LexinFintech Holdings Ltd.

Good day and thank you for standing by. Welcome to Le Sing second quarter 2026 earnings conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star followed by 11 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Head of Capital Markets, Mr. Will Tan. Thank you. Please go ahead.

Thank you, operator. Hello, everyone. Welcome to our second quarter 2026 earnings 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. Zhanwen Qiao, who will provide an update on overall performance and the strategies of our business. Our CRO, Mr. Zhanwen Qiao, will then provide more details on our risk management initiatives and updates. Lastly, our CFO, Mr. James Zeng, 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 will also apply 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 Alvin will give their hope remarks in Chinese first, then the English version will be delivered by Jay's and Alvin's AI-based voices. With that, I'm now pleased to turn over the call to Mr. Jay Wenjie Xiao, Chairman and CEO of Lexin. Please.

Hello, everyone. First of all, I would like to share with you the financial situation of our second quarter of 2026. Since the second quarter, the financial environment of the industry has continued to be suppressed. In particular, at the end of June, there was a risk event on individual platforms in the industry, which triggered a large-scale suspension and tightening of the supply of funds in the industry, which had a major impact on the industry's ecology and market confidence. The company's online consumer finance, stock exchange finance, and other residential businesses have been greatly affected. In order to effectively reduce the impact on the company, we have recently decisively promoted the following response measures. First, reduce the cost-effectiveness, improve the ability to go through the cycle, The company's rapid adjustment of the organizational structure has significantly optimized some of the resources, accelerated the application of AI technology, effectively reduced the operating cost of the company, and improved the long-term continuous operation and response to the ability to change the cycle. Second, tighten the risk management and maintain the stability of asset quality. The company is active in lowering the asset size, saving and controlling new assets, ensuring that the risk of new assets is stable and controllable, and improving the long-term safety of business development. The third is to strengthen financial control and improve operating efficiency. We focus on promoting the recovery work of receivables and guarantees. Achieve guarantee and balance balance balance to ensure the company's financial security and operating stability. Fourth, firmly promote a diversified strategy to accelerate the structural transformation of business. In non-banking businesses, the company has accumulated ecological business advantages for many years. We continue to accelerate from guaranteeing The company has always insisted on regular operations and has maintained its operability under the crisis of the current industry, and has continued to build up its ability to run long-term and be safe and reliable. Let me introduce the specific situation of the company in the second quarter. In the second quarter, the company achieved a transaction amount of 554.3 billion yuan, revenue of 319 billion yuan, profit of 1.01 billion yuan, In terms of asset risk indicators, due to the impact of the industry, the loss rate has risen, but the loss rate has also improved accordingly. In the face of changes in the industry, our long-term development of the company still persists. Mainly from the following aspects. First, the company has always been deeply rooted in the scene, and the technology retail business has a unique advantage. Under the policy direction and demand growth, we expect that the future technology retail business will have a good growth space. The company will continue to improve our supply chain system, surround users with long-term consumer needs, and improve the efficiency of the platform. Second, 2B digital technology business maintains rapid growth, and continues to meet the needs of private institutions and high-quality assets. The company has been deeply rooted in the field of digital technology for many years, and the industry advantage is significant. In the second quarter, the growth of 2B digital technology business has achieved a large-scale profit. This business is in line with the direction of future supervision and has long-term commercial value. We will continue to expand our investment. Third, AI landed in the negative energy business, the loss of capital is obvious. AI has landed in the whole chain of business, the effect is relatively obvious. With more than 100 AI intelligent positions on the line, it fully covers the strategy of intelligent production, compliance, education, delivery management, intelligent customer service and other business scenarios, to assist the company to complete the goal of reducing capital. In the second quarter, the operating cost of the company decreased by 17.6%, With the continued decline of AI technology, we expect that the cost of three-season companies will further decline. Looking forward to the future, the impact of the three events will continue. The industry still has a greater uncertainty. We will continue to save money. First, we will continue to strengthen business management, optimize financial status, promote e-commerce multi-faceted non-contained business development, and firmly respond to the confidence of the industry crisis. Second, we will adjust the dividend policy to one year at a time. Hi, everyone.