities yeah means

Speaker Change #105: so we are there toyeah leverage the capabilities we've developed in mainland china and yeah so

Ning Tang: So for this financial license company, before the formal operation, the repair process process, based on the communications status, we should replace the investment amount to our partners to lock the acquisition target. So you can see our investment catch flow is really catch out. That's most of our investment payment to our potential financial service target. I hope my question is answer. My question, and I think it's a good question. Yes, do you see the cash used plateauing or continuing to grow greatly?

Ning Tang: And also the target customer base is very young, which we like very much.

Ning Tang: And so they have really strong demand for like convenient credit.

Speaker Change #106: i think this is a very bigak opportunity fronis speaking for us to do like a part attack

Ning Tang: Yeah.

Ning Tang: But the market certainly, lacks such, yeah, opportunities, yeah, means.

Ning Tang: So we are there to, yeah, leverage the capabilities we've developed in mainland China.

Ning Tang: And yeah, so I think this is a very, very big opportunity, frankly speaking, for us to do like credit tax outside of mainland China in these like large population, young markets like where digital finance is still in very early days and booming.

Speaker Change #106: outside of meonchina in these like large population

Speaker Change #106: young markets like aware digital finance is still in very early days and pooming

Unknown Attendee: Unknown Attendee, May I know the current customer acquisition cost for this country, especially, in the Philippines?

Unknown Attendee: Okay, understood.

Unknown Attendee: May I know the current customer acquisition cost for these countries, especially in the Philippines?

Speaker Change #107: undersod may i know the current customer acquisition costs for these countries especially infinive

Unknown Attendee: Now, you have this number?

Na Mei: For our Philippine business, due to the acquisition cost is based on our new customer acquisition, strategy.

Speaker Change #108: now you have this number

Ning Tang: Yes, I think you can see for the catch from the operating will keep the housing and the stable catch flow and also we have used the catch to add a small opportunity, no matter the internal financial license or the international overseas business development also in our AI strategy. We also have many catch expectations, but in our forecast, we still have the confidence that our catch and catch by equivalent balance to ways that gave us strong space for us and the next to caught up.

Na Mei: But I think in the second half year of this year, as Ning mentioned above, we want to look for our development growth, our Philippine business, and other also business. So in the second half of the year, for our business development, we will improve my expense to our new customer acquisition. So with time, the acquisition rate of one person will be a bit increased in the third and the fourth quarter. But in this quarter, it's about $5 or $2 one person.

Unknown Attendee: For our Philippines business, due to the acquisition cost is based on our new customer acquisition strategy. And based on the current data in this culture, about one person is around to five or ten dollars when you need a person.

Speaker Change #109: five hour

Speaker Change #110: yeah i ' hour

Speaker Change #111: for our phliadbian business dueal to acquisition coun is based on our new customer acquis strategy

Na Mei: And based on the current data in this quarter, about one person is around $5 or $10 a one, unit person.

Speaker Change #111: and the basase on the car data into called about one person is ten dollars you need the person but i think second half year of this as mentioned about want to hope look for our develoment growth our being business and was this so in in the second half of the business one we to our new customer acquationso waste applation rate of one incour

Na Mei: But I think in the second half year of this year, as mentioned above, we want to, we hope, to look for our development growth, our Philippine business and other also business.

Unknown Attendee: But I think in the second half year of this year, as mentioned above, we hope to look for our development growth, our Philippines business and other also business. So in the second half of year, for our business development, we are providing our new customer acquisition. So, we stand to the acquisition rate of one person will be a bit to increase the second third and the first culture. But in this culture, it's about five or two thousand dollars per person. Yeah.

Ning Tang: Thank you. Once again, our internal business covers the Philippines and Mexico and we're also looking to expand to certain other markets in Southeast Asia and other parts of the world. Thank you. Again, if you have a question, please press star, then one on a touch-tone phone. It is the first, yeah, gentle back. Yes, we have him now. Okay, we cover the AI investment implementation part. Yes. Yeah, yeah. Hi, Ethan again. Can you hear me now?

Na Mei: So in the second half of the year, for our business development, we will improve my expense, to our new customer acquisition.

Na Mei: So with time, the acquisition rate of one person will be a bit increased in the third, and the first quarter.

Na Mei: But in this quarter, it's about $5 or $2 one person.

Speaker Change #112: and the first cter about this culture itis about file out two doubtarsts that one person yes

Na Mei: Yeah.

Ethan Yu: Okay.

Ethan Yu: Got it.

Ethan Yu: Thanks.

Unknown Attendee: Okay, okay, thank you again. Have a great evening, yeah.

Ethan Yu: Thanks again.

Ethan Yu: Okay, okay, got it. Thanks. Thanks again. Have a great evening. Thank you. The next question comes from Dylan Paul, Dylan Paul, ND. Please go ahead. Yes, can you hear me?

Ethan Yu: Have a great evening.

Ethan Yu: Yeah.

Operator: Thank you.

Speaker Change #112: i

Speaker Change #113: okay good god thank think again and have agreing yes

Unknown Attendee: Thank you.

Operator: The next question comes from Dylan Paul.

Doen Paul: The next question comes from Doen Paul by Doen Paul Andy. Please go ahead. Yes, can you hear me? I'm going to switch off speaker like you recommended. Yes, thank you so much.

Dylan Paul: Dylan Paul, MD, please go ahead.

Speaker Change #114: thank you the next question comes from dlenan paul by dt pollandy please go ahead

Operator: Yes?

Dylan Paul: Yes.

Operator: Okay, he accidentally disconnected.

Dylan Paul: Can you hear me?

Dylan Paul: Yes.

Dylan Paul: I'm going to switch off speaker like you recommended.

Dylan Paul: I'm going to switch off speaker like you recommended. Uhh, Yes, thank you so much. This is Dylan Paul here, private investor.

Speaker Change #115: yes can you hear me

Dylan Paul: Yes.

Speaker Change #116: our sments switch i'm going to switch off speaker like you recommended

Dylan Paul: Thank you so much.

Ning Tang: Yes, I can hear you very clearly. Actually, as I reported the beginning, we use AI extensively in our operations. And we also try and leverage the technology capabilities developed internally for potential like external opportunities. Like, you know, we have intact partners, financial institutions that are interested in our solutions. And, yeah, I hope we'll see some results later this year or, yeah, first half next year. At the same time, we try and build a strategic investment and partnership infrastructure like ecosystem.

Dylan Paul: Myself and my friend Dale Tiongson, who's very sorry he can't be here, have been following and invested in the company for a couple quarters now along. And we want to thank you all for the strong result. We'd like to hear and also mention that we'd like to hear from any people listening to the call who are interested in sharing bidirectional insights. So please reach out to us via email or social media, which is easily found online. We have two questions. The first is related to the guarantee business.

Operator: Just a moment.

Dylan Paul: This is Dylan Paul here, private investor.

Doen Paul: This is Doen Paul here, private investor. Myself and my friend, Dale Tiongson, who's very sorry you can't be here, have been following and invested in the company for a couple quarters now long. And we want to thank you all for this strong result. We'd like to hear, and also mention that we'd like to hear from any people listening to the call who are interested in sharing bi-directional insights. So please reach out to us the email or social media, which is easily found online.

Unknown Attendee: Moreover, our long facilitation platform continues to gain popularity with monthly active users rising by 88% year-over-year to 4.5 million in the second quarter of this year, showcasing strong customer engagement and loyalty.

Ning Tang: And so we've made a couple of small, but in my view, hopefully, yeah, very promising investment in the AI space. But their contributions are very tiny. And as I, yeah, going back to our like the AI, like the use cases internally, you know, for example, like, yeah, we use AI in customer like acquisition, customer service, like we use robots, like, yeah, and the large language models, yeah, for like incoming outbounding costs, like say, when we detect customer like emotions, yeah, change, yeah, it's time and to switch to like human, like, yeah, operator will do that.

Speaker Change #117: yes thank you so much this is dill in paul here private investor myself in my friend dale tiion who's very sorry you can't be here have been following invest in the company for a couple of quarters now along

Operator: Well, he must have pressed something accidentally.

Dylan Paul: Myself and my friend Dale Tiongson, who's very sorry he can't be here, have been following, and invested in the company for a couple quarters now along.

Operator: So, would you like to go to the next question and have him come back?

Dylan Paul: And we want to thank you all for this strong result.

Operator: Follow you.

Dylan Paul: We'd like to hear and also mention that we'd like to hear from any people listening to, the call who are interested in sharing bi-directional insights.

Speaker Change #118: and we want to thank you all for the strong result we'd like to he and also mentioned that we'd like to hear from

Operator: Would you like me to have the next questioner ask?

Dylan Paul: So please reach out to us via email or social media, which is easily found online.

Speaker Change #119: any people listening to the call who are interested in sharing by directional insights so please reach out does the email or social media which is easily found online we have two questions the first is related to the guarantee business

Dylan Paul: And I will say that these questions actually, that Dale is the one who's most talented in understanding and insights on the business. So I won't be able to ask any further follow-up, but I wanted to get them out there for his sake. The first is related to the guarantee business. It seems like this is becoming a growing part of the business, and we are interested in some additional color. Maybe you could speak towards how the guarantee contracts work in terms of sharing of credit risk and what that means for a return relative to the default rate on the underlying loans. And we also understand the accounting to be atypical for provisions. Could you maybe explain just how the accounting works or provide additional color?

Operator: And then, when –

Dylan Paul: We have two questions.

Doen Paul: We have two questions. The first is related to the guaranteed business. And I will say that these questions actually, that Dale is the one who's most talented in understanding and insights on the business. So I won't be able to ask any further follow-up, but I wanted to get them out there for his sake. The first is related to the guaranteed business. It seems like this is becoming a growing part of the business, and we are interested in some additional color. Maybe you could speak towards how the guaranteed contracts work in terms of sharing of credit risk and what that means for our return relative to the default rate on the underlying loans.

Operator: Yes.

Speaker Change #120: and i will say that these questions actually

Speaker Change #120: that dale is the one who's most talented and in understanding and insights on the business so i won't be able to accident askkingany further follow up but i wanted to get them out there for his sake the first is related to the guaranteed business it seems like this is becoming a growing part

Ning Tang: And would it be helpful to show progression of lost provisions to write-offs in the quarter similar to how you do for contract receivables in the 10-K? Unknown Attendee And then the second the the final component, which again, maybe I should be separating things, Well, actually let me stop right there and then it sounds like, sorry, this is my first time doing a call before. It sounds like I can come back and ask that second question.

Dylan Paul: The first is related to the guarantee business.

Dylan Paul: And I will say that these questions actually – that Dale is the one who's most talented, in understanding and insights on the business, so I won't be able to ask any further follow-up.

Ning Tang: I won't have any followup on the first because your answers, I won't be able to adequately process them the way Dale does when he's listening to them. So let me just stop right there with that first question there. Na, can, yeah, we can, please, we'll try to cover that. Maybe I can suggest that, yeah, we can have a follow-on call to go into some of the details with your friend. Yeah.

Dylan Paul: But I wanted to get them out there for his sake.

Dylan Paul: The first is related to the guarantee business.

Speaker Change #120: of the business and we are interested in some additional color

Speaker Change #121: maybe you could speak towards how the guarantee contracts work in terms of sharing of credit risk and what that means for a return relative to default relative to the default rate on the underlying loans

Dylan Paul: It seems like this is becoming a growing part of the business, and we are interested in, some additional color.

Dylan Paul: Maybe you could speak towards how the guarantee contracts work in terms of sharing of credit, risk and what that means for our return relative to default – relative to the default rate on the underlying loans.

Dylan Paul: And we also understand the accounting to be atypical for provisions.

Doen Paul: And we also understand the accounting to be atypical for provisions. Could you maybe explain just how the accounting works or provide additional color, and would it be helpful to show progression of lost provisions to write-offs in the quarter similar to how you do for contract receivables in the 10-K?

Dylan Paul: Could you maybe explain just how the accounting works or provide additional color?

Ning Tang: And also, yeah, the machine can interact with, yeah, customer up to the right point to switch to the human so on. And of course, we use like voice recognition, like technology. And also, I gave the example, like, yeah, we are a large language models, yeah, used in the Philippines, right? I can do like a great, like a visual recognition algorithm, like because in the Philippines, like IDs, personal identification, like a paperwork is really paper.

Speaker Change #122: could you maybe explain just how the accounting works or provide additional color and would it be helpful to show progression of loss through provisions to write offs and the quarter similar to how you do for contract receivables in the ten -k

Dylan Paul: And would it be helpful to show progression of loss provisions to write-offs in the quarter, similar to how you do for contract receivables in the 10-K?

Dylan Paul: And then the second – the final component, which, again, maybe I should be separating, things.

Doen Paul: And then the second, the final component, which again, maybe I should be separating things. Well, actually, let me stop right there. And then it sounds like, so I just my first time doing a call before. It sounds like I can come back and ask that second question. I won't have any follow-up on the first because your answers. I won't be able to adequately process on the way Dale does when he's listening to them. So let me just stop right there with those first first question there for questions.

Speaker Change #123: and then the second the final component which again maybe i should be separated these

Operator: She'll come back later, I think, yeah.

Dylan Paul: Well, actually let me stop right there and then it sounds like, sorry, this is my first time doing a call before.

Speaker Change #124: wellll actually let me sto right there andthen it sounds like sry my first time doing a call before it sounds like i can come back and ask that second question i won't have a follow on the first

Operator: So, let's go to the next question.

Dylan Paul: It sounds like I can come back and ask that second question.

Dylan Paul: I won't have any follow-up on the first because your answers, I won't be able to adequately process them the way Dale does when he's listening to them.

Dale: because your answers i won't be to adequately process on the way dale does when he's listening to them

Dylan Paul: So let me just stop right there with that first question there.

Speaker Change #126: so let me just stop right there with those bursts

Ning Tang: Yeah, so now we can please, we'll try to cover that.

Unknown Attendee: Yeah, so now can you know, we can't please will try to cover that. Maybe I can suggest that.

Speaker Change #127: that first question there

Speaker Change #128: for question then so not and you know we can't please will try to cover that maybe i can't suggest that yeah we can have a follow on call to go into some of the details with your friend

Ning Tang: Maybe I can suggest that, yeah, we can have a follow-on call to go into some of the details with your friend.

Unknown Attendee: Yeah, we can have a full-on call to go into some of the details with your friend. Yeah, okay, okay. All right, that's fine. And then, let me see you then whether the you have the same recommendation for this second question, then, which is. It's related to the parent controlling shareholder structure, which, which I guess we can do or Dale in particular, but we have continued to be confusing for us. And I know we have asked about it before, but just wondering, is there any further color you can provide regarding Credit Ease and how the relationship works with Ryan, Yirend, which, again, I've been involved in that question before.

Dylan Paul: Okay, gotcha.

Dylan Paul: All right, that's fine.

Dylan Paul: Oh, okay, gotcha, gotcha. All right, that's fine. And then, and let me see then whether you have the same recommendation for the second question then, which is, Unknown Attendee, Mei Zhao, Na Mei, Ning Tang, Lydia Yu, Yirendai, Yirendai, Yirendai, Yirendai, I guess we can, or Dale in particular, but we have, I continue to be confusing for us. And I know we have asked about it before, but just wondering, is there any further color you can provide regarding credit ease and how the relationship works with Ryren, Yiren, which again, I've been involved in that question before.

Dylan Paul: And let me see then whether you have the same recommendation for this second question then, which is it's related to the parent controlling shareholder structure, which I guess we, or Dale in particular, but we have continued to be confusing for us.

Speaker Change #129: all right that's fine and then let me see then whether whether you have the same recommendation for the second question then which is

Speaker Change #129: it's related to the parent controlling shareholders structure which which

Dylan Paul: And I know we have asked about it before, but just wondering, is there any further color you can provide regarding credit ease and how the relationship works with Yiren, which, again, I've been involved in that question before, and so I know you've addressed it.

Speaker Change #130: i guess we condu dal in particularly but we have continued to be confusing for us and i know

Speaker Change #130: we have asked about it before but just wanting is there any further color you can provide regarding credit and how the relationship works with ryrenonant iron which again i've been involved in that question for and so i know you addressed it and and he said mentioned before that he knows there's a large transaction in two thousand and nineteen

Unknown Attendee: And so I know you addressed it. And then he mentioned this before that he knows there's a large transaction in 2019, but, and this is the maybe the new part that can be addressed, and nothing has happened since. But are you expecting any related party crime draft transactions coming up here, if you're able to speak to that. And thank you. Not as substantial as like the one you mentioned several years ago, not even close. Yeah. Okay. All right.

Dylan Paul: And so I know you've addressed it and then you mentioned this before that he knows there's a large transaction in 2019, but, and this is the, maybe the new part that can be addressed and nothing has happened since, but are you expecting any related party transactions coming up here if you're able to speak to that? And thank you. Not as substantial as the one you mentioned several years ago, not even close, yeah.

Dylan Paul: And then you mentioned this before that he knows there's a large transaction in 2019, and this is maybe the new part that can be addressed, and nothing has happened since, but are you expecting any related party transactions coming up here, if you're able to speak to that?

Ning Tang: So it's not very digital and it takes quite some skills to detect risk. So AI plays a key role there and so on. So, yeah, basically, yeah, we use AI extensively in our own operations and some like, yeah, technology is really welcomed by outside, like partners, prospect, like buyers, yeah. So customers, so we'll try to monetize these technologies as well. Okay, thank you. My second question is, there is a continued rise in your R&D culture.

Speaker Change #131: but thisis the maybe the new part that can be addressedand nothing has happened sincese but are you pecting any related party ren dracks transactions coming up here if you're able to speak to that and thank you

Dylan Paul: And thank you.

Ning Tang: Not as substantial as, like, the one you mentioned several years ago, not even close, yeah.

Dylan Paul: Okay.

Speaker Change #132: not as substantial as like the one you mentioned several years though not well yes

Ning Tang: Okay. All right. Well, that's all of our questions or Dale's more specifically.

Dylan Paul: All right, well, that's all of our questions, or Dale's more specifically.

Unknown Attendee: Well, that's all of my our questions or Dale's more specifically. And again, most importantly, thank you for that tour that you guys gave me while I was in China and, you know, answering questions at that time and all your efforts that you've done with both my self and Dale to help understand the company. But again, we are currently very bullish and excited about everything you guys have accomplished so far. Thank you.

Speaker Change #133: okay all right well that's all of my our questions or dales more specifically and again most importantly thank you for that tour that you guys gave me while i was in china and you answering questions

Dylan Paul: And, again, most importantly, thank you for that tour that you guys gave me while I was in China, and answering questions at that time and all your efforts that you've done with both myself and Dale to help understand the company.

Dylan Paul: And again, most importantly, thank you for that tour that you guys gave me while I was in China and, you know, answering questions at that time and all your efforts that you've done with both myself and Dale to help understand the company. And we are currently very bullish and excited about everything you guys have accomplished so far. Thank you. You are more than welcome to come back and see us. And so, yeah, we'll book a follow-up call to cover, yeah, all the details. And again, Dale's a technical guy. That stuff confuses me too.

Operator: I can't follow him. This concludes, oh go ahead please. Okay, thank you for watching our company. I hope you will come again later. Okay, thank you. And then this concludes our question and answer session and concludes the year-end digital conference call. If you have any further questions, please contact the Investor Relations team at year-end digital. Thank you for attending today's presentation. You may now disconnect. Thank you all. Thank you, bye.

Speaker Change #133: at that time and all your efforts that you've done with both myself and dale to help understand the company and we are curarent currently a very bullish and excited about everything you guys have accomplished of our

Unknown Attendee: As we maintain our focus on attracting high quality borrowers and note that existing high-value borrowers repeatedly use our revolving loan products, we expect this growth momentum to continue throughout the year.

Dylan Paul: Again, we are currently very bullish and excited about everything you guys have accomplished so far.

Ning Tang: Could you share a more color about how this cost has been used? Yeah, so for our AI, large language model development, we take open source model combined with our own data and business algorithm to develop our proprietary models, and we purchase hardware and develop software so on, and so in the second quarter, I believe, yeah, it was about 56 million R&B, yeah, so I think this is a money wild span and yeah, so I think our investment in AI has been prudent, but yeah, strategic for the future. Thank you, Mr. Tang.

Unknown Attendee: You are more than welcome to come back to see us. And so, yeah, we'll follow up call to cover all the details. And again, Dale's a technical guy. That stuff confuses me too. I can't follow him. Thank you.

Speaker Change #134: thank you you have more than welcome to come back see us and yeah well follow up call to cover yeah the detail or sco

Speaker Change #134: and again ales a techical guythatstuff confuses me i can't that thank you

Unknown Attendee: This concludes. Okay. Go ahead, please. Okay.

Speaker Change #134: okay

Speaker Change #136: this can tell us 'll go ahead please

Unknown Attendee: Thank you for always the upcoming one. Hope you were coming again later. Okay. Thank you.

Dylan Paul: Thank you.

Speaker Change #137: okay thank you for ll come hopeyou are coming again later k thank you

Ning Tang: You are more than welcome to come back and see us.

Ning Tang: So, yeah, we'll book a follow-up call to cover, yeah, all the details.

Operator: And then this concludes our question-and-answer session and concludes the year in digital conference call. If you have any further questions, please contact the Investor Relations team at your end digital.

Operator: Thank you.

Dylan Paul: And, again, Dale's a technical guy.

Operator: This concludes – go ahead, please.

Operator: Okay, the next question is from Bruce Oren with Black Lab Fund.

Dylan Paul: That stuff confuses me, too.

Ning Tang: Okay, thank you for visiting our company, and I hope you are coming again later.

Bruce Oren: Please go ahead.

Dylan Paul: I can't follow him sometimes on his stuff, so thank you.

Ning Tang: Okay, thank you.

Bruce Oren: Yes, hello.

Operator: And then this concludes our question-and-answer session and concludes the year-end digital conference call.

Bruce Oren: I'd like to express appreciation to the board for the new dividend.

Speaker Change #138: and then this concludes our question and answer session and concludes the year-end digital conference call if you have any further questions please contact the investor relations team at your end digital thank you for attending today's presentation you may now disconnect

Bruce Oren: I think that's a good move.

Bruce Oren: I'd also like to congratulate and thank Mrs. Namé for helping to build an extraordinary company under circumstances that were often difficult.

Operator: If you have any further questions, please contact the investor relations team at year-end digital.

Operator: Thank you for attending today's presentation.

Operator: Thank you for attending today's presentation.

Operator: You may now disconnect.

Operator: You may now disconnect. Thank you all. Thank you.

Operator: Thank you all.

Bruce Oren: Thank you.

Operator: Thank you.

Bruce Oren: I have two questions.

Bruce Oren: Thank you.

Operator: Thank you.

Bruce Oren: The first is, could you add some insight into the large second quarter increase in net cash used in investing activities and net cash used in financing activities?

Na Mei: And now please cover them first.

Operator: Bye.

Operator: Bye.

Speaker Change #139: thank you all

Bruce Oren: And my second question is, where is most of the international business growth?

Na Mei: Yeah, as my mind is clear, for our capital, for our operating business, we can earn a, income about As we mentioned before, to the purpose of our financial service segment, the measurement is about financial listing opportunity to pay, I cannot hear you very clear now.

Na Mei: Now it's better.

Na Mei: I'm close to the phone now.

Na Mei: It's better now.

Speaker Change #139: thank you goodbye

Unknown Attendee: Meanwhile, our international business is showing exciting progress.

Ning Tang: I have another question about your, can I ask a more more question about your overseas business? Sure. Yeah, can I know what is the total loan volume?

Unknown Attendee: The total loan volume oversees nearly doubled in the second quarter of 2024, compared to the prior quarter.

Ning Tang: Okay, I selected overseas in second quarter, second quarter, I'm impressed with the growth rate achieved in Philippine and also you have mentioned that you have made another program in Mexico, and what is the driving rate achieved in Philippine? You have to say it again, sorry, the last part.

Ning Tang: Yeah, what is the driving these growth, and what's your outlook for the revenue generated from overseas business and profit in, let's say, second half, 24 or the coming 2025? I see. Well, yeah, the growth rate has been phenomenal, largely because the base is too small, yeah, so we really hope to grow the base and so yeah, the second quarter, like a loan volume, was R&B 63 million, and so yeah, and we expect to do like an over 100 million in this quarter, we hope to maintain, yeah, relatively high growth rate, like yeah, for the foreseeable future, just because the base is small and also you ask about the growth driver, I mean the citizens and some other countries in South Asia and also in Latin America, you know, they are large countries, yeah, with population of over like 100 million, and also the target customer base is very, yeah, which we like very much, and so they have really strong demand for like a convenient credit, yeah, like but the market certainly lacks such, yeah, opportunities, yeah, it means, so we are there to, yeah, leverage the capabilities we've developed in mainland China, and yeah, so I think this is a very big opportunity, frankly speaking, for us to do like a credit tax outside of mainland China in these like large population, young markets, like where digital finance is still in very early days and the booming, yeah.

Ning Tang: Okay, understood.

Unknown Attendee: In the Philippines, monthly loan volume facilitated, exceeded R&B 20 million milestone, with the growth rate remaining robust as we move into the second half of the year.

Unknown Attendee: Moreover, as our business continues to grow, we are benefiting from economic upscale.

Unknown Attendee: With customer acquisition costs decreasing by 18% quarter-over-quarter, in June 2024, our business in the Philippines achieved a positive net profit margin.

Ning Tang: May I know the current customer acquisition cost for these countries, especially in Philippines? Now, you have this number? For our Philippines business, due to the acquisition cost is based on our new customer acquisition strategy. And based on the current data in this culture, about one person is around to five or ten dollars when you need a person. But I think in the second half year of this year, as mentioned above, we hope to look for our development growth, our Philippines business and other also business.

Unknown Attendee: It was mentioning that our rapid growth is closely tied to our AI development and integration.

Unknown Attendee: Our proprietary large-language models have been implemented across various operations, including customer acquisition, customer service, risk management, and as a management.

Ning Tang: So in the second half of year, for our business development, we are providing our new customer acquisition. So, we stand to the acquisition rate of one person will be a bit to increase the second third and the first culture. But in this culture, it's about five or two thousand dollars per person. Yeah.

Unknown Attendee: For instance, in our international operations, our anti-broad AI models have processed over 10 different types of identification documents this quarter.

Unknown Attendee: Achieving a 93% accuracy rate and significantly enhancing our risk management efficiency. Additionally, to standardize our services, our large language models are used in our overseas call centers to translate local languages, detect sensitive words and analyze service quality and assurance, thereby boosting customer satisfaction.

Unknown Attendee: As more data are processed, we expect continued enhancements of our models in both accuracy and their applicability to a wider range of scenarios and uses.

Unknown Attendee: Okay, okay, thank you again. Have a great evening, yeah.

Unknown Attendee: Thank you.

Doen Paul: The next question comes from Doen Paul by Doen Paul Andy.

Doen Paul: Please go ahead. Yes, can you hear me? I'm going to switch off speaker like you recommended. Yes, thank you so much.

Doen Paul: This is Doen Paul here, private investor. Myself and my friend, Dale Tiongson, who's very sorry you can't be here, have been following and invested in the company for a couple quarters now long. And we want to thank you all for this strong result. We'd like to hear and also mention that we'd like to hear from any people listening to the call who are interested in sharing bi-directional insights. So please reach out to us the email or social social media, which is easily found online.

Unknown Attendee: Turning into asset quality, delinquency rates continue to show an encouraging trend as asset from upgraded borrowers increase. Specifically, the 15 to 89 date delinquency rate for the second quarter of 2024 declined to 3.8% down 10 basis points. The FPD 30 plus delinquency rate decreased for the third consecutive quarter and the M1 collection rate for the second quarter of 2024 increased by 290 basis points quarter over quarter to a historic high.

Unknown Attendee: We expect a sustained improvement in asset risk performance in the second half of this year as we continue to optimize our customer mix and the retune our credit risk models.

Unknown Attendee: Now, on funding cost, our effort in building an efficient funding management system is showing results. In the second quarter of this year, our funding cost decreased by 82 basis points quarter over quarter, reaching a historic low and exceeding our internal target. The downward trend will continue in the third quarter.

Unknown Attendee: Moreover, given the current market funding condition, we are strategically increasing our long volume and the risk taking model to better balance risk management and profitability.

Doen Paul: We have two questions. The first is related to the guaranteed business. And I will say that these questions actually that Dale is the one who's most talented in understanding and insights on the business. So I won't be able to ask any further follow-up, but I wanted to get them out there for his sake. The first is related to the guaranteed business. It seems like this is becoming a growing part of the business, and we are interested in some additional color.

Unknown Attendee: Regarding our insurance brokerage business, we have focused more on property insurance and expanded our customer acquisition channels to hedge against the ever-changing regulatory environment and uncertainties in the live insurance sector.

Unknown Attendee: In the second quarter, growth retail premiums totaled RMB 1.1 billion, reflecting a year-over-year decrease of 20%, and a quarter over quarter increase of 16%.

Unknown Attendee: The annual decline was primarily due to the impacted life insurance business, which experienced the limited sales of first-year premiums as a result of product changes and the new regulations.

Unknown Attendee: The quarter over quarter growth in premiums is largely attributable to the property insurance business. We are premiums reached the $557 million, marking a 19% increase from the previous quarter and setting a new record.

Doen Paul: Maybe you could speak towards how the guaranteed contracts work in terms of sharing of credit risk and what that means for our return relative to the default rate on the underlying loans. And we also understand the accounting to be atypical for provisions. Could you maybe explain just how the accounting works or provide additional color, and would it be helpful to show progression of lost provisions to write-offs in the quarter similar to how you do for contract receivables in the 10K?

Unknown Attendee: Going forward, we will continue to focus on three key areas in our insurance business. First, strengthening channel partnerships and expanding the scale of property insurance, optimizing our product mix, and continuously increasing the proportion of higher profitability products, such as liability insurance.

Unknown Attendee: Second, in life insurance, we will focus more on high network clients addressing their comprehensive protection needs for retirement and savings.

Unknown Attendee: Thirdly, we will enhance online customer acquisition by utilizing AIGC2 to improve market outreach and boost sales volume.

Doen Paul: And then the second, the final component, which again, maybe I should be separating things. Well, actually, let me stop right there. And then it sounds like, so I just my first time doing a call before it sounds like I can come back and ask that second question. I won't have any follow up on the first because your answers. I won't be able to adequately process on the way Dale does when he's listening to them.

Unknown Attendee: In our consumption and lifestyle service segment, our GMB increased by 40% year over year to R&B 554.6 million. However, due to the high penetration rate of these services among our current customer base, we are observing a moderation in growth rates.

Doen Paul: So let me just stop right there with those first first question there for questions. Yeah, so now can you know, we can't please will try to cover that. Maybe I can suggest that. Yeah, we can have a full on call to go into some of the details with your friend. Yeah, okay, okay. All right, that's fine.

Unknown Attendee: Moving forward, the company will focus on acquiring new customers and refining customer profiles to better understand and address their comprehensive needs.

Unknown Attendee: Moreover, with the aim to enhance shareholder returns and boost the market confidence, we are pleased to announce that the board has approved a new dividend policy. Under this policy, the board plans to declare dividends among two no less than 10% of the company's anticipated net income after tax for each half year, starting from the first half of this year. The cash dividend for the first half of 2024 set at US$0.2 per American debt policy share is expected to be paid on or about October 15, 2024 to holders of the company's ordinary shares and ADS of records as of the close of business on September 30 of 2024, Hong Kong time and New York time respectively.

Doen Paul: And then and let me see you then whether whether the you have the same recommendation for this second question, then, which is. It's related to the parent controlling shareholder structure, which, which I guess we can do or Dale in particular, but we have continued to be confusing for us. And I know we have asked about it before, but just wondering, is there any further color you can provide regarding credit ease and how the relationship works with Ryan, Yirend, which, again, I've been involved in that question before.

Doen Paul: And so I know you addressed it. And then he mentioned this before that he knows there's a large transaction in 2019, but and this is the maybe the new part that can be addressed and nothing has happened since. But are you expecting any related party crime draft transactions coming up here, if you're able to speak to that. And thank you. Not as substantial as like the one you mentioned several years ago, not even close. Yeah. Okay. All right.

Doen Paul: Well, that's all of my our questions or Dale's more specifically. And again, most importantly, thank you for that tour that you guys gave me while I was in China and, you know, answering questions at that time and all your efforts that you've done with both my self and Dale to help understand the company. But again, we are currently very bullish and excited about everything you guys have accomplished so far. Thank you.

Unknown Attendee: We would like to express our gratitude to our shareholders and investors for their ongoing support.

Doen Paul: You are more than welcome to come back to see us. And so, yeah, we'll follow up call to cover all the details. And again, Dale's a technical guy. That stuff confuses me too. I can't follow him. Thank you.

Unknown Attendee: This concludes. Okay. Go ahead, please. Okay. Thank you for always the upcoming one. Hope you were coming again later. Okay. Thank you.

Unknown Attendee: Finally, we have a management change to announce.

Unknown Attendee: And then this concludes our question and answer session and concludes the year in digital conference call. If you have any further questions, please contact the investor relations team at your end digital. Thank you for attending today's presentation. You may now disconnect. Thank you all. Thank you. Bye.

Keyao He: First, let me introduce our newly appointed CFO, Mr. Yuning Feng. Yuning possesses over a decade of experience in venture capital investment, investment banking and financial control. Before joining us, he was a partner at C Innovation Capital, where he led investments in FinTech, enterprise solutions, and AI sector. Part of that, Yuning was also served as an investment banker at China Ransung and a financial controller at Goldman Sachs and UBS. We are confident that Yuning's extensive experience and proven track record will enhance our global strategy and AI focus, and we look forward to the positive impact this will bring.

Keyao He: Also, on behalf of the board, I would like to extend our deep gratitude to Na for her significant contributions and outstanding work during the past years.

Na Mei: With that, I will pass it to Na, who will go through the financial performance for this quarter.

Na Mei: As this marks her final earnings call with us, we once again thank her for her leadership and which her continued success.

Na Mei: Thank you, you for all the 10 words and the support.

Na Mei: Hello everyone, on this card, I will only focus on our key financial highlights and the union will draw us for the Q&A section after the preparation marks.

Na Mei: First of all, we are glad to deliver a solid quarter with the health and preferability.

Na Mei: In the second call of this year, our total revenue reach RMB 1.5 billion, 30% increase year-over-year.

Na Mei: In the financial service segment, total loan facility, CO2 gross styling, which RMB 12.9 billion are 59% year-over-year.

Na Mei: This is the meeting drawn by the growing number of our new powers and the strong demand of our smaller growing low products.

Na Mei: When we move from financial service business, increase to 46% year-over-year to RMB 851 million.

Na Mei: The momentum remains strong throughout the year.

Na Mei: In the insurance sector, of course, RMB 1.5 billion, a decrease of 20% year-over-year, but increase of 15% compared with the private culture. The year-on-year decrease was driving by a substantial drop in our land insurance sales following local regular change.

Na Mei: During the same period last year, sales of life insurance products with a cap 3.5% interest rate burdened before being withdrawn from the China market due to the new regulation.

Na Mei: Therefore, the primary the second powder of last year was 17 high, making sharp contrast to the decrease of the second powder this year.

Na Mei: Meanwhile, the collected growth in our total Grammy was mainly drawn by the expansion of our property insurance business.

Na Mei: Consequently, the part of our property insurance in our overall primary needs increase, translating into a lower average when you take a rate, due to the lower commission-free rate, compared with the life insurance product.

Na Mei: In the second powder of this year, revenue for our insurance settlement reached RMB 91.5 billion, down 73% year-over-year.

Na Mei: Going forward, we have had to count your growth in our property insurance business in the first-go-future, and gradually target our life insurance products along with the market trend.

Na Mei: In the consumption of last year's segment, the total GMV for this culture reached RMB 455 million, an increase of 40% year-over-year by the decrease of 11% culture over-culture.

Na Mei: As mentioned by you, as the penetration rate of theories and products in this segment grows into a substantial level, with past growth rate of this segment will continue to moderate.

Na Mei: On the expense side, sales and marketing pens increased 21% year-over-year to R&D 218.5 This growth was made in fuel by the first pension of our financial segment and the enhanced marketing efforts focused on revenue and high-quality customers as it will continue to redefine our customer base.

Na Mei: Research and development increased to 69% year-over-year to R&D 156.

Na Mei: It was made due to our ongoing wisdom in AI enhancements and the technology of the enhancements.

Na Mei: Original and service costs increased to 29% year-over-year to R&D 247.5.

Na Mei: This is finally introduced to the deep-linked short-business wallet, especially the sharp decrease in the first permeah for our life insurance products, which light will low-channel base and relevant settlement costs.

Na Mei: Our G&A cost increased to 8% year-over-year to R&D 168.7 million, the main largely stable.

Na Mei: The launch for control assets and the receivable to R&D 123 million for this culture, a R&D and 52% year-over-year increase, and 20% culturally growth.

Na Mei: The increase was made in July by the girls in total loan volume facility.

Na Mei: My order, for very long-for-tongued reliability in this culture increased to R&D 278.9 million for a R&D 2.0 million in the same period of last year.

Na Mei: This is due to our rapid red apple in loan volume facility by our risk-taking model, which leads to a significant up-front perverian and a chiral accounting policy.

Na Mei: However, over time, this perverian will appear to be transferred to G&A 3.0.

Na Mei: Actually, in the second quarter of this year, the revenue from G&A 3.0, which the R&D 38.9 million, more than 4.10 of died in the same period of last year.

Na Mei: Now, on the bottom line, our night income decreased 22% year-over-year to R&D 400-time million in this culture due to three reasons.

Na Mei: Firstly, our probability is the insurance business declined as mentioned above.

Na Mei: Secondly, market stance increased due to our ongoing wisdom in trying to new high-quality powers for our financial service business.

Na Mei: Thirdly, substantial upfront perverian has been accrued as we red up our loan volume under the risk-taking model.

Na Mei: Currently, our profit margin reached the 23.4% still high in level in the industry.

Na Mei: Regarding the tax flow, the general probability is $300.59 million cash from our operations is this culture, remaining housing and the strong.

Na Mei: On the balance sheet side, our balance sheet remains strong with R&D 5.5 billion in cash and the cash equivalent, as of the end of this culture, and where it's point that worth by worth to your house or shareholder returns.

Na Mei: I see new checks introduced.

Na Mei: We are pleased to announce a family dividend plan with no less than 10% of our after-test income for the prior six months is attributed to our shareholder.

Na Mei: A debt dividend of $0.02 US dollars American deposits share is depended to be paid on about October 6, 2024. The holders of the company's out-and-share and the ADS of records as of close business on September 13, 2024.

Na Mei: Moreover, we are still doing share buybacks in the concurs of this year to allocate $4 million US dollars to your purchase shelves in the monthly market.

Na Mei: We are total dependent for the shareholder purchase per coin to $13.5 million US dollars by June 13, 2024.

Na Mei: Lastly, our business outlook is our seismic and car business and marketing condition.

Na Mei: We stand our venue for the third culture of 2024 to stand be to the 1.4 billion to the 1.5 billion with the housing and power of a margin.

Na Mei: This represent our car and the pretty minute of seismic, which may be subject to change and uncertainty.

Na Mei: That's concurs our remarks.

Unknown Attendee: Operating now, we are open for questions.

Unknown Attendee: Thank you.

Unknown Attendee: We will now begin the question and answer session.

Unknown Attendee: To ask a question, you may press star than one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys.

Unknown Attendee: If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

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

Ethan Yu: The first question comes from Ethan Yu with first trust group Inc.

Ethan Yu: Please go ahead.

Ethan Yu: Hi, good evening.

Ethan Yu: Thanks for taking my question.

Ethan Yu: I can write on under your solid product.

Ethan Yu: My first question is about your AI development.

Ethan Yu: As distilled in your ESC report, the company has developed a range of AI systems regarding your AI strategy.

Ethan Yu: Have they been any notable developments in AI applications or research?

Ethan Yu: Can you share more details about AMA's specific investment in AI sector?

Ethan Yu: And also, have there any been significant rituals in our AI project commercialization?

Unknown Attendee: Excuse me, Ethan.

Unknown Attendee: I'm sorry.

Unknown Attendee: You're not coming through clearly.

Unknown Attendee: Is it possible to move the microphone closer to you and repeat, please?

Unknown Attendee: I got the majority of the question and it's about AI development, investment, commercialization, right?

Unknown Attendee: Yes?

Unknown Attendee: Okay, he accidentally disconnected. Just a moment, he must have pressed something accidentally.

Unknown Attendee: So, would you like to go to the next question and have him come back?

Unknown Attendee: Okay, follow you.

Unknown Attendee: Would you like me to have the next questioner ask and then when?

Unknown Attendee: Yes, I think yes.

Unknown Attendee: Let's go to the next question.

Unknown Attendee: Thank you.

Bruce Orin: Okay, the next question is from Bruce Orin with Black Lab Fund.

Bruce Orin: Please go ahead.

Bruce Orin: Yes, hello.

Bruce Orin: I'd like to express appreciation to the board for the new dividend.

Bruce Orin: I think that's a good move.

Bruce Orin: I'd also like to congratulate and thank Mrs. Name for helping to build an extraordinary company under circumstances that were often difficult.

Bruce Orin: Thank you.

Bruce Orin: I have two questions.

Na Mei: The first is could you add some insight into the large second quarter increase in Netcash used in investing activities and Netcash used in financing, and my second question is, where is most of the international business growth?

Na Mei: Thank you.

Na Mei: Can Na please cover them first?

Na Mei: Yes, my name is Yimai.

Na Mei: Before I talk about our operating business, we can ask a nice income opportunity to ask.

Na Mei: I think my answer is for the purpose of our financial service.

Na Mei: The management is from our financial reasoning, opportunity to pick likely our company is impacted.

Unknown Attendee: Going on, poison, yokch.

Unknown Attendee: I cannot hear you very clearly now.

Unknown Attendee: Now it's better?

Unknown Attendee: I'm close to the phone now.

Unknown Attendee: Yes, it's better now.

Unknown Attendee: Yes, please repeat.

Unknown Attendee: Thank you.

Unknown Attendee: Please repeat.

Unknown Attendee: Thank you.

Unknown Attendee: Okay, I want to ask items and also our international business market.

Na Mei: I'm going to explain our investment catch flow, the reason why we increase the so much in the space culture.

Na Mei: As my mentioned, as you remember that last year, we purchased a new financial guarantee company, Chongqing-Tingtong, to our financial service segment purpose.

Na Mei: For this year, the management is still going on to improve our financial license to purchase for our financial service business, like the M.C.S company and the micro-small lending companies and other financial guarantee companies for this particular purpose.

Na Mei: So for this financial license company, before the formal operation, the repair process process, based on the communications status, we should replace the investment amount to our partners to lock the acquisition target.

Na Mei: So you can see our investment catch flow is really catch out.

Na Mei: That's most of our investment payment to our potential financial service target.

Na Mei: I hope my question is answer.

Na Mei: My question, and I think it's a good question.

Na Mei: Yes, do you see the cash used plateauing or continuing to grow greatly?

Na Mei: Yes, I think you can see for the catch from the operating will keep the housing and the stable catch flow and also we have used the catch to add a small opportunity, no matter the internal financial license or the international overseas business development also in our AI strategy.

Na Mei: We also have many catch expectations, but in our forecast, we still have the confidence that our catch and catch by equivalent balance to ways that gave us strong space for us and the next to caught up.

Na Mei: Thank you.

Na Mei: Once again, our internal business covers the Philippines and Mexico and we're also looking to expand to certain other markets in Southeast Asia and other parts of the world.

Na Mei: Thank you.

Unknown Attendee: Again, if you have a question, please press star, then one on a touch-tone phone.

Unknown Attendee: It is the first, yeah, gentle back.

Unknown Attendee: Yes, we have him now.

Unknown Attendee: Okay, we cover the AI investment implementation part.

Unknown Attendee: Yes.

Unknown Attendee: Yeah, yeah.

Ethan Yu: Hi, Ethan again.

Ethan Yu: Can you hear me now?

Ethan Yu: Yes, I can hear you very clearly.

Ning Tang: Actually, as I reported the beginning, we use AI extensively in our operations.

Ning Tang: And we also try and leverage the technology capabilities developed internally for potential like external opportunities.

Ning Tang: Like, you know, we have intact partners, financial institutions that are interested in our solutions.

Ning Tang: And, yeah, I hope we'll see some results later this year or, yeah, first half next year.

Ning Tang: At the same time, we try and build a strategic investment and partnership infrastructure like ecosystem.

Ning Tang: And so we've made a couple of small, but in my view, hopefully, yeah, very promising investment in the AI space.

Ning Tang: But their contributions are very tiny.

Ning Tang: And as I, yeah, going back to our like the AI, like the use cases internally, you know, for example, like, yeah, we use AI in customer like acquisition, customer service, like we use robots, like, yeah, and the large language models, yeah, for like incoming outbounding costs, like say, when we detect customer like emotions, yeah, change, yeah, it's time and to switch to like human, like, yeah, operator will do that. And also, yeah, the machine can interact with, yeah, customer up to the right point to switch to the human so on.

Ning Tang: And of course, we use like voice recognition, like technology.

Ning Tang: And also, I gave the example, like, yeah, we are a large language models, yeah, used in the Philippines, right?

Ning Tang: I can do like a great, like a visual recognition algorithm, like because in the Philippines, like IDs, personal identification, like a paperwork is really paper.

Ning Tang: So it's not very digital and it takes quite some skills to detect risk.

Ning Tang: So AI plays a key role there and so on.

Ning Tang: So, yeah, basically, yeah, we use AI extensively in our own operations and some like, yeah, technology is really welcomed by outside, like partners, prospect, like buyers, yeah.

Ning Tang: So customers, so we'll try to monetize these technologies as well.

Ethan Yu: Okay, thank you.

Ethan Yu: My second question is, there is a continued rise in your R&D culture.

Ning Tang: Could you share a more color about how this cost has been used?

Ning Tang: Yeah, so for our AI, large language model development, we take open source model combined with our own data and business algorithm to develop our proprietary models, and we purchase hardware and develop software so on, and so in the second quarter, I believe, yeah, it was about 56 million R&B, yeah, so I think this is a money wild span and yeah, so I think our investment in AI has been prudent, but yeah, strategic for the future.

Ning Tang: Thank you, Mr. Tang.

Ning Tang: I have another question about your, can I ask a more more question about your overseas business?

Ning Tang: Sure.

Ning Tang: Yeah, can I know what is the total loan volume?

Ning Tang: Okay, I selected overseas in second quarter, second quarter, I'm impressed with the growth rate achieved in Philippine and also you have mentioned that you have made another program in Mexico, and what is the driving rate achieved in Philippine?

Ning Tang: You have to say it again, sorry, the last part.

Ning Tang: Yeah, what is the driving these growth, and what's your outlook for the revenue generated from overseas business and profit in, let's say, second half, 24 or the coming 2025?

Ning Tang: I see.

Ning Tang: Well, yeah, the growth rate has been phenomenal, largely because the base is too small, yeah, so we really hope to grow the base and so yeah, the second quarter, like a loan volume, was R&B 63 million, and so yeah, and we expect to do like an over 100 million in this quarter, we hope to maintain, yeah, relatively high growth rate, like yeah, for the foreseeable future, just because the base is small and also you ask about the growth driver, I mean the citizens and some other countries in South Asia and also in Latin America, you know, they are large countries, yeah, with population of over like 100 million, and also the target customer base is very, yeah, which we like very much, and so they have really strong demand for like a convenient credit, yeah, like but the market certainly lacks such, yeah, opportunities, yeah, it means, so we are there to, yeah, leverage the capabilities we've developed in mainland China, and yeah, so I think this is a very big opportunity, frankly speaking, for us to do like a credit tax outside of mainland China in these like large population, young markets, like where digital finance is still in very early days and the booming, yeah.

Ning Tang: Okay, understood.

Ning Tang: May I know the current customer acquisition cost for these countries, especially in Philippines?

Ning Tang: Now, you have this number?

Ning Tang: For our Philippines business, due to the acquisition cost is based on our new customer acquisition strategy.

Ning Tang: And based on the current data in this culture, about one person is around to five or ten dollars when you need a person.

Ning Tang: But I think in the second half year of this year, as mentioned above, we hope to look for our development growth, our Philippines business and other also business.

Ning Tang: So in the second half of year, for our business development, we are providing our new customer acquisition.

Ning Tang: So, we stand to the acquisition rate of one person will be a bit to increase the second third and the first culture.

Ning Tang: But in this culture, it's about five or two thousand dollars per person.

Ning Tang: Yeah.

Ning Tang: Okay, okay, thank you again.

Unknown Attendee: Have a great evening, yeah.

Unknown Attendee: Thank you.

Doen Paul: The next question comes from Doen Paul by Doen Paul Andy.

Doen Paul: Please go ahead.

Doen Paul: Yes, can you hear me?

Doen Paul: I'm going to switch off speaker like you recommended.

Doen Paul: Yes, thank you so much.

Doen Paul: This is Doen Paul here, private investor.

Doen Paul: Myself and my friend, Dale Tiongson, who's very sorry you can't be here, have been following and invested in the company for a couple quarters now long.

Doen Paul: And we want to thank you all for this strong result.

Doen Paul: We'd like to hear and also mention that we'd like to hear from any people listening to the call who are interested in sharing bi-directional insights.

Doen Paul: So please reach out to us the email or social social media, which is easily found online.

Doen Paul: We have two questions.

Doen Paul: The first is related to the guaranteed business.

Doen Paul: And I will say that these questions actually that Dale is the one who's most talented in understanding and insights on the business.

Doen Paul: So I won't be able to ask any further follow-up, but I wanted to get them out there for his sake.

Doen Paul: The first is related to the guaranteed business.

Doen Paul: It seems like this is becoming a growing part of the business, and we are interested in some additional color.

Doen Paul: Maybe you could speak towards how the guaranteed contracts work in terms of sharing of credit risk and what that means for our return relative to the default rate on the underlying loans.

Doen Paul: And we also understand the accounting to be atypical for provisions.

Doen Paul: Could you maybe explain just how the accounting works or provide additional color, and would it be helpful to show progression of lost provisions to write-offs in the quarter similar to how you do for contract receivables in the 10K?

Doen Paul: And then the second, the final component, which again, maybe I should be separating things.

Doen Paul: Well, actually, let me stop right there.

Doen Paul: And then it sounds like, so I just my first time doing a call before it sounds like I can come back and ask that second question.

Doen Paul: I won't have any follow up on the first because your answers.

Doen Paul: I won't be able to adequately process on the way Dale does when he's listening to them.

Doen Paul: So let me just stop right there with those first first question there for questions.

Unknown Attendee: Yeah, so now can you know, we can't please will try to cover that.

Unknown Attendee: Maybe I can suggest that.

Unknown Attendee: Yeah, we can have a full on call to go into some of the details with your friend.

Unknown Attendee: Yeah, okay, okay.

Unknown Attendee: All right, that's fine.

Doen Paul: And then and let me see you then whether whether the you have the same recommendation for this second question, then, which is.

Doen Paul: It's related to the parent controlling shareholder structure, which, which I guess we can do or Dale in particular, but we have continued to be confusing for us.

Doen Paul: And I know we have asked about it before, but just wondering, is there any further color you can provide regarding credit ease and how the relationship works with Ryan, Yirend, which, again, I've been involved in that question before.

Doen Paul: And so I know you addressed it.

Doen Paul: And then he mentioned this before that he knows there's a large transaction in 2019, but and this is the maybe the new part that can be addressed and nothing has happened since.

Doen Paul: But are you expecting any related party crime draft transactions coming up here, if you're able to speak to that.

Unknown Attendee: And thank you.

Unknown Attendee: Not as substantial as like the one you mentioned several years ago, not even close.

Unknown Attendee: Yeah.

Unknown Attendee: Okay.

Unknown Attendee: All right.

Unknown Attendee: Well, that's all of my our questions or Dale's more specifically.

Unknown Attendee: And again, most importantly, thank you for that tour that you guys gave me while I was in China and, you know, answering questions at that time and all your efforts that you've done with both my self and Dale to help understand the company.

Unknown Attendee: But again, we are currently very bullish and excited about everything you guys have accomplished so far.

Unknown Attendee: Thank you.

Unknown Attendee: You are more than welcome to come back to see us.

Unknown Attendee: And so, yeah, we'll follow up call to cover all the details.

Unknown Attendee: And again, Dale's a technical guy.

Unknown Attendee: That stuff confuses me too.

Unknown Attendee: I can't follow him.

Unknown Attendee: Thank you.

Unknown Attendee: This concludes.

Unknown Attendee: Okay.

Unknown Attendee: Go ahead, please.

Unknown Attendee: Okay.

Unknown Attendee: Thank you for always the upcoming one.

Unknown Attendee: Hope you were coming again later.

Unknown Attendee: Okay.

Unknown Attendee: Thank you.

Unknown Attendee: And then this concludes our question and answer session and concludes the year in digital conference call.

Unknown Attendee: If you have any further questions, please contact the investor relations team at your end digital.

Unknown Attendee: Thank you for attending today's presentation.

Unknown Attendee: You may now disconnect.

Unknown Attendee: Thank you all.

Unknown Attendee: Thank you.

Unknown Attendee: Bye.