Good day, and welcome to the Yiren Digital Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. All participants will be in a 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 now like to turn the conference call over to Ms. Keyao He. The floor is yours, ma'am.

Thank you, operator. Good morning and good evening, everyone. Today's call features the presentation by the Founder, Chairman, and CEO of Credit Ease; our CEO, Mr. Ning Tang; and our CFO, Mr. Yuning Feng. There will be Q&A session after the prepared remarks. Before beginning, we'd like to remind you that discussions during this call contain forward-looking statements made under the Safe Harbor provision of U.S. Federal Security Litigation Reform Act of 1995. Such statements are subject to risk, uncertainties, and factors that can cause actual results to differ materially from those contained in any such statements. Further information regarding such risks, uncertainties, or factors is included in our filing with the U.S. Securities and Exchange Commission. We do not undertake any obligation to update any forward-looking statements as required under the relevant laws. During the call, we will be referring to certain non-GAAP financial measures and supplemental measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For information about those non-GAAP measures and reconciliations to GAAP measures, please refer to our earnings press release. I will now pass it to Ning for opening remarks.

Thank you all, for joining our earnings conference call today. We closed out the year on a strong note, delivering another solid quarter of results that were in line with our previous guidance. The year 2024 marked a significant milestone for us, driven by four key achievements. Firstly, we reshaped and upgraded customer segments for our Financial Services business, significantly improving asset quality and paving the way for long-term, sustainable development. Secondly, we made meaningful progress in the development and application of AI, by integrating our proprietary AI system throughout our operations, including customer acquisition, customer service, and asset management, we are seeing significant improvements in operational efficiency and user experience. Thirdly, our International Business steadily made progress throughout the year, meeting our phased objectives and achieving profitability. While expanding our operations in the Philippines, we are also working to replicate this success in more countries and regions moving forward. Lastly, our Insurance Brokerage business is actively adopting a digitization and internal-driven model, while the traditional model continues to be a major revenue contributor for this segment. Social media has emerged as an increasingly vital channel for client acquisition. To capitalize on this trend, we have established a dedicated team focusing on social media to drive conversion rates and further expand our digital footprint. Together, these achievements are laying a solid foundation for our next phase of higher quality growth, one that will continue to create value for our stakeholders in the years ahead. Now, I will go into details of our operational highlights for the quarter. Our Financial Services business continued to grow during the fourth quarter of 2024, with total loan volumes reaching RMB15.4 billion, a 32% year-over-year increase. The number of borrowers remained stable quarter-over-quarter at RMB1.6 million and grew 14% from the same period last year.…

Thank you, Ning. Hello, everyone. On this call I will be focused on our key financial highlights. Please refer to our earnings release and IR data for further details, both available on our website. First of all, we are pleased to report a solid year of strong financial performance, with 2024 full-year revenues in 90% annual growth, meeting our current full-year guidance. In particular, total revenue of the fourth quarter of 2024 sustained this growth momentum with a 14% year-over-year increase. In the financial services segment, total loan facilitation continued at strong momentum, reaching RMB15.4 billion in the fourth quarter, up 32% year-over-year. Loan volume facilitating the full year of 2024 reached RMB53.6 billion, jumping by 49% compared to 2023. This growth was primarily driven by robust demand for our small revolving loan product, coupled with a steady increase in demand from repeat higher-quality borrowers. The platform's ability to track and retain these high-quality borrowers has significantly contributed to the overall increase in loan volume. Consequently, revenue from this segment in the fourth quarter grew 34% year-over-year to RMB1,048 million, that's RMB1.048 billion. And the revenue for the whole year grew by 38% annually to RMB3.5 billion. In the insurance sector, our growth-reaching premium totaled RMB1.1 billion in the fourth quarter of 2024, making a 9% year-over-year decline. The year-over-year decline was primarily driven by a significant drop in life insurance sales, resulting from ongoing industry-wide impacts of regulatory changes and the adjustment to our product offering. In the fourth quarter, revenue from our insurance segment increased by 8% year-over-year to RMB106 million. This increase was due to a higher than expected renewal rate. For the year of 2024, revenue from the insurance segment reached RMB408 million, down 58% year-over-year, and we expect a double-digit recovery in 2025. In the…

Thank you. And operator, we’ll now open for Q&A.

[Operator Instructions] The first question we have will come from Haonan Zhang [ph] of Erdos Investments. Please go ahead.

Hi, it's Haonan [ph] from Erdos Capital. Thanks for taking my question. I have two questions here. Firstly, as the Chinese government now relaxed regulations, what change will the company make, especially when your competitors may act more positively? Thank you. It's the first question.

So the question is about, as the macro environment becomes more favorable, what is our like action plan?

Yes, yes.

Okay. So yes, indeed yes, the macro environment is getting better, and we will continue to drive up, repeat the borrowing rate. Now, it's below 70%. We want it to be 70% in this year. We are close, yes. So we will try and get there. That will make our risk side stable and improve. At the same time, we will do better customer acquisitions, smarter customer acquisition. So we work with like Douyin and such platforms and so on to do real-time advertising. Basically, we pick up the prospects to target, utilizing our AI-driven analytics model. So that will make us more kind of proactive in the customer acquisition process. Also, we'll explore more acquisition channels, like non-finance, like life-related platforms, applications for more loan volume. And also, as our customer mix gets upgraded, we will increase the average ticket size. Now, it's like 7K to 8K. It will further go up, likely, in the year. But yes, we will keep the risk side stable as I first highlighted. We'll do that by taking a variety of measures, yes. Keep doing a good job on that side. And we can also offer better customer experience, I suppose, and further streamlining the application process and upgrading the user interface and so on. So we'll be more competitive in the marketplace. Yes, thank you.

Okay. Thank you for answering the question. The second question is, can you share some long-term goals for the overseas business? Like, what scale will the business achieve, and how much will you invest in the overseas business? Do you think that overseas business could be bigger than the domestic business one day? Yes, thank you.

Yes, one day, yes. So probably, yes, because the international market is very big. So it's as big as the domestic market, so yes. I guess it's quite possible that one day it will be maybe half-half, but we are a bit, still in early stage right now. But we will try to make the international business a meaningful revenue contributor in the next couple of years, three-year time frame, yes. So because we can utilize the AI very well in those markets, and also we've had a good momentum developed in the Philippines, and the success can be replicated. And we've also done research other than Southeast Asia. We've made progress in America, in Southern America, and also the Middle East and so on. So yes, we are quite optimistic to grow globally, and that's certainly our strategic objective. So because we are a global player, and our competitive advantage is in domestic China, many of them can be applied as we grow globally to other parts of the world. Thank you.

Thank you. Thank you.

Well, the conference call has now concluded. If you have any further questions, you may contact Yiren's IR department for any follow-ups. Thank you for attending today's presentation. At this time, you may disconnect. Thank you, and have a great day!