Core Viewpoint - The implementation of the new regulations on internet lending by commercial banks has prompted listed fintech companies to proactively adjust their business structures, leading to a mixed performance in their third-quarter results as they seek new growth points to cope with regulatory challenges [1][2][4]. Business Adjustments and Performance - Listed fintech companies have begun to shrink high-risk matching business scales and deepen AI applications in response to the new lending regulations [1][4]. - Qifu Technology reported a 20.36% year-on-year decline in net profit to 1.433 billion yuan, despite a 19.12% increase in revenue to 5.206 billion yuan [4]. - Xinye Technology achieved a 6.43% year-on-year revenue growth to 3.487 billion yuan and a 2.66% increase in net profit to 641 million yuan [5]. - Yirendai's total revenue grew by 5% to 1.555 billion yuan, while net profit decreased by 10.64% [6]. - Jianyin Technology saw a 39.64% increase in net profit to 377 million yuan [5]. - Lexin's net profit surged by 68.39% to 521 million yuan, benefiting from flexible business adjustments [5]. Impact of New Regulations - The new lending regulations are expected to have a more pronounced impact on the performance of listed fintech companies in the fourth quarter, with anticipated declines in earnings [2][7]. - Industry experts suggest that the regulations will concentrate resources among compliant leading institutions, while smaller firms face rising compliance costs and narrowing cooperation channels [2][7]. AI Application and Efficiency - Companies are increasingly leveraging AI in customer service, risk control, and automated approvals to enhance efficiency and reduce costs [9][10]. - Qifu Technology reported a significant increase in its AI-driven financial technology output, with a 218% quarter-on-quarter growth in its subsidiary's business [9]. - Lexin's self-developed AI model improved user demand recognition accuracy by over 20% [10]. - Yirendai's AI strategy has led to a substantial increase in transaction amounts and borrower service numbers [10][11]. Overseas Market Expansion - In response to stricter domestic regulations, fintech companies are intensifying their overseas market strategies to seek diversified revenue growth [13][14]. - Xinye Technology's international business revenue reached 25% of total revenue, with significant growth in loan balances in Indonesia and the Philippines [13][14]. - Yirendai is also expanding its overseas presence, with expectations of international revenue contributing 4% by 2025 and over 10% by 2026 [14][15].

Core Insights - AI has become the central focus for leading domestic fintech companies listed in the US, with significant investments leading to stable growth in performance [1][2] - Companies are emphasizing shareholder returns, with Lexin increasing its dividend payout ratio from 25% to 30% and Xinyi Technology repurchasing shares worth approximately $66.5 million [1][2] Company Performance - Lexin reported a revenue of 3.42 billion yuan and a net profit of 675 million yuan in Q3, with a net profit margin of 2%, showing a quarter-on-quarter increase of 9 basis points and a year-on-year increase of 92 basis points [2] - Lexin's transaction volume reached 50.89 billion yuan, with a loan balance of 101.84 billion yuan and a user base of 240 million, reflecting a year-on-year growth of 7.7% [2] - Xinyi Technology achieved a revenue of 3.5 billion yuan and a net profit of 640 million yuan in Q3, with a transaction volume of 51.2 billion yuan and a loan balance of 77.1 billion yuan [3] AI Investment and Application - Lexin's investment in AI technology has led to the development of its proprietary model, LexinGPT, which improved user demand recognition accuracy by over 20% and reduced average response time to under 10 seconds [1][2] - Xinyi Technology has enhanced its AI customer service system, completing over 1 million automated services in Q3, significantly improving service efficiency and user experience [3]

Core Viewpoint - LexinFintech reported solid financial results for Q3 2025, demonstrating operational resilience despite macroeconomic challenges, with revenue of CNY 3.42 billion and Non-GAAP EBIT of CNY 675 million, reflecting a 1.5% quarter-on-quarter increase [1] Financial Performance - The company achieved a transaction volume of CNY 50.89 billion and a managed loan balance of CNY 101.84 billion, serving 240 million users, marking a 7.7% year-on-year increase [3] - The net profit take rate improved to 2%, up by 9 basis points quarter-over-quarter and 92 basis points year-on-year, achieving seven consecutive quarters of improvement [4] Shareholder Returns - The company prioritized shareholder returns by increasing the dividend payout ratio from 25% to 30% for the second half of the year and executing over half of the US$60 million share repurchase plan [5] Business Ecosystem - Lexin's ecosystem businesses, including consumer finance and digital technology, enhanced operational coordination, stimulating consumption and supporting micro and small enterprises [7][8] - The company focused on core consumption scenarios for young consumers, leading to a 58.5% quarter-on-quarter and 133.8% year-on-year increase in transactions of daily consumer goods [10] Support for Micro and Small Enterprises - Fenqile Inclusive Finance served over 330 counties, helping nearly 160,000 users obtain inclusive loans totaling approximately CNY 5 billion, addressing financing challenges for micro and small enterprises [13] Technology Investment - Lexin increased technology investments, particularly in AI risk management and customer service, enhancing competitive advantages [15] - The development of LexinGPT improved user demand recognition accuracy by over 20%, automating risk management processes and enhancing operational efficiency [16][19] Consumer Protection and Industry Recognition - The company upgraded its consumer protection system, leveraging technology to improve service efficiency and user satisfaction [20] - Lexin was recognized among the "2025 Guangdong Top 500 Enterprises" and awarded "Best AI Technology for Financial Technology Company in China" at The Asian Banker Awards 2025 [21][22]

Financial Data and Key Metrics Changes - In Q3 2025, loan volume reached RMB 50.89 billion, revenue was RMB 3.42 billion, and net profit was RMB 521 million, reflecting a 2% increase quarter-over-quarter and a 68% increase year-over-year [5][22] - The net profit take rate increased to 2.01%, up by 9 basis points quarter-over-quarter and 92 basis points year-over-year [5][22] - Total revenue decreased by 5% quarter-over-quarter, primarily due to a 29% decrease in e-commerce platform service income [32] Business Line Data and Key Metrics Changes - Net revenue from the credit business decreased by 3% to RMB 1.9 billion, attributed to increased credit costs [22][23] - E-commerce business net revenue increased by 14% to RMB 111 million, while total net revenue from both credit and e-commerce business decreased by 2% to RMB 2.1 billion [23][32] - E-commerce GMV for essential daily consumer goods grew 58.5% quarter-over-quarter and 133.8% year-over-year [11] Market Data and Key Metrics Changes - The company ceased facilitating loans with APRs above 24% starting October 1, impacting both business volume and average loan pricing [39] - The industry-wide liquidity tightened further in Q4, affecting credit risk and operational dynamics [15][19] Company Strategy and Development Direction - The company is focused on enhancing risk management capabilities and adapting to new regulations, which are expected to raise industry entry barriers [6][15] - A customer-centric approach is emphasized, with initiatives to improve user experience and satisfaction [9][12] - The company plans to continue investing in its ecosystem businesses to drive steady growth and capture opportunities arising from industry adjustments [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stable performance growth despite industry fluctuations and regulatory changes [13][33] - The company anticipates moderate loan volume decline in Q4 due to regulatory impacts, but expects to see stabilization in risk indicators towards the end of the quarter [54][56] - The long-term outlook remains positive, with expectations for gradual recovery as the regulatory environment stabilizes [57] Other Important Information - The dividend payout ratio was increased from 25% to 30% of net profit, and share repurchase programs are progressing well [6][35] - The company has maintained a solid financial position with cash reserves of approximately RMB 4.3 billion and shareholders' equity of about RMB 11.8 billion [32] Q&A Session Summary Question: Impact of new regulation on business operations - Management confirmed that the new regulation has led to a shift in business practices, including ceasing loans with APRs above 24%, which has affected business volume and pricing [39] Question: Development strategy and outlook for e-commerce business - The e-commerce business is focused on expanding product categories and improving risk management, with significant growth in transaction volumes during shopping festivals [43][44] Question: Managing credit risk during transitional period - The company has enhanced its risk management system to identify vulnerable customers and control risk fluctuations effectively [48][49] Question: Outlook for Q4 and full year 2026 performance - Management expects a moderate decline in loan volume for Q4 due to regulatory impacts but anticipates significant year-over-year growth for the full year 2025 [55][56]

Financial Data and Key Metrics Changes - In Q3 2025, loan volume reached CNY 50.89 billion, revenue was CNY 3.42 billion, and net profit was CNY 521 million, reflecting a 2% increase quarter-over-quarter and a 68% increase year-over-year [5][22] - The net profit take rate increased to 2.01%, up by 9 basis points quarter-over-quarter and 92 basis points year-over-year [5][22] - Total revenue decreased by 5% quarter-over-quarter, primarily due to a 29% decrease in e-commerce platform service income [32] Business Line Data and Key Metrics Changes - Net revenue from the credit business decreased by 3% to CNY 1.9 billion, while net revenue from the e-commerce business increased by 14% to CNY 111 million [22][23] - E-commerce loan volume grew by 15% sequentially to CNY 2.3 billion, despite a decline in overall pricing due to regulatory changes [28][29] Market Data and Key Metrics Changes - GMV for essential daily consumer goods grew 58.5% quarter-over-quarter and 133.8% year-over-year, with a 38% year-over-year increase during the Singles' Day Shopping Festival [11][43] - The asset quality of the inclusive finance business remained stable, validating the value of lower-tier markets [11] Company Strategy and Development Direction - The company is focused on enhancing risk management capabilities and adapting to new regulations, which are expected to raise industry entry barriers and promote healthier development [6][15] - The company emphasizes a customer-centric approach and plans to continue optimizing its product offerings and expanding its e-commerce platform [9][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stable performance growth despite industry fluctuations and regulatory challenges [12][33] - The company anticipates moderate loan volume decline in Q4 2025 due to regulatory impacts, but expects to see stabilization in risk indicators towards the end of the quarter [54][55] Other Important Information - The company increased its dividend payout ratio from 25% to 30% of net profit starting in the second half of the year [6] - The share repurchase program is progressing well, with over half completed, reflecting management's confidence in the company's outlook [35][60] Q&A Session Summary Question: Impact of new regulation on business operations - Management confirmed that they ceased underwriting loans with APR above 24% and noted that this has impacted business volume and average loan pricing [38][39] Question: Development strategy and outlook for e-commerce business - The company plans to continue optimizing its e-commerce platform and expanding product categories while managing risk [44] Question: Managing industry credit risk fluctuations - Management highlighted proactive measures taken to enhance risk control and mitigate fluctuations, resulting in manageable risk performance [48][49] Question: Outlook and guidance for Q4 and 2026 performance - Management expects moderate loan volume decline in Q4 due to regulatory impacts but anticipates significant year-over-year growth for the full year 2025 [55][56] Question: Future plans for shareholder returns - The company is committed to enhancing shareholder returns through its share repurchase program and increased dividend payout [60][61]

Financial Data and Key Metrics Changes - Loan volume reached RMB 50.89 billion, revenue reached RMB 3.42 billion, and net profit was RMB 521 million, up 2% quarter-over-quarter and 68% year-over-year [4][51] - Net profit take rate stood at 2.01%, increasing by 9 basis points quarter-over-quarter and 92 basis points year-over-year [4][51] - Total revenue decreased by 5% quarter-over-quarter, primarily due to a 29% decrease in e-commerce platform service income [29] Business Line Data and Key Metrics Changes - Net revenue of the credit business reached RMB 1.9 billion, a 3% decrease quarter-over-quarter [19] - Net revenue of the e-commerce business increased by 14% to RMB 111 million [20] - E-commerce GMV for essential daily consumer goods grew 58.5% quarter-over-quarter and 133.8% year-over-year [9][56] Market Data and Key Metrics Changes - The total GMV of the e-commerce platform increased by 38% year-over-year during the Singles' Day Shopping Festival, with transaction volume for essential daily consumer goods surging by 237% year-over-year [9][57] - The asset quality of the inclusive finance business remained stable, validating the value of lower-tier markets [9][57] Company Strategy and Development Direction - The company believes the new regulations will raise industry entry barriers and drive healthier development [5] - Emphasis on shareholder returns with an increased dividend payout ratio from 25% to 30% of net profit [5][52] - Focus on enhancing user experience and risk management capabilities, including the deployment of AI technology [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stable performance growth despite industry fluctuations [10][59] - The company anticipates moderate loan volume decline in the fourth quarter due to regulatory impacts [30][42] - Risk performance for new loans is showing signs of stabilization, validating the effectiveness of the risk management system [33][40] Other Important Information - The company has repurchased $25 million worth of ADS and the CEO has purchased over $5 million worth of shares [31][47] - The company is committed to enhancing shareholder value through share buyback programs and dividends [31][47] Q&A Session All Questions and Answers Question: Impact of new regulation on business operations - The company has stopped underwriting loans with APR above 24% and has seen some impact on business volume and average loan pricing due to the shift [32][33] Question: Development strategy and outlook of the e-commerce business - The e-commerce business is progressing steadily, with significant growth in transaction volume and a focus on customer acquisition and engagement [34][35] Question: Management of risk during the transitional period - The company has enhanced risk control measures and identified vulnerable customers to manage risk effectively [37][38]