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

Ladies and gentlemen, thank you for standing by and welcome to the Lufax Holding Second 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. Liu Xinyan, the company's Head of Board Office and Capital Markets. Please go ahead, Madam.

Thank you very much. Hello, everyone, and welcome to our second quarter 2024 earnings conference call. Our financial and operating results were released by our Newswire 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 recent developments and strategies of our business. Our CFO, Mr. Pei-Qing Zhu, will then provide more details on our financial performance in business operations. 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 Lufax, please.

Thank you for joining us today for our second quarter 2024 earning call. In the second quarter, the macroeconomic environment remained complex for small business owners. Despite this, we saw continued improvements in asset quality across both our Hui and consumer finance businesses. as we continued to implement our prudent business strategies. We believe this will provide a solid foundation for our future growth. Let me provide some updates on the macro situation before we discuss the business details. The SME Development Index trended down by 0.3 points quarter over quarter to 89 in June. Meanwhile, the Business Conditions Index published by the Chung Kong Graduate School of Business, declined from 50.1 in March to a 49.3 in June, falling below the 50 threshold and reaching its lowest level for the first half of 2024. These indicators underscore the persistent challenges faced by the small business sector Now let me provide some updates on our operating results. First, let's take a look at our loan volume. Our total new loan sales in the second quarter of 2024 were $45.2 billion, representing a 15.5% year-over-year decline. The decline was mainly caused by a 35% year-over-year decrease of public loans. which comprised 51% of total new loan sales in the second quarter, reflecting our continued emphasis on quality over quantity and sluggish demand for pre-loans among high-quality SBOs. Meanwhile, our consumer finance business continued to grow and delivered a solid performance during the quarter. Consumer finance loans sold a 23.6% year-over-year increase in neuron sales, representing 49% of our neuron sales, as a result of our continued efforts to roll out smaller tickets and revolving product structures. Furthermore, we are pleased to observe a notable improvement in asset quality as we adopt more stringent credit standards with focus on higher quality customer segments and resilient geographies, bolstered by our enhanced risk assessment system. For point loans, the C2MC flow rate improved 2.9% from 1.0% in the previous quarter, mainly driven by the improvement of C2MC ratio of unsecured loans. Our consumer finance loans also saw asset quality improvements, with NPL ratio decreasing to 1.4% from 1.6% in the first quarter. Next, let's take a look at our loan loans under the 100% Guarantee Model. As discussed previously, since the fourth quarter of 2023, all new PUI loans have been enabled under the 100% Guarantee Model. As our pre-loan balance increasingly represents loans enabled under this model, our balance take rate has trended upwards, reaching 9.3% during the second quarter. As a negative impact from high CGI premiums has been eliminated. Thanks to this improved asset quality, our credit costs have remained stable despite increased risk exposure. However, It is worth noting that due to decreasing loan balances, our unit operating expenses have increased, which has become a key drag on our unit profitability. Let me now provide some business updates on our newly acquired PAO bank. By leveraging strategic synergies with LUPEX following the acquisition, PAO Bank delivered solid growth in the first half of 2024. Its total loan balance stood at $2.4 billion by the end of the second quarter, representing a 45% year-over-year increase. Going forward, PAO Bank is planning to roll out new initiatives, including insurance, wealth management products, to better serve SME and retail customers. To reinforce the strong license strategy we have discussed in the past, we recently acquired a nationwide small lending license. We believe this new license will help further reduce our funding costs, diversify our products, and improve our capital management efficiency. Now turning to the progress of our special dividend, I am pleased to announce that we completed the distribution of special dividend at the end of July as scheduled. After receiving the script dividend, Ping An Group's ownership increased to 56.8%, and Ping An Group now consolidates our financial results. LUFEX will remain an independent entity listed on New York Stock Exchange and Hong Kong. Meanwhile, we will seek to enhance synergies with Ping An Group primarily in the following three key areas. First is branding. Piyang Group is a Fortune 500 company and a leading global financial institution. Its strong global reputation and financial standing will serve as a powerful endorsement for LUFEX, deepening trust among our customers and funding partners. This enhanced brand association will improve our domestic and international standing. and can potentially help lower funding costs. Second is technology. We will leverage Ping An Group's extensive technological resources, including its advanced AI systems, to further strengthen our risk management and food prevention measures. Our goal is to provide small business owners and consumers with efficient, secure, and cost-effective financial services. Third is channel resources. While adhering strictly to applicable laws and regulations, we aim to expand our reach by tapping into PN Group's extensive nationwide network of online and offline channels. This expansion will complement our efforts to strengthen our direct sales force. In summary, our expanded relationship with PN Group will help us better serve our SBO customers. easing their difficulty and expense of financing. With our strengths and capabilities, we strive to be a benchmark company with a unique role in supporting the growth of China's vital, small, and micro enterprise economy. While the MECOM environment remains complex, we are encouraged by the improvements in asset quality and the progress of our strategic initiatives. We remain committed to our deliberate strategic approach as we continue to navigate the economy landscape and have set our sights on achieving sustainable quality growth. I will now turn the court over to Pei-Ching, who will provide more details on our financial performance and business operations.