X Financial

Good day and welcome to the ex-financial second 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 one on a touch tone phone. 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. All financial results for the second quarter ended June 30, 2026, were released earlier today and are available on the company's investor relations website, ir.xiaoyingroup.com. On the call today from X Financial are Mr. Kan Li, President, Mr. Frank Fuya Zheng, Chief Financial Officer, and Mr. Noah Kauffman, Chief Financial Strategy Officer. Mr. Li will begin with an overview of our business performance and key operational developments. Mr. Kauffman will then review the second quarter financial performance, followed by Mr. Zheng, who will cover the detailed financial results, capital position, and outlook. After the prepared remarks, Mr. Li, Mr. Zheng, and Mr. Kauffman 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 take proper 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, and achievements to differ materially from those described in these statements. Further information on these and other risks can be found in our IPC filings. The company undertakes no obligation to update any forward-looking statements as a result of new information. future events and all otherwise except as required by law. It is my pleasure to introduce Mr. Kan Li.

Thank you Victoria and hello everyone. In the second quarter of 2026 we maintained the discipline operating that has defined our approach over the past several years. Conditions remain challenging and we continue to place credit quality, and the balance sheet strength ahead of near-term origination volume. During the quarter, we facilitated and originated RMB 11.63 billion in loans, a decline of 70.2% year-over-year and 20.5% sequentially from the first quarter. The pace of contraction moderated meaningfully from the first quarter, consistent with our measure approach to originating in the current environment. Operationally, we continue to concentrate origination in our internally operated channels, where borrower quality and unit economics are strongest. Underwriting criteria for newer vintages were refined further. Automation was extended across servicing and collections, and the discretionary spending remained tightly controlled. The average known amount per transaction rose to RMB 12,712, up 8.3% from the prior quarter and 21.3% year-over-year, reflecting a shift in transaction mix toward higher quality borrowers. From a volume standpoint, we served approximately 720,258 active borrowers in the quarter, down 74.8% year-over-year and 24.7% from the prior quarter. We facilitated approximately 0.91 million loans during the period. Outstanding loan balance at the quarter ended stood at RMB 24.97 billion, a decline of 61.5% from the same period of 2025 and 29.2% from the year of the first quarter, from the end of the first quarter. Credit quality. Credit trends showed encouraging sequential improvement in the second quarter, although overall conditions remained challenging. As of June 30th, our 31-60 day delinquency rate was 1.73% compared with 2.61% at the end of Q1 2026 and 1.16% as of the same period of 2025. Our 91-180 day delinquency rate improved to 9.09% compared with 9.95% at the end of Q1 2026 and 2.91% as of the same period of 2025. Both rates improved from the prior quarter. The first sequential improvement we have recorded in several quarters, which we attribute to the tighter underwriting standards applied to recent advantages and the additional resources deployed in collections. That said, both rates remain well above prior year levels and the 91 to 183 in particular remain elevated as earlier delinquency balances continue to season through the portfolio. We are not declaring victory on credit. We are maintaining the same conservative stance until the improvement proves due. With that, I'll turn the call over to Noah, who will take you through the financial results for the second quarter.