X Financial

Hello and welcome to the ex-financial first quarter 2026 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 1 on a touch-tone phone. To withdraw your question, please press star, then 2. 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 ended March 31, 2026, were released earlier today and are available on the Company's Investor Relations website at irgaoxiaoyingroup.com. On the call today from X Financial are Mr. Ken Lin, President, Mr. Frank Fuya Zheng, Chief Financial Officer, and Mr. Noah Kaufman, Chief Financial Strategy Officer. Mr. Li will begin with an overview of our business performance and the key operational developments. Mr. Kaufman will then discuss the regulatory environment and the first quarter financial performance, followed by Mr. Zheng, who will review the financial results, capital position, and outlook. After the prepared remarks, Mr. Li, Mr. Zheng, and Mr. Kaufman will be available to answer questions during the Q&A session. I remind you that this call may contain forward-looking statements and leadership harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the 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 findings. 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 Li.

Thank you, Victoria, and hello, everyone. In the first quarter of 2026, we continued to operate with a high degree of discipline as the operating environment remained challenging. Carrying forward the more conservative posture we adopted in the second half of 2025, we further reduced the pace of activity in Q1. keeping our business closely aligned with evolving supervisory expectations while maintaining an unwavering focus on credit quality and risk management. During the quarter, we facilitated and originated RMB 14.63 billion in loans, a decline of 58.4% year-over-year and 35.8% sequentially from the fourth quarter. This pullback was deliberate, as we continue to place greater priority on portfolio integrity and the long-term balance sheet stability over near-term origination volume. Operationally, we made further progress on a number of key initiatives during the quarter. We continued shifting our origination mix toward internally operated channels to deepen power relationships and reduce reliance on higher cost third-party traffic. Underwriting criteria were further tightened Compliance infrastructure was strengthened, and we continued rolling out process automation across servicing and collections, all with the goal of improving operational efficiency while keeping our cost base mean. From a volume standpoint, borrower activity continued to contract in the first quarter. We served approximately 956,520 active borrowers, down 60.6% year over year, and 43.5% from the prior quarter. We facilitated approximately 1.25 million loans during a period with an average loan size of RMB 11,741 per transaction. Outstanding loan balance at a quarter understood at RMB 35.3 billion, a decline of 39.6% from the same period of 2025. Credit quality. Credit conditions remained under pressure in the first quarter, consistent with the broader stress we and other across the industry have been observing. As of March 31st, our 31 to 60-day delinquency rate was 2.61% compared with 2.9% at end of Q4 2025 and 1.25% as of the same period of 2025. Our 91 to 180-day delinquency rate increased to 9.95% compared with 6.31% at end of Q4 2025 and 2.73% as of the same period of 2025. The data reflects a borrower base under continued financial strength consistent with what we are seeing across the broader consumer credit industry. We have addressed this by further narrowing our approval criteria, deploying more resources into collections, and pulling back on our origination in segments where repayment risk has risen most sharply. Higher credit costs weighed on quarter's financial results, and we accepted that trade-off knowingly. Protecting the integrity of the portfolio matters more to us than defending short-term earnings. Looking ahead, our focus is on keeping credit quality stable, managing liquidity carefully, and running the business with the same level of discipline will have maintained throughout this period. With that, I'll turn the call over to Noah, who will cover the key financial results for the first quarter as well as the regulatory environment.