Core Viewpoint - The company intends to renew the Financial Service Agreement with Chengtong Finance Co., Ltd. for another three years, which includes deposit, settlement, credit, and other financial services [1][2][7] Summary by Sections Transaction Overview - The renewal of the Financial Service Agreement is based on principles of equality, voluntariness, and good faith, with no significant risks involved [1][2] - The transaction is classified as a related party transaction and has been approved by the independent directors and the board of directors, pending approval from the shareholders' meeting [1][2] Related Party Information - Chengtong Finance Co., Ltd. is controlled by China Chengtong Holdings Group, with the company holding a 10% stake in Chengtong Finance [2][3] - As of December 31, 2024, Chengtong Finance has total assets of 33.448 billion yuan, total equity of 6.747 billion yuan, and a net profit of 1.79 billion yuan for the year [3] Financial Service Agreement Details - Chengtong Finance will provide services including deposits, settlements, credit services, and other approved financial services [4][6] - The total credit limit for loans and interest is capped at 2 billion yuan, subject to adjustment based on the company's operational needs [4] - The pricing for services will align with the prevailing rates set by the People's Bank of China and major commercial banks [4] Purpose and Impact of Related Transactions - The agreement aims to enhance the company's capital utilization and improve funding efficiency, while also broadening financing channels and reducing costs and risks [7] - The transaction is not expected to harm the interests of the company or minority shareholders [7] Approval Process - The agreement has been reviewed and approved by the independent directors and will be submitted for approval at the shareholders' meeting, where related shareholders will abstain from voting [7]

Core Insights - Lexin's Q1 2025 financial report shows a total revenue of 3.1 billion RMB, with a Non-GAAP EBIT of 580 million RMB, marking a year-on-year increase of 104.7% and a quarter-on-quarter increase of 25.3% [2][6] - The focus should be on the financial net income, which is derived from credit facilitation service income and tech-empowered service income, totaling 2.8157 billion RMB for Q1 2025 [2][3] - The core financial net income for Q1 2025 is 1.818 billion RMB, reflecting a quarter-on-quarter increase from 1.721 billion RMB in Q4 2024, indicating growth despite a decline in overall revenue [6] Revenue Breakdown - Credit facilitation service income for Q1 2025 is 2.648 billion RMB, while tech-empowerment service income is 361.5 million RMB [5] - Total operating costs for Q1 2025 amount to 2.045 billion RMB, with significant components including funding costs and various provisions [5][6] Asset Quality Improvement - The improvement in asset quality is evidenced by a 5% decrease in first payment default (FPD) rates and an 11% decrease in overall asset collection rates, contributing to a 9% reduction in the 90+ day delinquency rate [6] - The company's GAAP net profit reached 430 million RMB in Q1 2025, with a year-on-year growth of 113.4% and a quarter-on-quarter growth of 18.6% [6] Dividend Policy - Lexin plans to increase its dividend payout ratio from 25% to 30% of net profit starting in the second half of 2025, marking the second increase in dividend ratio within six months [7] Profitability Metrics - The take rate, defined as net profit over average loans, has increased from 0.66% in Q1 2024 to 1.58% in Q1 2025, with a quarterly profit margin growth of 21% [7]