FinVolution Group

Hello, ladies and gentlemen. Thank you for participating in the first quarter 2026 earnings conference call for Finvolution Group. At this time, all participants are in listen-only mode. After management prepare remarks, there will be a question and answer session. Today's conference call is being recorded. I'll now turn the call over to your host, Yim Ching, Head of Capital Markets for the company. Yim, please go ahead.

Thank you, Desmond. Hello, everyone. Welcome to our first quarter, 2026 Earnings Conference Call. The companies themselves 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 IR section of our website. Mr. Tie Zhen Li, Tim, our CEO, and Mr. Jia Yun Xu, Alexis, our CFO, We start the call with the 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 in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For information about these non-GAAP measures and the cancellation to 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 provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. The further information regarding these and other risks and uncertainties are included in the company's filing with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Finally, we posted a slide presentation on our IR website, providing further details of our results for this quarter. I will now hand over to our CEO, Tim. Tim, please go ahead. Thank you, Jan.

Hello, everyone. Early closeout 2025. Besides, we were stepping into this year with clarity, not certainty. One quarter in, the clarity is beginning to show in the trajectory of our business and in the early results of disciplining choices we made last year. The micro-back job has its challenges. Yet, we delivered a firm first quarter. Risk is recovering in China. Overseas business continues to scale with its own strength. And across the platform, years of technology investment are compounding into operating efficiencies. Despite the typical seasonal stopness in the first quarter, transaction volume held broadly steady at 42.6 billion RMB. Roughly in line with last quarter, our group net revenue reached 3.2 billion RMB, up 6% sequentially. Operating profit was up 13% sequentially. Net profit came in at 421 million RMB, up 1%, reflecting the impact of foreign exchange fluctuation. Overseas markets again delivered 30% of group revenue this quarter. This is no longer only a diversification story. It has matured into a second profitable engine. To give investors a clear view of this business, for the first time, we are disclosing our overseas business as a separate reportable segment. In the first quarter, overseas revenue reached 949 million RMB. up 35% year-over-year. Operating profit reached 46 million RMB, up 88% year-on-year. This is a reflection of both the scale we have built and the earnings power that now stands on its own. Now let me walk you through our two segments. Let's start with our mature market, Chinese mainland. The first quarter in China was, in a word, patient. We are seeing early signs of recovery in progress. The Chinese New Year holiday always makes the first quarter a seasonally softer period. Its transaction volume held up at $38.5 billion, roughly flat sequentially. On risk, we are seeing gradual improvements. The actions we took in the second half of last year are working. And credit risk is sending its way back to a higher baseline. Vintage delinquency is by 30 basis points. Day one delinquency ratio also improved, while 30-day collection rates picked up. This improving environment has given us the operating headrooms to re-engage with growth, cautiously, not aggressively. As the industry consolidated, some players pulled back. We selectively acquired more high-quality customers at compelling cost. Conversion improved. Acquisition costs came down, and we added roughly 0.6 million new borrowers in China this quarter, up 7% sequentially. In the near term, we will continue to closely observe the evolving regulatory landscape. There is still uncertainty ahead. Our approach is to stay aligned with the rules, manage risk carefully, and capture opportunities as they emerge. Now it rolls through our overseas business. Our overseas market segment is a regional platform that learns, compounds, and transfers. Under our LEGO Plus framework, The capability with building one market are deliberately designed to flow into the next. That means risk infrastructure, product architecture, customer strategy, funding relationships. A lot of these can be leveraged and replicated. This quarter is a demonstration of that idea in practice. The first quarter is traditionally a low season for our overseas markets as well, Across the region, transaction volume was 4.1 billion RMB, broadly flight sequentially. Indonesia moved through Ramadan. In the Philippines, we deliberately moderated origination ahead of new interest rate regime, taking effect in the second quarter. A mirrored decision, consistent with our playbook. Year over year, the direction is clear. Loan volume up 35%, loan balance up 38%, unique borrowers more than doubled to 4.5 million. As the trader is unfolding on the roadmap we set, we are firmly executing the initiative we laid out from day one, expanding new customer acquisition channels, migrating the platform onto our propriety risk infrastructure, deploying credit models, and the decisioning rules tailored for the Australian consumers. Early results are there, sharper risk detection, better borrower segmentation, stronger portfolio economics. What will make Australia work is the same combination that has served us before. Cross-market experience layered onto deep local knowledge. Technology. AI is no longer a supporting capability for us. It's how we run the business. From AI agents to workflow automation. We are proactively deploying nearly 120 active initiatives across the business. and more than 50% are embedded directly in frontline operations. For example, our engineering teams are building proprietary AI-native infrastructure to support new product launches across our current and future markets. In some of our overseas businesses, the results are already tangible. AI collection agents are not only the default touchpoint for pre-dued reminders, They are also handling 50% of early stage collections at a recovery efficiency level in line with our historical benchmarks. We believe this is a durable, compounding competitive mode, and we are just getting started. Community. Our longstanding community engagement programs continue to make an impact this quarter. Our major business support program further expanded its reach this quarter, opening eligibility to retired athletes who run their own business in China. Since the launch, over 140 small business owners have benefited from this initiative and upgraded their business with our help on operational and funding support. In the Philippines, Our local platform partnered with multi-local institutions to combat fintech-related cybercrime, reinforcing our commitment to building a safer digital financial ecosystem. Together, these initiatives reflect the depth of our local roots and the consistency of our commitment to responsible girls. To close, the first quarter gave us the early shape of the year. a recovery in China amid regulatory fog. Our overseas business standing on its own with growth and profit, a technology advantage that is compounding. Against an uncertain micro, we move with the same posture we spoke of last quarter, clarity, not certainty, patience, not hate. We remain focused on growth that lasts and on creating durable value for consumers and our stakeholders. I will now turn the call over to Alexis.