LexinFintech First Quarter 2026 Earnings Conference Call

Good day, and thank you for standing by. Welcome to Listing's First Quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. And I'd like to hand the conference over to your first speaker today, Wil Tan, IR Director of the company. Please go ahead.

Thank you, Operator. Hello, everyone. Welcome to our first quarter 2026 earnings conference call. Our results were released earlier today and concurrently available on our IR website. Today, you will hear from our Chairman and CEO, Mr. Jay Wenjiexiao, who will provide an update on our overall performance and the strategies of our business. Our CIO, Mr. Arvin Zhang Wenchow, will then provide more details on our risk management initiatives and updates. Lastly, our CFO, Mr. James Zeng, will discuss our financial performance. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call, as we will be making forward-looking statements. Last, please note that all figures are present in Renminbi terms, and all comparisons are made on a quarter-over-quarter basis, unless otherwise stated. Please kindly note, Jay and Arvin will give their whole remarks in Chinese first. Then the English version will be... ...when AI face the voices. With that, I'm now pleased to turn over the call to Mr. Jay, Wenjie Xiao, Chairman and CEO of Le Xie. Please, sir.

Hello. 大家好很高兴和各位分享我们2026年第一季度的业绩 第一季度面对宏观环境及行业挑战 公司布局多年的独特的多元生态业务 展现出了较强的经营韧性 季度内分期零售线下普惠及突逼数字科技业务等交易量占比接近50% 生态业务增速高于线上住在业务 成为公司新的增长曲线 新旧业务动能转换初步完成 多元发展的长期主义成效 公司正朝着稳健可持续的健康方向发展 季度内公司交易额578.98亿元 环比增长了15.9% 同比增长了12.2% 营收33.09亿元 活跃用户516.7万 环比增长14.1% 同比增长8.6% 新增活跃用户数144.4万 环比增长63% 同比增长101.6% 净利润2.01亿元 多项风险指标保持稳定并持续改善 接下来我向大家介绍一点工作的进展 第一多元生态业务占比近50%成为新的增长引擎 第一季度虽有春节假期的影响 公司分析零售线下普惠2B数字科技等业务依然稳健增长 交易量大幅提升 为公司业绩带来新的动能 高效对接流量平台与机动机构 打开2B增长的新空间 一季度公司布局多年的2B数字科技业务开始快速增长 我们的云西科技PRO解决方案 通过技术能力与运营经验的结合 在互联网流量平台与各类金融机构之间大同的桥梁 让合作平台流量实践精准高效的分发 助力合作机构获得最稳健盈利的资产 充分实现了三方的供应 分期零售完善供应链 全面渗透至刚需消费场景 分期零售业务 深耕分期消费场景 完善供应链体系 丰富 吃穿 用行 油 厨等多品类商品供应 季度类平台发挥头部品牌的合作优势 新增引入知名头部品牌近150个 并推出品牌特卖频道 签约20多个国内外时尚运动品牌 频道上线以来 参与特卖品牌总销量环比提升43% 充分满足了用户品质消费需求 针对名称刚需 节庆送礼等场景 在元旦 年货节 春节等消费节点 平台推出多场大处活动 持续带动消费增长 在3C数码领域持续不断贴息免息优惠 有效促进了用户活跃度的提升 季度类平台优质用户交易定单环比增长等37.5% 普惠业务扩大现役布局 在下层市场挖掘新的增量 公司线下普惠业务一直聚焦本地化经营 面向罗民牧鱼等特色产业 公司推出独特的针对行业客群的风险模型与审批策略 助力现役小微个体工商户资金需求与地方金融机构精准匹配 推动不会金融活水持续流向现役助力现役经济的发展 季度内海外业务也取得了稳定的发展 规模盈利与资产质量继续保持稳度的增长 第二调优风险策略 优化产品矩阵 资产质量有所改善 一季度我们持续调优风险策略 深度迭代的算法和模型 大幅提升渠道对接及目标用户筛选效率 新推出真心报告解读智能体 以及交互式真实功能 让用户识别更加准确 有效支持了优质客户的个性化定价定额 公司开放所有产品至随借随环,先锡后本的灵活化功能,聚焦白领小微客群打造差异化受信与触达策略,通过场景化经营,向优质客群倾斜定价与合作支援,持续促进优质客群活跃,季度内公司资产质量延续稳定恢复的态势,新增资产和全量资产风险同步改善, 全量资产入税率环比四季度下降7%左右 30天出税率保持逐月回升 新客质量教程不改善 优质客群放款规模显著增多 预估一季度新增放款FPG30下降约6% 一季度公司不断加大消保和客户体验改善方面的资源从路 我们强化前台服务消防传队与各业务条件之间的协调严重 使信息传递更为顺畅 问题响应更加及时 整体处理闭环机制更加高效 在服务体验方面 通过智能化路由分配与排队策略 并引入高峰期预警机制 用户服务效率得到明显提升 核心用户服务指标进一步改善 在用户关怀前面 我们通过更加完善的模型 强化用户的针对不同群体 实施更有针对性的服务关怀举措 整体提升了用户的体验与满意度 在打击黑灰产 金融黑灰产方面 公司积极响应有关部门部署 发挥在人工智能大数据领域的技术优势 完善风险识别 按键侦破等全链条防御与自立体系 有效地维护了消费者的合法权利 展望未来 公司将在多元布局以取得阶段性成果 业务呈现良好增长态势的基础上 继续发力分析零售现象普惠 突逼数字科技的业务 在多元稳健发展的道路上继续前进 我们相信独特的优势将会持续增强公司的经营任性 充分应对未来的不确定性 为股东创造长期可持续的回报

接下来我把发言时间交给夏恩阿伟谢谢 Hi everyone thanks for joining us today for our first quarter 2026 earnings call In the first quarter against the backdrop of macroeconomic and industry challenges Our unique and diversified business ecosystem which we have been building for many years Demonstrated strong operational resilience During the quarter the loan volume of our installment e-commerce drivers, offline inclusive finance, and fintech empowerment businesses accounted for nearly 50% of the total. Social system businesses grew faster than the online loan facilitation business, becoming the company's new growth drivers. This indicates the transition from old to new growth drivers, the initial success of our long-term oriented strategy of diversified development, and the company's steady progress toward healthy and sustainable development. During the quarter, the company achieved a loan volume of RMB 57.9 billion, representing a quarter-over-quarter increase of 15.9% and a year-over-year increase of 12.2%. Revenue reached RMB 3.3 billion. Number of active users stood at 5.17 million, a quarter-over-quarter rise of 14.1% and 8.6% year-over-year. Number of new active users was 1.44 million, up 63.3%, quarter over, and 101.6% year over year. Net profit reached RMB 201 million. Besides, a number of key risk indicators continue to show improvement, maintaining a stable trend. Next, I will walk you through the key initiatives we have undertaken since the first quarter. First, our diversified ecosystem businesses accounted for nearly 50% of our total loan volume, becoming the new growth drivers. In the first quarter, despite the seasonal impact of Chinese Spring Festival holiday, our installment e-commerce, offline inclusive finance, and fintech empowerment businesses continue to grow steadily, with loan volume increasing significantly, and the growth momentum to the company's overall performance. We have unlocked a new growth space for our B2B business by efficiently connecting with internet traffic platforms and financial institutions. In the first quarter, our fintech empowerment business, which we have been building for many years, began to grow rapidly. Our Yungshi Technology Pro solution builds a bridge of resource collaboration between Luxian internet traffic platforms and various financial institutions by incorporating our technological capabilities and operational experience. It enables our partnered platforms to distribute traffic precisely and efficiently, empowers financial institution partners to obtain assets with stable profitability, and thereby benefits for all three parties. Our installment e-commerce refined its supply chain and fully penetrated essential consumption scenarios. Installment e-commerce business continued to deepen its presence in different consumption scenarios, refined the supply chain system, and enriched product offerings across categories such as food, apparel, transportation, travel, shopping, entertainment, and pets. During the quarter, leveraging our advantage in partnerships with industry leaders, we added nearly 150 well-known brands and launched an outlet channel for select merchants, signing more than 20 domestic and international fashion and sports brands. Since its launch, total transaction volume of participating brands increased by 43% quarter over quarter, fully meeting users' demand for quality consumption, targeting essential daily needs and festive gifting scenarios, and several major promotional campaigns during key consumption periods, such as New Year's Day, Chinese Spring Festival gift fair, and the Lunar New Year holiday. consistently driving consumption growth in the 3C digital product segment ongoing interest-free and discount offers effectively boosted user activity during the quarter the number of orders from high quality users on our platform increased by 35.7 percent inclusive finance business expanded its bounty level presence unlocking new growth in lower tier markets our offline inclusive finance business has always focused on localized operations for specialized industries such as agriculture forestry animal husbandry and fishery we have launched unique risk models and credit approval strategies tailored to industry specific customer segments this helps match the funding needs of county level small and micro businesses and individual merchants with local financial institutions ensuring that inclusive financing resources continue to flow into county economies and support their development. During the quarter, our overseas business developed steadily with continued stable growth in loan volume, profitability, and asset. Second, we refined our risk strategies and optimized our product matrix, leading to improvements in asset quality. In the first quarter, we continued to adjust and optimize our risk strategies. Our deeply iterated algorithms and models significantly improved the efficiency of channel connection and target user screening. We newly launched a credit report interpretation AI agent and an interactive credit enhancement function, making user identification more accurate and effectively supporting personalized pricing and credit line allocation for high-quality users. We have made flexible repayment features, such as on-demand borrowing and repaying and bullet repayment, available across all products. Focusing on white-collar workers and small and micro-business owners, we developed differentiated credit granting and outreach strategies. Through scenario-based operations, we allocated pricing and credit line resources, preferentially to high-quality customers, consistently boosting their activity levels. During the quarter, our asset quality continued its steady recovery, with risk indicators improving for both existing and new assets. For total assets, day one delinquency ratio decreased by about 7% quarter over quarter. 30-day collection rate improved month over month. New customer quality also improved. Loan volume to high-quality segments rose notably. FPD30 of new loans initiated in the first quarter is expected to decrease by about 6%. In the first quarter, we continue to increase resource investment in consumer protection and customer experience improvement. We strengthen the coordination between our frontline service and consumer protection teams and various business lines, enabling smoother information flow, more timely issue response, and a more efficient closed-loop resolution mechanism. In terms of service experience, by optimizing intelligent routing and queuing strategies and introducing peak time early warning mechanisms, we significantly improved service efficiency with key customer metrics showing further improvement. On the customer care front, we enhanced our user behavior analysis through more sophisticated models and refined customer tiering, implementing more targeted care measures for different segments, which improved overall user experience and satisfaction. In combating illegal financial activities and fraudulent syndicates, we actively responded to relevant regulatory deployments, leveraging our technological advantages in AI and big data to strengthen the end-to-end defense and governance system, including risk identification and case detection, thereby safeguarding consumers' legitimate rights and interests. Looking ahead, building upon the initial success of our diversified system strategy and the solid growth momentum of our businesses, we will continue to drive our installment e-commerce, offline inclusive finance, and fintech empowerment businesses steadily advancing along the path of diversified and resilient development. We believe that our unique ecosystem advantages will continue to strengthen the company's operational resilience enabling us to navigate future uncertainties and create long-term sustainable returns for our shareholders next i'll hand over the floor to our cro arvin thanks 下面我将汇报一下今年一季度风险管理方面的工作情况 2026年一季度随着平规落地对行业风险影响逐步降低 一季度行业整体风险开始起稳回落 我们也保持了从7年11月起风险稳步下降趋势

从具体风险表现来看 1季度环比25年4季度 全量资产入催率下降了107左右 30天出催率也保持了逐月回升 预估1季度新增放款FG30下降约106左右 整体风险表现持续改善 下面介绍一下我们1季度采取的具体风险措施 第一我们季度继续加大 大模型在风险管理场景中的应用 持续提升风险管理的效率和效果 在复向处置方面 利用大模型能力应化升级了复向处置机器人 和风险自动巡检机器人 有效地提升了风险识别能力和风险客户处置效率 使得一季度风险继续保持下降趋势 同时,通过大模型进行实时交付提额,做大优质分母,促进新增犯法,风险持续改善 通过大模型实现线上提额实时交付,高效获取客户的额度需求和通信材料 这不仅大幅提升了风险识别的准确性与效率 更能基于对客户风险的全面洞察和对客户需求的全面了解 为客户提供满足其个性化需求的信贷offer 第二 消费信贷业务通过优质客群专项经营促进优质规模稳固增长 重点针对优质白领和小微客群通过专项识别模型 差异化提额降价策略和管户服务大幅提升专项人群的可经营人数 以及动资率促进优质规模显著增长 一季度相比四季度是白领客群规模上涨了56% 优质小微客户规模上涨了30% 优质人群专项经营方案初见成效 二季度将持续优化 优质人群专项经营能力经营部促进优质资产规模增长 第三 土会金融业务 我们持续深增广阔现域 全面落地本地化人民策略 针对现域客户的特点 开发现域小微风控模型 优化准入收信定价等风控策略 适配线下批林 农资 养殖等类别小微客户的风险特点和近债需求 同时通过线上线下小微客群风险管理和带后回收 截至目前覆盖近百个县域 累计服务400万家小微客体风险表现委届 业务规模持续提升 另外我们在一季度还加大了对黑灰产的识别和打击 构建事前预警、事中拦截、事后打击、生态协同 全面路防控体系、打击代理速速等黑灰产行为,向公安机关移送有效黑产线索,并协助城中打击山东母黑灰产残户,抓获犯罪嫌疑人40余名。 In the next year, we will continue to strengthen the economic structure of the financial system and the risk management system. At the same time, we will be able to improve the customer's needs and experience the risk management system. We will continue to strengthen the risk management system and maintain the risk management system. We will be able to control the risk management system and control the risk management system. Next, we will invite CFO and Jims to introduce the first year of the financial situation.

Thank you, Jay. Next, I will provide a review of our key initiatives and achievements in risk management for the first quarter of this year. In the first quarter of 2026, as the impact of the new regulations on industry risk gradually subsided, industry-wide risk began to decline. We also maintained the steady risk reduction trend we have seen since last year. Regarding specific risk performance compared to the fourth quarter of 2025, day one delinquency ratio of total assets decreased by approximately 7%. The 30-day collection rate continued to recover month over month, and we estimate that FTD 30 for new loans initiated in the first quarter to decline by about 6%. Overall risk performance continued to improve. Now, let me walk you through the specific risk initiatives implemented during the quarter. First, we continue to scale up the application of large models in risk management scenarios during the first quarter, consistently improving the efficiency and effectiveness of risk management. On the high-risk asset management side, we leveraged large model capabilities to optimize and upgrade our high-risk asset management robots and automated risk inspection robots, effectively enhancing our risk identification capabilities and the efficiency of high-risk customer management. This helps sustain the downward trend in risk during the quarter. At the same time, we used large models to enable real-time interactive credit line increases, growing a prime asset base and driving continued improvement in new loan risk. Through large models, we achieved real-time online interaction for credit line increases, efficiently capturing customers' credit needs and credit enhancement documentation. This not only significantly improved the accuracy and efficiency of risk identity, but also enabled us, based on a comprehensive understanding of customer risk profiles and needs, to offer customers personalized credit offers that meet their specific requirements. Second, in our consumer credit business, we promoted steady growth in prime asset volume through dedicated prime customer segment management, focusing on prime white-collar customers and small and micro-business owners. We leveraged dedicated risk identification models, differentiated credit line increase, and pricing reduction strategies, and account management services to substantially increase both the addressable customer base and drawdown rate of prime target segments, driving significant growth in volume. Compared with the fourth quarter of 2025, long volume from prime white-collar customers increased by 56 percent, and volume from prime small and micro business customers increased by 30 percent in the first quarter, demonstrating the early success of our prime segment management approach. In the second quarter, we will continue to refine our prime segment management capabilities to further drive prime asset growth. Third, regarding our inclusive finance business, we continue to deeply cultivate broad county-level markets and fully implemented localized operations strategies. Tailored to the characteristics of county-level customers, we developed a county-level business risk model and optimized risk strategies with optimized customer onboarding, credit granting, and pricing to match the risk profile and credit needs of small and micro customers in offline wholesale and retail, agricultural supply, and farming segments. At the same time, we strengthened risk management and post-loan collection for small and micro customers through online and offline coordination. To date, we have covered nearly 100 counties, served over 4 million small and micro merchants, and individual operators, maintained stable risk performance, and continued to grow loan volume. Additionally, in the first quarter, we strengthened our identification and on illegal and fraudulent activities. We built an end-to-end prevention and control system encompassing early warning, in-process interception, post-event enforcement, and ecosystem coordination to combat illicit activities such as agent assisted complaints we provided actionable leads to public security authorities assisted in the successful crackdown of a fraudulent syndicate in shangdong province and facilitated the arrest of over 40 suspects looking ahead to the second quarter of 2026 we will continue to optimize our asset mix and strengthen risk management over new loans At the same time, we will better serve prime customers and enhance their experience, driving further growth in high-quality assets while keeping risk stable and controllable. Our goal is to gradually bring risk levels back within our target risk appetite. Next, I will hand over to our CFO, James, to provide a review of the company's financial performance for the first quarter.

Thanks, Albert. I will now provide a detailed overview of our first quarter financial results. Please note that all figures are presented in revenue terms and all comparisons are made on a quarter-over-quarter basis unless otherwise stated. During the first quarter, the industry continued to navigate a period of adjustment. Again, this complex backdrop of our diversified business ecosystem demonstrated continued operational resilience. Driven by the structural optimization of our business portfolio, we successfully grew our total loan volume. While our online consumer finance business faced pressure due to the macro uncertainties, our ecosystem segments, particularly the Big Tech Empowerment Service, achieved solid growth. Consequently, total revenue for the first quarter was 3.3 billion, representing a 8.7% sequential increase with net income remaining relatively stable at 201 million. Now let's take a review of our first quarter financial results. First, net revenue of the credit business, which is derived by adding up credit facilitation service income and the tech empowerment service income, net of credit costs including provisions and the fair value changes and the funding cost was 1.5 billion, representing a 7.2% or 98 million increase quarter over quarter. The overall growth was largely driven by 382 million rights in tech empowerment service income. This was underpinned by revenue growth from lower provision top-ups for our capital life portfolio a month, improving asset quality. Since our capital life income is recorded net of credit cost, the material sequential decline in provisions directly boosted this revenue line. On the other hand, credit facilitation service income, our capital heavy business declined by about 10% or $253 million. This reflects the ongoing volume and the pricing headwinds in our online consumer finance business, partially offsetting the increase in our tech empowerment service income. Second, net income of the installment e-commerce business defined by installment e-commerce revenue net of cost of inventory sold increased by $41 million to $208 million. So, the total net revenue summing the credit and installment e-commerce business added up to $1.7 billion, a 9.1% or $138 million increase quarter over quarter. On the expense side, operating expenses including sales and marketing, research and development, General and administrative expenses and the process in the servicing cost increased by 13.8%, or $169 million to $1.4 billion. Tax and others decreased by 20.9%, or $18 million to $68 million. Consequently, total expenses added up to $1.5 billion, an increase of $151 million. By deducting the total expenses of $1.5 billion from the total net revenue of $1.7 billion, we arrive at a net income of $201 million, a decrease of 5.9%, or $13 million quarter over quarter. One of the macro headwinds, our diversified ecosystem has successfully sustained our financial performance. Now, let me walk you through three key business highlights behind these results. First, the resilience of our diversified business ecosystem. Amid continued industry consolidations in the first quarter of 2026, we proactively optimized our business mix to strengthen risk management and compliance. Anchored by our diversified ecosystem, we continue to demonstrate strong operational resilience. Consequently, non-online consumer finance GEV, which encompasses offline inclusive finance, Fintech empowerment services and our e-commerce businesses grew to nearly 50% of our total G&B, up 42% sequentially, effectively offsetting the contraction in our online consumer finance business. This shift was largely fueled by our FinTech Empowerment, or Shuke model, where we partnered with leading internet platforms and banks on risk assessment and assumed the corresponding credit risk. With loan volume surging to around $21 billion, this model's financial contribution is not yet fully reflected due to its lower pricing and advertise the revenue recognition. However, the build-up of the short curve model creates a robust revenue pipeline and it will improve our long-term asset quality and ensures steady profitability across market cycles. The installment e-commerce maintains its positive momentum supported by stable transaction volumes and improving the gross margins, which I will elaborate later. At the same time, our offline inclusive finance and overseas business advanced steady, serving as additional stabilizers and diversifiers for our broader business portfolio. Second, the steady development of our installment e-commerce business. Our installment e-commerce spins continue to be deeply integrated into our ecosystem, providing seamless and convenient consumption scenarios and acting as a unique competitive advantage. Given the current macroeconomic environment, this segment continues to prioritize asset quality over rapid expansion. While demand remains strong in the first quarter of 2026, we deliberately moderated the growth to contain credit risk within our risk appetite. As a result, installment e-commerce GME remained steady at $2.2 billion. Gross profit from the e-commerce business reached $208 million, representing a 24% increase with gross margin expanded by 169 business points, sequentially to 9.4%. The solid performance was largely driven by the continued refinement of our e-commerce operations. Ultimately, the steady development of this assessment not only generates reliable gross profit, but also allows us to capture and observe the diverse consumption needs of our users, further diversifying our revenue streams and reinforcing our operational resilience. Third, prudent provision coverage. In the first quarter, our total credit cost, which encompasses three provision line items and the fair value changes of financial guarantee derivatives in our income statement, stood at 1.3 billion, up 0.8% sequentially. This increase was primarily volume driven, aligning with the growth in our new loan origination. As Arvind noted, our risk indicators are stabilizing with risks for both existing and new loans trending downwards from January through March. The supplementary provisions required for our existing portfolio were lower than in Q4. To highlight our provisioning strength, let's look at our gross provision metrics. By stripping out the net impact of the fair value changes, gross provision offers a true picture of the capital we have reserved against our loan portfolio. Specifically, our gross provision ratio for new capital heavy loans stood at about 7.2%. Comfortably exceeding our historical peak vintage charge-off rate, average ratio was 258% in the first quarter. To summarize, our diversified ecosystem has proven its value as a structural stabilizer. The solid progress in our fintech empowerment and e-commerce segments effectively offsets the near-term pressure of consumer finance business, building a sustainable revenue pipeline line for future quarters. Coupled with our conservative provisioning strategy, we have established resilient foundations to navigate current and potential market uncertainties, ensuring steady operations across all cycles. Now let's move on to our operating expense line items. On the cost and expense side, total operating expenses increased by 14% or $169 million to $1.4 billion, mainly due to the increase of sales and marketing expenses of $124 million, primarily reflecting our investment in ecosystem user engagement, alongside the upgrading of our service infrastructure to further improve consumer protection and overall user experience. For balance sheet items, as of March 31st, our cash position, which includes cash, cash equivalence and restricted cash, was approximately $3.3 billion. Shareholders' equity remained solid at about, we expected, gradual recovery trend we saw in the first quarter to carry into the second quarter, modest in pace but trending in the right direction. That said, as the lingering impact of macroeconomic uncertainties has not yet fully dissipated, we will strictly maintain our prudent operational approach. As such, we expect the total loan originations for the second quarter to remain relatively stable. That's all our prepared remarks for today. Operator, we're now ready to take questions.

Thank you. To ask a question now, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. A moment for our first question. We will now take our first question from the line of Alex here from UBS. Please ask your question.

Alex, your line is open. 今期也看到出来了比较多的一些新的监管政策 能不能请关系层给我们展望一下未来在监管这边的一个情况 以及我们怎么将去应对 然后第二个关于贷款的资产质量 那想请教一下这个最新的一些风险表现怎么样 以及对接下来几个季度的风险有什么展望和判断 So my first question is regarding the recent rollout of various new regulations. What's the company's outlook on this front, and what are the variety of measures that you are taking to adapt to those changes? Second question is regarding the asset quality. Could you provide some update on the latest asset quality trend for your loan portfolio, and how do you think about the risk outlook for the coming quarters?

Thank you very much. 逐步的收缩甚至退出市场 行业的空间其实还是在带着 我这也为我们未来的整个的发展提供了更多的一些可能性 在这样的一个环境下 我们还会继续的深化以用会为中心的整个的一个权益经营的战略 具体来说我们还是会继续优化用户的体验 在做大优质资产的整个同时 我们会进一步优化资产结构提升整体抗风险的能力 此外,我们也会继续统筹推动多元生态业务的稳健发展 与此同时,我们再加快探索新客群、新产品、新的业务模式 比如说进一步生争小微群体 提升对优质用户的服务能力等等 消费者权益保护方面,我们也会全面住牢防线 从产品设计、信息披露到在后服务 全流程落实合规要求 长期来看,我觉得公司还是很坚定地践行合规经营的这个理念,一同我们有多元生态的整个业务体系,我们持续来提升公司的经营韧性,我们相信这样的战略布局能够帮助我们从容地应对外部环境的变化,实现长期稳健的一个增长。 and user experience, both a challenge and an opportunity.

If we match the company with our team, and some of the metrics will be best if you can exit the market. Market space and opportunities can remain. This gives us more room to grow in healthy and high quality ways. In this environment, we will continue to deepen our customer-centered approach to serve different customer segments. More specifically, we will keep improving customer experience, grow our high-quality assets, further optimizing our asset mix, and strengthen the overall race resilience. At the same time, we will steadily promote the healthy development of our diversified ecosystem businesses. We are also accelerating our efforts to explore new customer segments, new products, and new business models. For example, going deeper into serving small and micro businesses owners and improving services for prime partners. On consumer rights protection, we will put more focus on compliance process, covering the whole process from product design, disclosure, to post-long services. Over the long run, we will stick to compliant operation and leverage our diverse business ecosystem to further enhance our operational resilience. We believe this strategic positioning will help us navigate external changes and achieve stable operations and long-term sustainable growth. 预防波测量化, 并且下降趋势, 出催率一季度也逐月改善, 持续的一个回升。 从具体风险表现来看, 我们的入催率, 环比Q4下降了170左右,

我们的三天出催率逐月回升, FPD30下降了160左右, 整体风险表现出持续改善的一个良好趋势。 And in the second year's second year, we will continue to improve the temperature of the threat and increase the lower levels of the threat. And in the future of the threat to the threat and the decrease in a further increase. Our goal is to maintain the temperature of the threat and the temperature of the threat.

So overall, in the first quarter of 2026, the quality of both our new loans and existing loans maintained an improving change. Regarding the specific metrics, compared to Q4 of 2025, Bay-1 delinquency ratio of total assets decreased about 7% in Q1, 30-day collection, FTD-30 for new loans originally originated in Q1 is expected to decline around 6%, so you can see the overall risk performance continue to improve. Looking ahead to the second quarter of 2026, we will continue to optimize our asset mix and strengthen risk management over new loans by enhancing risk identification risk disposal and maintaining the quality of new loans. This will help us to further reinforce the current downward trend that we have already seen in the risk metrics. Our overall goal is to keep our risk steadily in the second quarter and which will set us up for recovery and high-quality growth for the rest of the year.

Thank you. We will now take our next question from the line of Judy Zhang from Citi. Please ask your question, Judy. Your line is open.

Thank you for letting me ask a question. This is Judy Zhang from Citi. So in light of the changing regulatory environment, what's your outlook for the company's full-year financial performance?

Okay. I will take the question. As a summary, if we look ahead to 2026, there are still a lot of uncertainty in the macro environment. So we'll continue to take a prudent approach and keep strengthening our operational resilience. I really, at this time, can't really provide specific numbers. Maybe I can quickly walk you through a few key metrics and its trend. First, on the loan volume side, the online consumer finance business may remain pressure. But thanks to the solid growth of our ecosystem business, like our cleantech empowerment and the e-commerce platform, we would expect the total loan volume to stay relatively stable quarter over quarter. Second, on the revenue side, because the Fintech Empowerment business recognizes revenue more gradually due to the accounting policy, so it will fully offset the near-term revenue impact from the contractions of the online consumer finance business. However, in the longer run, having a larger contribution from these businesses will give us more stable revenue base. Our asset quality continued to improve, resulting in lower provision top-ups on the existing capitalized business, which led to the increase in our tech department service revenue. So I would expect this trend to contribute positively to our revenue in the data. Third, on the credit cost side, they should come down as risk continues to decline, assuming no major macro or regulatory changes. With that said, we'll remain prudent with our provisions. Fourth, on the expense side, due to the expansion of our ecosystem business, our continued investment in customer experience of expenses increased slightly on the sequential basis in Q1. So going forward, we'll keep driving operational efficiency, reduce costs where we can, and aim to steadily optimize our expense ratio. So put all these together as a summary, overall for 2026, we continue to focus on making steady progress while navigating the uncertainties, so we'll keep building a strong foundation for the long-term, high-quality business.

Thank you. We will now take our next question from the liner Zihan Wang from Goldman Sachs. Please ask your question, 紫涵, your line is open. 好的,谢谢管理层给我这个提问的机会。 我是高正的分析师王子涵。 我请请管理层帮忙展望一下公司在提升股东回报方面未来有什么自己的计划。 我来翻译一下。 Thank you for taking my questions.

This is 紫涵王 from Gormis X. Could you please elaborate on the corporate plans to enhance shareholder returns? 好的,这个问题我来回答一下。 呃 我们一直把股东回报放在比较重要的一个位置 近期公司计划注销2000万ads 约占公司总发行及流通股本的百分之十二 当然 直到当前的环境存在一定的不确定性 我们阶段性的暂缓新增的股票回购 我们始终兼顾股东回报与资本使用效率 未来我们会根据市场环境的变化 灵活重启回购计划 争取在合适的时机 最大化释放回购资金对公司价值的催化作用 在完成本质回购以后 公司还会结合经营发展和资本市场情况 积极考虑推出新的股票回购方案 稳步提升股东的长期回报 我们希望通过持续务实的举措 让股东切实分享到公司成长的价值 of 20 million ADS, which represents about 12% of our total outstanding shares.

That's that, even the ongoing map for uncertainty, we have temporarily suspended new share repurchases for now. We always try to balance shareholder returns with capital efficiency. Going forward, we will stay flexible. When market conditions are right, we can make sure our buyback dollars After we complete this research program, we will actively consider launching a new launch based on how our business, our goal, is to steadily improve long-term return for our shareholders. Through consistent and practical steps and initiatives, we want our shareholders to share in the value we create.

We have now reached the end of the question and answer session. I would now like to turn the conference back to Will for closing comments.

Thank you. This conference is now concluded. Thank you for joining us today. If you have any more questions, please do not hesitate to contact us. Thanks again.

Thank you for your participation. In today's conference, this has concluded the program. You may now disconnect your lines.