Yiren Digital Ltd.

Thank you for standing by, and welcome to the Year in Digital Second Quarter 2023 Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. And today's conference call is being recorded. I would now like to turn the conference over to Lydia Yu with Vista Relations. Please go ahead, ma'am.

Thanks, Keith. Hello, everyone. Welcome to our second quarter 20.3 earnings conference call. Today's call features a pair of remarks by the founder, chairman, and CEO of Credit East and our CEO, Ms. Ernie Tang, and our CFO, Ms. Nan Mei. Before beginning, we would like to remind you that discussions during this call contain four looking statements made under the safe harbor provision of U.S. Private Securities Litigation Reform Act of 1995. Four looking statements involve inherent risks and uncertainties. As such, the company results may be materially different from the views expressed today. Further information regarding future risks and certain factors is included in our filings of the US SEC. We do not undertake any obligation to update any four looking statements as required under development laws. During this call, we will be referring to certain non-GAAP financial measures and supplemental measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. GAAP. For information about these non-GAAP measures and vacillations to GAAP measures, please refer to our earnings press release. I will now pass it on to Ming, our CEO, for opening remarks.

Thank you all for joining our earnings conference call today. Before I jump into business updates for the quarter, I would like to first review our new corporate positioning and AI and technology-driven financial and lifestyle services platform. Our new positioning better aligns with our business model that is anchored by three key pillars, financial services, insurance, and consumption and lifestyle services. with underlying business strategies and operational flows driven by AI technologies. The company's AI Lab, which was officially established last quarter, will focus on utilizing large language models and the generative AI technologies to build and develop new products and applications that will work across our business lines. A few examples of what we are working on include a customized virtual AI customer service agent that will be available to respond to customer inquiries 24 by 7, as well as AI-assisted marketing tools and AI productivity tools to enhance our productivity. I will continue to share more details and progress about AI during future earnings conference calls. Next, an update first on our insurance brokerage business. Total growth premiums reached more than RMB 1.3 billion in the second quarter of 2023, up 67% year over year, of which life insurance policies increased 162% year over year. The spike in life insurance policy sales this quarter was mainly driven by the timing of the new regulation that requires life insurance companies to lower their pricing interest rate of newly developed products from 3.5% to 3% and to discontinue selling old products above 3% interest rate. As we continue to invest in product innovation and customization and agent development and the digitization, we noted three key successes this quarter. Average first year premiums increased 15% quarter over quarter. The number of life insurance policy premiums exceeding RMB 3 million increased 206% quarter over quarter. and average productivity of our agents grew by 328%. On property insurance, as mentioned on our last call, reinsurance for overseas construction policies is a new key market we are focusing on. And the total premium for this product segment continued to grow at a fast pace, increasing 77% quarter over quarter. Next, on financial services. In the second quarter of 2023, total loan volume was RMB 8.2 billion, representing a 65% increase year over year. The total number of borrowers in the quarter increased 82% from prior year to 1.01 million. On Yixianghua, which continues to be our fastest-growing loan product, monthly active user number on our Yixianghua app continued to increase 11% from prior quarter to 2.4 million. And the number of average transactions per user increased to 3.2 times this quarter, up from 2.1 times from the second quarter of 2022. indicating a significant increase in LTV over tax ratio per borrower. Last quarter, I mentioned that we have started expanding internationally, in which we hope to leverage our expertise in the consumer finance sector to promote greater financial inclusion worldwide. We launched in the Philippines last quarter under the brand EasyPestle, and have seen rapid growth since. As our team continues to enhance local operational flows and refine our risk models, we have seen a continued improvement in margins. With initial success achieved in the Philippines, we have also started evaluating other regions and expect to expand to one to two new countries in the near future. On the funding cost front, as we continue to diversify our funding sources, we noted a 7% decrease in institutional funding cost in June as compared to beginning of the year. On asset quality, delinquencies remain stable with 15 to 89 days delinquency rate at 2.9% compared to 3.0% last quarter. On consumption and lifestyle services, total GMB generated this quarter increased 28% from prior quarter to RMB 396 million. The total number of paying members this quarter increased 57% from prior quarter to 2.44 million. To conclude, I want to say that I'm really proud of our team for everything we've accomplished so far. It's been a challenging few years, but I'm quite optimistic about the road ahead and grateful to you all for being on this journey with us. With that, I'll now pass it to Nga, who will go through the financials for this quarter.