Yiren Digital Ltd.

Good day, and welcome to the IRN Digital Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal Conference Specialists 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, you may press star then two. Please note, this event is being recorded. I would now like to turn the conference call over to Ms. Keao Hee. The floor is yours, ma'am.

Thank you, operator. Good morning and good evening, everyone. Today's call features the presentation by the founder, chairman, and CEO of Credit East, our CEO, Mr. Ning Tang, and our CFO, Mr. Yu Ning Feng. There will be 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 State Harbor Provision of U.S. Private Security's Delegation Reform Act of 1995. Such statements accepted risks, uncertainties, and factors that can cause actual results to differ materially from those contained in any such statement. Thirdly, information regarding future risks, uncertainties, or factors is included in our filing 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 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 those non-GAAP measures, and recently agents who get measures, please refer to any specialist. I will now pass it to Lin for opening remarks.

Thank you all for joining our earnings conference call today. We closed out the year on a strong note, delivering another solid quarter of results that were in line with our previous guidance. The year 2024 marked a significant milestone for us, driven by four key achievements. Firstly, we reshaped and upgraded customer segments for our financial services business, significantly improving asset quality and paving the way for long-term sustainable development. Secondly, we made meaningful progress in the development and application of AI. By integrating our proprietary AI system throughout our operations, including customer acquisition, customer service, and asset management, we are seeing significant improvements in operational efficiency and user experience. Thirdly, our international business steadily made progress throughout the year, meeting our faith objectives and achieving profitability. While expanding our operations in the Philippines, we are also working to replicate this success in more countries and regions moving forward. Lastly, our insurance brokerage business is actively adopting a digitization and internet-driven model. While the traditional model continues to be a major revenue contributor for this segment, social media has emerged as an increasingly vital channel for client acquisition. To capitalize on this trend, we have established a dedicated team focusing on social media to drive conversion rates and further expand our digital footprint. Together, these achievements are laying a solid foundation for our next phase of higher quality growth, one that will continue to create value for our stakeholders in the years ahead. Now, I will go into details of our operational highlights for the quarter. Our financial services business continued to grow during the fourth quarter of 2024, with total loan volume reaching RMB $15.4 billion, a 32% year-over-year increase. the number of borrowers remained stable quarter over quarter at 1.6 million and grew 14% from the same period last year. For the full year 2024, total loan volume reached RMB 53.6 billion, representing an impressive 49% increase from the previous year, surpassing our internal target. At the same time, our Yixianghua lending platform maintains strong in popularity with 4.5 million monthly active users in the fourth quarter, a 27% year-over-year increase. As I mentioned earlier, we are seeing clear improvements in asset quality. For full year 2024, average first payment default rate for 30 days rate dropped by 13 basis points compared to 2023, reflecting stronger anti-fraud measures. As of December 31, 2024, delinquency rates for 1 to 30-day and 61 to 90-day buckets decreased by 20 basis points and 10 basis points, respectively, from the previous quarter. Hold on one second, let me get the script. Moreover, M1 recovery rates in the fourth quarter further rose by 23 basis points to reach a record high. The upgrade in our customer base has clearly established a strong foundation for our long-term growth. On the funding side, we made substantial progress in expanding our funding partnerships by adding 22 new funding partners in 2024. Our funding costs in the fourth quarter saw another 23 basis points decline sequentially, translating into a total decline of 210 basis points compared to the same period in 2023. Moving on to our international business, we have upgraded our customer mix and shifted towards higher quality borrowers with a better credit performance in the Philippines. This led to a noticeable improvement in profitability, which has already turned positive and reached the high single digits. Currently, monthly loan volumes are in the RMB 30 to 40 million range, with total loan volume in 2025 expected to double compared to 2024. We are also exploring opportunities to replicate this successful model in other countries and regions and look forward to updating you on our progress in the near future. On our AI strategy, we have constantly prioritized the development and application of AI as a key element of our overall strategy homework. In 2024, research and development expenses totaled RMB 412 million, a year-over-year increase of 177%, of which approximately RMB 0.2 billion was allocated specifically to AI development. We have continuously built and refined our AI models for collections, customer service, quality assurance, and overseas identity verification, among other uses. These models have been widely applied across various areas of our operations, resulting in significant cost savings and the improvements in efficiency. For our domestic business operations, as of the end of fourth quarter, 81% of day one overdue cases were handled by AI robots, reducing labor cost savings by RMB 1.9 million during the quarter alone, and approximately RMB 9 million for the year. Our AI-powered intelligence funding routing system significantly enhanced the funding allocation efficiency by optimizing fund distribution based on the borrower's credit performance, funding partner's risk preference, and the funding cost. This resulted in cost savings of 44 million RMBs for the year. We recently integrated DeepSeat, which is expected to further enhance our deep thinking and customer analysis capabilities, providing further support to our customer service strategy. For overseas operations in the Philippines, our AI-powered ID verification model achieved an accuracy rate of over 96% during the quarter. We also applied our AI systems to loan collections which improved the customer service, the customer experience, and reduced the customer complaints by 47% in the fourth quarter. Moving on to our insurance brokerage business, 2024 was a challenging year for the entire industry due to regulatory changes with lower interest rates and the impact of the unified commissions and fees in reporting and underwriting policies. Total premiums in 2024 were over RMB 4.4 billion, down 10% year over year. Specifically, life insurance products saw strong renewal rates of 96% in the fourth quarter, much higher than the industry average, reflecting higher client recognition of our services. Moreover, as I mentioned earlier, we have been proactively expanding our business online with the support of AI-driven customer service and AI-generated content. As of the end of 2024, we have successfully onboarded over 10,000 users who are now engaged with us and in the conversion pipeline, making a strong start. Meanwhile, additional efforts to create synergies between our lending platform and the insurance services are beginning to pay off. By offering customized insurance products to our borrowers, growth momentum remains strong, with December premiums from this channel increasing more than eight times compared to September 2024. For our property insurance, Total premiums reached over RMB 2.0 billion in the full year 2024, driven by our strategy of strong channel partnerships and the tailored solutions. Currently, we have over 120 institutional partners, including more than 40 in the property insurance sector, and we offer more than 1,100 property insurance products. Moving forward, we will maintain this strategy and explore collaborative opportunities in additional technological and emerging fields, including AI, advanced modeling, and the low-altitude economy sector. Just some recent exciting news to share. Our insurance brokerage app, He Xiang Insurance Brokers, has successfully crafted an insurance solution for two Robinson R44 helicopters operated by Xinjiang Tianyin General Aviation Company Limited. We look forward to sharing more good news in the quarters to come. Last but not least, we are pleased to announce a cash dividend for the second half of 2024 of U.S. dollars, 0.22. per ADS. This dividend is expected to be paid on or around May 15, 2025, to holders of the company's ordinary shares and ADS as of the close of business on April 30, 2025, Hong Kong time and New York time, respectively. In conclusion, AI development and exploration High-quality growth and global expansion will be the key theme of our business journey in 2025. We will continue to embrace the changes shaping our current era, consistently exploring and refining our strategies to deliver sustainable long-term returns for both our company and our shareholders. Now, I'll pass it to Yuning who will go through our financial performance.