Financial Data and Key Metrics Changes - Total loan facilitation and origination volume decreased by 21.8% year-over-year to RMB 70.3 billion in Q4 2025, while full-year volume reached approximately RMB 327.1 billion, representing a year-over-year increase of 1.6% [4][5] - Non-GAAP net income in Q4 decreased by 45.7% year-over-year to RMB 1.07 billion, while full-year non-GAAP net income declined by 1% year-over-year to RMB 6.35 billion [4][5] - Non-GAAP EPADS on a fully diluted basis decreased by 39.8% year-over-year to RMB 8.23 in Q4, but increased by 10.4% year-over-year to RMB 46.8 for the full year [4][5][23] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.43 billion in Q4, down from RMB 3.87 billion in Q3 and RMB 2.89 billion a year ago, while revenue from platform services was RMB 660 million in Q4, down from RMB 1.34 billion in Q3 [19][20] - The average IRR of loans originated and/or facilitated declined by about 150 basis points compared to the prior quarter [20] - The proportion of loan volume from high-quality borrowers rose by six percentage points sequentially in Q4 [7] Market Data and Key Metrics Changes - The C-M2 ratio, representing the outstanding delinquency rate after thirty days of collection, increased to 0.97% in Q4, the highest recorded since COVID in 2020 [7][22] - The 90-day delinquency rate was 2.71% in Q4 compared to 2.09% in Q3, while the 30-day collection rate was 84.1% in Q4 versus 85.7% in Q3 [21][22] Company Strategy and Development Direction - The company is focusing on compliance and risk management as core strategies in response to regulatory changes, aiming for a healthier market environment [3] - The company plans to continue expanding into lower pricing borrower segments while optimizing its customer mix [12] - The international business strategy includes pursuing opportunities in Europe, Latin America, and Southeast Asia to drive long-term growth [17][58] Management Comments on Operating Environment and Future Outlook - Management noted that the consumer finance industry is undergoing a systemic restructuring, which has tightened market liquidity and suppressed credit demand [3] - The company expects ongoing consolidation in the industry to create broader opportunities for leading credit-tech platforms [3] - For Q1 2026, the company expects to generate non-GAAP net income between RMB 900 million and RMB 950 million, representing a year-on-year decline between 51% and 53% [29] Other Important Information - The company returned approximately $200 million in dividends and $680 million via share repurchases in 2025, representing 98% of its 2024 GAAP net income [17][35] - Total ABS issuance grew 40.8% year-over-year to RMB 21.4 billion, with average issuance costs declining by 72 basis points from the previous year [11] Q&A Session Summary Question: What is the medium to long-term outlook for loan pricing and sustainable net take rates? - Management indicated that regulatory efforts to reduce funding costs will lead to a healthier market, with a focus on high-quality users and potential for further downward adjustment in average pricing for 2026 [31][33] Question: How does the company balance dividends and buybacks, and is the dividend sustainable? - Management emphasized a commitment to shareholder returns, maintaining a progressive dividend policy while being cautious with buybacks due to macro uncertainties [35][36] Question: What has been the trend of risk indicators and the outlook for new loan volume growth? - Management reported improvements in risk indicators, with a focus on high-quality customers, while maintaining a prudent risk strategy amid ongoing industry adjustments [39][56] Question: What is the outlook on the proportion of capital-heavy versus capital-light business models? - Management indicated a shift towards a more capital-light model in 2026, depending on macro conditions, while not setting a fixed target for the mix [43] Question: Can management provide updates on overseas market expansion strategies? - Management confirmed active exploration of multiple markets, including Europe and Latin America, with plans to grow overseas teams and leverage technology for global expansion [58][59]

Financial Data and Key Metrics Changes - Total loan facilitation and origination volume decreased by 21.8% year-over-year to RMB 70.3 billion in Q4 2025, while full-year volume reached approximately RMB 327.1 billion, representing a year-over-year increase of 1.6% [4][5] - Non-GAAP net income in Q4 decreased by 45.7% year-over-year to RMB 1.07 billion, while full-year non-GAAP net income declined by 1% year-over-year to RMB 6.35 billion [4][5] - Non-GAAP EPADS on a fully diluted basis decreased by 39.8% year-over-year to RMB 8.23 in Q4, but increased by 10.4% year-over-year to RMB 46.8 for the full year [4][5][22] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.43 billion in Q4, down from RMB 3.87 billion in Q3 and up from RMB 2.89 billion a year ago, while revenue from platform services was RMB 660 million in Q4, down from RMB 1.34 billion in Q3 and RMB 1.59 billion a year ago [17][18] - The average IRR of loans originated and/or facilitated declined by about 150 basis points compared to the prior quarter [18] - The proportion of loan volume from high-quality borrowers rose by six percentage points sequentially in Q4 [6] Market Data and Key Metrics Changes - The C-M2 ratio, representing the outstanding delinquency rate after thirty days of collection, increased to 0.97% in Q4, the highest recorded since COVID in 2020 [6][20] - The 90-day delinquency rate was 2.71% in Q4 compared to 2.09% in Q3, and the 30-day collection rate was 84.1% in Q4 compared to 85.7% in Q3 [20][21] Company Strategy and Development Direction - The company is focusing on compliance and risk management as core strategies in response to regulatory changes, aiming for a healthier market environment through ongoing consolidation [3][4] - The company plans to continue diversifying funding channels and optimizing funding structures to ensure stable liquidity at competitive costs amid market volatility [10][11] - The international business expansion is a key strategy, with plans to enter markets in Europe, Latin America, and Southeast Asia [15][58] Management Comments on Operating Environment and Future Outlook - Management noted that the consumer finance industry is undergoing significant restructuring due to regulatory guidance, which has tightened market liquidity and suppressed credit demand [3] - The company expects to see gradual improvement in risk indicators and plans to maintain a cautious approach in business planning for 2026, focusing on efficiency and cost-cutting [27][56] - Management anticipates that the regulatory environment will continue to evolve, impacting loan pricing and market dynamics [30][31] Other Important Information - The company returned approximately $200 million in dividends and $680 million via share repurchases in 2025, representing 98% of its 2024 GAAP net income [15][33] - The effective tax rate for Q4 was 11.3%, lower than the typical rate of approximately 15% due to year-end adjustments [23] Q&A Session Summary Question: What is the medium to long-term outlook for loan pricing and sustainable net take rates? - Management indicated that regulatory efforts to reduce funding costs will lead to a healthier market, with a focus on high-quality users. Average pricing dropped by 140 basis points in Q4, and they expect further adjustments in 2026 [30][31] Question: How does the company balance dividends and buybacks? - Management emphasized that shareholder returns are a top priority, with a progressive dividend policy and a cautious approach to buybacks due to current macro conditions [33][34] Question: What is the trend of risk indicators and the outlook for capital-heavy versus capital-light business models? - Management reported improvements in risk indicators due to proactive measures and indicated a shift towards a more capital-light model in 2026, depending on market conditions [38][42] Question: What is the outlook for new loan volume growth and overseas market expansion? - Management noted that while risk control measures have shown positive results, they will prioritize quality over volume growth. The company plans to accelerate overseas expansion, targeting both mature and developing markets [56][58]

Financial Data and Key Metrics Changes - In Q4 2024, total net revenue was RMB4.48 billion, slightly up from RMB4.37 billion in Q3 and RMB4.5 billion a year ago [37] - Non-GAAP net income for Q4 increased by 71.5% year-over-year to RMB1.97 billion, with non-GAAP net income per diluted ADS rising 91.3% year-over-year to RMB13.66 [10][45] - Full-year non-GAAP net income reached an all-time high of RMB6.42 billion, a 44% increase year-over-year [10] - The company executed a USD410 million share repurchase, buying back approximately 12% of its share count [11] Business Line Data and Key Metrics Changes - Loan facilitation and origination volume in Q4 increased by 9% sequentially to RMB89.9 billion, with a 15% increase in loan volume in the second half of the year compared to the first half [9] - Revenue from platform service (capital light) was RMB1.59 billion in Q4, up from RMB1.47 billion in Q3 and RMB1.25 billion a year ago [38] - The proportion of loan volume from the Capital Light segment increased by approximately 10 percentage points to 53% throughout 2024 [21] Market Data and Key Metrics Changes - The company empowered 162 financial institutions to serve over 56 million users with approved credit lines by the end of 2024 [8] - The average internal rate of return (IRR) of loans originated was 21.3% in Q4, slightly down from 21.4% in the prior quarter [40] Company Strategy and Development Direction - The company is shifting towards a platform model, enhancing user engagement and operational efficiency [7] - The strategy includes a "one core two wings" approach, focusing on domestic credit as the core and Technology Solutions and international expansion as the wings [31] - Plans to develop an AI-plus bank agent platform to improve operational efficiency and enhance core lending processes [28] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in user activities and credit demand, with expectations for Q1 2025 loan volume to grow by more than 10% year-over-year [62] - The company remains cautiously optimistic about 2025, expecting high-quality development in its core credit business while expanding its Technology Solutions business [32] - Management emphasized a prudent approach to business planning amid macroeconomic uncertainties [64] Other Important Information - The company plans to maintain a dividend payout ratio of over 70% while prioritizing share buybacks [95] - The effective tax rate for Q4 was significantly lower at 1.0% due to favorable tax adjustments [46] Q&A Session Summary Question: AI integration and efficiency gains - Management discussed the potential of AI in credit assessment and operational processes, with a dedicated team expected to grow to 150 people by year-end [61] Question: Credit demand recovery - Management observed improvements in user activities and loan application ratios, with expectations for a modest recovery in credit demand [62] Question: Risk metrics and delinquency rates - Management explained the stability of risk levels and the slight increase in delinquency rates due to changes in repayment reminder strategies [70][72] Question: Funding costs outlook - Management indicated that funding costs have been declining but noted limited room for further decreases due to operational costs of financial institutions [88] Question: Shareholder returns and sustainability - Management committed to returning value to shareholders through dividends and share buybacks, with plans to increase dividends semiannually [95][98]