Q2 2026 Lufax Holding Ltd Earnings Call
Operator 3: Ladies and gentlemen, thank you for standing by and welcome to the Lufax Holding Q2 2026 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will have a question and answer session. Please note this event is being recorded. Now I'd like to hand the conference over to your speaker host today, Ms. Xinyan Liu, the company's Head of Board Office and Capital Markets. Please go ahead, ma'am.
Operator: Ladies and gentlemen, thank you for standing by and welcome to the Lufax Holding Q2 2026 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will have a question and answer session. Please note this event is being recorded. Now I'd like to hand the conference over to your speaker host today, Ms. Xinyan Liu, the company's Head of Board Office and Capital Markets. Please go ahead, ma'am.
Speaker #1: After the management's prepared remarks, we will have a question-and-answer session. Please note this event is being recorded. Now, I'd like to hand the conference over to your speaker host today, Ms. Xin Yan Lu, the company's Head of the Board Office and Capital Markets.
Speaker #1: Please go ahead, ma'am.
Speaker #2: Thank you very much. Hello, everyone, and thank you for joining us on today's call—the company's first investor conference call in almost two years.
Xinyan Liu: Thank you very much. Hello everyone, and thank you for joining us on today's call, the company's first investor conference call in almost two years. Our financial and operating results were released by our Newswire services earlier today and are currently available online. This represents a key milestone as we return to a normal reporting cadence. Today, you will hear from our Director and CEO, Mr. Zhi Xiang, who will provide an update of the recent developments and strategies of our business. He will also provide details on our financial performance and the business operations. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. With that, I am now pleased to turn over the call to Mr. Zhi Xiang, Director and CEO of Lufax. Please.
Xinyan Liu: Thank you very much. Hello everyone, and thank you for joining us on today's call, the company's first investor conference call in almost two years. Our financial and operating results were released by our Newswire services earlier today and are currently available online. This represents a key milestone as we return to a normal reporting cadence. Today, you will hear from our Director and CEO, Mr. Zhi Xiang, who will provide an update of the recent developments and strategies of our business.
Speaker #2: Our financial and operating results were released by our newswire services earlier today and are currently available online. This represents a key milestone as we return to a normal reporting cadence.
Speaker #2: Today, you will hear from our Director and CEO, Mr. Ji Xiang, who will provide an update on the recent developments and strategies of our business.
Speaker #2: He will also provide details on our financial performance and business operations. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call, as we will be making forward-looking statements.
Xinyan Liu: He will also provide details on our financial performance and the business operations. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. With that, I am now pleased to turn over the call to Mr. Zhi Xiang, Director and CEO of Lufax. Please.
Speaker #2: With that, I am now pleased to turn the call over to Mr. Ji Xiang, Director and CEO of Lufax. Please go ahead.
Speaker #3: Thank you, Xin Yan. Thank you all for joining our second quarter 2026 earnings call. Today's release marks the first step towards a normal, predictable reporting cadence for Lufax.
Zhi Xiang: Thank you, Xian. Thank you all for joining our Q2 2026 earnings call. Today's release marks the first step towards a normal, predictable reporting cadence of Lufax. We very much appreciate the continued patience and support of our shareholders and the broader investor community throughout the process. I want to begin with updating you on the progress our management team has made in restoring Lufax financial reporting and strengthening our governance. Since taking on our roles, we completed the re-audit for 2022, 2023 financial statements and completed audits for 2024 and 2025, with all financial reports now published. As a result, we have brought our SEC periodical filings current and regained compliance with New York Stock Exchange continued listing standards.
Xiang Ji: Thank you, Xian. Thank you all for joining our Q2 2026 earnings call. Today's release marks the first step towards a normal, predictable reporting cadence of Lufax. We very much appreciate the continued patience and support of our shareholders and the broader investor community throughout the process. I want to begin with updating you on the progress our management team has made in restoring Lufax financial reporting and strengthening our governance. Since taking on our roles, we completed the re-audit for 2022, 2023 financial statements and completed audits for 2024 and 2025, with all financial reports now published. As a result, we have brought our SEC periodical filings current and regained compliance with New York Stock Exchange continued listing standards.
Speaker #3: We very much appreciate the continued patience and support of our shareholders and the broader investor community throughout the process. I want to begin by updating you on the progress our management team has made in restoring Lufax financial reporting.
Speaker #3: And strengthening our governance. Since taking on our roles, we completed the re-audit of our 2022–2023 financial statements, and completed audits for 2024 and 2025.
Speaker #3: With all financial reports now published, we have brought our SEC periodical filings current and regained compliance with New York Stock Exchange continued listing standards.
Speaker #3: We engaged Deloitte Consulting Shanghai as our new independent internal control consultant to conduct a comprehensive review of our internal controls and to provide rectification recommendations to enhance our internal control system.
Zhi Xiang: We engaged Deloitte Consulting Shanghai as our new independent internal control consultant to conduct a comprehensive review of our internal controls and to provide rectification recommendations to enhance our internal control system. We have implemented corresponding remedial measures to address identifying internal control deficiencies in accordance with Deloitte's recommendations. Beyond engaging Deloitte, we also strengthened our corporate governance through a restructuring of our board and the establishment of the position of Chief Compliance Officer. Independent non-executive directors now make up a majority of our board, and our Chairman, Mr. Ziki Yip, is an independent, non-executive director himself. Going forward, we remain committed to further strengthening our internal controls, including through our new company-wide compliance initiative and the compliance culture we are building across the organization. We are equally committed to delivering long-term value to our shareholders as we return to a normal, predictable reporting cadence.
Xiang Ji: We engaged Deloitte Consulting Shanghai as our new independent internal control consultant to conduct a comprehensive review of our internal controls and to provide rectification recommendations to enhance our internal control system. We have implemented corresponding remedial measures to address identifying internal control deficiencies in accordance with Deloitte's recommendations. Beyond engaging Deloitte, we also strengthened our corporate governance through a restructuring of our board and the establishment of the position of Chief Compliance Officer.
Speaker #3: We have implemented corresponding remedial measures to address identified internal control deficiencies, in accordance with Deloitte's recommendations. Beyond engaging Deloitte, we also strengthened our corporate governance through a restructuring of our board and the establishment of the position of Chief Compliance Officer.
Speaker #3: Independent non-executive directors now make up a majority of our board, and our chairman, Mr. Diki Yip, is an independent non-executive director himself. Going forward, we remain committed to further strengthening our internal controls, including through our new company-wide compliance initiative and the compliance culture we're building across the organization.
Xiang Ji: Independent non-executive directors now make up a majority of our board, and our Chairman, Mr. Ziki Yip, is an independent, non-executive director himself. Going forward, we remain committed to further strengthening our internal controls, including through our new company-wide compliance initiative and the compliance culture we are building across the organization. We are equally committed to delivering long-term value to our shareholders as we return to a normal, predictable reporting cadence.
Speaker #3: We're equally committed to delivering long-term value to our shareholders as we return to a normal, predictable reporting cadence. As you may note, while our ADSs have been trading normally on the New York Stock Exchange, our ordinary shares remain suspended from trading on the Hong Kong Stock Exchange.
Zhi Xiang: As you may note, while our ADSs have been trading normally on the New York Stock Exchange, our ordinary shares remain suspended from trading on the Hong Kong Stock Exchange, a matter we continue to work through with the Hong Kong Stock Exchange. Now moving on, let me share a bit of update on the macro and regulatory environment. Amid numerous external uncertainties and instabilities, China's overall economic growth continued to moderate in Q2, with GDP growing 4.3% year over year. The operating environment for small and micro enterprises stayed difficult, and financing demand remained weak. Tsinghua Business School SME Development Index fell month over month during the quarter and dropped below the 50-point boom-bust line in June. This basically reflects a challenging environment for our core small business customer base. Consumer finance demand was similarly soft.
Xiang Ji: As you may note, while our ADSs have been trading normally on the New York Stock Exchange, our ordinary shares remain suspended from trading on the Hong Kong Stock Exchange, a matter we continue to work through with the Hong Kong Stock Exchange. Now moving on, let me share a bit of update on the macro and regulatory environment. Amid numerous external uncertainties and instabilities, China's overall economic growth continued to moderate in Q2, with GDP growing 4.3% year over year. The operating environment for small and micro enterprises stayed difficult, and financing demand remained weak. Tsinghua Business School SME Development Index fell month over month during the quarter and dropped below the 50-point boom-bust line in June. This basically reflects a challenging environment for our core small business customer base. Consumer finance demand was similarly soft.
Speaker #3: A matter we continue to work through with the Hong Kong Stock Exchange. Now, moving on, let me share a bit of an update on the macro and regulatory environment.
Speaker #3: Amid numerous external uncertainties and instabilities, China's overall economic growth continued to moderate in the second quarter, with GDP growing 4.3% year over year. The operating environment for small and micro enterprises stayed difficult.
Speaker #3: And financing demand remained weak. The CKGSB SME Development Index fell month over month during the quarter and dropped below the 50-point boom-bust line in June.
Speaker #3: This basically reflects a challenging environment for our core small business customer base. Consumer finance demand was similarly soft. Household consumer loan balances were down 1.7% year-over-year, as of the end of June.
Zhi Xiang: Household consumer loan balances were down 1.7% year over year as of the end of June. On the regulatory side, regulators have issued a number of guidelines, policies since 2025, covering a wide range of things such as collection practices, data securities, and personal information protection. Oversight now spans the full value chain from pricing and customer acquisition through risk management, post-loan operations, and data governance. Combined with continued interest rate compression and fee transparency requirements, industry margins are narrowing. The previous business model of offsetting high risks with high fees is no longer sustainable. We see this as near-term pressure on growth and profitability. Over time, however, we believe such tightened regulatory requirements will support healthier and more disciplined competition across the industry and enhance competitive advantage of top players with proper licenses and compliance mechanisms. Now let me turn to our operating strategy.
Xiang Ji: Household consumer loan balances were down 1.7% year over year as of the end of June. On the regulatory side, regulators have issued a number of guidelines, policies since 2025, covering a wide range of things such as collection practices, data securities, and personal information protection. Oversight now spans the full value chain from pricing and customer acquisition through risk management, post-loan operations, and data governance. Combined with continued interest rate compression and fee transparency requirements, industry margins are narrowing.
Speaker #3: On the regulatory side, regulators have issued a number of guidelines and policies since 2025, covering a wider range of areas, such as collection practices, data security, and personal information protection.
Speaker #3: Oversight now spans the full value chain, from pricing and customer acquisition, through risk management, post-loan operations, and data governance. Combined with continued interest rate compression and fee transparency requirements, industry margins are narrowing.
Speaker #3: The previous business model of offsetting high risks with high fees is no longer sustainable. We see this as near-term pressure on growth and profitability.
Xiang Ji: The previous business model of offsetting high risks with high fees is no longer sustainable. We see this as near-term pressure on growth and profitability. Over time, however, we believe such tightened regulatory requirements will support healthier and more disciplined competition across the industry and enhance competitive advantage of top players with proper licenses and compliance mechanisms. Now let me turn to our operating strategy.
Speaker #3: Over time, however, we believe such tightened regulatory requirements will support healthier and more disciplined competition across the industry, and enhance the competitive advantage of top players with proper licenses and compliance mechanisms.
Speaker #3: Now, let me turn to our operating strategy. Given the environment, we are maintaining a prudent approach characterized by a selective customer strategy and AI-powered refined operations.
Zhi Xiang: Given the environment, we are remaining a prudent strategy characterized by selective customer strategy and AI-powered refined operations. Our selective customer strategy is focusing on shifting our customer mix towards lower-risk borrowers. Meanwhile, we aim to improve our performance through AI-powered refined operations. We are now focused on customer segmentations and on deepening our relationship with existing customer base. We launched our Industry Plus product, which deploys differentiated product and operational priorities tailored to local industries and customer across different regions. Basically, the plus is industry, plus region, or even at a county level. We developed customized financing solutions based on the unique operational characteristics and funding needs of different sectors, enabling more precise and customized support to satisfy the financing needs of our SBO, small business owners, customer base. Moreover, we are using AI to further improve our operational efficiency. We introduced AI-powered digital twin.
Xiang Ji: Given the environment, we are remaining a prudent strategy characterized by selective customer strategy and AI-powered refined operations. Our selective customer strategy is focusing on shifting our customer mix towards lower-risk borrowers. Meanwhile, we aim to improve our performance through AI-powered refined operations. We are now focused on customer segmentations and on deepening our relationship with existing customer base. We launched our Industry Plus product, which deploys differentiated product and operational priorities tailored to local industries and customer across different regions.
Speaker #3: Our selective customer strategy is focused on shifting our customer mix toward lower-risk borrowers. Meanwhile, we aim to improve our performance through AI-powered, refined operations.
Speaker #3: We're now focused on customer segmentation and on deepening our relationship with our existing customer base. We launched our Industry Plus product, which deploys differentiated product and operational priorities tailored to local industries and customers across different regions.
Speaker #3: So basically, the plus is industry plus region, or even at a county level. We developed customized financing solutions based on the unique operational characteristics and funding needs of different sectors, enabling more precise and customized support to satisfy the financing needs of our SBO—small business owners—customer base.
Xiang Ji: Basically, the plus is industry, plus region, or even at a county level. We developed customized financing solutions based on the unique operational characteristics and funding needs of different sectors, enabling more precise and customized support to satisfy the financing needs of our SBO, small business owners, customer base. Moreover, we are using AI to further improve our operational efficiency. We introduced AI-powered digital twin.
Speaker #3: Moreover, we're using AI to further improve our operational efficiency. We introduced an AI-powered digital twin, which supports our direct sales team across acquisition, product recommendation, post-loan management, and customer engagement.
Zhi Xiang: This supports our direct sales team across acquisition, product recommendation, post-loan management, and customer engagement, improving both service quality and operational efficiency. We are also improving our customer management model, moving from single product sale towards full lifecycle account management. Leveraging our direct sales team's expertise and interaction with customers, we believe this effort will enable long-term customer value cultivation. Turning now to our operating results. Total new loan sales in Q2 were 51.1 billion RMB. This was up 4.6% year over year and up 4.8% from Q1. This growth was driven by consumer finance, where new loan sales grew 27.6% year over year to 36.9 billion RMB. We continue to gain share in a pretty contracting market.
Xiang Ji: This supports our direct sales team across acquisition, product recommendation, post-loan management, and customer engagement, improving both service quality and operational efficiency. We are also improving our customer management model, moving from single product sale towards full lifecycle account management. Leveraging our direct sales team's expertise and interaction with customers, we believe this effort will enable long-term customer value cultivation. Turning now to our operating results. Total new loan sales in Q2 were 51.1 billion RMB. This was up 4.6% year over year and up 4.8% from Q1. This growth was driven by consumer finance, where new loan sales grew 27.6% year over year to 36.9 billion RMB. We continue to gain share in a pretty contracting market.
Speaker #3: Improving both service quality and operational efficiency. We're also improving our customer management model, moving from single-product sales towards full life-cycle account management. Leveraging our direct sales team's expertise and interaction with customers, we believe this effort will enable long-term customer value cultivation.
Speaker #3: Turning now to our operating results. Total new loan sales in the second quarter were RMB 51.1 billion. This was up 4.6% year over year, and up 4.8% from the first quarter.
Speaker #3: This growth was driven by consumer finance, where new loan sales grew 27.6% year over year to RMB 36.9 billion. We continue to gain share in a pretty contracting market.
Speaker #3: Our total outstanding loan balance was RMB 167.3 billion as of the end of the second quarter, down 13.5% year over year, reflecting continued weak demand in the SBO business segment, combined with our prudent underwriting approach.
Zhi Xiang: Our total outstanding loan balance was 167.3 billion RMB as of the end of Q2, down 13.5% year over year, reflecting continued weak demand in the SBO business segment, combined with our prudent underwriting approach. Turning to asset quality. We prioritize improvement of our intelligent risk control system by further optimizing our risk strategy and upgrading our models. On the post-loan side, we expanded our collection model reforms and broadened the use of AI-powered collection. These efforts delivered an improvement in asset quality on a sequential basis. Our CM3 flow rate was 1.0% in Q2, down from 1.2% in Q1. CM3 flow rate of unsecured loans was 1%, and secure loans was 0.9%, as compared to 1.2% and 1.0%, respectively, in Q1. DPD 30 plus delinquency rate, excluding consumer finance subsidiary, was 5.8%, down from 6.1% sequentially.
Xiang Ji: Our total outstanding loan balance was 167.3 billion RMB as of the end of Q2, down 13.5% year over year, reflecting continued weak demand in the SBO business segment, combined with our prudent underwriting approach. Turning to asset quality. We prioritize improvement of our intelligent risk control system by further optimizing our risk strategy and upgrading our models. On the post-loan side, we expanded our collection model reforms and broadened the use of AI-powered collection. These efforts delivered an improvement in asset quality on a sequential basis. Our CM3 flow rate was 1.0% in Q2, down from 1.2% in Q1. CM3 flow rate of unsecured loans was 1%, and secure loans was 0.9%, as compared to 1.2% and 1.0%, respectively, in Q1. DPD 30 plus delinquency rate, excluding consumer finance subsidiary, was 5.8%, down from 6.1% sequentially.
Speaker #3: Turning to asset quality, we prioritize the improvement of our intelligent risk control system by further optimizing our risk strategy and upgrading our models. On the post-loan side, we expanded our collection model reforms and broadened the use of AI-powered collection.
Speaker #3: This effort delivered an improvement in asset quality on a sequential basis. Our CM3 flow rate was 1.0% in the second quarter, down from 1.2% in the first quarter. The CM3 flow rate of unsecured loans was 1.0%, and secured loans was 0.9%, as compared to 1.2% and 1.0%, respectively, in the first quarter.
Speaker #3: DPD 30 plus delinquency rate, including the consumer finance subsidiary, was 5.8%, down from 6.1% sequentially. As of the end of the second quarter, the NPL ratio for consumer finance loans was 1.3%, as compared to 1.4% as of March 31, 2026.
Zhi Xiang: As of the end of Q2, the NPL ratio for consumer finance loan was 1.3%, as compared to 1.4% as of 31 March 2026. Now let me turn to pricing and funding costs. The average pricing of Rongyi loans, previously known as Puhui loans before the rebranding in 2025, was 20.4% in Q2, slight sequentially and up slightly year over year. The average pricing of consumer finance loan was 19% in Q2. On funding, we continue to optimize our cost. We leveraged our long-term relationships with our banking partners to reduce funding costs under our guaranteed model. Our cost of funding by balance, including consumer finance, was 3.8% in Q2, down around 90 basis points year over year.
Xiang Ji: As of the end of Q2, the NPL ratio for consumer finance loan was 1.3%, as compared to 1.4% as of 31 March 2026. Now let me turn to pricing and funding costs. The average pricing of Rongyi loans, previously known as Puhui loans before the rebranding in 2025, was 20.4% in Q2, slight sequentially and up slightly year over year. The average pricing of consumer finance loan was 19% in Q2. On funding, we continue to optimize our cost. We leveraged our long-term relationships with our banking partners to reduce funding costs under our guaranteed model. Our cost of funding by balance, including consumer finance, was 3.8% in Q2, down around 90 basis points year over year.
Speaker #3: Now let me turn to pricing and funding costs. The average pricing of Rongyi loans, previously known as Puhui loans before the rebranding in 2025, was 20.4% in the second quarter, flat sequentially and up slightly year over year.
Speaker #3: The average pricing of consumer finance loans was 19% in the second quarter. On funding, we continue to optimize our costs. We leveraged our long-term relationships with our banking partners to reduce funding costs under our guaranteed model.
Speaker #3: Our cost of funding by balance, including consumer finance, was 3.8% in the second quarter, down around 90 basis points year over year. As for consumer finance loans enabled by our consumer finance subsidiary, we continue to access low-cost funding in the interbank market, leveraging our licensed advantage and consistent with the broader downward trend in interest rates.
Zhi Xiang: As for consumer finance loans enabled by our consumer finance subsidiary, we continue to access low-cost funding in the interbank market, leveraging our license advantage and consistent with broader downward trend in the interest rate. All right. Now, let me briefly discuss the key business drivers behind our Q2 results. On the top line, total income declined by 15.5% year over year, driven primarily by decrease in the balance of our Rongyi loans as small business owners demand remained weak. We maintained a prudent underwriting approach in light of the increased risk associated with certain long-tail customers. This was partially offset the continued growth in our consumer finance loan balance, which grew nearly 20% year over year.
Xiang Ji: As for consumer finance loans enabled by our consumer finance subsidiary, we continue to access low-cost funding in the interbank market, leveraging our license advantage and consistent with broader downward trend in the interest rate. All right. Now, let me briefly discuss the key business drivers behind our Q2 results. On the top line, total income declined by 15.5% year over year, driven primarily by decrease in the balance of our Rongyi loans as small business owners demand remained weak. We maintained a prudent underwriting approach in light of the increased risk associated with certain long-tail customers. This was partially offset the continued growth in our consumer finance loan balance, which grew nearly 20% year over year.
Speaker #3: All right. Now, let me briefly discuss the key business drivers behind our second quarter results. Our income declined by 15.5% year-over-year, driven primarily by a decrease in the balance of our Rongyi loans.
Speaker #3: As small business owners’ demand remained weak, we maintained a prudent underwriting approach in light of the increased risk associated with certain long-tail customers.
Speaker #3: This was partially offset, but continued the growth in our consumer finance loan balance, which grew nearly 20% year over year. On the bottom line, while our net loss narrowed sequentially from the same period last year, we recorded a net loss for the quarter, which continued to reflect credit costs that remain elevated relative to our income base.
Zhi Xiang: On the bottom line, while our net loss narrowed subsequentially from the same period last year, the recorded net loss for the quarter continued to reflect credit costs that remain elevated relative to our income base. This is heightened by the challenging macro environment for small business owners and by tightened regulatory requirements that impacted supply of high-priced products. While we believe such tightened regulatory requirements will benefit the development of industry in the long run, in the short term, the reduction in supply to high-risk customer segments adversely impacted their repayment capability and increased our credit costs. Going forward, we remain focused on disciplined execution, strengthening our governance and controls, and on building a sustainable high-quality growth path for Lufax. Again, we very much appreciate your continued support, and this concludes our prepared remarks for today. Operator, we are now ready to take any questions.
Xiang Ji: On the bottom line, while our net loss narrowed subsequentially from the same period last year, the recorded net loss for the quarter continued to reflect credit costs that remain elevated relative to our income base. This is heightened by the challenging macro environment for small business owners and by tightened regulatory requirements that impacted supply of high-priced products. While we believe such tightened regulatory requirements will benefit the development of industry in the long run, in the short term, the reduction in supply to high-risk customer segments adversely impacted their repayment capability and increased our credit costs.
Speaker #3: This is heightened by the challenging macro environment for small business owners and by tightened regulatory requirements that impacted the supply of high-priced products. While we believe such tightened regulatory requirements will benefit the development of the industry in the long run, in the short term, the reduction in supply to high-risk customer segments has adversely impacted their repayment capability.
Speaker #3: ...and increased our credit costs. Going forward, we remain focused on disciplined execution, strengthening our governance and controls, and building a sustainable, high-quality growth path for Lufax.
Xiang Ji: Going forward, we remain focused on disciplined execution, strengthening our governance and controls, and on building a sustainable high-quality growth path for Lufax. Again, we very much appreciate your continued support, and this concludes our prepared remarks for today. Operator, we are now ready to take any questions.
Speaker #3: Again, we very much appreciate your continued support. This concludes our prepared remarks for today. Operator, we are now ready to take any questions.
Speaker #1: We will now begin the question-and-answer session. To ask a question, please press star, then one. If you are using a speakerphone, please pick up your handset before pressing the keys.
Operator 3: We will now begin the question and answer session. To ask a question, please press star then 1. If you are using a speakerphone, please pick up your handset before pressing the keys. If you would like to withdraw your question, please press star then 2. In addition, I would like to remind you to please mute yourself after stating your question. Thank you. The first question today comes from Richard Xu with Morgan Stanley. Please go ahead.
Operator: We will now begin the question and answer session. To ask a question, please press star then 1. If you are using a speakerphone, please pick up your handset before pressing the keys. If you would like to withdraw your question, please press star then 2. In addition, I would like to remind you to please mute yourself after stating your question. Thank you. The first question today comes from Richard Xu with Morgan Stanley. Please go ahead.
Speaker #1: If you would like to withdraw your question, please press star, then two. In addition, I'd like to remind you to please mute yourself after stating your question.
Speaker #1: Thank you. The first question today comes from Richard Hsu with Morgan Stanley. Please go ahead.
Speaker #2: Thank you for taking my question first. Two questions. One on strategy: I just want to see, from the view of the management team, what will be the top two or three priorities over the next two to three years?
Richard Xu: Thank you for taking my question first. Two questions. One on strategy. I just want to see from the view of management team, what will be the top two or three priorities over the next two to three years? Will there be any material changes versus previous strategy? Secondly, is on the loan growth and business mix. New loans return to positive in Q2. Obviously, the consumer finance accounting for a rising share of business. Is this sustainable? There is still a lot of policies trying to obviously influence the growth in this area's pricing. Under the new strategy, what should be the long-term balance between consumer and, I guess, the SME loan portfolio? Thank you very much.
Richard Xu: Thank you for taking my question first. Two questions. One on strategy. I just want to see from the view of management team, what will be the top two or three priorities over the next two to three years? Will there be any material changes versus previous strategy? Secondly, is on the loan growth and business mix. New loans return to positive in Q2. Obviously, the consumer finance accounting for a rising share of business. Is this sustainable? There is still a lot of policies trying to obviously influence the growth in this area's pricing. Under the new strategy, what should be the long-term balance between consumer and, I guess, the SME loan portfolio? Thank you very much.
Speaker #2: Will there be any material changes versus the previous strategy? Secondly, on loan growth and business mix: now, new loans have returned to positive. In the second quarter, consumer finance is obviously accounting for a rising share of the business.
Speaker #2: Is this sustainable? There are still a lot of policies trying to, obviously, influence the growth in this area's pricing. Under the new strategy, what should be the long-term balance between consumer and, I guess, the SME loan portfolio?
Speaker #2: Thank you very much.
Zhi Xiang: Thank you, Richard. Thank you for your questions. The first question is around strategy, right? Over the next two to three years, our top priorities are pretty clear, right? First, growing the mid to low-risk customer base. We want to focus on high-quality customers across three segments. Small business owners, which is really the stronghold of Lufax over the years. Individually-owned businesses or self-employed. That is basically a new customer segment we want to broaden. Salaried employees, right? Through consumer finance, we see some good momentum and want to see that to continue. By increasing the proportion of mid to low-risk customers, build a more diversified product matrix, right? Deepen, refine operations by customer segment, and achieve improvement in risk and profitability. So that is our basically the very much the top-line priority.
Xiang Ji: Thank you, Richard. Thank you for your questions. The first question is around strategy, right? Over the next two to three years, our top priorities are pretty clear, right? First, growing the mid to low-risk customer base. We want to focus on high-quality customers across three segments. Small business owners, which is really the stronghold of Lufax over the years. Individually-owned businesses or self-employed. That is basically a new customer segment we want to broaden. Salaried employees, right? Through consumer finance, we see some good momentum and want to see that to continue. By increasing the proportion of mid to low-risk customers, build a more diversified product matrix, right? Deepen, refine operations by customer segment, and achieve improvement in risk and profitability. So that is our basically the very much the top-line priority.
Speaker #4: Thank you, Richard. Thank you for your questions. So, basically, the first question is around strategy, right? Over the next two to three years, our top priorities are pretty clear, right?
Speaker #4: So first, growing the need for a low-risk customer base. We want to focus on high-quality customers across three segments: small business owners, which has really been the stronghold of Lufax over the years.
Speaker #4: Individually owned businesses, or self-employed—that's basically a new customer segment we want to broaden. And salaried employees, right? So through consumer finance, we see some good momentum.
Speaker #4: I want to see that continue, and increase the proportion of new to low-risk customers, build a more diversified product matrix, right? Deepen refined operations for that customer segment, and achieve improvement in risk and profitability.
Speaker #4: So that's our basically the very much the top line priority. Second priority, with all the pricing compression, and sort of a credit cost going up in the market, we want to continue to optimize cost.
Zhi Xiang: Second priority, with all the pricing compression and sort of a credit cost going up in the market, we want to continue to optimize cost, our cost structures. We are going to comprehensively apply and promote AI applications across the business to optimize customer acquisition, risk, operating costs, and create more rooms for improved profitability while we are lowering the price. Third, strengthening internal controls and compliance, right? Like what Tian said, it has been two years, we have not been able to talk to you, so we want to strengthen internal control and compliance, strictly implement regulatory requirements to achieve a long-term sustainable development. The previous strategy, as is set out in 2024, two years ago in the earnings call, centered around two pillars. Number one, prudent operation, prioritizing asset quality over scale growth. Number two, business diversification, growing consumer finance, expanding our non-SBO consumer base.
Xiang Ji: Second priority, with all the pricing compression and sort of a credit cost going up in the market, we want to continue to optimize cost, our cost structures. We are going to comprehensively apply and promote AI applications across the business to optimize customer acquisition, risk, operating costs, and create more rooms for improved profitability while we are lowering the price. Third, strengthening internal controls and compliance, right? Like what Tian said, it has been two years, we have not been able to talk to you, so we want to strengthen internal control and compliance, strictly implement regulatory requirements to achieve a long-term sustainable development.
Speaker #4: Our cost structures. We are going to comprehensively apply and promote AI applications across the business to optimize customer acquisition, risk, operating cost, and therefore create more room for improved profitability where we're lowering the price.
Speaker #4: Third, strengthening internal controls and compliance, right? It's like we've seen and said, it's been two years. We haven't been able to talk to you.
Speaker #4: So, we want to strengthen internal control and compliance, and strictly implement regulatory requirements to achieve long-term sustainable development. The previous strategy, as set out in 2024, two years ago in the earnings call, centered around two pillars.
Xiang Ji: The previous strategy, as is set out in 2024, two years ago in the earnings call, centered around two pillars. Number one, prudent operation, prioritizing asset quality over scale growth. Number two, business diversification, growing consumer finance, expanding our non-SBO consumer base. Going forward, this is still the sort of the strategy we are basically trying to implement. We will further strengthen our dual engine strategy for small business lending and consumer finance, while also relying on our new selective customer strategy to optimize customer base, drive growth in the business scale, and improve profitability. When it comes to the second question, right? The second question around the consumer finance going up, whether that is sustainable, what is the proportion between the consumer finance business and SME.
Speaker #4: Number one, prudent operation—prioritizing asset quality over scale growth. Number two, business diversification: growing consumer finance and expanding our non-SBO consumer base. Going forward, this is still the sort of strategy we're basically trying to implement.
Zhi Xiang: Going forward, this is still the sort of the strategy we are basically trying to implement. We will further strengthen our dual engine strategy for small business lending and consumer finance, while also relying on our new selective customer strategy to optimize customer base, drive growth in the business scale, and improve profitability. When it comes to the second question, right? The second question around the consumer finance going up, whether that is sustainable, what is the proportion between the consumer finance business and SME. Our strategy is to build two growth engines. One is small business lending, the other is consumer finance, with resources concentrated on the two core consumer segments. As you can see, consumer finance is a new growth engine and will continue to be the driver for growth. We are testing new customer acquisition models as we speak, and product combinations to serve higher quality customers.
Speaker #4: We will further strengthen our engine strategy for small business lending and consumer finance. We will also rely on our new selective customer strategy to optimize our customer base, drive growth in business scale, and improve profitability.
Speaker #4: And when it comes to the second question, right? The second question is around the consumer finance going up—whether that's sustainable, and what's the proportion between the consumer finance business and SME?
Speaker #4: Our strategy is to build two growth engines. One is small business lending. The other is consumer finance, with resources concentrated on the two core consumer segments.
Xiang Ji: Our strategy is to build two growth engines. One is small business lending, the other is consumer finance, with resources concentrated on the two core consumer segments. As you can see, consumer finance is a new growth engine and will continue to be the driver for growth. We are testing new customer acquisition models as we speak, and product combinations to serve higher quality customers.
Speaker #4: And as you can see, consumer finance is a new growth engine, and it will continue to be the driver for growth. We are testing new customer acquisition models as we speak.
Speaker #4: And product combinations to serve higher-quality customers. We believe this growth is sustainable. When it comes to small business lending, we see that as our traditional strength.
Zhi Xiang: And we believe this growth is sustainable. When it comes to small business lending, small business lending, we see that as our traditional strength. Our focus there is to return to growth through improved customer acquisition efficiency and broadened product portfolio and stronger risk management capability. We see small business lending and consumer finance complementary. They have different demand characteristics and risk profiles. So going forward, we will endeavor to continue to optimize our business mix based on market conditions to achieve balanced growth.
Xiang Ji: And we believe this growth is sustainable. When it comes to small business lending, small business lending, we see that as our traditional strength. Our focus there is to return to growth through improved customer acquisition efficiency and broadened product portfolio and stronger risk management capability. We see small business lending and consumer finance complementary. They have different demand characteristics and risk profiles. So going forward, we will endeavor to continue to optimize our business mix based on market conditions to achieve balanced growth.
Speaker #4: Our focus is to return to growth through improved customer acquisition efficiency, a broadened product portfolio, and stronger risk management capability. We see small business lending and consumer finance as complementary.
Speaker #4: They have different demand characteristics and risk profiles. So, going forward, we will endeavor to continue optimizing our business mix, based on market conditions, to achieve balanced growth.
Speaker #1: The next question comes from Emma Hsu with Bank of America. Please, go ahead.
Operator 3: The next question comes from Emma Xu with Bank of America. Please go ahead.
Operator: The next question comes from Emma Xu with Bank of America. Please go ahead.
Emma Xu: Great. Thank you. Thank you for the opportunity to ask the question. So, I have two questions. The first one is about the regulation. So following recent stress amongst the smaller online lending platforms, has management observed any tightening in institutional founding or borrower refinancing conditions, and how will you deal with this? The second one is about the capital return. So given the large free cash balance and improving operating trajectory, what level of capital do you consider necessary to support this business under the full guarantee model? Once sustainable profitability is restored, should investors expect the existing 20% to 40% payout framework to remain the base policy? Under what conditions would you consider additional capital distribution? Thanks.
Emma Xu: Great. Thank you. Thank you for the opportunity to ask the question. So, I have two questions. The first one is about the regulation. So following recent stress amongst the smaller online lending platforms, has management observed any tightening in institutional founding or borrower refinancing conditions, and how will you deal with this? The second one is about the capital return. So given the large free cash balance and improving operating trajectory, what level of capital do you consider necessary to support this business under the full guarantee model? Once sustainable profitability is restored, should investors expect the existing 20% to 40% payout framework to remain the base policy? Under what conditions would you consider additional capital distribution? Thanks.
Speaker #5: Thank you. Thank you for the opportunity to ask the question. So I have two questions. The first one is about the regulations. Following recent stress among smaller online lending platforms, has management observed any tightening in institutional funding or borrower refinancing conditions?
Speaker #5: And how were you dealing with this? And the second one is about capital return. So, given the large free cash balance and improving operating trajectory, what level of capital do you consider necessary to support this business under the full guarantee model?
Speaker #5: Once sustainable profitability is restored, should investors expect the existing 20% to 40% payout framework to remain the base policy? And under what conditions would you consider additional capital distribution?
Speaker #5: Thanks.
Speaker #4: Yeah. Thank you for the question. So basically, first of all, talking about the regulation, as well as the sizable players in the market, we fully welcome the tightened compliance regulations, etc., right?
Zhi Xiang: Yeah. Thank you for the question. So basically, first of all, talking about the regulation. As well, the sizable players in the market, we fully welcome the tightened compliance regulation, et cetera, right? Strengthened compliance across the industry is inevitable trend. Recent policy changes are aimed at comprehensively strengthen compliance requirements, protecting consumer rights, and promoting the healthy and sustainable development of the industry. We will continue to implement adjustment in line with regulatory requirements at our full strength. The tightened regulatory requirements will bring some pressure to our business in the short term, for sure. We will accelerate our selective customer strategy, strengthen cost management, optimize cost structure, and improve capital efficiency, among other measures, to continue optimizing customer acquisition, risk and operating costs. So this will further create room to lower pricing while ensuring stable profitability.
Xiang Ji: Yeah. Thank you for the question. So basically, first of all, talking about the regulation. As well, the sizable players in the market, we fully welcome the tightened compliance regulation, et cetera, right? Strengthened compliance across the industry is inevitable trend. Recent policy changes are aimed at comprehensively strengthen compliance requirements, protecting consumer rights, and promoting the healthy and sustainable development of the industry. We will continue to implement adjustment in line with regulatory requirements at our full strength. The tightened regulatory requirements will bring some pressure to our business in the short term, for sure. We will accelerate our selective customer strategy, strengthen cost management, optimize cost structure, and improve capital efficiency, among other measures, to continue optimizing customer acquisition, risk and operating costs. So this will further create room to lower pricing while ensuring stable profitability.
Speaker #4: Strengthened compliance across the industry is an inevitable trend. Recent policy changes are aimed at comprehensively strengthening compliance requirements, protecting consumer rights, and promoting the healthy and sustainable development of the industry.
Speaker #4: We will continue to implement the adjustment in line with regulatory requirements at our full strength. The tightened regulatory requirements will bring some pressure to our business in the short term, for sure.
Speaker #4: We'll accelerate our selective customer strategy, strengthen cost management, optimize our cost structure, and improve capital efficiency, among other measures. We will continue optimizing customer acquisition, risk, and operating costs.
Speaker #4: This will further create room to lower pricing while ensuring stable profitability. Nevertheless, over the mid-term to long-term, this trend will help the healthy growth of the industry. Compliant leading platforms, such as Lufax, will benefit from further optimization of the industry landscape and gain market share.
Zhi Xiang: Nevertheless, over midterm to long-term, this trend will help healthy growth of the industry. Compliant leading platforms, such as Lufax, will benefit from further optimization of the industry landscape and gain market share. In short-term, we do feel pressure in terms of our business performance. But we are also optimistic around midterm and long-term performance because a more compliant market will benefit players such as us. You also asked a question around capital return, right? Management believes our current cash position is appropriate relative to the scale of our business. It reflects both the capital requirements and the applicable financial regulations, and the need to maintain a buffer to support future growth. Management is focused on executing our strategy. Our top priority is returning to profitability as soon as possible in order to create long-term value for shareholders.
Xiang Ji: Nevertheless, over midterm to long-term, this trend will help healthy growth of the industry. Compliant leading platforms, such as Lufax, will benefit from further optimization of the industry landscape and gain market share. In short-term, we do feel pressure in terms of our business performance. But we are also optimistic around midterm and long-term performance because a more compliant market will benefit players such as us. You also asked a question around capital return, right? Management believes our current cash position is appropriate relative to the scale of our business. It reflects both the capital requirements and the applicable financial regulations, and the need to maintain a buffer to support future growth. Management is focused on executing our strategy. Our top priority is returning to profitability as soon as possible in order to create long-term value for shareholders.
Speaker #4: So, in short, in the short term, we do feel pressure in terms of our business performance. But we're also somewhat optimistic about mid-term and long-term performance.
Speaker #4: Because a more compliant market will benefit players such as us. And you also asked a question around capital return, right? Management believes our current cash position is appropriate relative to the scale of our business.
Speaker #4: It reflects both the capital requirements and the applicable financial regulations, as well as the need to maintain a buffer to support future growth. Now, management is focused on executing our strategy.
Speaker #4: Our top priority is returning to profitability as soon as possible in order to create long-term value for shareholders. Regarding our dividend policy, once we achieve our profitability targets, management will review the dividend policy together with the board.
Zhi Xiang: Our dividend policy, once we achieve our profitability targets, management will review the dividend policy together with the board and to decide whether we should have payout for a month.
Xiang Ji: Our dividend policy, once we achieve our profitability targets, management will review the dividend policy together with the board and to decide whether we should have payout for a month.
Speaker #4: And to decide whether we should have a payout framework.
Speaker #1: The next question comes from Alex Yee with UBS. Please go ahead.
Operator 3: The next question comes from Alex Yi with UBS. Please go ahead.
Operator: The next question comes from Alex Yi with UBS. Please go ahead.
Alex Yi: Hi, many thanks for taking my question. Two questions from me. First one is regarding our unit economics. Now with our transition to the full guarantee model largely complete, can you give us more color about underlying profitability of the new loans, and what is the expected net rate for this new full guarantee business? Second question is on asset quality. We have seen some early indicators, including CM3 and consumer finance NPL ratios improved QoQ in Q2. But some of the lagging indicators still remain elevated. We have also seen there has been some risky events across the smaller platform in the industry since the end of Q2. Could you comment a little bit on the latest asset quality trend? Thank you.
Alex Ye: Hi, many thanks for taking my question. Two questions from me. First one is regarding our unit economics. Now with our transition to the full guarantee model largely complete, can you give us more color about underlying profitability of the new loans, and what is the expected net rate for this new full guarantee business? Second question is on asset quality. We have seen some early indicators, including CM3 and consumer finance NPL ratios improved QoQ in Q2. But some of the lagging indicators still remain elevated. We have also seen there has been some risky events across the smaller platform in the industry since the end of Q2. Could you comment a little bit on the latest asset quality trend? Thank you.
Speaker #6: Hi, management. Thanks for taking my question. Two questions from me. First one is regarding our unit economics. So now, with our transition to the full guarantee model largely complete, can you give us more color about the underlying profitability of the new loans?
Speaker #6: And what is the expected net rate for this new full guarantee business? Second question is on asset quality. We have seen some early indicators, including C2M3 and consumer finance NPL ratios, improved quarter-on-quarter in Q2.
Speaker #6: But some of the lagging indicators still remain elevated. So we have also seen that there have been some risk events across the smaller platforms in the industry since the end of Q2.
Speaker #6: Could you comment a little bit on the latest asset quality trend? Thank you.
Speaker #4: Sure. Sure. This is the first time that I talk to our shareholders, investors, and analysts. However, the new strategy has been implemented, I would say, since the very beginning of the year, right?
Zhi Xiang: Sure. This is the first time that I talk to our shareholders, investors, analysts. However, the new strategy has been implementing, I would say, since the earlier beginning of the year. With the new strategy, we have seen improvements in the asset quality of new Rongyi loans enabled in 2026. We believe our overall profitability will continue to improve as we continue to implement the new strategy. What I can see for this call is, the new loans we have issued over the H1 of the year have improved profitability over the asset we have accumulated in the year of 2025. That leads us to asset quality. Since the start of this year, we have upgraded our risk control measures. We actually take a very prudent approach. We also refined our risk strategy and enhanced our risk models.
Xiang Ji: Sure. This is the first time that I talk to our shareholders, investors, analysts. However, the new strategy has been implementing, I would say, since the earlier beginning of the year. With the new strategy, we have seen improvements in the asset quality of new Rongyi loans enabled in 2026. We believe our overall profitability will continue to improve as we continue to implement the new strategy. What I can see for this call is, the new loans we have issued over the H1 of the year have improved profitability over the asset we have accumulated in the year of 2025. That leads us to asset quality. Since the start of this year, we have upgraded our risk control measures. We actually take a very prudent approach. We also refined our risk strategy and enhanced our risk models.
Speaker #4: And with the new strategy, we have seen improvements in the asset quality of new loans enabled in 2026. We believe our overall profitability will continue to improve as we continue to implement the new strategy, right?
Speaker #4: So what I can see for this call is that the new loans we have issued over the first half of the year have improved profitability over the sort of asset we have accumulated in the year of 2025.
Speaker #4: Right? And that leads us to asset quality. Since the start of this year, we have upgraded our risk control measures and actually taken a very prudent approach.
Speaker #4: Right? We also refined our risk strategy and enhanced our risk models. On the post-loan side, we have broadly rolled out collection model reforms and expanded the use of AI-powered collection.
Zhi Xiang: On the post loan side, we have broadly rolled out collection models reforms and expanded the use of AI-powered collection. All these initiatives have delivered initial positive results, with sequential improvement in asset quality in Q2. Asset quality has been gradually worsening since the H2 of last year. However, as you can see, in Q2, our CM3 flow rate declined notably compared to Q1. The management is expecting the trend to continue over the H2 of the year. Thank you.
Xiang Ji: On the post loan side, we have broadly rolled out collection models reforms and expanded the use of AI-powered collection. All these initiatives have delivered initial positive results, with sequential improvement in asset quality in Q2. Asset quality has been gradually worsening since the H2 of last year. However, as you can see, in Q2, our CM3 flow rate declined notably compared to Q1. The management is expecting the trend to continue over the H2 of the year. Thank you.
Speaker #4: Right? And all these initiatives have delivered initial positive results. We saw sequential improvement in asset quality in the second quarter. Asset quality had been gradually worsening since the second half of last year.
Speaker #4: However, as you can see, in the second quarter, our CM3 flow rate declined notably compared to the first quarter. The management is expecting this trend to continue over the second half of the year.
Speaker #4: Thank you.
Speaker #1: The next question comes from Yufan with CICC. Please go ahead.
Operator 3: The next question comes from Yu Fan with CICC. Please go ahead.
Operator: The next question comes from Yu Fan with CICC. Please go ahead.
Speaker #3: Well, okay. Thanks, management, for taking my questions. This is Yoyo Fan from CICC. I also have two questions. The first one is about customer compensation.
Yu Fan: Okay. Thanks management for taking my questions. This is Yu Fan from CICC. I also have two questions, Hale. The first one is about customer competition. We noticed that the secured loans of Rongyi price around 17%. Do the credit characteristics of these customers qualify them for bank loans? For the relatively high-quality customers, how does the company compete with banks or other lower price channels? The second question is about Hong Kong trading. I just wonder how is the processing of the resumption of our trading in Lufax Hong Kong shares, and could you share, is there any better visibility on the trading resumption timeline? These are my two questions. Thank you.
Yu Fan: Okay. Thanks management for taking my questions. This is Yu Fan from CICC. I also have two questions, Hale. The first one is about customer competition. We noticed that the secured loans of Rongyi price around 17%. Do the credit characteristics of these customers qualify them for bank loans? For the relatively high-quality customers, how does the company compete with banks or other lower price channels? The second question is about Hong Kong trading. I just wonder how is the processing of the resumption of our trading in Lufax Hong Kong shares, and could you share, is there any better visibility on the trading resumption timeline? These are my two questions. Thank you.
Speaker #3: We noticed that the secured loans of Longi are priced around 17%. Do the credit characteristics of these customers qualify them for bank loans? And for the relatively high-quality customers, how does the company compete with banks or other lower-priced channels?
Speaker #3: And the second question is about Hong Kong trading. I just wonder, how is the process of the resumption of our trading in Lufax Hong Kong shares?
Speaker #3: And could you share if there is any better visibility on the trading reception timelines? Those are my two questions. Thank you.
Speaker #4: Yep. Thank you. So, first of all, we don't see ourselves competing head-to-head with most of the banks, right? Our Longi product targets small business owners and individually owned businesses.
Zhi Xiang: Yeah. Thank you. First of all, we do not see ourselves competing head-to-head with most of the banks. Our Rongyi product targets small business owners and individually owned businesses, a customer base that is different from typical bank customers. When I say different, many of these customers either cannot access bank loans or cannot obtain sufficient loan amounts from the bank. Basically, Rongyi fills this supply gap and complements banks rather than competing head-to-head. Rongyi and bank products are priced differently, which allows the two to complement each other well. Our products' differentiated advantages include higher loan amounts, a more convenient process, and typically take less than a day, and flexible repayment terms, which better meets customer supplementary and emergency financing needs. On refined operation, we launched our Industry Plus initiative, which is tailored to the distinct operating characteristics and financing needs of different regions and industries.
Xiang Ji: Yeah. Thank you. First of all, we do not see ourselves competing head-to-head with most of the banks. Our Rongyi product targets small business owners and individually owned businesses, a customer base that is different from typical bank customers. When I say different, many of these customers either cannot access bank loans or cannot obtain sufficient loan amounts from the bank. Basically, Rongyi fills this supply gap and complements banks rather than competing head-to-head. Rongyi and bank products are priced differently, which allows the two to complement each other well.
Speaker #4: A customer base that's different from typical bank customers. Why do I say different? Many of these customers either cannot access bank loans or cannot obtain sufficient loan amounts from the bank.
Speaker #4: So basically,
Speaker #1: Only fill this supply gap and complement banks, rather than competing head to head. In addition, bank products are priced differently, which allows the two to complement each other well.
Speaker #1: All products are differentiated by advantages including higher loan amounts, a more convenient process that typically takes less than a day, and flexible repayment terms, which better meet customers’ supplementary and emergency financing needs for unrefined operations.
Xiang Ji: Our products' differentiated advantages include higher loan amounts, a more convenient process, and typically take less than a day, and flexible repayment terms, which better meets customer supplementary and emergency financing needs. On refined operation, we launched our Industry Plus initiative, which is tailored to the distinct operating characteristics and financing needs of different regions and industries.
Speaker #1: We launched our Industry Plus initiative , which , you know , which is tailored to the distinct operating characteristics and financing needs of different regions and industries .
Speaker #1: So , for example , I've been to provinces such as Shandong , such as Guangdong , etc. , at a county level , they typically have , you know , industries which are basically serving the entire entire nation .
Zhi Xiang: For example, I have been to provinces such as Shandong, such as Guangdong, et cetera. At a county level, they typically have industries which are basically serving the entire nation. For example, cooking wares in a particular county in Shandong and lighting facilities in a particular county in Guangdong. We are basically leveraging our direct sales to penetrate to county level, and this allows us to design dedicated product solutions and more precisely address small business financing needs across different sectors. You also asked a question around Hong Kong trading resumption. We have now completed the restatement of our 2022, 2023 financial statements, the audits of 2024 and 2025. With all reports now published and released, we have now also completed the internal control review and upgrades with the help of external professionals.
Xiang Ji: For example, I have been to provinces such as Shandong, such as Guangdong, et cetera. At a county level, they typically have industries which are basically serving the entire nation. For example, cooking wares in a particular county in Shandong and lighting facilities in a particular county in Guangdong. We are basically leveraging our direct sales to penetrate to county level, and this allows us to design dedicated product solutions and more precisely address small business financing needs across different sectors. You also asked a question around Hong Kong trading resumption. We have now completed the restatement of our 2022, 2023 financial statements, the audits of 2024 and 2025. With all reports now published and released, we have now also completed the internal control review and upgrades with the help of external professionals.
Speaker #1: So for example , cooking warehouse in a particular county in Shandong . And lighting , lighting sort of facilities in , in a particular county in Guangdong , right .
Speaker #1: And we are basically leveraging our direct sales to penetrate to the county level. This allows us to design dedicated product solutions that more precisely address small business financing needs across different sectors, right? And you also asked a question around the Hong Kong trading assumption.
Speaker #1: We have now completed the restatement of our 2020, 2022, and 2023 financial statements, as well as the audit of 2024 and 2025. Right. And with all reports now published and released, we have also completed the internal control review and upgrades with the help of external professionals. The company is still responding to outstanding questions and comments raised by the Hong Kong Stock Exchange regarding the relevant fundings. We will keep investors updated on any developments in a timely manner and will make appropriate adjustments as necessary.
Zhi Xiang: The company is still responding to outstanding questions and comments raised by the Hong Kong Stock Exchange regarding the relevant findings. We will keep investors updated on any developments in a timely manner and will make appropriate announcements as necessary.
Xiang Ji: The company is still responding to outstanding questions and comments raised by the Hong Kong Stock Exchange regarding the relevant findings. We will keep investors updated on any developments in a timely manner and will make appropriate announcements as necessary.
Speaker #2: Thank you. That concludes our question and answer session for today. I will now turn the call back over to our management for closing remarks.
Operator 3: Thank you. That concludes our question and answer session for today. I will now turn the call back over to our management for closing remarks.
Operator: Thank you. That concludes our question and answer session for today. I will now turn the call back over to our management for closing remarks.
Speaker #3: Thank you . Operator This concludes today's call . Thank you for joining the conference call . If you have more questions , please do not hesitate to contact Lufax .
Xinyan Liu: Thank you, operator. This concludes today's call. Thank you for joining the conference call. If you have more questions, please do not hesitate to contact Lufax IR team. Thanks again.
Xinyan Liu: Thank you, operator. This concludes today's call. Thank you for joining the conference call. If you have more questions, please do not hesitate to contact Lufax IR team. Thanks again.
Speaker #3: IR team Thanks again
Operator 3: Thank you. The conference is now concluded. You may now disconnect.
Operator: Thank you. The conference is now concluded. You may now disconnect.
