Financial Data and Key Metrics Changes - Total net revenue for Q3 was RMB 5.21 billion, slightly down from RMB 5.22 billion in Q2 but up from RMB 4.37 billion a year ago [16] - Non-GAAP net income reached RMB 1.51 billion in Q3, compared to RMB 1.85 billion in Q2 [21] - Non-GAAP net income per fully diluted ADS was RMB 11.36 in Q3, down from RMB 13.63 in Q2 [21] - The effective tax rate for Q3 was 20.9%, higher than the typical rate of approximately 15% due to withholding tax provisions [21] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.87 billion in Q3, up from RMB 3.57 billion in Q2 [16] - Revenue from platform services was RMB 1.34 billion in Q3, down from RMB 1.65 billion in Q2 [17] - The average internal rate of return (IRR) for loans originated was 20.9%, compared to 21.4% in Q2 [17] Market Data and Key Metrics Changes - The number of new credit line users grew by 9% to 1.95 million in Q3, while the average cost per credit line user declined by 8% [8] - The 90-day delinquency rate increased to 2.09% in Q3 from 1.97% in Q2 [18] - The provision coverage ratio remained near historical high at 613% in Q3 [21] Company Strategy and Development Direction - The company is focusing on risk management and enhancing AI capabilities to better serve inclusive finance needs [4] - The strategy includes optimizing the user mix by increasing the proportion of high-quality borrowers [6] - The company aims to strengthen its competitive edge through technology solutions and AI-driven initiatives [10] Management's Comments on Operating Environment and Future Outlook - The management acknowledged persistent headwinds in the consumer finance sector and the need for regulatory adjustments [4] - They expect the competitive environment to become healthier in the long run, despite short-term impacts on market size and profitability [27] - The company plans to maintain a cautious approach in business planning for the next few quarters, focusing on risk control [23] Other Important Information - The company issued RMB 4.5 billion in asset-backed securities (ABS) during Q3, up 29% year-over-year [8] - Total cash and cash equivalents were RMB 14.35 billion in Q3, compared to RMB 13.34 billion in Q2 [22] - The company plans to resume its share repurchase program after the earnings call [33] Q&A Session Summary Question: Impact of new loan facilitation rules on business model and take rates - Management indicated that the new rules will require time for adjustment, impacting market size and profitability in the near term [26] - They expect a take rate of 3%-4% in Q4 due to pricing and risk impacts, with a focus on optimizing risk strategies and improving collection efficiency [28] Question: Shareholder return and buyback plans - The company plans to resume its share repurchase program after the earnings call, with a goal to gradually increase dividend payouts [33][34] Question: Asset quality trends and expectations - Management noted early signs of stabilization in asset quality, with no further upward trend in delinquency rates observed in November [39] - They expect improvements in overall portfolio risk to take a few more months to materialize [43] Question: Implications of potential APR regulations - Management assessed that while direct impacts are limited, there may be indirect effects on liquidity and risk volatility [49] - They emphasized the importance of serving higher-quality users and optimizing pricing to maintain a balanced risk profile [50] Question: Drivers behind technology solutions loan volume growth - The technology solutions business saw significant growth due to increased collaboration with financial institutions and strong demand for AI agents [55] - The company is upgrading its technology offerings to enhance customer acquisition and risk management [56] Question: Capital heavy vs. capital light business mix outlook - In the short term, the company may lean towards capital light models due to market volatility, but expects to maintain a balanced mix over the long term [60]

Financial Data and Key Metrics Changes - Total net revenue for Q3 was RMB 5.21 billion, slightly down from RMB 5.22 billion in Q2 but up from RMB 4.37 billion a year ago [16] - Non-GAAP net income reached RMB 1.51 billion in Q3, compared to RMB 1.85 billion in Q2 [21] - Non-GAAP net income per fully diluted ADS was RMB 11.36 in Q3, down from RMB 13.63 in Q2 [21] - The effective tax rate for Q3 was 20.9%, higher than the typical rate of approximately 15% due to withholding tax provisions [21] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.87 billion in Q3, up from RMB 3.57 billion in Q2 [16] - Revenue from platform services was RMB 1.34 billion in Q3, down from RMB 1.65 billion in Q2 [17] - The average internal rate of return (IRR) of loans originated was 20.9% in Q3, compared to 21.4% in Q2 [17] Market Data and Key Metrics Changes - The number of new credit line users grew by 9% to 1.95 million in Q3, while the average cost per credit line user declined by 8% [8] - The 90-day delinquency rate increased to 2.09% in Q3 from 1.97% in Q2 [18] - The day-one delinquency rate rose to 5.5% in Q3 from 5.1% in Q2 [18] Company Strategy and Development Direction - The company aims to prioritize risk management and enhance AI capabilities to better serve inclusive finance needs [4] - The focus will be on high-quality customers and optimizing the user mix to improve unit economics and user lifetime value [9] - The company is exploring international opportunities and believes its fintech capabilities are among the best globally [14] Management's Comments on Operating Environment and Future Outlook - The management noted persistent headwinds in China's economy and consumer finance sector, with a decline in short-term consumer loans [4] - The company expects the new regulatory environment to impact market size, risk levels, and profitability in the near term but believes it will lead to a healthier competitive landscape in the long run [27] - For Q4, the company expects non-GAAP net income between RMB 1 billion and RMB 1.2 billion, reflecting a cautious approach due to economic uncertainty [23] Other Important Information - The company issued RMB 4.5 billion in asset-backed securities (ABS) during Q3, up 29% year-over-year [8] - Total cash and cash equivalents were RMB 14.35 billion in Q3, compared to RMB 13.34 billion in Q2, indicating a strong financial position [22] - The company has executed a share repurchase program, purchasing approximately 7.3 million ADSs for $281 million [23] Q&A Session Summary Question: Impact of new loan facilitation rules on business model and take rates - Management indicated that the new rules will require time for adjustment, impacting market size and profitability in the near term, but will lead to a healthier competitive environment in the long run [26][27] Question: Shareholder return and buyback plans - The company plans to resume its $450 million share repurchase program after the earnings call, with a focus on gradually increasing dividends [33][34] Question: Asset quality trends and expectations - Management noted early signs of stabilization in asset quality, with a focus on optimizing risk strategies and improving collection efficiency [39][43] Question: Implications of potential APR regulations - Management stated that while direct exposure to consumer finance companies is limited, there may be indirect impacts on liquidity and risk volatility, leading to adjustments in risk management [46][48] Question: Drivers behind technology solutions loan volume growth - The technology solutions business saw a 200% increase in loan volume due to ramping partnerships and expanding collaboration methods with financial institutions [52][55] Question: Capital heavy vs. capital light business mix outlook - The company anticipates a flexible adjustment in the mix between capital heavy and capital light businesses, with a potential shift towards more capital light in the short term [56][57]

Financial Data and Key Metrics Changes - Total net revenue for Q3 was RMB 5.21 billion, slightly down from RMB 5.22 billion in Q2 but up from RMB 4.37 billion a year ago [16] - Non-GAAP net income reached RMB 1.51 billion in Q3, compared to RMB 1.85 billion in Q2 [20] - Non-GAAP net income per fully diluted ADS was RMB 11.36 in Q3, down from RMB 13.63 in Q2 [20] - The effective tax rate for Q3 was 20.9%, higher than the typical rate of approximately 15% due to withholding tax provisions [20] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.87 billion in Q3, up from RMB 3.57 billion in Q2 [16] - Revenue from platform services was RMB 1.34 billion in Q3, down from RMB 1.65 billion in Q2 [17] - The average internal rate of return (IRR) for loans originated was 20.9%, compared to 21.4% in Q2 [17] Market Data and Key Metrics Changes - The number of new credit line users grew by 9% to 1.95 million in Q3, while the average cost per credit line user declined by 8% [9] - The 90-day delinquency rate increased to 2.09% in Q3 from 1.97% in Q2 [18] - The day-one delinquency rate rose to 5.5% in Q3 from 5.1% in Q2 [18] Company Strategy and Development Direction - The company aims to prioritize risk management and enhance AI capabilities to better serve inclusive finance needs [4] - The focus will be on onboarding high-quality users and optimizing the overall user mix, supported by AI-driven data models [10] - The company is exploring international expansion opportunities while maintaining a commitment to shareholder returns [15] Management Comments on Operating Environment and Future Outlook - The management noted persistent headwinds in China's economy and consumer finance sector, with a decline in short-term consumer loans [4] - The company expects the competitive environment to become more sustainable and healthier in the long run due to regulatory changes [26] - For Q4, the company anticipates generating non-GAAP net income between RMB 1 billion and RMB 1.2 billion [23] Other Important Information - The company issued RMB 4.5 billion in asset-backed securities (ABS) during Q3, up 29% year-over-year [9] - The total cash and cash equivalents and short-term investments amounted to RMB 14.35 billion in Q3, compared to RMB 13.34 billion in Q2 [21] - The company has executed a share repurchase program, purchasing approximately 7.3 million ADSs for a total of $281 million [23] Q&A Session Summary Question: Impact of new loan facilitation rules on business model and take rates - Management indicated that the new rules will impact market size, risk levels, and profitability in the near term, but will lead to a healthier competitive environment in the long run [25][26] Question: Competitive landscape after loan facilitation rules - Management noted a major shakeout in the high-pricing segment, with expectations of reduced competition for traffic and potential market consolidation benefiting the company [28][29] Question: Shareholder return and buyback plans - Management confirmed the resumption of the share repurchase program after the earnings call, with a goal of gradually increasing dividend payouts [31][32] Question: Asset quality trends and expectations - Management observed early signs of stabilization in asset quality, with a focus on optimizing risk strategies and improving collection efficiency [33][34] Question: Implications of potential APR regulations - Management assessed that while direct impact from APR regulations is limited, there may be indirect effects leading to increased liquidity pressure and risk volatility [37][39]