FinVolution Group

Ladies and gentlemen, thank you for participating in the third quarter 2023 earnings conference call for Finvolution Group. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. I'll turn the call over to your host, Jimmy Tan, head of investor relations for the company. Please go ahead.

Hello, everyone. Welcome to our third quarter 2023 earnings conference call. The company results were issued via newswire services earlier today and are posted online. You can download the earnings release and sign up for the company's email alerts by visiting the IRR section of our website at irr.fimpigroup.com. Mr. Tien-Chen Lee, our Chief Executive Officer and Mr. Chia-Yuan Xu, our Chief Financial Officer will start the call with their prepared remarks and conclude with a Q&A session during this call. We will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered isolation or as a substitute for the financial information prepared and presented in accordance with US GAAP. For information about these non-GAAP measures and reconciliation of the GAAP measures, please refer to our earnings press release. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Statification Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties are included in the company filings with the U.S. Security and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable laws. Finally, here is a slide presentation on our IR website providing details of our results for the quarter. I will now turn the call over to our CEO, Mr. Tie Zheng Li. Please go ahead, sir.

Thanks, Jimmy. Hello, everyone, and thank you for joining our running call. This is Tie Zheng Li, CEO of Inversion Group. We are happy to speak with you today. During the third quarter, we steadily executed our local focus, Global Outlook Strategy. We are suggesting our efforts to build our business throughout the Pan-Asian region. Cumulatively, we are proud to have served over 29 million borrowers in China, Indonesia, and the Philippines. As we continue to expand our presence in these cultures, we have tapped more deeply into our leading resources. and we can now successfully deploy them across the large market in which we operate. One of our regional funding partners can now support our loan facilitation operations across different countries, greatly improving our capability to serve more borrowers in our market. We plan to leverage and replicate this success as we expand into additional countries, while strengthening our presence in existing markets. China's post-COVID economic recovery continues to progress gradually during the third quarter, with microdata reflecting uneven improvements in different areas. For instance, in September, the Consumer Confidence Index went up slightly to 87 points, but is still hovering at a relatively low level. Also, according to data from the National Statistical Bureau, our employment rate officially peaked at 5.3% in July, before trending down to 5% in September. Although there has been some moderate recovery in the consumption market, the bulk of the recovery has been in children's education, sports, medical, healthcare, domestic travel, and other offline activities. Purchase intention for big ticket items such as property, cars, and luxury goods remain relatively weak. Meanwhile, the overall microenvironment in Indonesia, our legacy overseas market, remained robust as the region is in a faster stage of development. For instance, Indonesia's consumer confidence index from August through October remained high at about 120 points, a positive indicator for increasing consumer spending. Its unemployment rate in September also declined by 5.3%, compared with 5.9% in the same period last year. its lowest level since the first quarter of 2020. Thus far, our tactical approach of maintaining prudent, progressive growth in China market, while pursuing rapid growth in the international market, has proven very effective under the current and even micro conditions we have observed. While waiting for China's economy to recover at a faster rate, We have been constantly investing in R&D to further streamline our processes, enhance customer experience, and achieve operational efficiency improvements. Since 2018, we have deployed around RMB 2.4 billion to develop cutting-edge technologies and implement them throughout our business operations. In particular, we made notable progress Progress with Blue BLU, our AI-powered chatbot, which now supports operations in six different countries with five language options, Chinese, English, Tagalog, Bahasa, and Spanish. Furthermore, by integrating Blue with our human loan collection personnel for device reminder calls, we have achieved cost saving of up to 80% while maintaining our per 10,000 cost efficiency levels. Blue's effectiveness once again showcases our R&D prowess as well as our ability to improve operational efficiency. It's a pragmatic yet innovative tech that can be seamlessly applied in our operation across different markets. Speaking of AI, We continue to leverage AIGC to boost social media engagement for our overseas business, increasing our campaign's audience targeting accuracy and achieving greater visibility on leading social media platforms. Thanks to our engaging AIGC-driven advertisement and inventive use of technology, our followers on Facebook surpassed 1 million milestone, while our followers on TikTok grew to around 740,000. As always, we continue to promote financial inclusion, a mission that reflects our commitment to social responsibility and supports our business goals. Our average borrowing rate in China maintained stable sequentially. making our products and services accessible to even more borrowers. I'm pleased to report that despite all the micro uncertainties, Finvolution's group's total transaction volume for the third quarter grew to RMB 51 billion, while our outstanding loan balance grew to RMB 686 billion, representing year-over-year increase of 13% and 9%. These results clearly demonstrate that our local focus, global outlook strategy, is not only variable, but it is also scalable, which is a critical factor for our future growth. On a related note, I would like to share a brief update on our recent ESG initiatives. Our dedication to sustainability and giving back to society remains at the heart of our corporate values and forms a core part of our identity. Over the last couple of years, the company has made several charitable trips to the Sichuan Daliang Mountains area. This year, we donated 350 renewable energy stream lamps to improve infrastructure for the local villagers. We also organized a unique schooling event for children at Finvolution Kindergarten, another of our long-standing community projects in the area. Going forward, we will continue to align our ESG and business goals to maximize our positive societal impact, while creating value for all of our stakeholders. To summarize, the third quarter of 2023 was not without challenges, but our firm and focused execution of our local focus, Global Outlook Strategy, alongside tech innovation empowered our steady progress and strengthened our foundation, supporting long-term sustainable growth. We will continue to embrace inclusion, accessibility, and technology as we seek to serve borrowers with better financial services. With that, I will now turn the call over to our CFO, Jiayuan Xu, who will discuss our operational and financial results.