A：China's economy and consumer finance sector have faced persistent headwinds, with the outstanding balance of short-term consumer loans declining for three consecutive quarters on both a year-over-year and quarter-over-quarter basis.

A：The consumer finance industry in China is undergoing regulatory-driven adjustments to improve consumer financial inclusion. These changes are viewed as strengthening the sector's long-term prospects and sustainability, and creating a healthier competitive landscape.

A：The leading credit tech platform in China is prioritizing risk management, advancing AI capabilities, and deepening collaboration with financial institutions to serve inclusive finance needs and maintain its leadership position.

A：By the end of the quarter, the AI-powered credit decision engine and asset distribution platform served 167 financial institutions, reaching over 62 million credit line users on a cumulative basis. The platform also maintained a healthy balance between risk and growth, with total loan facility mediation and origination volume at RMB 83 billion.

A：Despite macro headwinds, the company delivered steady financial results, with a non-GAAP net income of RMB 1.51 billion and non-GAAP EPADS on a fully diluted basis of RMB 11.36, reflecting solid profitability and operating resilience.

A：To address the tightening funding liquidity and delinquency risk, the company dynamically fine-tuned risk strategies, tightened credit standards, optimized the customer mix by increasing the proportion of high-quality borrowers, refined risk models, and improved collection efficiency.

A：The new regulations and industry self-discipline initiatives led to a decline in the company's FPD7, a leading risk indicator for new loans, since September compared to August. However, risk indicators are expected to remain volatile in the near term due to current levels being above historical averages.

A：The company was whitelisted by all active financial institution partners, maintained leading pricing power, secured ample funding supply at stable costs, and kept the average funding cost steady. ABS issuance grew significantly, optimizing funding structure.

A：User acquisition efforts diversified channels and improved efficiency, resulting in a nine percent growth in new credit line users to 1.95 million and a 10 percent sequential increase in new borrowers to 1.35 million. The embedded finance network expanded with seven new strategic partners, increasing the number of new credit line users from these channels by 13 percent sequentially.

A：The company's long-term strategic priority focuses on high-quality customers. It plans to use AI-driven data models to gain insights into user needs and behaviors, refine products and services, and deliver a superior user experience while improving unit economics and user lifetime value.

A：The technology solutions business continued to advance the AI+banking strategy, with exponential growth in loan volume supported by this business. The company deepened collaboration with banks, expanding to a broader range of internet scenarios and providing end-to-end technology support in customer acquisition and risk management.

A：The engagement rate among the activated user base has reached around fifty percent, and the plans for the future include strengthening capabilities in multi model recognition, voice data collection, lead management, feedback loops, expanding pilot programs, and further improving user engagement.

A：The company has worked closely with financial institution partners to optimize business structure and product experience, resulting in temporary impacts on loan volume and profitability. However, prioritizing value for users is believed to eventually strengthen trust and promote more sustainable and resilient growth.

A：The company is prioritizing risk management over near-term growth, focusing on improving user quality and collection efficiency in response to the current industry-wide adjustment phase.

A：Since mid-October, there have been encouraging early signs of stabilization in asset quality. The company has a proven track record of emerging stronger from past challenges, including multiple industry-wide adjustments.

A：The company is actively exploring opportunities across multiple overseas markets and is confident in the quality of its fin tech capabilities, viewing international expansion as a challenging yet strategically sound path.

A：The company is committed to delivering value to shareholders through compelling shareholder returns and will continue to pursue efficient capital allocation.

A：The consumer finance industry is facing new regulatory scrutiny and significant pressure due to headwinds, leading to total net revenue of $5.21 billion in the third quarter, compared to $5.22 billion in the second quarter and $4.37 billion in the same quarter of the previous year.

A：Revenue from credit-driven, capital-heavy services was $3.87 billion in the third quarter, up from $3.57 billion in the second quarter and $2.9 billion in the same quarter of the previous year. Overall funding costs remained stable despite some liquidity shortages later in the quarter.

A：Revenue from platform service capital light was $1.34 billion in the third quarter, down from $1.65 billion in the second quarter and $1.47 billion in the same quarter of the previous year, primarily due to lower capital light facilitation and ICE volume.

A：The current average IRR of the loans originated and facilitated is 20.9%, compared to 21.4% in the second quarter.

A：The company plans to adjust the pace of new user acquisition in the coming months based on volatile market conditions and will optimize user acquisition channels to improve user engagement and retention.

A：The delinquency rate was 2.09% in the third quarter, compared to 1.97% in the second quarter. The company took measures to tighten risk standards in September and October, and while it's too early to reverse the trend, there is a marginal improvement in new loans. The company is taking a conservative approach to book provisions against potential credit loss.

A：The non-GAAP net profit for the third quarter was $1.51 billion, compared to $1.85 billion in the second quarter. The effective tax rate for the third quarter was 29%, higher than the typical rate of approximately 15%, mainly due to withholding tax provisions related to cash distribution.

A：The leverage ratio, defined as risk parent loan balance divided by shareholders' equity, was 3.0 times in the third quarter, near the low end of historical range. The company expects the leverage ratio to fluctuate around this level in the near term.

A：The company generated approximately $2.5 billion in cash from operations in the third quarter, with total cash and cash equivalents and short-term investments at $14.35 billion. The company has started a share repurchase program and had purchased approximately 7.3 million shares for a total amount of approximately $281 million as of November 18th. The company intends to resume the repurchase program after the window opened after this earnings call.

A：The business outlook for the next couple of quarters is cautious, with a focus on risk control of operations. For the fourth quarter of 2025, the company expects to generate non GAAP net income between $1 billion and $1.2 billion. This outlook is subject to material changes.

A：Upon the new loan facilitation rules coming into effect in October, there will be a change to the business model and population model of loans. The management expects the competitive environment to become more sustainable and healthier in the long run, which is beneficial for the industry. In the near term, the rules will impact market size, risk levels, and profitability. The take rate is expected to decline due to pricing and risk impact, while the industry is anticipated to remain volatile. The exact take rate floor for 2026 and beyond is still being determined. The management is focusing on optimizing risk strategies, improving collection efficiency, further optimizing costs in user acquisition and operations, and exploring new service offerings to improve user conversion and retention. These efforts are expected to help improve the take rate over time.

A：The industry is expected to take some time to adjust to the new rules, with the rules impacting market size, risk levels, and profitability in the near term. The liquidity pressure in the market is pushing the overall risk higher for the broader consumer financial space, leading to an increase in net provisions. The industry is expected to remain volatile, and the take rate floor in the new loan for 2026 and beyond is still being evaluated. The management is focusing on several key areas to enhance risk performance and overall efficiency.To offset the impact of the new rules on loan volume and profitability, the company is focusing on optimizing risk strategies and improving collection efficiency to enhance risk performance. Furthermore, they are looking to optimize costs in user acquisition and operations to improve overall efficiency and exploring new service offerings to improve user conversion and retention.

A：Post the new loan facilitation rules, the competitive landscape is expected to change significantly. There has been a major shakeout in the high pricing segment, leading to a decrease in new loan volumes and some smaller platforms facing difficulties in survival. The remaining platforms are shrinking their loan books. This is resulting in less competition for traffic in the current quarter. Looking ahead, many platforms may try to move to the 18 to 24 percent range, but due to funding, risk management, and operational efficiency disadvantages, it will be difficult for them to be profitable. Consequently, in the long term, some players are expected to leave the market. This market consolidation is expected to benefit the company by improving the effectiveness of marketing efforts, allowing for the acquisition of higher value users at lower costs, and improving credit risk and conversion rates, which will enhance users' lifetime value.

A：As of the latest earnings call, the company has about $170 million left from the $450 million share buyback plan announced in the previous year. A temporary pause was taken during the third quarter due to incoming regulatory updates and associated risks. The company plans to resume the execution of the program to fulfill their commitment for the rest of the year. Regarding the dividend, the goal is to gradually increase the dividend per share through each semiannual dividend payout.

A：Consumer finance companies are required to keep their average pricing below twenty percent, a rule that is thought to be similar to new regulations on the low-for-situation sector. The aim of this pricing regulation is to reduce borrowing costs for consumers and make credit more accessible in the short term, which is expected to impact market size, risk levels, and profitability. Over time, it is believed to foster healthier competition and improve asset quality.

A：The speaker's company has a small direct exposure to consumer finance companies and the direct impact is limited as most funding comes from banks. Consumer finance companies' adjustments in pricing may lead to short-term pressure and liquidity issues, potentially causing risk volatility. If necessary, the speaker's company can shift its funding structure, as most of its funding comes from banks.

A：The speaker anticipates that as consumer finance companies adjust their pricing, there may be further pressure on liquidity leading to risk volatility in the short term. The company plans to continue to adjust its risk mitigants to manage these risks, with an average APR in Q3 at 20.9%.

A：The company intends to focus on serving higher quality users with a broader user base and a better mix, which should allow for optimized pricing and a well-balanced risk profile. The company aims to improve overall profitability and is more focused on the long-term value of users than short-term profitability.

A：The significant growth in the tech solution business in the third quarter was driven by two main factors: an increase in loan volume with scientific partners and the expansion of collaboration with financial institutions to include both their ecosystems and a broader set of online scenarios. The company anticipates future growth by continuing to partner with financial institutions and develop AI agents that enhance customer acquisition and risk management across various channels.

A：The super credit AI agent is expected to streamline processes, accelerate approvals, and enhance risk assessment by identifying risks in seconds and generating precise user profiles within minutes. Pilots with bank partners have shown a positive impact in key areas like customer acquisition and approvals, and the company is seeing interest from other financial institutions. Market feedback has been very positive, and the potential upside for the super credit AI agent is considered very substantial.

A：In the short term, the company may need to make flexible adjustments to the mix between capital light and capital heavy business based on volatile market conditions. The mix may lean more towards capital light in a higher-risk environment, but the approach could vary depending on different factors such as the cap on price and the capability to conduct IC side of the business. In the fourth quarter, there may be a slight increase in capital light business as the company aims to reduce risk exposure. In the longer term, the company plans to make timely adjustments based on various conditions, funding sources, and risk levels, which may result in a fluctuating mix around the fifty-fifty line.