X Financial

Hello and welcome to the ex-financial fourth quarter 2025 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 for 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 Victoria Yu. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining today's call. Our financial results for the first quarter and the fiscal year ended December 31, 2025 were released earlier today and are available on the company's Investor Relations website at ir.xiaoyingroup.com. On the call today from X Financial are Mr. Ken Lee, President, Mr. Frank Fu-Ya Zheng, Chief Financial Officer, and Mr. Noah Kaufman, Chief Financial Strategy Officer. Mr. Lee will begin with an overview of our business performance and key operational developments. Mr. Kaufman will then discuss the regulatory environment and first quarter financial performance. followed by Mr. Zheng, who will review the full financial results, capital position, and outlook. After the prepared remarks, Mr. Li, Mr. Zheng, and Mr. Kaufman will be 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. Such statements are based on management's current expectations and involve known or unknown risks, uncertainties, and other factors. These factors are difficult to predict and many are beyond the company's control, which may cause actual results, performance, or achievements to differ materially from those described in these statements. Further information on these and other risks can be found in our SEC filings. The company undertakes no obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required by law. It is now my pleasure to introduce Mr. Ken Lee.

Thank you, Victoria, and hello, everyone. In the fourth quarter of 2025, we continue to operate with heightened discipline as the external environment became more demanding. Following a strong first class, we deliberately moderated activity in Q4 to remain aligned with evolving supervisory expectations and to prioritize credit quality and prudent risk management. During the quarter, we facilitated and originated RMB 22.77 billion in loans, representing a 29.5% decline year over year and a 32.3% decline sequentially from the previous quarter. This moderation was intentional, reflecting our focus on protecting portfolio health and maintaining long-term stability rather than pursuing near-term volume expansion. For the fall year 2025, we facilitated and originated RMB 130.6 billion in loans. of 24.5% from RMB 104.9 billion in 2024. This four year performance reflects the scale we achieved earlier in the year and our ability to operate with the discipline and market and regulatory conditions involved. During the quarter, we focused on strengthening the stability of our core operations through disciplining the channel management, tighter risk controls, and continued efficiency improvements. We increased the proportion of activity on internal operating platforms to enhance customer stability and reduce dependence on higher cost external traffic sources. We also further tightened underwriting standards, strengthened compliance processes, optimized operational workflows, and expanded automation across services and collection functions. to improve efficiency without increasing headcount. From an operational standpoint, borrower activity moderated meaningfully in the fourth quarter. We served approximately 1.69 million active borrowers, down 20.2% from a year ago, and down 30.7% sequentially. We facilitated approximately 2.47 million loans in the quarter, with an average loan amount per transaction of RMB 9,226. We ended the quarter with RMB 50.5 billion in outstanding non-balance, down 3.6% from the same period of 2024. Credit quality. We did observe continued credit pressure during the quarter, consistent with broader market trends and a more cautious industry-wide risk posture. As of December 31st, Our 31 to 60 day delinquency rate increased to 2.9% compared with 1.85% at the end of Q3 and 1.17% a year ago. Our 91 to 180 days delinquency rate increased to 6.31% compared with 3.52% at the end of Q3 and 2.48% a year ago. These movements reflected rising repayment stress among certain segments, as well as a more conservative approach to risk. In response, we tightened underwriting criteria, enhanced the collection strategies, and adjusted capital deployment to preserve balance sheet resilience. As credit costs increased, we chose to prioritize stability and risk management, which affected short-term earnings but strengthens the foundation of the business. We believe this more cautious stance is appropriate given current conditions. Our near-term priorities remain clear. Safeguard portfolio quality, preserve liquidity, and maintain discipline in operations. With that, I'll now turn the call to Noah, who will walk through P4 fourth quarter financial performance and profitability trends, along with a brief regulatory update.