Hello, and welcome to the X Financial Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I would like to turn the conference over to Tanya Wen [ph]. Please go ahead.

Thank you, operator. Hello everyone and thank you for joining us today. The company's results were released earlier today and are available on the company's IR Web site at ir.xiaoyinggroup.com. On the call today from X Financial are Mr. Simon Cheng, President; and Mr. Kevin Zhang, Chief Financial Officer. Mr. Cheng will give a brief overview of the company's business operations and highlights, followed by Mr. Zhang, who will go through the financials and guidance. They are all available to answer your questions during the Q&A session. I remind you that this call may contain forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and the current market and operating conditions and related events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. For the information regarding this and other risks, uncertainties and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under law. It is now my pleasure to introduce Mr. Simon Cheng. Mr. Cheng, please go ahead.

Hello, everyone. We continued to face great challenges due to COVID-19. However, we have shown and strengthened strong signs of gradual recovery in the market and made timely and strategic decisions that will help the business deal with these uncertainties and the adverse impact on the economy and market environment. As a result, we believe we are well positioned to capture potential market opportunities ahead under the accelerated industry consolidation due to COVID-19. During the second quarter, our number of active borrowers reached 625,707, representing an increase of 46% from 428,366 from the previous quarter. It is mainly due to an increase in the number of active borrowers of Xiaoying Credit Loan. In addition, the credit quality of our borrowers improved greatly during the quarter in part due to our comprehensive risk management capabilities and stringent assessment criteria for the borrowers. Our total loan facilitation amount in July has recovered to the level in January 2020 before COVID-19, and so were the delinquency rates for outstanding loans. We implemented more stringent risk policy and control measures to improve margins during the quarter. The total cumulative registered users on the platform increased 10.6% to 47.1 million as of June 30, 2020, demonstrating the continued value and quality of the loan products that we offer borrowers and consumers, even during such a challenging environment. The regulatory compliance has always been our top priority and key competitive edge in the market. So far, our transition to 100% institutional funding has been very smooth and we expect to strengthen our relationship with financial partners and keep diversifying our institutional funding resources. At present, we have achieved 100% institutional funding for new loans facilitated through our platform. Despite the impact from COVID-19, our risk management capabilities continue to be well recognized by our institutional partners,…

Thank you, Simon, and hello, everybody. Although the last quarter was challenging, we continued to make progress on the execution of our business transition strategy. We did see an increase in the number of our active borrowers by 46% on a sequential basis and total cumulative registered users reached 47 million as of June 30, 2020. Institutional funding accounted for 97% of the total loan facilitation amount compared with 81% in the first quarter of 2020. During the second quarter, the percentage of loan products we facilitated that were covered by ZhongAn Insurance decreased further to 54% as we continued to reduce our insurance coverage rate to lower customer borrowing costs and enhance credit quality. In the early onset of the third quarter, our business was already on track for a steady recovery. In July, our total loan facilitation amount was back to the level in January 2020 before COVID-19, and so were the delinquency rates for outstanding loans. The delinquency rates for all outstanding loans that are past due for 31 to 90 days as of June 30, 2020 was 3.53% compared with 6.71% as of March 31, 2020. We expect this improvement trend to continue in the upcoming quarters. In the meantime, we continue to take a distinct and prudent approach on cost control and will conform our business operation towards a healthier margin profile. In light of the accelerated combination of efforts to improve our top-line and reduce operational expenses, we expect to resume the profit during the second half of 2020. We will continue to prioritize long-term value for our shareholders by focusing on improving operational efficiency and lowering our customer borrowing costs. In addition to improving the quality of our underlying assets and risk control management systems, we have largely strengthened our internal efforts to…

We will now begin the question-and-answer session. [Operator Instructions]. : :

This concludes our question-and-answer session. I would like to turn the conference back over to Tanya Wen for any closing remarks.

Thank you everyone for joining us on the call today. If you haven't got a chance to raise your questions, we will be pleased to answer them through follow-up contacts. We look forward to speaking with you again in the near future. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.