00:04 Good day ladies and gentlemen. Thank you for standing by and welcome to the Jiayin Group’s Third Quarter of twenty twenty one Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] 00:28 I will now turn the call over to Ms. Susie Wang, Director of The Blueshirt Group, Asia. Ms. Wang, please proceed.

0:36 Hello everyone. Thank you all for joining us on today’s conference call to discuss Jiayin Group’s financial results for the third quarter of twenty twenty one. We released the results earlier today and the press release is available on the company’s website as well as from Newswire Services. On the call with me today are Mr. Yan Dinggui, Chief Executive Officer; Mr. Xu Yifang, Chief Risk Officer; and Ms. Jin Chen, Co-Chief Financial Officer. 01:00 Before we continue, please note that today’s discussion will contain forward-looking statements made on the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of nineteen ninety five. Forward-looking statements involve inherent risk and uncertainties as such the company’s actual results may be materially different from expectations expressed today. Further information regarding these and other risk and uncertainties is included in the company’s public filings with SEC. 01:27 The company does not assume any obligation to update any forward-looking statement except as required under applicable law. Also please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese renminbi. 01:41 With that, let me now turn the call over to our CEO, Yan Dinggui. Go ahead Mr. Yan.

01:49 Hello everyone. Thank you for joining our third quarter twenty twenty one earning conference call. We delivered another outstanding quarter with impressive financial results, reflecting the success of our growth strategies execution. As we continued to diversify our funding resources and broaden our collaborations with institutional partners, our loan origination volume has doubled from last year to surpass U.S. Dollar 1 billion with a forty three point eight percent increase in our net revenue. 02:27 We believe we are on the right track for our next stage of growth, leveraged by our continuous efforts in expanding our funding resources, while maintaining risk management excellence. In quarter three, our funding partners increased to thirty six with another forty two institutions in discussion. We are confident we will have continued top line growth and will capture massive opportunities in the growing consumer market. 03:04 In this quarter, we resumed our marketing program and have begun acquiring new customers at a more accelerated pace that is focused on higher credit quality customers. We have maintained delinquency rates by sustaining rapid portfolio growth. We started the long program for small business owners. Small business are the backbone of our country’s economic development and a common prosperity initiatives that [act of the option] [ph] for accessing [indiscernible] present a great opportunity for us. 03:47 However, we are very cautious about what we are offering, and as a use of low [indiscernible] and a repayment capabilities. We are gradually rolling out this program and will gather more [indiscernible] develop differential risk on underwriting criteria and tours to ensure our loans are for borrowers of quality and a good credit. 04:16 Today, a large portion of our loan volume continues to go to our existing borrowers with higher quality with our repeat borrowing rate for this…

06:53 Thank you, Mr. Yan. And thank you everyone for joining our call today. As Mr. Yan mentioned, we ended another great quarter on a strong note. Total loan origination volume maintained a strong growth for trajectory, reaching six point seven billion RMB, representing an increase of one hundred point two percent year over year and seventeen point seven percent sequentially. 07:18 Net income came in at one hundred and twenty four point eight million RMB, a forty one point two percent year over year increase compared to eighty eight point four million RMB in the same period last year. 07:32 With the clearance of P2P balance and the diverse financial institutional partners, we are able to continue our [upward chain] [ph] in this quarter, and we are confident to resume high quality growth in the years ahead. 07:46 Now, let me go through our financial highlights for the quarter. Please note that unless stated otherwise all numbers quoted are in RMB and [indiscernible] change refer to year over year comparisons. Net revenue was RMB five hundred and seventy seven point one million, up forty three point eight percent. Revenue growth was primarily driven by the significant growth in loan origination volumes, which increased the one hundred point two percent. 08:17 Other revenue was RMB forty point three million, down forty seven point seven percent. This decrease was primarily due to reduced revenue from P2P related services as the company no longer supports a legacy P2P lending business, partially offset by the sales of hardware by Shanghai Bweenet since the integration in May. 08:44 Moving on to costs, we have step up the overall spending from customer acquisition since last quarter. In the third quarter, our total operating costs and expenses increased sixty eight point four percent year over year…

13:18 [Operator Instructions] Your first question comes from the line of [Andrew Scott] [ph] ROTH Capital Partners. Please ask your questions.

13:58 Good evening and congrats on the strong profitability. My first question revolves around your increased acquisition of new borrowers. It looks like you guys are making strong traction on the sales and marketing spend you guys have made in the last few quarters, so can you just kind of talk to the success you've seen in the new online advertising?

14:21 Yeah. This is – I will take this question. So, yes, sales and market expense were two hundred and thirty six point nine million RMB. So, if you compare it to the last year, I think it's primarily due to the increase along [facilitation amount] [ph]. But if we look at the last quarter's number, this quarter represents thirty six percent increase. 14:47 So among thirty six percent increase, I think roughly half is the marketing fee and the remaining half is driven by the marketing initiatives and the strategy that we launched. So, as we mentioned in the last quarter, I think the second quarter is the quarter that we build launching of information feed advertisement. So, compared with the last quarter, we are pretty happy to see great improvements [indiscernible] ratio of these initiatives. 15:21 So, in terms of the cost per new borrowers and the cost per [indiscernible] amounts, they are both edging downwards. So, and we've also seen the great breakthrough at the end of September. That's the cost of these initiatives are comparable to our existing marketing channels. 15:44 So, if we look at the total sales and the marketing expenses at this moment, I would say there are lots of [indiscernible] and the result will be affected by different customer mix. I mean the [repeat borrowers] [ph] or the newly on board borrowers and the channel mix. But as the numbers and performance come in this quarter, we are pretty confident to see that this new initiatives will help bringing our target customers in the more effective economic and efficient way. So, there will be room for efficiency gains as long as our volumes grows, and we will continue to work to optimize this cost. 16:32 So, hope it would clarify the change that we are seeing now.

16:42 Great. Thank you for the information. Great to hear the efficiency and the initiatives is improving. So, my second question revolves around the new products you guys have for small businesses, it's starting to hear you guys are rolling that out. Can you maybe provide some details on maybe size of the loans, what type of businesses you guys are targeting and any other detail you could provide there would be good?

17:08 This is Yifang. I'm going to take your question. Thank you, Andrew. So, regarding SME, we started to focus on SME – primarily focusing on acquiring these customers through our online acquisition channels. 17:24 So, we stay where we are familiar with and where we are highly cost effective with channel wise. In terms of the type of customer we are acquiring are really micro to small businesses. As part of the acquisition process, we are asking these potential customers as to submitting their business licenses, as well as their personal credential, which helps us to evaluating their credit worthiness. 17:58 At this point, we have both targeting – existing customer calls to identify the customers who are part of Jiayin customers, but also are small business owners. In addition, as I said before, we are also acquiring to our online new customer acquisition channels. 18:21 In terms of [indiscernible] wise, it's staying a little bit on-site on the loan prices a little bit higher than what we are having now, about twenty percent to thirty percent higher in terms of average credit lines.

18:39 Awesome. Thanks. That was very helpful. My next question has to be with the international expansion. Last time we spoke, you guys were still seeing great diversity [indiscernible] top three lender and just recently received [indiscernible]. I was just wondering if you guys have any updates on the various markets you guys are entering into?

19:02 We are – it is Yifang again. I'm going to take on the questions on the market expansion. As we have shared last time, we are making solid progress in international markets. For the Mexico market, we're seeing new commerce into the Mexico micro-lending business, but we remain as the leading position in the Mexico. For all, our total volumes may not having increased dramatically, but we are making solid progress in terms of preparing ourselves towards our product proliferation. 19:42 In terms of the Nigeria, I said we believe we share that we obtained the lending license. We are now trying to achieve our scalability. And reporting back on Indonesia, we are still in the process of trying to solidify our positions in terms of our lending license.

20:11 Great. Thank you. Next from me, if I may? On your credit costs, your charge for allowance of uncollectible receivables as a percentage of loans funded has dropped substantially. Is there kind of a level that you guys see it normalizing? And do you guys feel comfortable with the average credit quality of the customer you guys are funding today?

20:39 We're not able to catch your question. Can you say it again Andrew?

20:44 Yes, sorry. Just on credit cost, your charges for uncollectible accounts per loan funded has dropped substantially. So, can you talk to where you see credit costs going and how you feel about the average credit quality of the standard customer today?

21:10 I will talk about the general directions. The reason for the drop of the credit cost on the uncollected loans is primarily driven by our improvement on the credit quality.

21:25 And for – because of last year, we’ve changed our business model substantially. So, most of the uncollectible allowance are for this quarter due to the related party. I mean, it is our financial institutions that we provide our service to. So, most of them are licensed credit and financial institutions. So, they have pretty good credit. So, we – basically you can see the remaining part on the uncollectible allowance are from the previous business that are remaining on the book.

22:11 Awesome. Thank you. And last one if I may. You guys are beginning to generate some revenues from Bweenet, can you just speak to how the integration is going? And how you see that business working over the next few quarters? Thanks, and that’s all for me.

22:28 Yes. Yeah, right. So this is Yifang again. So because of the recent crackdown down on the blockchain and a bitcoin mining brought at the market [indiscernible], a lot of challenges to this business segments. So, as a result at this moment, we just stop this segment operations in Mainland China, but we are actively seeking opportunity to move it to the overseas. We will be closely monitoring the regulation change and remain alert to adjust our plan. 23:03 And at this moment, we are assessing this investment according to this ever evolving policy and we will update the market when there is a progress.

23:20 Great. Thank you for the responses and once again congrats on the strong quarter.

23:26 Yes. Thank you, Andrew.

23:31 [Operator Instructions] Seeing no more questions. I will turn the call to Ms. Chen. Please go ahead.

23:54 Thank you, operator, and thank you all for participating on today's call, and thank you for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress.

24:14 This concludes today's conference call. Thank you for participating. You may now disconnect.