Lufax Holding Ltd American Depositary Shares, each representing two (2) Ordinary Shares

Ladies and gentlemen, thank you for standing by and welcome to LUFAX Holding Limited first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will have a Q&A session. Please note this event is being recorded. Now I'd like to hand the conference over to your speaker host today, Ms. Lu Zinyan, the company's head of board office and capital markets. Please go ahead, madam.

Thank you very much, Operator. Hello, everyone, and welcome to our first quarter 2024 earnings conference call. Our quarterly financial and operating results were released by our UseWire services earlier today and are currently available online. Today, you will hear from our Chairman and CEO, Mr. Y.S. Cho, who will provide an update of the macroeconomic trend and the recent developments in the strategy of our business. Our co-CEO, Mr. Greg Gibb, will then go through our first quarter results and provide more details on our business priorities. Afterwards, our CFO, Mr. David Choi, will offer a closer look into our financials before we open up the call for questions. 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 With that, I'm now pleased to turn over the call to Mr. Y. S. Cho, Chairman and the CEO of LUVAX. Please.

Thank you for joining today's call. In the first quarter, we witnessed improvement in our early risk indicators. However, high quality loan demand from small business owners remained subdued. While our risk exposure is steaming from our 100% guarantee model, means we will be prudent and patient in new business development. Our emphasis continues to be on quality over quantity. Before diving into business performance, let's take a look at the macro environment. Overall, the environment showed signs of improvement during the first quarter. The Purchasing Managers Index, or PMI, which measures prevailing trends in the manufacturing and service industries. both trended positively. The index increased from 49 in December, December 2023, to 50.8 in March 2024 for manufacturing, while moving from 49.3 to 52 for services. Despite improvement in the macro environment, the SCBO segment recovered at a relatively slow pace. For example, The SME Development Index published by the China Association of Small and Medium Enterprises was 89.3 for the first quarter of 2024 compared to 89.1 for the fourth quarter of 2023 and 89.3 for the first quarter of 2023. Now, regarding business development. As discussed in our fourth quarter earnings call in 2023, we completed five major de-risking and diversification actions, including four mixed changes and one business model adjustment. Thus far, these actions have yielded signs of improvement in asset quality, although we believe operational prudence remains critical to ensure long-term growth and sustainability. During the first quarter, total new loan sales decreased by 15.6% year-on-year, mainly due to weak quality loan demand from SCBOs and our own emphasis on prudent operations. As we shifted our focus from SCBO loans to a more diversified approach, new loan sales of our consumer finance business grew to $20.3 billion in the first quarter representing an increase of 46% year-over-year. On the other hand, New York sales of Poo-Hee business continued to face pressure from a lack of high-quality SBO loan demand and decreased by 35.5% year-over-year. As mentioned previously, we successfully completed transition into our 100% guaranteed business model. for the poor business by the end of third quarter 2023. Starting from fourth quarter of 2023, all the new loans were either granted by our consumer finance subsidiary as on-balance sheet loans or enabled by our guaranteed company under the 100% risk-bearing business model. As a result, our risk-bearing increased from 39.8% of the total outstanding balance as of the end of 2023 to 48.3% as of the end of the first quarter of 2024. While the switch to 100% guarantee model will exert a positive impact on our take rate, as it alleviates the effect of elevated CGI premiums, our profitability will take longer time to recover due to higher upfront provisioning. Now let's turn to asset quality. After successful execution of our de-risking adjustments to the mix of segments and products, region, channel, and industry, together with improvements in the macro environment and removal of short-term negative impact, caused by restructuring of our direct sales and branches. We witnessed improvement in our early risk indicators in the first quarter. The C2M slip flow rate for poor business decreased from 1.2% in the fourth quarter last year to 1.0% in the first quarter this year. The NPL ratio of our consumer finance loans also remained stable. While we are pleased with such improvements in asset quality, we are taking a patient and prudent approach to ensure this success is sustainable. In terms of broader strategy, we are pleased to announce that we completed acquisition of Ping An One Connect Bank in early April as part of our strategy initiative to leverage on strong licenses. These licenses have the potential to underpin a more expanded set of service offerings, allowing us to provide more dynamic services and to further diversify our business. I would also like to provide an update on the special dividend arrangement that we announced earlier. On March 21st, we announced a special dividend plan of $2.42 per ADS or $1.21 per ordinary share. This special dividend remains subject to shareholder approval at the Annual General Meeting, or AGM, which will be held on May 30, 2024. The record date for the Annual General Meeting is April 9, 2024. To sum up, in the first quarter, we encountered preliminary improvements in asset quality, which demonstrate that our de-risking and diversification initiatives are starting to bear fruit. Despite this, we maintain a prudent approach in our operations as we see continued weakness in high-quality SBA loan demand. Last but not least, our CFO David will resign for personal reasons with an effective date of April 13. David has been with the company for nearly six years and we thank him for his tremendous contributions to the company. We have appointed Zhu Peiqing as our new CFO. We assume the CFO role effective from April 30. Peiqing has extensive experience in finance industry, especially in audit and financial management. We look forward to his onboarding and future contributions. I will now turn the call over to Greg to share more details on our operating results.