X Financial

Hello and welcome to the ex-financial second quarter 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then 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 touch-tone phone. To withdraw a question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Tanya Wen. Please go ahead.

Thank you, operators. 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.xiaoyingroup.com. On the call today from X Financial are Mr. Ken Lee, President, and Mr. Frank Sun, Financial Officer. Mr. Lee will give a brief overview of the company's business operations and highlights, followed by Mr. Jun, who will go through the financials. They are all available to answer your questions during the Q&A section. I remind you that this call may contain forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1935. Such statements are based on the company's current expectations and current market and operating conditions, and related to events that involve known or unknown risks, uncertainties, and other factors of which are difficult to predict, and many of which are beyond the company's control, which may cause the company's actual results, performance, or shapeless to differ materially from those in the forelooking statement. For the information regarding this 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 obligation to update any forward-looking statements as a result of new information due to events or otherwise effects as required under the law. It is now my pleasure to introduce Mr. Ken Lee. Mr. Lee, please go ahead.

Hello, everyone. We are very pleased to deliver another strong quarter of operational and financial results. In the second quarter, total non-facilitation amount is at a stark high since our inception, and our bottom line continues to maintain strong growth momentum on both the year-over-year and quarterly quarter basis, in line with our guidance. During the quarter, we reduced the fees we charge for our non-facilitation service which matches institutional funding partners with borrowers, as well as lower the weighted average total borrowing costs for our loan products to attract and retain borrowers. With the effective management of our cost control policy, we continue to maintain strong momentum of profitable growth. On the regulatory front, In April, the National People's Congress Standing Committee released a second draft of the Personal Information Protection Law for public comment, demonstrating that the Chinese government is determined to strengthen user data security and privacy protection. We have always placed a high value on user data protection and continue to improve our self-regulated internal mechanism. We continue to closely monitor regulatory developments. and adjust our strategy and services in compliance with government policies and evolving market trends. During the second quarter, our total loan facilitation amount reached RMB 12.8 billion, an increase of 108.6% year-over-year and 18.2% quarter-over-quarter. This was mainly driven by the strong growth in the loan facilitation amount of Shaoying Card Loan. which increased 180.1% year-over-year and 18.2% quarter-over-quarter. Xiao Ying car loan has contributed 100% of our total loan facilitation amount since the first quarter of 2021. As of June 30th, 2021, the total outstanding loan balance of Xiaoying Car Loan reached RMB 20.4 billion, an increase of 24.9% compared with previous quarters. Recently, the Chinese government has been gradually introducing guiding principles for lower lending rates to the market to stimulate economic growth, which is expected to put some pressure on our revenues. For the second half of the year, we will continue to be fully compliant, but will mitigate policy pressures by devising feasible solutions with our institutional funding partners. At the same time, we remain in active negotiations with existing funding partners to reduce funding costs, and our team continues to improve our risk management capabilities and taking proactive measures on cost control. In conclusion, we are encouraged by the solid progress we made during the first half of the year, and we'll continue to execute on our proven strategies to driving sustainable long-term growth. We expect to commence operation of our micro-credit business in the third quarter of 2021. Consumer confidence in China's economy has continued to trend upward, and we see rising demand for consumer finance solutions We are confident of leveraging our technology and service capability to capture the vast opportunities ahead and bring more valuable returns to our shareholders. Now I will turn the call to Frank, who will go through our financials.