LexinFintech Holdings Ltd.

Thank you, operator. Hello, everyone. Welcome to our second quarter 2025 EARNEST conference call. Our results were released earlier today and are currently available on our IR website. Today, you will hear from our chairman and CEO, Mr. J. Wenjie Xiao, who will provide an update on overall performance and strategies of our business. Our CIO, Mr. Arvin Zangwen Chao, will then provide more details on our risk management initiatives and updates. Lastly, our CFO, Mr. James Chen, will discuss our financial performance. 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. Last, please note that all figures are presented in renminbi terms, and all comparisons are made on a quarter-over-quarter basis, unless otherwise stated. Please kindly note Jay and Arvind will give their whole remarks in Chinese first, then the English version will be delivered by Jay's and Arvind's AI-based voices. With that, I'm now pleased to turn over the call to Mr. Jay Wenjiexiao, Chairman and CEO of Lexin.

Please. Hello, everyone. I'm very happy to share with you our business plan for 2025. The company is committed to risk-driven, data-driven, and strategic transformation of economic operation. and another high-quality growth record. In the face of an uncertain red-light environment, the company's strategy to win victory over victory continues to grow and develop more steadily. The second quarter's trading volume is 5.29 billion yuan, with a return growth of 2.4%. The revenue is nearly 3.6 billion yuan, with a return growth of 16%. The net profit is 5.11 billion yuan, with a return growth of 19% and a return growth of 126%, creating a new high of 14 quarters. Consumption continues to decline, and the growth of ecological businesses has led to excellent performance in the quarter. The company has always paid great attention to shareholding returns and is committed to returning shares in various ways. In the second half of this year, the shareholding ratio will increase from 25% in the first half of the year to 30%. In July, the company announced another $60 million stock return plan in the next year. The company's shareholding return rate has been further improved and has reached the top of the industry. Next, I will introduce the key work and specific progress of Group II. First, the unique ecological business continues to develop healthily. The core competitiveness is constantly improving. The company's business resilience is clearly improving. The branch sales business is focused on young customers. We have fully upgraded the supply chain and introduced dozens of top-level brand merchants in the industry. We have strengthened the model of real products, factory chains, etc. to meet the needs of the users. We have improved the business strategy of one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time, one step at a time Increased service capacity, efficient service, no small users. Profitability is growing rapidly. Personal consumption, new business, acceleration of deployment. We have added a number of head-on platform cooperation, occupying a strong position. For future further growth, we have established a foundation. A standardized system and risk management capability for digital business. We continue to assist banks in connecting with various major debt platforms, improving the banking speed and risk management capability, and the recognition of wide-ranging cooperating banks. In the quarter, the scale and number of customers have increased significantly, and the development trend is good. In the overseas business, we continue to strengthen the human resources construction in the middle and late stage. We have made good progress in the quarter, and the scale and revenue of multiple quarters have increased significantly. Second, to improve product service experience, promote quality customers, scale steady growth. Second, we enrich product evidence, provide competitive offer and flexible management for users, match users' product and service needs throughout their lifetime. Users are much younger and stronger. For quality personal consumption new generation customers, launch a new hot gold card with a more competitive price. to meet the individual needs of the users. After the product is launched, it is widely welcomed by users. For the high-quality Puhui micro-videos, our joint bank has launched flexible products, which have further reduced the cost of financing the users and accurately met the needs of more Puhui micro-videos. Third, AI has further highlighted the truth for the business. The AI model of localization is deeply used in multiple core business scenarios, The AI support platform has been implemented in the management of users from case allocation, collection, and homework. The full-route AI support of the loan strategy effectively increases the overall return rate of the loan. The company's self-proclaimed AI self-management system has also made a major progress. Currently, more than 50 AI self-management systems are available to be used in strategy support generation, strategy inspection, Autonomous monitoring and other core business areas have greatly improved the company's operating efficiency. The company is based on the service concept of the user as the center, and continues to optimize user service experience, effectively respond to the needs of users, and work hard to enhance the customer's sense of achievement and credibility. We continue to focus on the construction of top-level design and long-term mechanism of sales management and management, and promote sales integration into the entire business chain, to remove the engine, to build a pre-built full protection system, to promote consumer protection work and high-quality development. In the third quarter, we have increased the technology investment of Xiaobao, perfected the digitalization and modelization tools, and improved the response rate of service users. Looking forward to the future, in the third quarter, we will maintain a stable scale, and the risk will continue to decrease, and the profit will grow steadily. The new rules will be implemented in the fourth quarter, Although Xinggui may bring some changes to the industry, we believe that Xinggui will be beneficial to the long-term health development of the industry, especially beneficial to a platform such as Lexin, which pays great attention to the rule of law. We will actively play Lexin's business ecosystem-cooperative advantage, create some competitive advantages for us, and promote the stable operation of the company. Therefore, we maintain the overall performance guidance of the whole year. Thanks for joining us today for our second quarter 2025 earnings call.

We're delighted to report another quarter of high quality growth. The company has successfully executed the transformation towards a business model by data analytics, risk management, and refined operations. Despite macroeconomic uncertainties, our prudent strategy has led to continued profitability recovery and sustainable growth. In the second quarter, total GMV reached 52.9 billion RMB, a quarter-over-quarter growth of 2.4%. Revenue increased by 16% to 3.6 billion RMB. Net profit reached 511 million RMB. representing quarter over quarter growth of 19% and year over year growth of 126%, a record high in the past 14 quarters. The excellent quarterly results are driven by the sustained improvement of asset quality and resilient growth across our business ecosystem. The management has always placed great emphasis on shareholder returns and remains committed to improving shareholder returns through various means, Starting from the second half of this year, our cash dividend payout ratio is raised from 25% to 30%. Also, in July, the company announced a $60 million share repurchase plan to be executed within the next 12 months. These measures will further raise the company's shareholder returns above the industry average level. Now let me introduce the specific business progress we have made in the second quarter. First, our unique business ecosystem has sustained strong growth, which has enhanced our competitiveness and strengthened our operational resilience. Our installment e-commerce business focuses on the essential consumption needs of young customers In the second quarter, we comprehensively upgraded our supply chain and partnered with dozens of top-tier brands to expand our product matrix. Also, we fully tapped into users' diverse consumption demands through two merchandising categories, high-quality offerings and factory outlet products. In addition, based on our user insights, we developed and optimized our HAPR personalization approach to customize operation and risk strategies for different segments of customers. During the June 18th shopping festival, our e-commerce GMV increased by 139% year-over-year, putting this business firmly on a rapid expansion path. For offline, inclusive finance business, we strengthened localized operations and expanded our business into lower tier cities. By adopting customized risk management and differentiated competition strategies, Enhancing our service capabilities and improving our efficiency to serve small and micro business owners, the profitability of inclusive finance business achieved steady sequential growth. For online consumer finance business, we accelerated its development by partnering with multiple leading platforms to secure a favorable market position, laying a solid foundation for future growth. For our tech empowerment business, we leveraged our standardized systems and risk management expertise to help partner banks efficiently connect with major platforms, enhancing their data-driven risk management capabilities, and have gained wide recognition from our partner banks. During the quarter, the business saw significant increase in business volume and number of users, maintaining robust growth momentum. For overseas business, we continue to strengthen mid- and back-end capabilities, making notable progress during the quarter. It delivered substantial quarter-over-quarter growth in both business volume and revenue for multiple consecutive quarters. Second, we strove for product service excellence to drive the growth of quality user in our online credit business. In the second quarter, we expanded our product portfolio, offering users competitive terms and flexible repayment options to meet their product and service needs throughout the full life cycle, significantly increasing user engagement. For prime customers, we launched a product with more competitive pricing, upgraded Lojin Card, catering to their demands for on-demand borrowing and repayment with daily interest calculation. The product has been well-received since its launch. For qualified small and micro-business owners, we partnered with banks to introduce products with flexible terms, further reducing financing costs, and precisely meeting the needs of the segment. AI further enhanced our business quality and efficiency. Our locally deployed large AI models have been deeply applied in most business scenarios. For example, in post-loan management, the intelligent data-driven platform has achieved full process end-to-end AI support, ranging from case allocation and collection operations to customer operation and repayment strategies. Effectively improving the post-loan collection rate, the company's self-developed AI agents have also made significant progress, with 50 AI agent roles currently deployed in key business areas, such as operational strategy generation, credit strategy review, and automated monitoring. greatly enhancing our operational efficiency. The company adheres to a user-centric philosophy and strives to enhance consumer satisfaction and trust by optimizing user service and experience and responding to user needs efficiently. We remain focused on the top-level design and long-term mechanisms for consumer rights protection governance, integrating consumer rights protection into all business processes. Also, we have built a proactive consumer rights protection system to advance the high quality development of consumer rights protection. During the quarter, we increased technology investment in consumer protection and have refined over 50 digital and model-based tools to improve service response and user satisfaction. Looking ahead, we will maintain table business scale, further reduce risks, and sustain profit growth in the third quarter. Although the new regulation of loan facilitation, which is to take effect in the fourth quarter, may bring some changes to the industry, we believe it will foster the healthy development of the industry, particularly benefiting platforms. like Colossium that place high importance on compliance. We will strengthen our business ecosystem synergy to build a unique competitive advantage and ensure continued business growth. As such, we maintain our full-year guidance of achieving significant year-over-year profit growth. Now I would like to give the floor to our CRO, Arvind. Thanks.