Hello, and welcome to the X Financial First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Victoria Yu. 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 website at ir.xiaoyinggroup.com. On the call today from X Financial is Mr. Frank Fuya Zheng, Chief Financial Officer. Mr. Zheng will give an overview of the company's business operations and highlights, go through the financials and then answer your questions during the Q&A session. I remind you that this call may contain forward-looking statements and the safe harbor provisions of Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions and relate to 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. Further information regarding risks 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 statement as a result of the new information, future events or otherwise, except as required in the law. It is now my pleasure to introduce Mr. Frank Fuya Zheng. Mr. Zheng, please go ahead.

Hello, everyone. We are pleased to start 2024 with a solid financial performance in the first quarter. We continue to implement our strategy of proactively and dynamically adjusting loan volumes based on close monetary asset quality dynamics, and this again proved effective in securing our profitability. As a result, despite a year-over-year and the quarter-over-quarter decline in the loan volume, both our top and the bottom line increased on a yearly and quarterly basis with notable improvements in profits. In the first quarter, the total loan amount facilitated and originally decreased by 11% year-over-year and 18% quarter-over-quarter to RMB 22 billion, in line with our guidance. Our total outstanding loan balance was RMB 44 billion at the end of March 2024. Delinquency rates for the outstanding loans past due for 31 to 60 days and 91 to 180 days were 1.61% and 4.37%, respectively, at the end of the quarter, compared with 1.05% and 2.4% a year ago. The increase in overdue loans as a percentage of total outstanding loans is primarily due to lower outstanding loan balances at this quarter end, as a result of proactive control of loan facilitating and originating that we initiated in the first quarter of last year. Excluding the impact of the reduced loan volume, asset quality began to stabilize during this quarter. We remain committed to closing monitoring borrowers through the entire credit cycle, continuing streaming our risk control system and taking all necessary measures to mitigate risks. In the first quarter, total net revenue was RMB 1.2 billion, up 20% year-over-year and 1% quarter-over-quarter despite decline in the loan volumes. Thanks to our strict risk controls and improved operational efficiency, net income increased by 28% year-over-year and 92% quarter-over-quarter to RMB 363 million. This once again demonstrates the effectiveness of our strategy,…

[Operator Instructions] Your first question today comes from Mason Bourne with AWH Capital.

I hope you could talk about what you're seeing in the Chinese economy and how it's related to loan volumes and your outlook for the rest of the year?

Overall, Chinese economy is still facing some challenges. Contrast to the U.S., there is an inflation environment, we are sort of in the deflation environment. So overall, for the overall -- generally, overall for the loan, demand is stable or a little bit decline. I think if you look at the order first quarter financial reports from the -- all the Chinese major banks, they are all -- they loan volume and their income and the profit are all down a little bit. So we are in that kind of environment. But for our demand, I think it's mainly is a risk factor. We are still stay -- our overall loan portfolio still at elevated risk level. But we kind of -- in the first quarter, we kind of stabilized that situation. Technical, there's a little bit of improvement compared with the fourth quarter last year, but still on elevated level. So that is, I think, is the main factor instead of an economic environment to [ restrain ] everybody in our sector cautious to expand loan volume in a more aggressive way. We are all under some kind of pressure for the loan quality. That's the main factor, I believe.

And then I was hoping you could also talk about the regulatory environment and how you view that going forward.

Regulatory environment, there's not much new development in this quarter and just basically stable situation. There's not much news coming from the regulatory side.

[Operator Instructions] It appears there are no further questions at this time. I'd like to turn the call back over to Victoria Yu 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 today's presentation. You may now disconnect.