Yiren Digital Ltd.

Thank you for standing by and welcome to the year-end digital third 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 keys followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms. Lydia Yu, Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to our third quarter 2023 earnings conference call. Today's call features prepared remarks by the founder, chairman, and CEO of Credit East, and our CEO, Mr. Ning Chang, and our CFO, Ms. Nan Mei. Our SVP, Ms. Mei Zhao, will join the presenters in a Q&A session. Before beginning, we would like to remind you that discussions during this call contain forelooking statements. made under the safe harbor provision of U.S. Private Securities Litigation Reform Act of 1995. Forward-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 uncertainties or factors is included in our filings of the U.S. SEC. We do not undertake any obligation to update any forward-looking statements as required under the relevant 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 replacement for the financial information prepared and presented in accordance with U.S. GAAP. For information about those non-GAAP measures and regulations to GAAP measures, please refer to our earnings press release. I will now pass it on to Ning, our CEO, for opening remarks.

Thank you, Lydia. Hi, everyone. Thank you all for joining our earnings conference call today. As China transitions into the post-COVID era, recent macroeconomic data shows economic recovery gaining traction, with China reaching 4.9% year-over-year GDP growth in the third quarter, beating market expectations but still a decline on a year-over-year basis from the previous quarter. In the face of overarching challenges on the macroeconomic front, we have consistently directed our investments toward research and development, aiming to elevate customer experience and optimize operational efficiency. As a result, over the past few quarters, we have enhanced the quality of our earnings Consistent improvement in our bottom line quarter over quarter. Strategic approach positions us to capitalize on growth opportunities once the economy rebounds. We reviewed our new corporate positioning as an AI and technology-driven financial and lifestyle services platform that is anchored by three key pillars. financial services, insurance, and consumption and lifestyle services. This quarter, we have started utilizing AI-assisted marketing tools to increase our advertising targeting accuracy and achieve greater social media visibility. We are also in progress of upgrading our chatbots to assist in early stages of the loan collection process. Let's get into this quarter's business update. First, on financial services. In the third quarter of 2023, total loan volume was RMB 9.8 billion, representing a 56% increase year over year. The total number of borrowers in the quarter increased 63%. from prior year, 1.2 million. View on our Yixianghua app continued to increase for the sixth consecutive quarter by 23% from prior quarter to 2.9 million. And that the number of every transaction per user maintained stable at three times, indicating high user stickiness and the activeness In terms of user distribution for Yixianghua, approximately 30% are first-time borrowers, while the remaining 70% are repeat borrowers. Borrower acquisition. Continue to explore new acquisition channels as well as optimize our acquisition methods to attract high-quality new customers. During this quarter, experimented with utilizing our WeChat. Additionally, we initiated collaboration with selected media partners to fine-tune our acquisition model and enhance the accuracy of user targeting. Combined with utilizing AI-assisted marketing tools These new initiatives resulted in loans facilitated to new borrowers increasing by 49% this quarter from prior quarter. For international expansion efforts, we have experienced significant growth in the Philippines market, with third quarter results showing a remarkable increase of 172% compared to the previous quarter. We have also achieved the notable improvement in risk management as we continue to join and fine tune our risk models tailored for the local market to continue to pursue growth in international markets and are excited for this emerging as a substantial driver for future growth. To continue to diversify our funding sources, we noted approximately 5% decrease in institutional funding costs this quarter as compared to last quarter. Asset quality remains stable with 15 to 89 days delinquency rate at 3% and M1 collections rate improved by 0.5 percentage point this quarter. Consumption and lifestyle services have been continuing rapid growth over the past few quarters, with total GMB generated this quarter increasing 42% from prior quarter. RMB 563 million. The number of active users this quarter also increased 22% from prior quarter to 2.96 million. The growth in our consumption and lifestyle services segment has also created synergies with our financial services segment, with active users further stimulating an increase in loan demand, resulting in a mutually reinforced loop in our ecosystem. Lastly, on our insurance brokerage business, the world's premiums reached RMB 1.4 billion, quarter of 2023, up 43% year-over-year and 7% quarter-over-quarter, which is significantly ahead of industry average. Second quarter was the peak for first-year premiums due to the timing of the new pricing regulation capping future product returns at 3%. Breaking down, this quarter, 62% of total premiums were attributed to life insurance premiums, while property insurance premiums accounted for the remaining 38%. Highlighted on prior course costs, our strategic emphasis on driving growth centers around three key areas, product innovation, agent development, and digitization. A very important KPI for us is agent quality and productivity. I'm happy to note that with the establishment of our elite agent team, we have seen a notable 39% quarter-over-quarter increase in life insurance policy premiums, surpassing RMB $3 million per policy, as well as a 62% quarter-over-quarter increase in high margin property insurance policies. On property insurance, we continue to see continued growth in overseas construction policies with total premiums for this product segment increasing 19% quarter over quarter. On product innovation, I'm very excited to announce that we have a lineup of novel and tailored life insurance policies scheduled for release in the fourth quarter. including a product significantly designed for inheritance. I'll share more details and initial results during our next quarter's call. I will now pass it to Na, who will go through the financials for this quarter.