X Financial

Hello, and welcome to the ex-financial fourth quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your 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, 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.tiaoyingoods.com. On our call today for financial are Mr. Ken Lee, President, and Mr. Frank Royazan, Chief Financial Officer. Mr. Lee will give a brief overview of the company's business operations and highlights, followed by Mr. James. 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 follow-looking statements under the Safe Harbor provisions of the Private Security Litigation Reform Act of 1995. Such statements are based on the management's current expectations and current market and operating conditions and relate to events that involve known or unknown risk 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 achievements to differ materially from those in the forelooking statements. Further 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, future events, or otherwise effects as required on the law. It is now my pleasure to introduce Mr. Ken Lee. Mr. Lee, please go ahead.

Hello, everyone. We are very pleased to conclude 2021 with another solid quarter of financial results, delivering probability for the full year Both our top and bottom line for the fourth quarter significantly improved over the same period of 2020. Despite the challenging macroeconomy and the regulatory environment in 2021, we have successfully turned our business back on track and maintained a steady growth momentum compared with 2020. The total loan amount facilitated and provided in 2021 increased by 75% year over year to RMB $52 billion from RMB $30 billion. With a very focused product strategy and effective cost control initiatives, we turned profitable in 2021 and our bottom line outperformed the full year of 2019, the year before COVID-19 outbreak. During the fourth quarter, our total loan amount facilitated and provided reached RMB 13 billion, an increase of 51% year-over-year. As mentioned in our previous guidance, we saw a moderate sequential decline in the loan volume in the fourth quarter, which was mainly attributed to the year-end outstanding loan balance requirements of our institutional funding partners. In the first quarter of 2022, the level of available funds has resumed its normal pattern Since 2020, we have shifted our product focus to shell-in-card loan, which contributed 100% to the total loan amount facilitated and provided in 2021. With this focused and proven product strategy, we are confident in our ability to sustain steady growth in the loan facilitation business in 2022. Regarding asset quality, the delinquency rate for the all outstanding loans that are past due for 31 to 60 days as of December 31st, 2021 was 1.48%, higher than the 0.96% as of September 31st, 2021 and the 0.79% as of December 31st, 2020. This fluctuation is mainly attributed to the liquidity tightening in the fourth quarter of 2021. Since February 2022, we have seen our asset quality gradually improving as a result of ample liquidity in financial markets and our stricter risk management measures. In 2021, we officially commenced operation of our microcredit business in the third quarter after we received a regulator approval for our microcredit license. And during the fourth quarter, we're further increasing registered capital to RMB $1 billion in compliance with the regulations. We are on track with our microcredit business and look forward to creating more value for our shareholders. In the fourth quarter of 2021, we invested RMB $315 million and it became indirect minority shareholders of Newark Bank of Liaoning, a PRC company and a non-state-owned bank. We are exploring opportunities to cooperate with the Newark Bank to better serve SMEs, and we are confident that, based on our advantages in technology and risk management capabilities, the cooperation with Newark Bank would bring more possibilities to our business to jointly empower and support the development of the economy in China. Heading into 2022, we expect regulatory uncertainties to subside with clear guidance from authorities. The Chinese government has affirmed the value of fintech industry to address people's inclusive financial needs and support the development of SMEs. We remain cautiously optimistic about our business outlook while being prepared for any macro uncertainty that may emerge in 2022. In order to pass our confidence to the market and increase shareholders' value, our Board has been timely evaluating, based on our current market environment, regulatory policy and conditions of business operations, multiple ways of returning profits to our shareholders, including share repurchase as well as cash dividend distribution. Recently, our Board approved a U.S. $15 million share repurchase plan. which reflects our confidence in the company fundamentals, strategy, and a sustainable growth. We are looking forward to an increase of shareholders' value in the future. Now, I will turn the call to Frank, who will go through our financials.