Yiren Digital Ltd.

Good day and welcome to the IRON Digital First Quarter 2024 Earnings Conference Call. All participants will be in 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 and 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 Kiaoha, Investor Relations Officer. Please go ahead.

Thank you, operator. Good morning and good evening, everyone. This call features the presentation by the founder, chairman, and CEO of Credit East, our CEO, Mr. Lin Tang, and our CFO, Ms. Na Mei. and our FDT, Ms. Mei Zhao, will also attend the Q&A session after the prepared remarks. Before beginning, we'd like to remind you that discussions during this call contain forward-looking statements made under the safe harbor provision of U.S. Traffic Security Detection Reform Act of 1995. Such statements assess risk, uncertainty, and factors that can cause actual results to differ materially from those contained in any such statement. Further information regarding future risks and certainty of factors is included in our filings with the U.S. Securities and Exchange Commission. We do not undertake any obligation to update any forward-looking statements as required under the relevant laws. During the call, we will be referring to certain non-GAAP financial measures and certain measure 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 financial measures and the reconciliation of GAAP measures, please refer to our earnings press release. I will now pass it to Lin for opening remarks.

Thank you all for joining our earnings conference call today. We are pleased to record another solid quarter with stable growth in our top line and overall business scale during a traditional off season in the industry while maintaining healthy profitability. Moreover, we are excited to announce that our AI Lab initiative has begun to yield early results as AI integration continues to permeate all aspects of our operations. Before delving into our business performance, I would like to highlight our recent branding upgrade. As you may know, we've rebranded our Chinese company name from Yiren Jingke to Yiren Zhike. The term Jingke, meaning fintech, has been replaced with Zhike, signifying intelligent technology or AI technology. This change underscores our commitment to ongoing technological innovation and our dedication to enhancing our customer experience. Our core mission of leveraging technology to deliver value to our clients remains unwavering. Now, I would like to go through our business highlights for this quarter. First, regarding our financial services business, the first quarter of 2024 saw a steady growth with total loan volume reaching RMB 11.9 billion, marking an 86% increase year over year and the fifth consecutive quarter of growth. The number of borrowers experienced a slight decline to 1.35 million from 1.37 million in the prior quarter, influenced by seasonal factors, as well as our emphasis on quality growth and a strategic shift toward a higher-quality borrower segment. Additionally, our loan facilitation platform, the Yixianghua app, has seen a surge in popularity. Its monthly active users grew to over 4.4 million in the first quarter of 2024, up from 3.5 million last quarter, representing a 26% increase. This impressive growth is due to our improved customer services and enhanced efforts to boost customer engagement. It's also worth mentioning that our AI integration into loan facilitation business has shown concrete progress. Currently, our proprietary large language model-based intelligent voice interaction model has been applied into our telemarketing as a management and customer service, which has brought visible improvement in efficiency. For instance, our intelligent robots used for customer acquisition are now able to make over 400,000 phone calls daily, doubling the previous volume. In addition, our telemarketing team has seen an almost 40% improvement in customer conversion rate through the use of AI-powered robots. Currently, the voice recognition accuracy of our system has reached 92%. and this ratio is expected to increase as we continue to fine-tune our models and train them with more data. Meanwhile, our international business has been showing strong momentum with a 60% increase in total loan volume compared to the previous quarter. In the first quarter of 2024, our Philippine market achieved a milestone by surpassing RMB 10 million in monthly loan volume, showcasing exceptional growth. Additionally, we've seen a continued decline in customer acquisition costs as we continue to optimize our products and enhance our conversion rate. Specifically, the cost of acquiring borrowers in March decreased by double digits compared to January. Furthermore, our overseas operations extensively leverage AI technology. For example, our anti-fraud AI models are highly effective in detecting image fraud. Our black and white document detection model boasts an accuracy rate of over 97%. and our mobile screenshot detection model achieved an accuracy rate of 99%. These AI models have significantly enhanced our risk management efficiency, reducing potential fraud losses. Now, turning to asset quality. In the first quarter of 2024, the overall delinquency rates of our loan portfolio increased with the 15 to 89-day delinquency rate rising to 3.9% due to industry-wide credit quality fluctuations. However, we are actively upgrading our customer base and fine-tuning our risk control standards through AI analysis. As a result, the asset quality of new customers continues to improve. The M1 collection rate in the first quarter of 2024 has increased by 67 basis points compared to the prior quarter. As the proportion of assets from our new borrowers continues to increase, the risk indicators of our overall loan portfolio started to decline in May and continue to trend downward. On the funding front, we've experienced a consistent decrease in cost as our network of funding partners grows. In the first quarter of 2024, our funding costs decreased by 43 basis points compared to the previous quarter, a trend we expect to continue throughout the year. Moreover, to achieve a better balance between risk management and profitability, we began engaging more in risk-taking model where the company takes the credit risk of the loans facilitated. Therefore, the proportion of loans and the risk-taking model is expected to grow in the coming quarters. Now, regarding our insurance brokerage business, recent regulatory changes have impacted the overall growth of the life insurance sector. In response, our strategy emphasizes prioritizing quality over quantity. improving profitability and the shifting towards a stronger focus on property insurance. In the first quarter of 2024, our total premiums reached RMB 112 million, indicating a slight 1% decrease year over year. Specifically, life insurance premiums declined by 16% annually, consistent with industry trends. However, Property insurance premiums increased by 19% year-over-year, generating RMB $118 million in revenue, a 12% rise compared to the previous year and marking a peak over the past two years. Notably, we have optimized our business structure by reducing the proportion of low-margin products, such as auto insurance, and focusing on liability insurance and overseas construction insurance. By prioritizing gross profit margin as a key performance indicator for the team, we substantially enhanced the profitability of our property insurance segment, achieving a 5.5% improvement in average commission rates. Moreover, our product innovation and customization capabilities have been recognized within the industry, resulting in a steady stream of high-quality orders in our pipeline. During the first quarter of 2024, Hejiang Insurance secured contracts with Xinjiang Transportation Investment Group and ranked the top among its three major suppliers. This achievement sets a strong foundation for our future expansion. in providing customized services within the construction insurance sector. In the realm of AI integration, our insurance business is actively exploring innovation, innovative applications, and currently developing our proprietary AI-driven insurance renewal reminder robot. Following rigorous voice training program testing, and data segmentation, we've already begun initial deployment in our operations. Additionally, we are making significant progress in customer acquisition through social media channels. In the first quarter of 2024, we converted leads from our social media efforts into RMB 2.2 million in premiums. This momentum remains strong as we enter into the second quarter. Moving forward, we will continue to focus on strengthening our channel partnerships and overall profitability. However, we maintain a conservative attitude toward the life insurance sector as the regulatory impact is expected to continue in the foreseeable future. In the consumption and lifestyle services segment, our total GMB reached RMB 625 million in the first quarter of 2024, making a remarkable 103% year-over-year increase, largely driven by our existing and expanding customer pool. As we continue to deepen penetration within our current customer base, we anticipate the growth rate of this segment will gradually normalize, aligning with our other business segments. To wrap up my prepared remarks, I would like to reiterate our AI strategy as the foundational direction for our future development. It is structured in three comprehensive phases or three steps. Firstly, empowering existing business. We are leveraging AI to enhance and optimize our current operations, driving efficiencies and improving outcomes across all segments, as we are currently doing. Secondly, building advanced AI capabilities and ecosystem. While we integrate AI into our existing business, we have developed many high-value tools, capabilities, and partnerships. For example, our proprietary Deakin Intelligent Decision-Making System has made over 1 billion decisions by the end of the first quarter of 2024 and has earned industry-wide recognition with a prestigious award. Another example is our AI-driven intelligent customer service solution, which was honored with the Outstanding Solution Award at the National Industrial Financial Collaboration Data Modeling Algorithm Competition, among others. Such tools, together with our large language model training, fine-tuning, and optimization capabilities, can serve not just us, but many other industries and enterprises as well. We are keen to explore such business opportunities. Furthermore, we are actively seeking strategic investment and partnership opportunities and have built a healthy pipeline for execution. They can help build better access to top talents and technologies. Lastly, for the long run, long-term goal, exploring future AI commercialization. We endeavor to build AI-native businesses as our business expansion and company transformation strategy. We believe the high-value tools, capabilities, and the relationships as mentioned above serve as a solid foundation. Our AI strategy is not a sudden shift in business direction, but a solid step-by-step approach to upgrading and sharpening our core competitive strength that we've built over the past decade of operations. We are excited to continue this journey with our partners and shareholders to embrace a bright future. Now, I will pass it to Nat, who will go through the financial performance for this quarter.

Thank you, Ning, and hello, everyone. On this recall, I will only focus on our key financial highlights. Please refer to our earnings release and our IR data for further details. First of all, we are glad to deliver a solid partner with a high rate margin. In this quarter of 2024, our total revenue reached RMB 1.4 billion, representing 14% increase year-over-year. In the financial service segment, Our total loan facilities continue to grow steadily, with RMB 11.5 million, an increase of 86% year-over-year, drive by the strong demand of our small rolling loan products. Revenue from financial service business increased 53% year-over-year, to RMB 738.1 million. In the insurance sector, our gross revenue framework is RMB 902 million, representing a decrease of 1% year-over-year. As mentioned by Niu earlier, the decline in our climate was leading to an essential drop in our life insurance sales, followed by the local regulation change, which was offset by an increase in our property insurance products. Consequently, the portion of our property insurance in our overall primary needs increased sharply. Compared to our life insurance products, the average commuting rate in the corporate insurance sector is lower, resulting in a 36% year-over-year decrease in the revenue for our insurance worker segment, to only 125 million for this quarter. However, going forward, there will also impact our life insurance business to greatly rebound in line with marketing recovery, but the revenue insurance is part of the system in the short term. In the consumption and lifestyle segment, The total GMV for this quarter reached the 625 million, representing an increase of 103% year-over-year, driven by our large consumer base. As mentioned previously, this segment was launched a year ago to serve our users across all business lines. Therefore, as service penetration grows, we expect the GMV of this segment will grow to align with our business as an increase in the number of combined consumers across our business segments. On the expense side, sales and marketing expense increased to 161% year-over-year to only 275 million. This growth was probably derived by the rapid expansion of our financial service segment and enhanced our marketing efforts in and acquiring new high-quality customers as we continue to optimize our customer rates Research and development expense increased 39% year-over-year to RMB 41 million due to our continued advancement in AI upgrades and technological innovation. Our internal and service costs increased 17% year-over-year to RMB 233 million. The growth extremely contributed to our high channel base in the profit insurance business compared to our large insurance. As a portion of private insurance requirements increase, there is a corresponding increase to China's settlement costs. Moreover, our G and A costs increased by 72% year-over-year to RMB 84 million, probably due to unnecessary personal adjustments, which include adding more than personal staff and granting additional incentives. The allowance for country assets and the receivable was RMB 102 million for the quarter, representing a 150% year-over-year, mainly due to the growth in our long-volume facility. Moreover, as we mentioned earlier, in order to improve the balance between our overall risk management cost and profitability, we have started to gradually increase long-volume facilities under the risk-taking model. Therefore, we have added a new item named provision for contingent liability to reflect the provision under this model. Additionally, as the loan volume under this model grows, we expect a great increase in our revenue from our guaranteed service in the coming quarters. On to our bottom line, we continue to deliver a strong profit of RMB 486 million this quarter, representing a 14% increase from the prior year. A general about RMB 632 million net cash from operating this quarter, an increase of 62% from prior year. On the balance sheet side, our balance sheet will be 5.9 billion in cash and cash equivalent as of the end of this quarter. We have already 2.1 million U.S. dollars to perform our share purchase in the public market for the first quarter of this year. With our total deployment for the share program to 5.5 million U.S. dollars by the end of March 2024. We will continue to do our share approaches and maintain confidence in the fundamental direction of our company business and its growth potential. Based on our assessment of current business and the marketing condition, we spend our revenue for the second quarter this year to stand before RMB 1.4 billion to RMB 1.6 billion, with a heavily net profit margin. This reflects our career and preliminary view, which is subject to change and uncertainty. With that, we come to our remarks. Operator, now we are open for questions. Thank you.

And thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause for a moment to assemble our roster. Our first question today will come from Matthew Larson of Syncadia. Please go ahead.

Good evening, you all. Thanks for taking my call. Just a couple of comments. I mean, another good quarter. You guys generate quite a bit of cash and earnings, and you do quarter after quarter. And I've been involved in and out of your organization. company's stock since you went public. I've mentioned that in previous conference calls. And I've done quite well over the last year. So the stock's done very well. I'm hoping it can break out to kind of a more mainstream price level. Working against you is just the lack of interest in Chinese stocks. securities here in the United States. Your local markets, the Hang Seng and Shanghai markets have not done well. So you've kind of got the wind in your face, so to speak, versus the wind at your back. And I will give you guys tremendous credit for improving your public relations over the last few months. You've put out updates on your business and you've used catch words like artificial intelligence quite often, which I think are accurate. Your company has used algorithms and some level of AI for years to determine your lending activities and acquiring new customers and things like that. So it's quite legitimate and I'm glad that you are highlighting that sort of technology that your company has used for years. And, you know, it hasn't helped the stock recently, but your stock has remained elevated, and I'm hoping the next move, you know, gets us significantly higher. So thank you, all right? However, an area that we've talked about, One other thing, I'll say your earnings announcement today was a lot better. It was broken out in two or three parts, comparing it from the year before. It wasn't just a one-line thing. So whoever you're using to get your news out is a great improvement. But we've talked in the past about maybe instituting a dividend. Many of your peers that are listed in the United States do have a significant dividend, QFIN, QFIN. Kifo, if I'm pronouncing it correctly, or XYF, just announced a tender offer and a dividend. And then GIN, J-F-I-N, just announced another large dividend. So they're returning cash to their investors. And like your company, they traded a very low multiple between one and two times earnings. I wish you would do that. You have a huge amount of cash on your balance sheet. $30 or $40 million presumably wouldn't change your business model or your growth prospects, but that would really be great for shareholders, and it could very well raise the value of your stock several times that amount. So I continue with that suggestion. Your peer group is doing it. And then also your share buyback is still pretty small. But outside of that, thank you for another good quarter. I have confidence in your company. And if more interest in the Chinese stock markets is created here, I think your stock could do well. So I'll leave it there. Thank you.

Thank you, Matthew. A couple of thoughts following your very nice remarks. One is that indeed we have improved the way we communicate with the public. Thank you. And some other shareholder friends making this great suggestion. And we'll continue to do that. And secondly, artificial intelligence is for us very, very real. Yeah. And this time is the new, new, new thing. And it's the real thing. Yeah. So for all the industries and the companies, yeah. And we have strong conviction that we are well positioned to capture this great change element, the opportunity. We've already seen very exciting initial results as we embrace AI strategy. We will continue doing that and also talking about that. Thirdly, regarding the dividend suggestion, while we continue to believe share buyback and investing into the future like AI can best serve our shareholders, we hear you and, yeah, other shareholder friends, yeah, regarding this issue. And we are evaluating, further evaluating, yeah, this issue and, yeah, this is where we and we will report more as there's additional progress. And it is our intention to really serve our shareholders with great value creation in many different ways. Yes, and I appreciate that. the suggestion you and some other shareholder friends have given us. And lastly, regarding China, so indeed, yeah, there is this impact that we are also growing internationally. And so, yeah, and we are in more markets So the business is more balanced. And so the story is not just a China story, but a global story. It's not just a fintech story, but an AI story. So I think what we are doing is really in terms of a business strategy, transforming the company to an AI player. And in terms of a capital market strategy, we are like recategorizing the company, you may say, and I hope by doing this, yeah, well, for some time, yeah, we can best serve our shareholders, including ourselves. Thank you.

Our next question today will come from Marco Zhang of DeLonghiu Research. Please go ahead.

Hi. Thanks, management, for taking my question. This is Marco from Glenelg Research. So following Mr. Tang's answer to Matthew's question earlier, not just a Chinese story, so my first question is about your international business. So as you mentioned in your last earnings call, you have a pretty big plan for expansion international expansion this year into Southeast Asia Latin America and also Mexico just for our modeling purpose I don't know if you can disclose like how much of your revenue this quarter came from your international business and what's your target percentage by the end of 2024

Thank you. Again, going global, being truly global is our clear strategy. We are making very solid progress in Southeast Asia and also Latin America. I mentioned certain information in my prepared remarks. And let me see whether Na can provide more details at this point.

Got it, yeah, maybe we can talk offline and get this out, yeah. Okay, okay, yeah.

And our . Okay, Na, I will.

Sorry, I can give you some information for your reference, our international business around this year. Yes, as mentioned in our, each quality as mentioned by you, yes, the OSI business is one of our main business strategies for our company. And from 2022, after we acquired our licenses to say the least, Actually, our overseas business volume increased with digital client and in this quarter, our overseas volume is about 32 million, representing 52% growth compared to the last quarter of 2023. And for the second quarter of this year, we also have the confidence in our overseas business and we think that we will maintain the high growth rate. Basically, same as the first quarter, maybe it's higher than the first quarter. And for the full year of this year, we spent, I'll always say, loan volume increased about five to six times compared to the last year. So we can look forward to our future business. Of course, for the revenue, actually for the first quarter of this year, due to we have only 32 million loan volume, so the total revenue is not just significantly compared to our total revenue. But for the whole year, based on our forecast and the total revenue of our LLC, it's about 3% to 5% of our financial service for the whole year. Of course, except for the loan volume and the revenue, we also put more attention to our probability of the product. Actually, in this quarter, our overseas product, especially in the Philippines, our margin has got a positive result. And so we hope we ever have the confidence in our overseas department. And I always think that by the end of this year, the overseas business can contribute more profit, including the revenue and the profit margin as well, overall financial revenue. Okay, thank you. I hope the information is useful for your question. Thank you.

Perfect. Yeah, that answers my question about your international business. Yeah, and my second question is about AI. So congratulations on your successful launch of AI Lab last quarter. And you also mentioned in your last earnings call that you aim to expand your AI expertise beyond the fintech verticals to more selective sectors. Is there any progress there that you can disclose? And also as you have a much stronger cash position and you change your Chinese name from Yiren FinTech to Yiren SmartTech, do you have any strategic plans in AI such as acquisitions in the near future?

Thank you. And so the new Chinese name is more like AI tech or intelligent tech. Yeah, but it's smart. Yeah, thank you. And so what we're doing right now is that, as I mentioned, there are three steps. The first step is that we utilize AI really well in our existing businesses and in our company management operations. Because it's really not an easy, easy thing to do our existing business well. As you know, given the risk situation, we need to do better risk management, so on. There's always competition, so on. Yeah, so we need to utilize AI really well in our existing business. At the same time, though, we are preparing for the future. For example, we train our models. The capability of training our own models, fine-tuning them, optimizing them is actually quite valuable for many other companies and industries. And also, many of the agents, you'd say, we use in our own business. the way we build the agents, the way we use them, yeah, is also very valuable for other companies and industries. So we are productizing, yeah, is that the right word? Like productizing, yeah. So making such capabilities, such tools into products, which we can sell to other companies, industries. That's one key thing we are doing right now. At the same time, as I mentioned, we are looking to do some incubation and strategic investment work like focusing on AI-native business opportunities. We are still in early stage of exploration and implementation. There will be more coming out. We will report in a timely way. And so regarding acquisition, so we are interested in doing a smarter M&A. So there's actually indeed one idea we are currently evaluating. As it progresses to a certain stage, we will be in a position to share more. But overall, I think we are doing the first step, which is utilizing AI in our own business. And the second step, which is developing, like, advanced, yeah, building advanced AI capabilities and the ecosystem through, like, productizing the tools and, yeah, yeah. solutions we use in our own business for future business opportunities. And also, yeah, we are looking to build a strategic relationship through investment and smart M&A. Hope I can share more next time.

Okay. Great. Yeah, that's great to hear. And congratulations again on another strong quarter, and we look forward to hearing more good news from the company. Operator, I have no more questions.

Thank you. Our next question today will come from Andrew Corporate, a private investor. Please go ahead.

Hello, Mr. Nipang, and thank the company thank you for your great results and great work on this company uh i wanted to uh first start with a remark that where where d is still trading at 1.4 or even it was 1.5 price earnings but the net profit increased quarter on quarter so it's lower right now and my question is um my question first question is how did the net cash from operations increase by 62 percent from the previous uh quarter one 2023 And why, like why?

I beg your pardon, what about the 60%?

The net cash from operations, it increased by 62% from last year. I was wondering why this happened or should we expect this in quarter two, quarter three, quarter four, better cash performance, better net cash provided by operations? Should we expect it to be 30, 40% roughly in quarter two, quarter three, quarter four?

Can Tom please provide?

Yes, I will answer your question. As you mentioned, in this quarter, our R&D is 41 million, and also it's a reprise increase compared to the first quarter of last year, but actually it's a little decrease compared to last year in the 2026. In the first quarter of last year, The total research and development time is 48 million. The decrease in this count is mainly due to we take active action to do some staffing adjustment. For example, maybe replace some lower technical staff to replace some higher technical staff. So there is some staff cost of the technical staff will be a little decrease in this quarter. However, although this code is compared to the last code, it's a little bit quick. We still have more R&D enrollment and testing in the next future and in our R&D plan. We hope in this low year, our R&D expense is about 100 million and 200 million. And compared to the last year, the total R&D is 149 million. So, compared to the low year, we still put our upside to our R&D expense. Okay.

Okay. Again, I asked about net cash provided by operations. So, it's like cash from operations. It increased a lot, and I was... happy about it, but okay. Second question is your guidance is again I think reiterated in 2023 last quarter in 2023 Q4 you provided a guidance, a middle guidance, a mid-bound guidance of 6.4 billion RMB with the current projections in Q2 of 1.4 to 1.6 billion RMB If you continue doing 1.6 billion RMB in Q3 and Q4, you should achieve the mid-bound target of 6.4 billion RMB. I think you're expecting that, right, on the revenue guidance. So my question is actually the revenue guidance which you provided in 2023 Q4, if you will reach mid-bound to upper bound of that guidance because you succeeded better or how are you feeling in Q2, Q1? Q1.

And now, can you please, yeah.

Sorry, so you gave a guidance in 2024.

No, no, no, I'm asking my colleague to respond, yeah.

Okay, my apologies. If you don't understand anything, I can repeat.

Yeah, I thought, yeah.

Yeah, I think for the whole year of this 2024, with our current assessment, we can meet our the total outlook of the total revenue we released in the third quarter of the last year. But for this quarter, because this is meet the like some festival in China mainland because like the plane festival. And during this festival, it's not our business peak season. And it's a low season. That is why you can see our revenue cannot increase much. But in the future, we think generally we can meet the guidance or the outlook we lived before. We have the confidence that our businesses have the contribution for the whole year.

Okay, just if you reach this mid-bound guidance, you will have 31% or 30.6% growth increase in revenue with 1.4 price trainings for anybody here in this school and you're also AI-powered. Okay, my last question or one of the last is... Your prepaid expenses and other assets in the balance sheet, it increased quite a lot. It's a current asset from what I know. My question is what caused this increase year on year and also from quarter four, from last quarter, they increased I think by 800 million RMB or 900 million RMB. The prepaid expenses, they increased a lot, the current asset, prepaid expenses and other assets. What caused that? It's a good thing, I think, yes. It's like account receivables increasing.

It's a hard question.

Now it's probably looking into the details. Okay, yeah, so prepaid expenses, yeah, they increased a lot.

Yeah, yeah, yeah, yeah. So by the end of the last year, our prepaid expense and other effects present some increase compared to the end of last year because consider our business development. Some of our suppliers need to ask us to prepay some customers. So like some channel cost and like some AI investment, we should prepay some amount of our channel cost to our suppliers. So for the purpose of our prepayment to our suppliers, because we can have a cooperation with our partners, and can fix some good asset list and other good channel cost. So you can say there is some increase of our prepaid assets that is mainly due to our prepayment to our supplies in the once about three or four months to fix some good resources and good supply service.

OK. Again, I want to congratulate you for these results. I'm actually very happy and you're executing great. A question for Mr. Ning Tang or actually a suggestion. If you change the name in Chinese company to AI or whatever, from Iran Digital to AI, Iran AI or something, AI in the name, Could you change also the New York Stock Exchange name or the LTD which appears when you say search YRD stock on Google or whatever. You see Iran Digital LTD. Could you change the name of the LTD also to Iran AI? Maybe it will catch more eyes of investors if the name change. Thank you for the idea. Yeah.

I really like the Yiren Digital, English name. Okay, as you wish. Because, yeah, digital is a great, yeah.

Yes, but investors see the Chinese name. Investors don't see the Chinese name. You must Google translate the Chinese name. So American investors in your stock exchange, they see digital. They don't see AI in the name.

I see. Okay.

If you did the name change in China, I don't know, if you did the name change in China, maybe you think about it. Thank you very much.

And if you have one more question, say sorry. I really want our interested prospect investors, shareholders, to look a bit further into all the details, right? Not just the name, but I was an investment banker on Wall Street like 98, 99. Yeah. So I experienced like if you just added .com, your name, all of a sudden your marketing cap goes up like, you know, three, four times. But my sense is, yeah, so it's probably good for the short term, but really – yeah i'm not so uh yeah yeah you said in the chinese in chinese it's you ran artificial something or you you said to the previous guy who asked the questions that the name that the change made in china is mainly because the original chinese name suggested that fintech if we are more than fintech we better change the name But the English name, Iran Digital, doesn't suggest a fintech. Yeah, my sense is digital includes, certainly includes fintech notion, but also includes like AI notion. But I took your point and I'll think about it.

Okay, maybe Iran Fintech and AI or small AI capital. I don't know, whatever, as you wish. Thank you very much, sir. And the last question also about AI. You said, I will have to read the transcript, you have so many achievements this quarter, but you said 400,000 calls were provided by an AI-powered language model. So there was like an AI language model, smart language model selling or doing as a sales rep, but it was AI. Did I understand correctly? 400,000 calls? Yeah.

Yeah, I think it's outbound cost. Yes. Automated, yeah, intelligent cost to prospect customers.

Okay, so customers joined or they bought your, whatever, they entered the UN Digital because of these 400,000 calls. which were powered by AI. Very interesting.

Yeah, we made this number of calls to try and sign them up.

Very nice. Okay, thank you very much, sir. And thank you also for the $2 million repurchases, and I hope they will continue, even though they are peanuts compared to your cash balance, but whatever. I hope you continue to grow and continue to execute and build something so beautiful. Your team, pictures of it, they're very nice. And thank you very much for you being also a great shareholder of the company and the CEO. Have a wonderful day. Bye-bye. Thank you.

Our next question today will come from Peter Rue of Bluebird Advisory. Please go ahead.

Thank you. Good evening. It's disappointing that the CEO and founder is not on the call for the second consecutive quarter.

I'm the founder and the CEO of the company. This is Ning Tang speaking.

Oh, thank you. I apologize, Mr. Tang.

I've been doing a lot of talking. I did the prepared remarks, yeah, and then I answered the a number of the questions.

Okay, thank you.

I have actually participated in every earnings conference call since the company went public.

Were you on last quarter? I thought you were traveling.

Yes. Yes. No, the CFO, our CFO, my colleague,

was traveling yeah and she's with us now yeah yeah and i and i do have trouble understanding your cfo but it could be my phone my question is i the reason your stock is so low is people don't have faith in you because of well all the changes i think having a dividend You have a lot of cash. It's not a good use of shareholder cash. I know you're the main shareholder and I know if I don't really care what other people say, but you, um, uh, just having money in the bank is not a good, it hurts your return on invested capital. So it's hurting your fundamentals and. And you should either put that to better use or return it to shareholders. And like Matthew said, a small $50 million dividend would probably greatly increase your overall market capitalization by that or more. And it would instill some confidence in the market that you treat your fellow small shareholders with respect. My second question is, even though you made $90 million of cash, your cash balance did not increase at all. In fact, it went down a little bit. And as the prior gentleman said, your prepaid expenses and other assets went up 200%. It's the second largest item, second largest asset on your balance sheet. And I did not understand what your CFO was saying, prepaid expenses and other assets. What are prepaid expenses and other assets that went from 400 million RMB to 1.2 billion RMB, an increase of over 800 million RMB, a 200% increase. Could you, the founder, Mr. Tang, tell us? Because I can understand you better than your CFO.

First of all, thank you very much for asking again about the dividend. We understand the importance of this issue, but were you there at the beginning of the Q&A session? Was I clear about my...

Yes, I heard your answer to Matthew and you said that it is under consideration. I was hoping you would announce it this month since you've had three months to hear our feedback from the last conference call. And I don't know if I should sell your stock or keep it for another three months if you're just going to tell us in another three months that you're still investigating it. You've had three months to think about it and you did nothing today with regard to the dividend.

So I don't have to repeat my answer at the beginning of the Q&A session and yeah, we will try and do a good job evaluating this issue. And regarding the prepaid expenses, I don't know what additional color can Na provide, but Na, can you please help out if you can?

Yeah, I can add some information about our cash management we can do currently. First, we now use our fund to service our current business. For example, we used our fund to cooperate with the trust company to set up the trust plan to facilitate our Yixianghua loan. In the first quarter of this year, our cooperation with the trust plan is about 500 million RMB. And we also plan to use our fund to acquire some financial licenses, which our financial service business requires. Yeah, the first purpose. And the second purpose, as I mentioned in my script, we also continue to do our share payback continue and set up for our staff. And for this project, we have used $2.1 million to do our payback. share purchase in the marketing and accumulate about 10 million U.S. dollars to do the thing. And we also keep on continuing our share purchase in the future. And we're also confident in all business development. And finally, but not last, as I mentioned, doing any gains that We will keep on revising all AI labs and LMP except for cell technical development. We're also from our external environment, we like the AI areas. Also, it's a preliminary review. We can say if something finalizes about our environment, obviously, and the external areas, we'll find a company to show the public awareness. Okay, I hope I can give some more information for you. Thank you.

Thank you. And ladies and gentlemen, at this time, we will conclude our question and answer session, and we will also conclude the YARN Digital conference call. If you have further questions, please contact the Investor Relations team at YARN Digital. Thank you for attending today's