Jiayin Group Inc.

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Jiayin Group's first quarter 2026 earnings conference call. Currently, all participants are in listen-only mode. Later, we will conduct a question and answer session and instructions will follow up on today's call. If you have any objections, you may disconnect at this time. I will now turn the call over to Mr. Sam Lee from Investor Relations of Jiayin Group. Please proceed.

Thank you, operator. Hello, everyone. Thank you all for joining us on today's conference call to discuss Jiayin Group's financial results for the first quarter of 2020. We released our earnings results earlier today. The press release is available on the company's website, as well as from Newswire Services. On the call with me today are Mr. Yan Dinggui, Chief Executive Officer, Mr. Fan Chunling, Chief Financial Officer, and Ms. Qi Dan, Chief Risk Officer. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statement, except as required under applicable law. Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures Please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese renminbi. With that, let me now turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese, and I will follow up with corresponding English translations.

Please go ahead, Mr. Yan.

Hello, everyone. Thank you for joining our first quarter of 2026 Earnings Conference Call.

In the first quarter of 2016, the consumer credit industry was out of the adjustment period. The credit needs are recovering, the rhythm is slowing down, and the entire industry is under pressure. In this context, we focus on the structural upgrade of the operation and business model of superior storage users. In this quarter, our pre-tax trading volume decreased by 45.8% in January 1993, During the first quarter of 2026, the consumer lending industry remained in an adjustment phase.

The recovery in credit demand continued at a relatively gradual pace, and the industry as a whole remained under pressure. Against this backdrop, we focused on refining the operations of our high-quality existing borrower base and the structural enhancement of our business model. During the quarter, we achieved transaction volumes of RMB $19.3 billion, presenting a year-over-year decrease of 45.8%. Revenue was impacted by industry cyclicality and volume contraction, while temporary cost pressures persisted during the period. As a result, We recorded a net loss of approximately RMB 61.7 million for the quarter.

This quarter, we focus on the standardized operation of high-end users. Through cross-reference analysis of user risk assessment and platform behavior data, we will divide the customer group into high-end users, and based on the credit level and will power of different groups, we will match the differentiated initial strategy and operation plan. This quarter, we concentrated on the refined management and engagement of our high-quality existing borrower base.

Through cross-analysis of user risk scores and platform behavioral insights, We segmented our existing borrowers into groups and implemented differentiated engagement strategies and operating strategies tailored on each group's credit profile and borrowing intent. Repeat borrowing contribution accounted for 76.3% of transaction volume during the quarter, representing an increase of 4.4 percentage points from the same period last year. These highly engaged users not only contributed to stable repeat borrowing demand, but also validated the initial effectiveness of our strategy to deepen engagement with existing borrowers.

At the end of the first quarter, the expected interest rate of more than 90 days is 22.5%, which is better than the previous one. For high-risk customers, we continue to tighten the strategic and revenue control to achieve a stable exit. For high-risk customers, we deep-dive the user demand, adjust the strategy of the joint operating team, The 90-plus-day delinquency ratio was 2.25% as of the end of the first quarter, increasing sequentially.

For higher-risk borrower segments, we continue to tighten underwriting criteria and credit limit controls to facilitate an orderly runoff of portfolio risk exposure. For high-quality borrowers, we further analyze borrower needs and work closely with our operations team to refine borrower management and engagement strategies with a focus on improving retention. Meanwhile, we are embedding AI capabilities into our operations to drive the productization of risk management and continuously refining and developing reusable standardized solutions.

In terms of business expansion, the overall strategy to continue last quarter We have three main lines around us to promote structural upgrade. The first main line is the optimized upgrade of the joint operation model. In this record, we actively promote the technology side of financial institutions. Under this model, the company, as a technology and operation service provider, is deeply involved in the digital whole process of cooperating banks, providing a full chain of flow operation, technical service, and wind control models. Using advanced technology On the business development front,

We continue to execute the overall strategy established in the previous quarter and advance our structural upgrade through three key initiatives. The first initiative is the enhancement of our joint operations and tech empowerment model. During the quarter, we actively expanded our technology empowerment services for financial institutions. Under this model, the company acts as a technology and operations service provider, deeply integrating into the entire lending process of partner banks. We provide comprehensive solutions covering borrower engagement and operations, technology services, and risk modeling capabilities. Leveraging our advanced data technologies and extensive operational experience, we empower our partners throughout the credit lifecycle. In the first quarter, the transaction volume generated through our technology empowerment business reached RMB 1.52 billion, representing a sequential increase of approximately 67.6%. This business represents a natural extension of the technology service capabilities we have accumulated over many years, enabling us to deepen our collaboration with financial institutions. It also represents an important innovation initiative in the current operating environment. We remain optimistic about the long-term value of this model and expect its scale to continue expanding in the future.

using the car trunk and digital V-bag to expand specific scenarios and customer groups. In terms of the car trunk, the 3.0 system that was launched in the beginning of the year has been realized and fully streamlined. The company is focused on the front-end traffic operation, air-conditioning and cooling, and combination and matching. The trunk management and vehicle production section are only professionally cooperated, so that we can concentrate resources and cooperate with commercial oil to form an advantageous complement. The second initiative is the development of a diversified product portfolio, including auto-back loans and digital intelligence micro-loans,

which enables us to serve specific scenarios and borrower segments. For our auto-backed loan business, the version 3.0 system launched earlier this year has achieved end-to-end fully digitalized operations. We remain focused on borrower engagement and operations, risk empowerment, and matching, while specialized partners handle post-loan servicing and vehicle disposal. This collaborative model allows us to concentrate resources on our core strengths, while creating complementary advantages with upstream and downstream partners. Since the beginning of this year, the autobag loan business has maintained strong growth momentum, with overall user conversion rates ranking among the highest in the market under a full online operating model. The continued expansion of our diversified product portfolio helps us reach differentiated borrow groups while providing funding partners with broader asset options.

The third main line is overseas business. In the Indian region, a quarter of the market share has increased by 20%, which is the same as before. Through deepening cooperation with local funders, we have been able to broaden the scope of cooperation. The current business scale of the Mexican region is small, but growth is fast. Our local cooperation partners' quarter of the market share has increased by 35%, which is the same as before, which has led to rapid growth. In the report period, the size of overseas regions has gradually increased. We will continue to support globalization. The third initiative is our international business.

In Indonesia, loan volume increased by 20% quarter-over-quarter and more than doubled year-over-year in the first quarter. By deepening cooperation with local funding partners, we continue to expand our presence in the market. While currently small in scale, growth has been even faster. Our local partner loan volume increased by 35% sequentially during the first quarter and also delivered strong year-over-year growth. During the reporting period, revenue scale from overseas markets continued to increase. We will continue to execute our globalization strategy, leveraging strategic investments as an entry point to export our advanced technology capabilities and operational expertise.

and steadily build this segment into a growth engine for the company's future development. In terms of R&D acceleration, the Z-Lint generation code accounts for a total of 30% of the total AI code. The R&D efficiency has increased by about 20%, further enhancing AI-scale production of engineering technology. In terms of R&D support, the Z-Lint model is fully up-to-date in the recovery phase. The detection rate has increased from 78% to 93%. While the R&D efficiency has increased, the model call cost has decreased by 90%. In artificial intelligence,

We continue to execute against a clear strategic roadmap by integrating AI technologies into our FinTech ecosystem and accelerating the evolution of our technology service capabilities. In Intelligent Engineering, the feature iteration cycle for our risk management models has been reduced from several days to less than one hour, enabling strategies to respond rapidly to changes in market conditions. This capability has also become a core technology offering provided to our institutional partners. For R&D acceleration, AI agents now generate approximately 30% of all AI-assisted code, improving development efficiency by around 20%, and further strengthening the engineering foundation for large-scale AI deployment. In service assistance, our proprietary models have been fully deployed across customer service operations. Intent recognition accuracy improved from 78% to 93%, significantly enhancing service efficiency while reducing model inference costs by 90%. In addition, in workplace intelligence, we have completed enterprise-grade security enhancements for OpenClock and deployed our proprietary AI agent, Jiayin Clock, across a wide range of daily work scenarios. These initiatives are gradually reshaping the way our organization operates. enabling AI to serve as a collaborative partner for every employee and continuously unlocking productivity gains. AI is steadily evolving from a supporting tool into an intrinsic driver of operational efficiency across the company.

我们始终是安全与责任为企业的生命线, 充分发挥杜姆特AI技术优势, 持续做劳,用用户权益的安全防线。 一季度,累计识别并阻断欺诈借款人约29万人, We continue to promote the wind and wind strategy from the post-war defense to the preemptive initiative to intercept and introduce, especially in the multi-modal large model field such as voice recognition and image recognition, which has achieved substantial progress. Through the introduction of voice, picture and algorithmic analysis and other technologies, we promote the ability of anti-theft to gradually upgrade from traditional structural rules of recognition to multi-modal perception, plus picture and algorithmic and engineering landing, We have always regarded security and responsibility as the lifeline of our business.

Leveraging the advantages of multimodal AI technologies, we continue to strengthen the protection of user interests. During the first quarter, we identified and blocked approximately 290,000 fraudulent followers and intercepted 113,000 malicious applications associated with organized fraud activities. We continue to advance our risk management strategy from a reactive defense model toward proactive prevention and preemptive interception. In particular, we have achieved substantial progress in multimodal large language model applications. including voice print recognition, image recognition technologies. By integrating voice print analysis, graph algorithms, clustering technologies, and other advanced techniques, we are transforming our anti-fraud framework from traditional structured rule-based detection into a comprehensive prevention and control system built upon multimodal perception, graph analytics, and scalable engineering implementation. Our multimodal antifraud system has identified approximately 5 million suspicious audio and video samples associated with fraudulent and illicit activities, with an accuracy rate exceeding 90%.

In terms of shareholding, the company has extended the current shareholding plan until June 12, 2027. The remaining shareholding amount is about $49.6 million. We will gather the market environment and the actual operation of the company to arrange the shareholding of each shareholder.

Turning to shareholder returns, we have extended our current share repurchase program through June 12, 2027, with approximately $49.6 million remaining available under the program. We will continue to evaluate market conditions and our operational performance and comprehensively evaluate and implement various shareholder return initiatives.

Given the continuing uncertainty in the macroeconomic environment, we remain prudent in our outlook.

We currently expect transaction volume for the second quarter of 2026 to be between RMB 9.5 billion and RMB 10.5 billion. Looking ahead, we will continue to prioritize disciplined operations and sustainable development. Through deeper operational experience and enhanced organization resilience, we aim to build a durable competitive moat. Next, please introduce the financial performance of this quarter. With that, I will now turn the call over to our CFO, Mr. Fan Chunling. Please go ahead.

Thank you, Mr. Yan, and hello, everyone. Thank you for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB, and all percentage changes refer to year-over-year comparisons, unless otherwise noted. As Mr. Yan noted earlier, we remain disciplined in our execution during the first quarter and deliver the transaction volume in line with our previous guidance. Transaction volume was $19.3 billion, representing a decrease of 45.8% from the same period of 2025. Our net revenue was $756.7 million, representing a decrease of 57.4% from the same period of 2025. Moving on to costs, facilitation and servicing expense was 331.6 million, representing a decrease of 1.3% from the same period of 2025. Allowance for uncapable receivables, country assets, prepaid expenses, and other current assets and others was RMB 1.1 million, compared with RMB 17.5 million for the same period of 2025, primarily due to the decrease in allowance for overseas contingent guarantees. Sales and marketing expense was $340.1 million, representing a decrease of 49.6% from the same period of 2025, primarily due to decreased borrow acquisition expenses. General and administrative expense was $44.1 million, representing a decrease of 16.5% from the same period of 2025, primarily due to decreased professional service fees. R&D expense was 109.8 million, representing an increase of 24.6% from the same period of 2025, primarily driven by an increase in technology infrastructure expenses and employee costs. Non-GAAP loss from operation was 70.1 million, compared with 606.6 million non-GAAP income from operation in the same period of 2025. Consequently, our net loss for the first quarter was $61.7 million compared with $539.5 million net income in the same period of 2025. Our basic and diluted net loss per share were both $0.29 compared with $2.53 basic and diluted net income per share in the first quarter of 2025. Basic and diluted net loss per ADS were both 1.16 compared with 10.12 basic and diluted net income per ADS in the first quarter of 2025. Each ADS represents four Class A ordinary shares of the company. We ended this quarter with 43.4 million in cash and cash equivalents compared with 61.8 million at the end of the previous quarter. With that, we can open the call for questions. Ms. Chee, our chief risk officer and I will answer your questions. Operator, please proceed.

Thank you. If you would like to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. Thank you. We will now begin with our first question. This is from Zhihao Li from CSC. Please go ahead.

Thank you for giving me the opportunity to ask this question. My name is Feiying Li. I have two questions to ask the company. First, we see that the company's first record shows nearly 62 million losses. Hello, management. I'm Jerry Lee from China Securities. We have seen the companies reported a net loss of almost 62 million for the fourth quarter. It is fourth quarterly loss since listing. What are the primary drivers behind this performance? Any operational adjustments to improve for feasibility moving forward? Thank you.

I am the CEO of the company, Yan Dinggui. I would like to do the following answers to your two questions. The first one is We recorded a loss of 6,170 million yuan this quarter. Since Q2 last year, and then the 9th issue was mentioned, and then the 9th issue was implemented from the 11th. The entire industry is actually facing a very huge decline in performance. Not only us, but the entire industry is the same. Because the 9th issue requires The highest interest rate of the loan has decreased from 36% to 24%. From the 11th of last year to the 6th of this year, the entire market has decreased by nearly 500 billion yuan. So, from the 11th of last year, according to the requirements of the supervision, we have adjusted the interest rate to 24%. The overall performance . . . .

Hi, Jerry. I'm the CEO, Yanying Gui. I will answer your question. So on the loss of $61.7 million. So ever since the new regulation came out last year and implemented in October, where the lower rate cap was enforced, from October to June, the overall market loan volume has reduced by $500 million. And due to this significant decrease lowering of the loan volume, there has been a liquidity crunch from the borrower side.

So, the 9th quarter has caused a serious shortage of credit, and then due to the shortage of borrowers, it has caused a sharp increase in the interest rate, which has brought a very huge impact to the industry. So, from the 11th of last year, we have been Ever since the new regulation and the liquidity crunch on the borrower side, since implementation on October 1st, we've tried many methods

and to be highly efficient to resolve the critical risk brought on by the aftereffects of the implementation.

So this answer can also answer your second question. Since this year, after the Spring Festival, we have experienced a very difficult end of February. The long term is a very large number. But since March, We have been through the most difficult period of time. Since we have compressed our credit scale from the 11th, we have been able to accept more alternatively. Because there is not enough supply and demand. The decline in the scale has led to a decrease in income. Ever since Chinese New Year, we've had a very difficult adjustment period combined with

the combined with no cost reduction action last year. So the slower, there's a faster decrease in loan volume than the decrease in cost reduction. So that explains most of the difference in the loss.

So we started from Q2. We have achieved some progress. First of all, we have reduced our costs, so that we have received effective support in the field of advanced technology. In terms of performance, we have also balanced our income and expenses well, so that we have passed the Q2 very well. So ever since Q2, we've implemented a lot of cost control and reduction.

So the cash flow will be better next quarter. And from the volume and revenue perspective, we've balanced out our cash flow and revenue and expenses. So we're better equipped to continue to have better cash flow and better liquidity for the upcoming quarter. That's my response to your question.

Thank you. We will now take our next question. This is from Hua Rong from Jinyu Asset. Please go ahead.

Hello, I'm Hua Rong from Jinyu Asset. I have a question. Can you please introduce the risk trend of the first quarter and the fourth and fifth months? Have the recent risk conditions improved? Hello, management. Could you provide some color on the risk trends through the first quarter and into April and May? Are we seeing an improvement in the risk metrics? Thank you.

那我就请我们新加入的我们的组织的CIO, 其丹女士去回答这个问题。 其丹女士在加入我们这个组织之前, 曾经是这个腾讯... I would like to welcome Ms.

Qi Dan, our new chief risk officer, to answer this question. She's from Tencent WeBank, and she used to be in risk management over there. So I would like to welcome her to answer this question.

Okay, let me introduce her. So the deterioration in asset quality caused by the rise in credit risk last year has been improving.

credit risk among the new borrowers peaked in September last year, while the risk associated with new loans facilitated to existing borrowers peaked in November. Since then, both have trended downward and shown steady improvement.

From last year's April 4th, we actively adjusted the combination and optimization model of the customer channels. The entire volume of customers

For new borrowers, since Q4 of last year, we proactively really adjusted our borrower acquisition mix and the channel mix and optimized our risk models while really controlling the overall volume of new borrower acquisitions. As a result, the new borrower credit performance has continued to improve. So by March and April of this year, the new borrower metric has already declined to the lowest levels recorded during the entire last year.

老客的新增资产方面,一季度的风险是逐步回落的。 那四五月份风险,较去年高峰期已经下降了25%到30%,回落到了去年五六月份的水平。 In terms of risk management, we have selected customers with stronger financing and long-term debt capabilities, with better assets and qualities. We have actively countered customers with weaker risk capabilities, such as high public debt, high financial capacity, and weak assets. We have shortened the deadline for loans and reduced the amount of receivables. We have actively adjusted the structure of assets from receivables, receivables, and receivables, by shrinking the volume of business and increasing the quality of business.

With respect to the new facility loans for existing borrowers, the risk levels continue to decline throughout the first quarter. By April and May, the risk metrics have really fallen by approximately 25 to 30 percent from their peak levels, returning to levels seen in May and June of last year. So from a risk management perspective, we've really tightened our borrower selection criteria by focusing on borrowers with stronger financial and repayment capabilities, as well as more stable asset and credit profiles. At the same time, for the higher risk borrowers, such as those with elevated leverage, significant multiborrowing exposure, greater liquidity stress or weaker asset profiles. For those borrowers, we have proactively shortened the loan tenures and reduced credit limits. So by making these adjustments to the borrowing emission standards, credit limits, and loan terms, we have really actively optimized our asset mix. So while this has resulted in a more measured pace of business growth has significantly improved the overall quality of our operations. Yeah, that's my answer to your question.

Thank you. Seeing no more questions, I will return the call to Sam for closing remarks. Please go ahead.

Thank you, operator, and thank you all for participating on today's call. We appreciate your interest and look forward to reporting to you again next quarter on our progress.

Thank you all again. This concludes the call. You may now disconnect.