Hello, ladies and gentlemen. Thank you for standing by for the Second Quarter 2018 Earnings Conference Call for PPDAI Group Inc. also known as Paipaidai. At this time, all participants are in listen-only mode. After management’s prepared remarks, there will be a question-and-answer session. Today’s conference call is being recorded. I will now turn the call over to your host, Mr. Jimmy Tan, Investor Relations Director for the company. Jimmy, please go ahead.

Hello, everyone and welcome to Paipaidai’s second quarter 2018 earnings conference call. The company’s results were issued via Newswire services earlier today and are posted online. You can download the earnings release and sign up for the company’s distribution list by visiting the IR section of our website at ir.paipaidai.com. Mr. Cliff Zhang, our Chairman and Chief Executive Officer; Mr. Feng Zhang, our Chief Operating Officer; and Mr. Simon Ho, our Chief Financial Officer will start the call with their prepared remarks and conclude with a Q&A session. During this call, we will be referring to several non-GAAP financial measures to review and access our operating performance. These non-GAAP financial measurements are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. GAAP. For information about these non-GAAP measures and reconciliation to the GAAP measures, please refer to our earnings press release. Before we continue, please note that today’s discussions will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company’s results maybe materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company’s filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable laws. Finally, we posted a slide presentation on our IR website providing details on our results for the quarter. I will now turn the call over to our CEO, Cliff. Please go ahead.

Hello, everyone and thank you for joining our second quarter 2018 earnings conference call today. During the second quarter, we remain focused on driving healthy results and maintaining regulatory compliance. Despite the challenging market sentiment, we achieved solid results in the second quarter with loan origination volume growth of 36% quarter-on-quarter and increase in our operating income of 17% quarter-on-quarter. Also we continue to grow our user and borrower base. The number of registered users exceeded 78 million and the number of cumulative borrowers reached 12.4 million end of June. As mentioned on our previous earnings call, while we continue to grow our core business in this evolving environment, we are investing in new engines of growth by leveraging on our technological capabilities and massive amounts of data to provide a suite of cutting edge technologies as a service to third-party financial service providers. Those services include our AI driven loan connection robots, our advanced anti-fraud detection system, our proprietary Magic Mirror credit scoring system, and online customer acquisition. We are making positive progress and are currently engaging on wider range of financial service providers, not just online lenders, but also licensed financial institutions such as banks, credit card companies and the consumer finances companies. The external acceptance of our financial technologies reinforces our leading edge innovation and the core capabilities. We continue to be recognized as an industry leader and are very proud to be among one of the first 15 lending companies in the country and owning just one of the two P2P platforms to connect with China’s first unified credit reporting platform, Baihang Credit. We recently entered into a strategic agreement with Zhejiang University to develop an AI research and development center. This partnership further recognized our industry leadership position and our large customer scale and high-quality design. We remain focused on capturing the tremendous long-term growth opportunities in our industry with maintaining compliance with regulations as it evolves. Now, I would like to pass the call over to our COO, Feng to discuss the updates of our business.

Thank you, Cliff and hello everyone. I am Feng Zhang. We are pleased with our operational results in this quarter. Despite the challenges we face, the fundamentals of our core business model remains strong as evidenced by our continued profitability and improved delinquency trends in the second quarter. Our 90-day plus delinquency is nearly halved from 8% in March to 4.6% at the end of June. Early delinquencies that is 15 to 90 days past due fell sharply from 5.4% in March to 3.1% at the end of June. On a vintage basis, the delinquency curve for first quarter 2018 originations is now following a similar trend as those vintages back in late 2016 and early 2017, although loan tenure is now slightly longer than before meaning that delinquencies are a little more delayed than before. The first quarter 2018 vintage appears to be performing significantly better than the fourth quarter 2017 vintage. I want to briefly mention regulations. As you maybe aware, the central regulatory authorities last week issued a notice outlining the nationwide inspection standards for P2P platforms, which includes a list of 108 requirements and the deadline of December 31, 2018 for the completion of all such inspections. The requirements are generally in line with our expectations and in line with the previous Shanghai local requirements. This is a top priority for us and we are confident in our ability to meet the P2P registration requirements. However, in the past few months, the delay and tightening of regulations have contributed to problems for smaller P2P platforms. Although this industry consolidation is within our expectations, it has dampened the retail investor confidence across the country. We firmly believe industry consolidation and the tightening of regulations is the necessary step and significantly positive for the longer term health and sustainability of the industry. With that, I will now turn the call over to our CFO, Simon Ho who will discuss our financial results of the quarter.

Thank you, Feng and hello everyone. We had a solid financial performance in the second quarter. We continued to drive operating efficiency and maintained our non-GAAP operating margin at a healthy level of 46%, slightly higher than the previous quarter. Now, let me briefly go over the financial results for the second quarter, but in the interest of time, I will not walk through line by line on this call. Please refer to more details in our earnings release. Operating revenues for the second quarter of 2018 slightly decreased to RMB1.05 billion from RMB1.07 billion in the same period of 2017 primarily due to lower average transaction fee rates for the quarter. The impacts of applying the new revenue standard ASC 606 resulted in an increase in revenue of approximately RMB160 million. Loan facilitation service fees decreased by 7.1% to RMB753 million for the second quarter of 2018 from RMB811 million in the same period of 2017 primarily due to a lower average transaction fee rate during the second quarter of 2018 compared to the second quarter of 2017. But on a sequential quarter-on-quarter basis, our takeaway was largely stable at 6.3%. Post-facilitation service fees increased by 32% to RMB206 million for the second quarter of 2018 from RMB156 million in the same period of 2017 primarily due to the rolling impact of deferred transaction fees and the adoption of ASC 606. Non-GAAP adjusted operating income, which excludes share-based compensation expenses, was RMB487 million representing a decrease of 12% from RMB555 million in the same period of 2017. Other income was RMB297 million for the second quarter of 2018 compared with RMB193 million in the same period of 2017. Net profit decreased by 3.8% to RMB608 million for the second quarter of 2018 from RMB632 million in the same period…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Alice Li with Credit Suisse.

Hi. Thanks for taking my question. And I have two questions. The first is about recent problematic platforms, so you also mentioned that the retail investors they are more cautious now. And I would like to have more color on your liquidity conditions, so what’s the latest trend of active investor number or the outstanding loan balance and your funding cost? And I would also like to know the latest breakdown of your funding structure, because previously you have also mentioned that you will also increase the funding from institutional investors. So, I would like to know what’s the latest mix? And my second question is on the asset quality, we see significantly improvement in the first quarter cohort and release of the other income, so what’s our assumption for the ultimate delinquency ratio for the QAF protected loans? And also for the second quarter cohort as we accelerate the loan volume growth and the overall industry liquidity tightened, have we seen the early size of asset quality deterioration for the second quarter cohort? This is my two questions. Thanks.

Okay. Alice, thank you very much. I will address the liquidity conditions and the funding structure and then Feng will address the asset quality. In terms of sort of recent liquidity trends, let me share with you what we have seen in the recent weeks. Maybe that will help. Since last week when news of the nationwide inspection standards first came out, we have seen a noticeable improvement in investor confidence in retail funding trends. This is only one week of data. So, it is too early to call this a sustainable trend, but the early signs are encouraging. So, as we mentioned earlier in the call, this period we are in could be the low point and as we go through the inspection and regulatory process in the next few months, investor confidence is likely to return for the compliant platforms and we could see a recovery in the fourth quarter. We have also obviously not been sitting on our hands doing nothing we have also been collectively using a wide range of methods to maintain retail investor confidence. We have been stepping up online sales efforts, for example, using loyalty point systems to increase sales of – or attract investors’ money, we have increased our offline face-to-face group meetings with retail investors across the country. We are running online live broadcast with investors and everyday our investor sales and customer service teams are educating and addressing investor queries. In terms of the trends and sort of the funding costs, our retail money if you come to our website, you can see for say a 12-month period, the returns investors are getting is roughly around 11% annualized and this has been little changed over the past several months. In the current environment where obviously investor confidence is the main issue, it’s in our view less about how high the returns are, but more about the safety and security of these investors’ funds. And I hope that help give some color to the recent obviously the liquidity trends that we are seeing in our platform. In terms of the institutional funding, the institutional funds are more professional and knowledgeable than the general retail investors, but obviously in the current environment there is generally still a greater degree of caution as well from our institutional investors. However, we do have a decent pipeline of institutional funds and we expect the proportion of institutionally funded loans on the platform will continue to increase in the second half of the year. In the second quarter of 2018, the institutional funded loans accounted for about 10% of our total loan volume in the second quarter of 2018. We foresee that rising in the second half of the year and it could increase to around say 20% later in the year. I will turn the call to Feng who will address some recent asset quality trends.

Hey, thanks Alice for the question. Yes. In terms of recent asset quality, we have seen a significant recovery from Q4 and Q1 this year from last year. To your question, our current expectation of the QAF, the ultimate interest rate or charge-off rate for the QAF protected loans is around 10%, let’s say, plus, minus like 2% and if we compare that to the fund balance of 17.8%, we have a very healthy coverage ratio there. And to the other part of your question, yes, there is due to the recent deterioration of the retail investor sentiment and shortage of funding supply, many lenders are putting back. So, I think that has created some kind of credit squeeze. We have seen slight uptick in our recent delinquency, but nothing material and definitely nothing material, nothing what we saw in Q4 last year. So, yes, we would expect to see some deterioration because of the credit squeeze, but on the other side, due to the funding shortage, we have put back on our – we have tightened our credit standard as well. So net-net I think it will have very limited impact in our overall asset quality.

Yes. Let me just add comment to the back of that in terms of the other income that you have seen. There has been a release – not much say release, it has been a gain on our quality assurance fund in the second quarter and this is due to a few reasons. Firstly, it’s due to the increased proportion of loans that have quality assurance fund support. In the second quarter, 85% of our loans origination had QAF behind it versus 63% in the first quarter. We still have the positive buffer that’s priced in, in our loan pricing and so there is still an ongoing stream of QAF gains coming in. And of course, there has also been a slight improvement in our expected default rates for the current stock of loans in the portfolio. I hope that helps to answer your question.

Yes, that’s very helpful. Thank you very much.

Thank you. And the next question comes from Daphne Poon with Citi.

Hi, management. Thank you for taking my questions. So actually I guess you have already addressed some of my questions on the funding and asset quality side. But I am also wondering if reading into your full year loan volume outlook whether you are seeing is this still achievable to maintain your previous loan volume guidance or if not like how much deviation you expect? And the second question is about you mentioned in the prepared remarks that there has been some new initiatives to provide the test service to other financial institutions. So, can you give more color I guess on the progress and also the expected revenue contribution from this new business initiative? Thanks.

Sure. Thank you, Daphne. Let me just address the loan guidance that we gave earlier in the year. Earlier in the year, we gave loan guidance for the full year of 70 billion to 80 billion of loan originations. This clearly what we have been saying is this looks unachievable in the current environment. The target of 70 billion to 80 billion that we gave earlier in the year was premised on us achieving registration pretty much by the third quarter of this year. And we were very confident at that point in time, but the situation of course has changed given the regulatory delay. So today, we are not giving an explicit full year loan target as such or loan guidance as such, but we are obviously giving you our loan originations that we have done so far and what we expect for the month of August, which is about 4 billion to 4.5 billion is what we think we will achieve this current month. Now, if you sort of assumed hypothetically, right, if we continue to run at the August levels for the rest of the year, right, plus the 34 billion of originations near to July that would leave us at roughly around 55 billion for the full year. Now, but this is not an official target, I am just doing some mathematics and giving you some hypothetical sense of what the numbers are. So we don’t have an official outright loan guidance for the full year at this point. Now, with regards to your second question, your question about our technologies as a service progress, I am very pleased to report it’s progressing well. And as Cliff mentioned, we have a wide range of financial institutions, including licensed financial institutions who are signing up for our service. One of the leading businesses in this suite is our customer acquisition or lead generator for online lenders. In the second quarter, revenues were in the sort of roughly around 15 million mark and this has about maybe 100 plus different external customers. We are also getting good traction with our loan collections service, which includes our AI voice driven loan collections robot. As of June, this business had about 15 external customers and many more are in the pipeline who are assessing the capability of our system. We have also started up – opening up our antifraud detection system, our Magic Mirror credit scoring system to third-parties as well.

Okay, that’s very helpful. Thank you.

Thank you. And the next question comes from Sanjay Sakhrani with KBW.

Thanks. And just a follow-up on some of the previous questions and your commentary, when we think about that $50 billion to $55 billion of origination, the timing you mentioned, when we think about the risk to that number, is it more along the lines of demand and it sounds like you are comfortable from the funding standpoint in terms of investor participation?

Yes. Sanjay, so first of all, I am not going to comment directly on the $55 billion figure I mentioned because it’s all hypothetical and it’s not part of any official guidance. The constraint right now is investor funding on the platform, low demand for our loan products and assets are very, very strong. So I think it’s largely on the funding side of the platform as a result of all the problematic P2P platforms that’s obviously impacted the retail investor sentiment. As you could imagine for some of these retail investors they may not be – some maybe sophisticated, understand the differences but others may not understand much of differences between platform A and platform B. So what you need is an ability to help them differentiate and coming through more news and action and development on the regulatory side on these inspections on registration will help, because not every platform is going to get through this process. So that’s what I mean when I said investor confidence and retail investor confidence obviously could come back as this sort of regulatory process moves forward.

Okay. This is Feng. I will just add that we are optimistic. I think the government has clearly as Simon mentioned the government has clearly solved the issue and they don’t want to see these trends will continue and that’s why they have issued this 108 checklist. And actually like since the issuers of that list we have seen like in the recent days some recovery that pointing to the right direction in terms of our investor sentiment. I think we are optimistic that with the just like things getting more clearer and investors’ sentiment may recover, but obviously, it is very hard to predict when and by how much. That’s why we are not issuing any new guidance, but overall, I think there is a pretty good chance that really depends on how the regulatory check move forward, but there is a timeline by end of this year, the inspection needs to be finished. So, there is a set deadline and things should move in the positive direction.

I guess a follow-up is just on this registration process news, have the institutional investors perked up more because they would seem to be more – it would be easier to convince that things are changing constructively?

Yes, I think you are absolutely right. The institutional investors are definitely more sophisticated. However, I would say like in the last 2 months or so, they will impact as well, because they will kind of say hey, things are still like too much for us and why shouldn’t I wait. Now, I think with the issuance of the clear guidance, regulatory guidance, I think the confidence will pickup faster than the retail investor side.

Okay. And one final question just in terms of the timing of the registration process, I know the goal is by the end of the year, any idea whether some players might be notified ahead of that timeframe versus others?

So Sanjay, let me take that question. So, first of all, the deadline is for the end of 2018 for the inspection process to complete. The registration process will then be granted after that into 2019. The process is such that the company first performed the self inspection or self check, then the National Internet Finance Association and also the Shanghai Association will perform their inspections at the next stage and then the local government, P2P working office, which consist of the local CBIRC also performs inspections and they will report to the national P2P working office. So that’s sort of the process and this is supposed to have been complete by the end of 2018. We haven’t received any timetable yet from the regulators. We will begin our own self inspection and submit our report in a timely manner.

Okay, thank you.

Thank you. And the next question comes from Alex Shea with UBS.

Hi, management. Thanks for taking my questions. I have couple of follow-up questions. First one is on the delinquency, so it’s encouraging to see any improvement in delinquency in Q2. Can I ask is it more due to an improvement in the general trend of the whole industry or it is more due to tightened credit control and tightened approval rate and like also lower risk appetite? And second question is on the transaction fee rate, so I noticed in your release, you mentioned that part of the reason for the reduction in the average transaction rate due to the exclusion of some of the products that are not applicable for the transaction fee rate. Can you give some more color on that? And perhaps can we have some apples-to-apples comparison in terms of what’s the pricing have you changed in the Q2 and perhaps in terms of APR? And lastly, in terms of the institutional funding, can I ask what is the main challenge we are facing in more institutional funding, because I think many of your peers are competing for this kind of institutional lending especially from banks and licensed financial institutions. So anymore color will be helpful? Thanks.

Thanks, Alex. Feng will take the delinquency question and the institutional funds question and I will take the transaction fee rate.

So I will take the first. Yes, okay. Thanks, Alex. Yes, in terms of the equal recovery, I think it contributes – it is coming from multiple factors. I think largely it comes from the industry wide recovery as we have some credit spike happened in Q4 Q1 really was to combine the regulatory change at that time and very quick pullback putting out of many players. So that created a very sharp credit squeeze and created a very strong and quick spike. So we have – that spike has gone through and that creates a lot of recovery. But on the other side, we also benefited from partly our credit tightening in Q1 and also as well as the optimizations we have done very quickly, quick actions that we have taken to optimize and improve our credit policy and modeling. So it’s really coming from multiple factors. But if we – I think by and large, the biggest impact is probably industry wide [indiscernible], but we also had a lot of broader work in optimizing our strategy, that also contributed to the recovery. To your question about institutional funding, yes, I think there is a strong competition there, but I think the main challenge that we face is many licensed institutions, they are concerned about risk on their side, especially given the recent turbulence they are very worried about okay, will we guys be able to get registration, are you healthy enough so this part of things. And I think in the – we are very optimistic, because we overall I think we have very strong brand, we have very strong capital position and we have very strong and proven track record of good quality assets. So those are the benefits, the advantages we have compared to many competitors in the industry in terms of securing more institutional funding. So with the turbulence going through and with more clearance on the registration process we are very optimistic that we will be able to partner – few more partnerships with licensed financial institutions for institutional funding.

So Alex, let me just address the transaction fee rate question that you mentioned. So the basically the transaction fee rate of 6.31% that we quoted for the second quarter of 2018, we have made a small amendment to this definition basically beginning this current quarter or the second quarter. Our transaction fee definition excludes certain types of institutionally funded loans that typically with trusts where our income model is different, so it doesn’t actually – those loans we originate for these trusts do not include a transaction fee. This type of structure didn’t much exist prior to the second quarter and part of set of our push obviously into attracting taking in more institutional funds. And in the second quarter this particular type of loans that actually don’t have the transaction fee incorporated is about I think about 2% of the volume in the second quarter. So that gives very minimal impact. So when you look at our 6.31% for the second quarter, the 6.32% in the first quarter it is a true apples-to-apples pretty much true apples-to-apples comparison. Did that answer your question?

Yes, sure. Thanks.

Thank you. And the next question comes from Jacky Zuo with Deutsche Bank.

Hi, Simon. Hi, Feng. Thanks for taking my questions. I just have two questions to ask. One is the regulation, so you mentioned the 108 detailed rules for the new round of inspection, so any current – so on the current operation, based on the new rules anything you expect to change, particularly on the like APR disclosure, investor protection, our QAF, such things, any significant change you expect to be compliant? And based on the current schedule when do you think the current business scale control would be removed. Is that at the end of this inspection check or we need to wait until the formal registration? And second question is on the cost, I saw that we actually did very good on the OpEx, on the cost control, especially on the origination and servicing expenses, which – this is accounted for 1.4% of loan volume, down from 2% from last quarter. So, what drives the improvement and what ratio we should expect going forward? Thank you.

Sure. Jacky thanks for your questions. With regards to your first question is pretty much what’s the impact on the 108 requirements and whether we make any changes to our business? Now, just to mention, I think just to start off, the positive aspect among obviously all the problems with the smaller P2P platforms is that it has firstly accelerated as you can see some regulatory process by at least half a year. And secondly, it also confirms that the government recognizes the benefits of financial inclusion and technology innovation in the P2P industry that we bring to the table. Now based on our preliminary assessment of the 108 requirements, some work of course needs to be done, but we do not anticipate the need for significant adjustments to our business. The list of 108 requirements is substantially in line with the previous Shanghai government requirements that we have been working very hard towards. Obviously, we still need to discuss with our regulators. So, this is only our preliminary assessment and view. And if there is any significant changes, we will update you. With regards to the loan balance gap removal, I would expect that this will occur upon successful registration and not as part of their inspection, I would assume, it’s the registration. And finally, your questions on our expenses, in particular, the origination and servicing expenses, what you are referring to is that in the second quarter, our origination and servicing expenses declined 5% quarter-on-quarter. This was due mainly to lower staff costs. Our headcount declined 18% quarter-on-quarter to about 4,000 in June mainly due to the decline in loan collections staff. And yes, that’s mainly the reason. And we expect our headcount to remain relatively stable at this level for the rest of the year.

Alright, got it. Thank you.

Thank you. And the next question comes from Matthew Larson with Wells Fargo.

Hi, thanks for the call. My questions have all been answered, thank you very much, by the previous speakers.

Thank you. And the next question comes from Richard Wang with CICC.

Hello. And I will read my question in Chinese first and then in English. I have two questions. The first one is again related to the regulatory environment, given that the regulators are not going to give anybody a formal license likely before 2019, is it possible that for the next several months such implementation of 108 specific requirements will actually accelerate lot of the smaller P2P players which will not only further dampen the investor confidence, but also potentially slowdown the speed of our PPDAI to have institutional funding, because it’s regulated on the licensed institutions that can always wait for several months before they finally see PPDAI formalizes? My second question is, is there any plan for cash dividend payout?

Hi, this is Feng. I will answer the first question. Yes, I think it is possible that the scenario you have raised, we will expect many smaller players will quit, because they are not able to meet the run-rate checklist. However, I would say that relatively speaking compared to what we have seen in the situation in the last 2 months, we will expect things to recover and the sentiment to recover from this point – from the last 2 months, because there is a lot more clarity now versus like 2 weeks ago. Now, we have these run-rate comments and we have very clear deadlines by which all the inspection is moving down, right. Now, we are not far away from December 31 and there will be like self inspection, there will be inspection by the association, and then there will be the final inspection. So, we will start moving towards that and probably very quickly we will finish our self inspection. And yes, in the process we will see smaller players continue to quit and probably increase, but we will also see clear separation that – and I think in our retail investors in the media, they will see clear separation. So, that will help recover or gather investors to our platform. Now, to our second question about institutional funding, I think again I would just call out relative to what we have been experiencing in the last 2, 3 months, I think the institution has the confidence, the willingness to partner with us will significantly improve. Yes, we are nowhere – it’s not possible to get the final registration down, because that’s not happening this year, but with the clarity, I think they are confident their willingness to partner will significantly improve and even without the clarity if we compare looking back to the last 6 months, we have made significant headway into securing more institutional funding. So, we are cautiously optimistic that moving forward we will be able to secure more institutional funding.

Richard, I think I will also add a quick comment on the back of what Feng said about sort of the tail of the P2P platforms that needs to exit. And clearly, this is a necessary process, this consolidation and exit of this tail, but there are two things I think that will differentiate between what was happening in June and July versus now going forward. One is in June July, they were disorderly exit of P2P platforms, yet people running away from – owners running away from the platforms etcetera. And retail investors could not differentiate between good and bad platforms, they couldn’t differentiate – some couldn’t differentiate us versus others. I think the difference going forward is we are going to see much more orderly exits of P2P platforms. The government is doing all they can to ensure these exits will be orderly, right, and they will take different measures to act. And secondly, I think with the inspections going on, I think the retail investors will be able to differentiate between good and bad platforms. I think that will be much increasingly clear. So I think there is a difference. And the consolidation has to happen, but the environment I think will be somewhat different from what we have seen in a few months ago. Now, to what your question about dividends, I mean just to give you some context, the reason why we are doing these buybacks is because we have the cash flow. We have it on our balance sheet, we are generating positive cash flows and we think the share price is too low. So we are taking an opportunistic approach in terms of the price at which we are buying back, because we think it’s too cheap right now. So that’s why we chose buyback over dividends, it’s more flexible for us at this juncture. We don’t have concrete plans at the moment in the near-term to pay dividends, but it’s our policy that we will continuously consider and discuss internally.

Thank you, Simon.

Thank you. And we have another question from Matthew Larson with Wells Fargo.

Hi, I got back in the queue. Thanks. Just wanted to make a comment, I – most of the questions that have been on this conference call are being expression caution and concern about what’s going on. I mean obviously as you have said, it’s not so much how much firm like PPDAI or some of the firms that are in this space that recently went public, are they going to prosper or they are just going to survive and if they survive your stocks are going to go dramatically. And clearly with a lot of the competition getting swept away the territory players in that who can’t – don’t have their market capitalization or the wherewithal to adhere to the new rules are going to be gone and leaving larger pie for the remaining players. To me your firm sounds like it will be a survivor. You got plenty of cash. You have been in the business for 10 years. You expressed yourself very, very transparently and eloquently on the conference call. And I can say this, just speaking in my own book, I took some losses because I owned some stocks in the space, but when one of your – I don’t know if it’s competitor, but another name in the space [indiscernible] which is a very small player had an earnings call last week and they suggested a huge share buyback and they survived. I went across the board and bought many stocks, it’s an asymmetrical situation now. And I just where the downside is maybe a dollar or more for the company share, but the upside is open entity, you just have to look at lending tree here in the U.S. or maybe credit acceptance because these things are up 7, 8, or 9-fold. So I just want to express for any individual investor who is listening to this conference call that you got to disclose that noise and if you feel people in the PRC have the same goals and ambitions that people in the U.S. have which is you want buy things, you want to consume and it’s hard to get a loan in the PRC from the bank. You have to go to these shadow banking sectors. And the better managed ones will layout and 1 year or 2 years this will all be kind of forgotten in the same way that our own banking crisis back in ‘09 places like JPMorgan and Bank of America have more and more deposits than they have did back then, they were supposedly bigger fell. So I just wanted to through that out not just cheerleading or to talk of my book which is kind of just counter what I consider most of the questions are – have a negative. With that shed, I will let somebody else step in and make a comment.

Matthew thanks very much for your comments. Obviously, we can’t agree more, we are well positioned to get though this transitional process in the industry. And I think the longer term outlook and opportunity in this space is enormous. And we look forward to capturing those opportunities. And hopefully the line of questioning on the calls will become much more optimistic in due course. I very much appreciate your comments Mathew.

Thank you. And as there are no further questions now, I would like to turn the call back over to the company for closing remarks.

Okay. Thank you once again for joining us today. If you have further questions, please feel free to contact PPDAI Investor Relations through the contact information provided on our website or in our press release.

Thank you. This concludes this conference call. You may now disconnect your lines. Thank you.