LexinFintech Holdings Ltd.

Ladies and gentlemen, thank you for standing by and welcome to the Lexin FinTech second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. I must advise you that this conference is being recorded today. I would now like to hand the conference over to your first speaker today, Ms. Patricia Cheng, Head of Capital Markets. Thank you. Please go ahead.

Hi, everyone. Welcome to Le Xin's second quarter 2021 earnings call. Our results were issued earlier today and are available online. Joining me today on the call are Mr. Jay Hsiao, our founder, chairman, and CEO, Mr. Chris Chiao, our interim CFO, Mr. Jayden Chiao, chief risk officer, and Ms. Beryl He, senior finance director. Jay will first provide an overview of our recent performance and highlights. Chris will then discuss the financial results and Jayden will cover credit performance. Before we begin, please note that the safe harbor statement in the earnings press release, which applies to this call, as well as will be making forward-looking statements. The call may include discussions of non-GAAP financial measures. You can find the reconciliation between non-GAAP and GAAP in the earnings press release. Finally, Unless otherwise stated, all numbers mentioned during this conference call are in RMB. I will now pass it over to Jay. His remarks will be in Chinese and translation will follow. Jay, 交给你。 好的,大家好,很高兴再次跟大家交流。 第二季度是乐欣的一个重要的里程碑。 我们在几个关键的经营指标上都创下了历史新高。 贷款发放、债贷余额、营收和净利润均取得了突破。 这是一个来之不易的结果。

In the course of our development, we have experienced many ups and downs, and we have been actively facing them. For those of you who have been following our analysts, you have witnessed some of the difficulties and challenges we faced in the past, and witnessed how our team responded to changes, actively adjusted and achieved good results, especially the change in assets caused by the epidemic last year. This also made us reflect and adjust the main development strategy, and made a comprehensive upgrade to the risk management system, and improved our ability to manage assets. Fortunately, our efforts have gradually come to fruition. In the past few seasons, our asset quality has continued to decline, and our profits have also continued to decline. In the second quarter, the average of 90 days has decreased by 100 points to 1.85 points. Looking back, our assets have also remained stable. Jason will explain this in detail later. I would like to emphasize that in the past, our entire series of adjustments and upgrades have been very effective. This also helps us in the future. in the face of the uncertainty of the industry. Then I will talk to you about the changes we have been concerned about recently, especially the price of the top 24. How will it affect us and how will we deal with it? This policy is a adjustment that has a greater impact on the development of the industry. Therefore, we are also actively preparing to face this major change. First, we will slow down our growth rate. asset quality, and maintain a good financial model. Therefore, we decided to release a guide for the whole-year loan, from the previous 2400 to 2500 billion yuan, down to 2300 billion yuan. For Lexin, when it comes to monitoring the price of the top line, a healthy and sustainable financial model is more important than the growth of scale. We will not sacrifice the long-term sustainable development of the company for the scale of one or two seasons. When the price is gradually affected by the 24th, our overall strategy is to conduct more detailed management of customers, eliminate high-risk customers, and re-adjust our risk bias, and further reduce the risk of assets to a reasonable level. In fact, we will also raise the price of customers below 24 to match the impact of a part of the decline, and increase the operation of this part of the customer, and increase the asset size of the people. Secondly, we want to fully improve our operating efficiency, improve our operating level to maintain our profitability. We believe that the industry is changing constantly. As long as we are actively responding, the impact is controllable. Once our response measures are in place, our profitability will reach the current level. Ensuring the sustainability and high growth of core businesses is our main task. At the same time, we will continue to develop new consumer strategies, In the second quarter, the products of the first and second quarter maintained a good growth trend, cooperated with more than 1,000 businesses, and served more than 600,000 users. It contributed 3.49 billion GMV. It is more than five times in the first quarter. We will also actively promote new business, expand new development space, and make the development of pleasure more diverse. The core of consumer finance is consumption and finance. The two are head-to-head, and the future can be better co-developed. This is Lexin's concept and Lexin's future core competitiveness. Thank you for your attention and support. Next, I would like to invite Chris to discuss some of the performance of our core business figures of this quarter.