X Financial

Hello and welcome to the ex-financial first quarter 2020 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. Please note this event is being recorded. I would now like to turn the conference over to Tanya Wen.

Please go ahead. Thank you, operator. Hello, everyone, and thank you for joining us today. The company's results were released earlier today and are available on the company's IR website at ir.jiaoyingroup.com. On the call today from X Financial are Mr. Simon Chen, President, and Mr. Kevin Zhang, Chief Financial Officer. Mr. Chen will give a brief overview of the company's business operations and highlights, followed by Mr. Zhang, who will go through the financials and the guidance. They are all available to answer your questions during the Q&A session. I remind you that this call may contain forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. expectations and the current market and operating and relate to events that involve known or unknown risks, unconditional opportunities and other factors. It is difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, and factors is included in the company's filing with the U.S. Securities and Exchange Commission. The company does not undertake any obligations to update any forward-looking statements as a result of new information, further events, or otherwise effects as required under law. It is now my pleasure to introduce Mr. Simon Chen. Mr. Chen, please go ahead.

Hello, everyone. Despite the challenges created by the coronavirus disease, COVID-19, adversely impacting our operating environment, we made meaningful progress in extending institutional funding for all new loan products originated on our platform during the quarter. Institutional funding accounts for 81% 81.7% of the loan facilitated in the first quarter and increased from 50.2% in the previous quarter. We rapidly built upon this with institutional funding with now accounting for 100% of loan facilitated throughout our platform. As of March 30th, In 2020, the total credit line provided by our institutional partners expanded to RMB 50.6 billion from RMB 46.7 billion as of December 31, 2019. Given the current uncertainties in the market, this further proves our asset quality and risk management capabilities continue to be well recognized by our institutional partners despite the impact from the pandemic. We remain in active negotiation with funding partners to further decrease our funding costs and further expand our funding partners, which could bring down funding costs going forward. As president, We have ample funding resources to meet growing demand as our consumer sentiment improves. We continue to adopt a strategic and disciplined approach to our risk management and have implemented stricter criteria when assessing borrowers. because we believe it's even more important now for the sustainability of our business. To strengthening our ability to generate stronger results when the market is expected to rebound during the second half of 2020 and adjusted An adjustment period is therefore expected and is reflected in the lower number of active borrowers during the quarter. The number of active borrowers this quarter was 228,366. It is a decrease of 29.7% from 609,368 in the first quarter of 2019. Over the past few quarters, we continued to ramp up our technology-driven risk infrastructure and a strengthened custom acquisition to successfully manage a rise in the delinquency rate during the peak of pandemic. Where restrictions put in place to contain this pandemic continue to easy and the life returns to normal, we have seen an improvement in delinquency rates from April 2020. We also saw a significant rebound both in loan facilitation amount and numbers of active payments, which strengthen our confidence in the gradual recovery taking place in China. Overall, the evolving health crisis and growing impact from COVID-19 have weighed heavily on consumer sentiment in China, which is reflected in the performance of Yao Qianhua and Xiao Ying online mall during the quarter. Also, in order to control the impact of COVID-19, we have taken a more stringent risk policy. Therefore, the GMV of 2020 Xiaoying Online Mall declined 62.2% from the fourth quarter of 2019 to RMB 60.8 million. Despite of this, the number of active users of YaoQianHua reached around 463,000 as of March 31st, 2020, representing an increase from roughly 408,000 as of December 31st, 2019. Transaction volume of Yao Chenhua only declined slightly to RMB 2 billion and 192 million from RMB 2 billion and 204 million in the last quarter. Yao Chenhua outstanding loan balance increased to RMB 1,801,000,000 as of March 31st, 2020 from RMB 1,503,000,000 as of December 31st, 2019. Now it has approved cumulative credit line of R&B 11 billion with credit realization rate around 28% as March 31, 2020. We believe the pandemic has significantly affected consumer behavior, but in doing so, also created many more new opportunities for us to drive further growth. In addition, China's central and local governments have recently rolling have recently been rolling out a series of policies to improve business. As we continue to evolve from pure financial services provider to a more comprehensive business service provider, we are confident we are well positioned to not just survive this challenging environment, but thrive when the market reforms. Now I will take the call to Kevin, who will go through our financials.