X Financial

Hello and welcome to the ex-financial first quarter 2023 earnings conference call. All participants will be in 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. To withdraw from the question queue, please press star then two. Please note this event is being recorded. And I'd like to turn the conference over to Victoria Yu. 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.sharing.group. On the call today from Ex-Financial Officer Ken Lee, President, and Mr. Sam Tsui-A-Chun, 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 session. I remind you that this call may contain forward-looking statements under the safe harbor provisions of Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions. and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause companies' actual results, performance, or achievements to differ materially from those in follow-looking statements. Further information regarding these and other risks, uncertainties, and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or other ones, except as required in the law. It is now my pleasure to introduce Mr. Ken Lee. Mr. Lee, please go ahead.

Hello, everyone. We are very pleased to be off a good start in 2023. We delivered a solid operational and financial performance in the first quarter. The known facilitation amount was in line with our guidance range, and the net revenue grew steadily both year over year and quarter over quarter. We also saw decent improvement in our bottom line. We have seen signs of economic recovery in China, with increased consumer spending and better-than-expected GDP growth in Q1. However, as stated by the National Bureau of Statistics, inadequate domestic demand remains prominent and the Foundation for Economic Recovery is not started yet. We saw increased competition in the personal finance industry with challenges in borrower acquisition. Against this backdrop, our first quarter performance is very encouraging and impressive thanks to our strong business resilience and execution. In Q1, our total loan amount facilitated and originated reached RMB 24 billion, increased by 58% year-over-year and 11% quarter-over-quarter. Despite the intense competition, we continue to grow our premium borrower base. During the quarter, the number of active borrowers grew by 71% to more than 1.5 million. In addition, our asset quality remained stable sequentially and improved significantly year-over-year. Our de-intensity rate for all outstanding non-PAS2 for 31 to 60 days decreased to 1.05% as of the end of March 2023, from 1.31% a year ago. We do not expect our risk performance to fluctuate significantly for the remainder of the year. In addition, with sufficient credit lines in place, We continue to negotiate the funding costs with our institutional funding partners and expect to see a positive impact in the near future. During the recent May Golden Week holiday, Chinese tourist spending has reached pre-pandemic levels for the first time, according to government figures. Although the economic recovery is still in its early stages and there are concerns about the sustainability of the growth, We remain cautiously optimistic about the steady business growth this year as the government releases various measures to stimulate domestic demand and accelerate economic growth. Meanwhile, we are keeping our close eye on the regulatory side and have been consistently cooperating with the government on the industry-wide rectification work previously scheduled to be completed by June 2022. No further guidance has been released by the Chinese government, but we do not rule out the possibility that new interpretations or updated implementation details of the rectification work will be released, which could have an impact on the industry and our business. Now, I will turn the call to Frank, who will go through our financials.