Jiayin Group, Inc. Sponsored ADR Class A Aktie

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Jiayin Group Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. I will now turn the call over to Mr. [ Sam Lee ] from Investor Relations of Jiayin Group. Please proceed.

Thank you, operator. Hello, everyone. Thank you all for joining us on today's conference call to discuss Jiayin Group's financial results for the second quarter of 2026. We released our earnings results earlier today. 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; and Mr. Fan Chunlin, Chief Financial Officer.

Before we continue, please note that today's discussion 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 actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Also, this call includes discussions of certain non-GAAP financial measures.

Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese renminbi.

With that, let me now turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese, and I will follow up with corresponding English translations. Please go ahead, Mr. Yan.

[Foreign Language]

[Interpreted] Hello, everyone. Thank you for joining Jiayin Group's Second Quarter 2026 Earnings Conference Call.

[Foreign Language]

[Interpreted] According to the statistics from the People's Bank of China, the outstanding balance of short-term household consumer loans in China decreased by approximately RMB 190 billion in the second quarter compared to the end of the first quarter as industry regulatory compliance requirements continue to take effect, influenced by isolated industry events. institutional funding partners have adopted a more cautious approach.

Against this backdrop, the company proactively adapted to changes in the industry and accelerated the strategic adjustment of our business structure. During the quarter, the company achieved transaction volume of RMB 9.5 billion, representing a year-over-year decrease of approximately 74.4%, driven by both the industry-wide contraction and our strategic adjustment, we recorded a net loss of approximately RMB 180 million for the quarter.

[Foreign Language]

[Interpreted] In response to impacts brought by industry-wide liquidity tightening, we proactively reduced our risk exposure and steadily mitigated existing portfolio risk, concentrating our focus on our core base of high-quality borrowers. At the same time, we intensified our collection efforts and the 30-day collection rate improved consecutively quarter-on-quarter. As of the end of the second quarter, the 90-plus day delinquency rate stood at 2.21%, remaining stable on a sequential basis.

[Foreign Language]

[Interpreted] Our international business serves as a key anchor in driving our strategic transformation and structural upgrades. In the second quarter, our Indonesian partners' business volume increased by 58% year-over-year and 10% sequentially. By upgrading our risk strategy framework and advancing refined borrower segmentation, we significantly improved our customer acquisition cost efficiency and further expanded our partnership network with local financial institutions. In Mexico, business volume increased by 36% sequentially in the second quarter with continued improvements in borrower acquisition efficiency and asset quality.

To achieve our long-term vision for our overseas business, we have completely comprehensively upgraded both our strategy and execution team. Moving forward, we plan to continue deepening our presence in Southeast Asia as our core anchor market while taking a prudent approach to market research and expansion in emerging regions such as East Africa and Central Asia, thereby advancing our global expansion in a structured and disciplined manner.

[Foreign Language]

[Interpreted] Technology empowerment is a critical pillar of our strategic transformation, and we are accelerating our technology upgrade to transition from a loan facilitation service provider to a more comprehensive technology service provider. During the quarter, the company's proprietary [ Fuxi ] platform has completed the key development in the infrastructure layer, risk management layer and core skills deployment, covering all key operational processes throughout the credit life cycle.

Specifically, the end-to-end skill for credit assessment modeling has been implemented at scale, compressing the traditional model optimization cycle from 3 to 5 days down to a matter of hours with risk identification accuracy metrics, including model [ AUC ] and [ KS ] scores, significantly outperforming human benchmarks. Looking ahead, we will focus on building a customer data platform tailored for financial institutions, enabling existing borrower segmentation and targeting capabilities. with full integration into our automated marketing platform, establishing a standardized and scalable framework for technology service delivery.

[Foreign Language]

[Interpreted] In addition, AI applications have been fully embedded into the company's core operational value chain. End-to-end AI coverage has now been implemented in key operational scenarios such as customer service and loan application intake, completely replacing human agents in select functions. On the risk management front, we have developed our proprietary strategy assistance agent by combining large language models with traditional machine learning, driving the upgrade of risk strategy development from expert modeling with manual calculation to AI-assisted expert modeling with automated machine calculation.

Consequently, our risk strategy iteration efficiency has improved by more than tenfold and accuracy in key scenarios has increased by over 20%, benefiting from the workforce efficiency gains brought by AI, we are actively optimizing our organizational structure. AI is evolving from a stand-alone tool into a systemic capability, supporting the company in maintaining operational efficiency and cost competitiveness during this period of business adjustment.

[Foreign Language]

[Interpreted] On the anti-fraud front, during the first half of this year, the industry experienced a rapid evolution of fraudulent and illicit activities in the industry, characterized by sophisticated disguising and masking tactics and showed a clear trend towards organized operations, causing growing losses to institutions across the sector.

To address this, we accelerated the iteration of our multimodal risk strategy system to precisely identify behavioral differences between genuine users and proxy-based fraud operations. As of the end of June, we had cumulatively blocked 176,000 malicious applications from fraudulent activities and identified and intercepted more than 264,000 high-risk repeat fraud applications, effectively intercepting fraudulent agent-initiated complaints and safeguarding the interest of institutional partners and borrowers.

[Foreign Language]

[Interpreted] In light of the uncertain macroeconomic operating environment and the current strategic development priorities, the company has decided to refrain from issuing guidance for the third quarter and to suspend our dividend for this fiscal year. By maintaining flexibility in our capital allocation and operational pace, we will focus internal resources on business transformation and risk mitigation. Notably, as of the end of the second quarter, the company's cash and cash equivalents increased to RMB 504 million. providing a strong financial buffer to navigate through the industry cycle and ensure sound future development.

[Foreign Language]

[Interpreted] With that, I will now turn the call over to our CFO, Mr. Fan Chunlin. Please go ahead.

Thank you, Mr. Yan, and hello, everyone. Thank you for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB and all percentage changes refer to year-over-year comparisons, unless otherwise noted. As Mr. Yan noted earlier, we remained disciplined in our execution during the second quarter and delivered transaction volume in line with our previous guidance.

Transaction volume was CNY 9.5 billion, representing a decrease of 74.4% from the same period of 2025. Our net revenue was CNY 636.9 million, representing a decrease of 60.9% from the same period of 2025. Moving on to costs. Facilitation and servicing expense was CNY 549.3 million, representing an increase of 92.7% from the same period of 2025, primarily due to the increase in average outstanding loan balance for which the company provided guaranteed services.

Allowance for uncollectible receivables, contract assets, prepaid expenses and other current assets and others was CNY 51.3 million compared with CNY 32.5 million for the same period of 2025, primarily due to increased guarantee services the company provided. Sales and marketing expense was CNY 221.8 million, representing a decrease of 68.8% from the same period of 2025, primarily due to decreased borrower acquisition expenses and commission expenses. General and administrative expense was CNY 66.9 million representing a decrease of 39.5% from the same period of 2025, primarily due to a decrease in share-based compensation.

R&D expense was CNY 94.2 million, representing a decrease of 13.1% from the same period of 2025, primarily due to a decrease in share-based compensation. Non-GAAP loss from operations was CNY 225.7 million compared with CNY 737.6 million non-GAAP income from operations in the same period of 2025. Consequently, our net loss for the second quarter was CNY 183.6 million compared with CNY 519.1 million net income in the same period of 2025.

Our basic and diluted net loss per share was CNY 0.89 compared with CNY 2.46 basic and diluted net income per share in the second quarter of 2025. Basic and diluted net loss per ADS was CNY 3.56 compared with CNY 9.84 basic and diluted net income per ADS in the second quarter of 2025. Each ADS represents 4 Class A ordinary shares of the company. We ended this quarter with CNY 504 million in cash and cash equivalents compared with CNY 43.4 million at the end of the previous quarter.

With that, we can open the call for questions. Operator, please proceed.

[Operator Instructions] There are no questions. I will return the call to Sam for closing remarks. Please go ahead.

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

Thank you all again. This concludes the call. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Jiayin Group's First Quarter 2026 Earnings Conference Call. [Operator Instructions]. I will now turn the call over to Mr. [ Sam Lee ] from Investor Relations of Jiayin Group. Please proceed.

Thank you, operator. Hello, everyone. Thank you all for joining us on today's conference call to discuss Jiayin Group's financial results for the first quarter of 2026. We released our earnings results earlier today, 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. Fan Chunlin, Chief Financial Officer; and Ms. Xu Yifang, Chief Risk Officer.

Before we continue, please note that today's discussion 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 actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC.

The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese renminbi.

With that, let me now turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese and I will follow up with corresponding English translation. Please go ahead, Mr. Yan.

[Foreign Language]

[Interpreted] Hello, everyone. Thank you for joining our first quarter 2026 earnings conference call.

[Foreign Language]

[Interpreted] During the first quarter of 2026, the consumer lending industry remained in an adjustment phase. The recovery in credit demand continued at a relatively gradual pace. and the industry as a whole remained under pressure. Against this backdrop, we focused on refining the operations of our high-quality existing borrower base and the structural enhancement of our business model. During the quarter, we achieved transaction volume of RMB 19.3 billion, representing a year-over-year decrease of 45.8%. Revenue was impacted by industry cyclicality and volume contraction, while temporary cost pressures persisted during the period. As a result, we recorded a net loss of approximately RMB 61.7 million for the quarter.

[Foreign Language]

[Interpreted] This quarter, we concentrated on the refined management and engagement of our high-quality existing borrower base. Through cross analysis of user risk scores and platform behavioral insights, we segmented our existing borrowers into groups and implemented differentiated engagement strategies and operating strategies tailored on each group's credit profile and borrower intent. Repeat borrowing contribution accounted for 76.3% of transaction volume during the quarter, representing an increase of 4.4 percentage points from the same period last year. These highly engaged users not only contributed to stable repeat borrowing demand, but also validated the initial effectiveness of our strategy to deepen engagement with existing borrowers.

[Foreign Language]

[Interpreted] The 90-plus day delinquency ratio was 2.25% as of the end of the first quarter, increasing sequentially. For higher-risk borrower segments, we continue to tighten underwriting criteria and credit limit controls to facilitate an orderly runoff of portfolio risk exposure. For high-quality borrowers, we further analyze borrower needs and work closely with our operations team to refine borrower management and engagement strategies with a focus on improving retention. Meanwhile, we are embedding AI capabilities into our operations to drive the productization of risk management and continuously refining and developing reusable standardized solutions.

[Foreign Language]

[Interpreted] On the business development front, we continue to execute the overall strategy established in the previous quarter and advance our structural upgrade through 3 key initiatives. The first initiative is the enhancement of our joint operations and tech empowerment model. During the quarter, we actively expanded our technology empowerment services for financial institutions. Under this model, the company acts as a technology and operation service provider, deeply integrating into the entire lending process of partner banks. We provide comprehensive solutions covering borrower engagement and operations, technology services and risk modeling capabilities.

Leveraging our advanced data technologies and extensive operational experience, we empower our partners throughout the credit life cycle. In the first quarter, the transaction volume generated through our technology empowerment business reached RMB 1.52 billion, representing a sequential increase of approximately 67.6%. This business represents a natural extension of the technology service capabilities we have accumulated over many years, enabling us to deepen our collaboration with financial institutions. It also represents an important innovation initiative in the current operating environment. We remain optimistic about the long-term value of this model and expect its scale to continue expanding in the future.

[Foreign Language]

[Interpreted] The second initiative is the development of a diversified product portfolio, including auto-backed loans and digital intelligence micro loans, which enables us to serve specific scenarios and borrower segments. For our auto-backed loan business, the version 3.0 system launched earlier this year has achieved end-to-end fully digitalized operations. We remain focused on borrower engagement and operations, risk empowerment and matching, while specialized partners handle post loan servicing and vehicle disposal. This collaborative model allows us to concentrate resources on our core strength while creating complementary advantages with upstream and downstream partners.

Since the beginning of this year, the auto-backed loan business has maintained strong growth momentum with overall user conversion rates ranking among the highest in the market under a full online operating model. The continued expansion of our diversified product portfolio helps us reach differentiated borrower groups while providing funding partners with broader asset options.

[Foreign Language]

[Interpreted] The third initiative is our international business. In Indonesia, loan volume increased by 20% quarter-over-quarter and more than doubled year-over-year in the first quarter. By deepening cooperation with local funding partners, we continue to expand our presence in the market. In Mexico, while currently small in scale, growth has been even faster. Our local partner loan volume increased by 35% sequentially during the first quarter and also delivered strong year-over-year growth. During the reporting period, revenue scale from overseas market continued to increase. We will continue to execute our globalization strategy, leveraging strategic investments as an entry point to explore our advanced technology capabilities and operational expertise and steadily build this segment into a growth engine for the company's future development.

[Foreign Language]

[Interpreted] In artificial intelligence, we continue to execute against a clear strategic road map by integrating AI technologies into our fintech ecosystem and accelerating the evolution of our technology service capabilities. In intelligent engineering, the feature iteration cycle for our risk management models has been reduced from several days to less than 1 hour, enabling strategies to respond rapidly to changes in market conditions.

This capability has also become a core technology offering provided to our institutional partners. For R&D acceleration, AI agents now generate approximately 30% of all AI-assisted code improving development efficiency by around 20% and further strengthening the engineering foundation for large-scale AI deployment. In service assistance, our proprietary models have been fully deployed across customer service operations.

Intent recognition accuracy improved from 78% to 93%, significantly enhancing service efficiency while reducing model inference costs by 90%. In addition, in workplace intelligence, we have completed enterprise-grade security enhancements for open cloud and deployed our proprietary AI agent, [indiscernible], across a wide range of daily work scenarios. These initiatives are gradually reshaping the way our organization operates, enabling AI to serve as a collaborative partner for every employee and continuously unlocking productivity gains. AI is steadily evolving from a supporting tool into an intrinsic driver of operational efficiency across the company.

[Foreign Language]

[Interpreted] We have always regarded security and responsibility as the lifeline of our business, leveraging the advantages of multimodal AI technologies, we continue to strengthen the protection of user interest. During the first quarter, we identified and blocked approximately 290,000 fraudulent borrowers and intercepted 113,000 malicious applications associated with organized fraud activities. We continue to advance our risk management strategy from a reactive defense model towards proactive prevention and preemptive interception. In particular, we have achieved substantial progress in multimodal large language model applications, including voice print recognition, image recognition technologies by integrating voice print analysis, graph algorithms, clustering technologies and other advanced techniques.

We are transforming our anti-fraud framework from traditional structured rule-based detection into a comprehensive prevention and control system built upon multimodal perception, graph analytics and scalable engineering implementation. To date, our multimodal anti-fraud system has identified approximately 5 million suspicious audio and video samples associated with fraudulent and illicit activities with an accuracy rate exceeding 90%.

[Foreign Language]

[Interpreted] Turning to shareholder returns. We have extended our current share repurchase program through June 12, 2027, with approximately USD 49.6 million remaining available under the program. We will continue to evaluate market conditions and our operational performance and comprehensively evaluate and implement various shareholder return initiatives.

[Foreign Language]

[Interpreted] Given the continuing uncertainty in the macroeconomic environment, we remain prudent in our outlook. We currently expect transaction volume for the second quarter of 2026 to be between RMB 9.5 billion and RMB 10.5 billion. Looking ahead, we will continue to prioritize disciplined operations and sustainable development. Through deeper operational experience and enhanced organization resilience, we aim to build a durable competitive moat.

[Foreign Language]

[Interpreted] With that, I will now turn the call over to our CFO, Mr. Fan Chunlin. Please go ahead.

Thank you, Mr. Yan, and hello, everyone. Thank you for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB and all percentage changes refer to year-over-year comparisons, unless otherwise noted. As Mr. Yan noted earlier, we remain disciplined in our execution during the first quarter and delivered transaction volume in line with our previous guidance. Transaction volume was RMB 19.3 billion, representing a decrease of 45.8% from the same period of 2025. Our net revenue was RMB 756.7 million, representing a decrease of 57.4% from the same period of 2025.

Moving on to costs. Facilitation and servicing expense was RMB 331.6 million, representing a decrease of 1.3% from the same period of 2025. Allowance for uncollectible receivables, contract assets, prepaid expenses and other current assets and others was RMB 1.1 million compared with RMB 17.5 million for the same period of 2025, primarily due to the decrease in allowance for overseas contingent guarantees. Sales and marketing expense was RMB 340.1 million, representing a decrease of 49.6% from the same period of 2025, primarily due to decreased borrower acquisition expenses.

General and administrative expense was RMB 44.1 million, representing a decrease of 16.5% from the same period of 2025, primarily due to decreased professional service fees. R&D expense was RMB 109.8 million, representing an increase of 24.6% from the same period of 2025, primarily driven by an increase in technology infrastructure expenses and employee costs. Non-GAAP loss from operations was RMB 70.1 million compared with RMB 606.6 million non-GAAP income from operations in the same period of 2025. Consequently, our net loss for the first quarter was RMB 61.7 million compared with RMB 539.5 million net income in the same period of 2025.

Our basic and diluted net loss per share were both RMB 0.29 compared with RMB 2.53 basic and diluted net income per share in the first quarter of 2025. Basic and diluted net loss per ADS were both RMB 1.16 compared with RMB 10.12 basic and diluted net income per ADS in the first quarter of 2025. Each ADS represents 4 Class A ordinary shares of the company. We ended this quarter with RMB 43.4 million in cash and cash equivalents compared with RMB 61.8 million at the end of the previous quarter.

With that, we can open the call for questions. Ms. Xu our Chief Risk Officer, and I will answer your questions. Operator, please proceed.

[Operator Instructions] We will now begin with our first question. This is from [ Zhao Lee ] from [ CSC ].

[Foreign Language] I'm Jerry Li from China Securities. we have seen the company reported a net loss of almost RMB 62 million for the fourth quarter. It is fourth quarterly loss since listing. What are the primary drivers behind this performance? Any operational adjustments to improve profitabilities moving forward?

[Foreign Language]

[Interpreted] Jerry, I'm the CEO, Yan Dinggui, I will answer your question. So on the loss of RMB 61.7 million. So ever since the new regulation came out last year and implemented in October, where the lower rate cap was enforced from October to June, the overall market loan volume has reduced by RMB 500 million. And due to the significant lowering of the loan volume, there has been a liquidity crunch from the borrower side.

[Foreign Language]

[Interpreted] Ever since the new regulation and the liquidity crunch on the borrower side since the implementation on October 1, we tried many methods and to be highly efficient to resolve the credit risk brought on by the after effects of the implementation.

[Foreign Language]

[Interpreted] So ever since Chinese New Year, we've had a very difficult adjustment period combined with no cost reduction actions last year. So the slower -- there's a faster decrease in loan volume than the decrease in cost reduction. So that explains most of the difference in the loss.

[Foreign Language]

[Interpreted] So ever since Q2, we've implemented a lot of cost control and reduction. So the cash flow will be better next quarter. And from the volume and revenue perspective, we balanced out our cash flow and revenue and expenses. So we're better equipped to continue to have better cash flow and better liquidity for the upcoming quarter.

[Foreign Language]

[Interpreted] That's my response to your question.

Thank you. We will now take our next question. This is from [ Hua Wang ] from [indiscernible] Asset.

[Foreign Language] Hello management could you provide some color on the risk trends through the first quarter and into April and May? Are we seeing an improvement in the risk metrics?

[Foreign Language]

I would like to welcome Ms. Xu Yifang, our new Chief Risk Officer, to answer this question. She's from [ Tencent ] WeBank, and she used to be a risk in risk management over there. So I'd like to welcome her to answer this question.

[Foreign Language]

[Interpreted] So the deterioration in asset quality caused by the rise in credit risk last year has been improving. Credit risk among the new borrowers peaked in September last year, while the risk associated with new loans facilitated to existing borrowers peaked in November. Since then, both have trended downward and shown steady improvement.

[Foreign Language]

[Interpreted] For new borrowers since Q4 of last year, we proactively really adjusted our borrower acquisition mix and the channel mix and optimized our risk models while really controlling the overall volume of new acquisition -- borrower acquisition. As a result, the new borrower credit performance has continued to improve. So by March and April of this year, the new borrower metrics has already declined to the lowest levels recorded during the entire last year.

[Foreign Language]

[Interpreted] With respect to the newly facilitated loans for existing borrowers, the risk levels continue to decline throughout the first quarter. In April -- by April and May, the risk metrics has really fallen by approximately 25% to 30% from their peak levels, returning to levels seen in May and June of last year. So from a risk management perspective, we've really tightened our borrower selection criteria by focusing on borrowers with stronger financial and repayment capabilities as well as more stable asset and credit profiles.

At the same time, for the higher risk borrowers, such as those with elevated leverage, significant multi-borrowing exposure, greater liquidity stress or weaker asset profiles for those borrowers, we have proactively shortened the loan tenures and reduced credit limits. So by adjusting the -- making these adjustments to the borrowing emission standards, credit limits and loan terms, we have really actively optimized our asset mix. So while this has resulted in a more measured pace of business growth, it has significantly improved the overall quality of our operations.

[Foreign Language]

[Interpreted] Yes, that's my answer to your question.

Thank you. Seeing no more questions, I will return the call to Sam for closing remarks. Please go ahead.

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

Thank you all again. This concludes the call. You may now disconnect.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Jiayin Group's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time.

I will now turn the call over to Mr. [ Sam Lee ] from Investor Relations of Jiayin Group. Please proceed.

Thank you, operator. Hello, everyone. Thank you all for joining us on today's conference call to discuss Jiayin Group's financial results for the fourth quarter of 2025. We released our earnings results earlier today. 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. Fan Chunlin, Chief Financial Officer; and Ms. Xu Yifang, Chief Risk Officer.

Before we continue, please note that today's discussion 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 actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese renminbi.

With that, let me now turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese, and I will follow up with corresponding English translation. Please go ahead, Mr. Yan.

[Foreign Language]

[Interpreted] Hello, everyone. Thank you for joining our fourth quarter and full year 2025 earnings conference call.

[Foreign Language]

[Interpreted] 2025 was a pivotal year for the industry, marked by deepening regulation and standardized development. Despite the continuously tightening in external environment, we maintained steady progress with -- for the full year, our loan facilitation volume reached RMB 129 billion, representing a year-on-year increase of approximately 28%. We achieved revenue of RMB 6.22 billion, up approximately 7.3% year-on-year and net income of RMB 1.54 billion, a year-on-year increase of approximately 45.4%, demonstrating our operational resilience amidst a complex environment.

[Foreign Language]

[Interpreted] In the fourth quarter, following the implementation of the new regulation, we observed a continuous decline in comprehensive financing costs alongside higher entry barriers and stricter compliance requirements. In response to this new regulatory landscape, we have proactively collaborated with our funding partners to facilitate necessary adjustments. As of now, we maintain partnerships with 79 financial institutions with an additional 53 currently in negotiations.

[Foreign Language]

[Interpreted] We have consistently adhered to the operating philosophy of compliance as the foundation, quality and efficiency as priority. We proactively adjusted our borrowing acquisition pace this quarter, adding approximately 407,000 new borrowers, reflecting a year-on-year decline. To further enhance the precision of channel management and the efficiency of marketing spend, we implemented cross-functional collaboration to revamp our channel evaluation framework and to continue to optimize onboarding standards, ongoing monitoring and off-boarding processes. Additionally, by establishing a more flexible credit limit management system, implementing targeted reactivation strategies for existing borrowers, we effectively unlocked the repeat borrowing potential among quality borrowers. Repeat borrowing contribution accounted for 79.4% of loan facilitation volume, an increase of 6.7 percentage points compared to the same period last year.

[Foreign Language]

[Interpreted] Since the fourth quarter, risk indicators have remained under pressure. We have been advancing a phased deep restructuring of our risk control strategy, which include multiple rounds of tightening entry criteria, optimizing credit limits and iterating on product offerings. This has allowed us to proactively manage risk exposure and refine borrower segment structures, mitigating the impact of certain external fluctuations on asset quality.

As of the end of the fourth quarter, the 90-plus day delinquency ratio was 2.03%. Entering 2026, thanks to precise identification and isolation of tail risk, along with structural optimization of existing asset portfolio, forward-looking risk indicators are showing positive trends. We will continue to build a risk control system that balances long-term stability with short-term dynamics serving as the balance for steady operations.

[Foreign Language]

[Interpreted] On the artificial intelligence front, we made solid progress in 2025 in multimodal, antifraud, AI-powered agents and data intelligence. In 2026, our 4+2 strategy will undergo a key upgrade. We have reorganized our 4 core pillars into 2 main tracks: production and non-production.

The production track focuses on core business value creation, covering 3 directions: borrower acquisition, risk management and marketing. We are exploring AI-driven identification and acquisition of high-quality borrower groups, deepening the application of multimodal technologies such as voice print, knowledge graph and anti-fraud and enabling AI-powered content generation and review and marketing.

The non-production track aims to improve efficiency and quality in daily operations, covering engineering intelligence, agent assistance and office intelligence. Key initiatives include advancing AI programming from coding completion to autonomous coding, adopting a human-machine collaborative agent model to enhance service quality and efficiency and further upgrading our internal intelligent workplace systems.

Meanwhile, our intelligent agent platform and machine learning platform as the 2 foundational infrastructures will continue to provide underlying tooling support for upper layer applications. This strategic upgrade marks a shift in our AI strategy from capability building to value creation, embedding AI more deeply into our business value chain and providing stronger, more sustainable drivers for development.

[Foreign Language]

[Interpreted] In terms of new business expansion, we have continued to focus on 3 dimensions: financial product innovation, partnership model innovation and overseas market. On the product side, we actively expanded into auto-backed loans and digital intelligent micro loans, enriching our credit product portfolio. In partnership models, we connected with leading traffic ecosystem through joint operations, establishing deep strategic partnerships with multiple institutions.

Throughout the year, we launched 21 projects with business scale growing month by month. As an early mover in global markets, its strategic value has become increasingly prominent. In 2025, facilitation volume in Indonesia increased by approximately 187% year-on-year, while registered users grew by approximately 119% year-on-year, demonstrating gradual scale effect.

Mexico business accelerated significantly in the fourth quarter. For the full year, the total loan facilitation volume grew approximately 105% year-on-year, while registered users up approximately 110% year-on-year, marking a key milestone in validating our business model. We plan to use several countries where we have investment and operational experience as anchors to explore opportunities in other markets. Through cross geography and cross-cycle deployment, we will steadily expand our global footprint.

[Foreign Language]

[Interpreted] The essence of financial inclusion lies not only in the depth of service reach, but also in conveying social value. Over the past year, our philanthropic initiatives reached multiple areas, including youth mental health and support for special needs groups. We directly trained over 30,000 teachers, students and parents covering more than 1,300 schools and conducted mental health assessments for over 60,000 students and teachers, protecting the healthy growth of children through concrete actions.

In terms of volunteering services, since the establishment of the Jiayin volunteer service team, we have grown to 120 members, completed 28 activities and accumulated nearly 3,800 hours of service. Our philanthropic practices and social responsibility efforts have received multiple recognition from government departments, authoritative media outlets and social organization. This is not only an affirmation of our commitment to long-termism, but also a core competitive advantage in building trust in our brand.

[Foreign Language]

[Interpreted] Regarding shareholder returns, in 2025, we continue to deliver on our commitment to sharing benefit of our development with our shareholders. During the year, we completed cash dividend distributions totaling USD 41.1 million, representing an increase of over 50% year-on-year. In August, we increased the total quota of the current share repurchase program to no less than USD 80 million. To date, we have repurchased nearly 4.6 million ADS with total value of approximately USD 30.4 million. We will maintain our existing dividend policy and make disciplined use of the remaining repurchase capacity to deliver sustainable returns to shareholders.

[Foreign Language]

[Interpreted] Given the ongoing uncertainty in the macro environment, we maintain a prudent stance and expect loan facilitation volume for the first quarter of 2026 to be between RMB 18.5 billion and RMB 19.5 billion. We will continue to use compliance as our foundation and innovation as our engine to continuously solidify the technological foundation and build resilience against cyclical fluctuations.

[Foreign Language]

[Interpreted] With that, I will now turn the call over to our CFO, Mr. Fan Chunlin. Please go ahead.

Thank you, Mr. Yan, and hello, everyone, for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB and all percentage changes refer to year-over-year comparisons, unless otherwise noted.

As Mr. Yan noted, amid the liquidity tightening and heightened risk volatility following the new regulatory implementation, we have proactively pivoted to prioritize asset quality over expansion to safeguard our long-term stability.

Loan facilitation volume in Q4 was RMB 24.2 billion, representing a decrease of 12.6% from the same period of 2024. Our net revenue was RMB 1,090.2 million, representing a decrease of 22.4% from the same period of 2024.

Moving on to costs. Facilitation and servicing expense was RMB 328.2 million, representing a decrease of 3.3% from the same period of 2024.

Reversal of credit losses of uncollectible assets, loans receivable and others was RMB 20.1 million compared with RMB 1.2 million allowance for credit losses of uncollectible assets, loans receivable and others in the same period of 2024, primarily due to write-back of allowance for oversea contingent guarantees arising from lower expected loss rates.

Sales and marketing expense was RMB 498.7 million, representing a decrease of 3.6% from the same period of 2024, primarily driven by the improvement in operational efficiency.

General and administrative expense was RMB 66.8 million, representing an increase of 24.4% from the same period of 2024, primarily due to an increase in employee costs.

R&D expense was RMB 121.9 million, representing an increase of 21.4% from the same period of 2024, primarily due to an increase in professional service fees and employee costs.

Non-GAAP income from operations was RMB 120.4 million compared with RMB 402.4 million in the same period of 2024.

Consequently, our net income for the fourth quarter was RMB 100.6 million compared with RMB 275.5 million in the same period of 2024.

Our basic and diluted net income per share were both RMB 0.49 compared with RMB 1.30 in the fourth quarter of 2024. Basic and diluted net income per ADS were both RMB 1.96 compared with RMB 5.20 in the fourth quarter of 2024. Each ADS represents 4 Class A ordinary shares of the company.

We ended this quarter with RMB 61.8 million in cash and cash equivalents compared with RMB 124.2 million as of September 30, 2025.

With that, we can open the call for questions. Ms. Xu, our Chief Risk Officer, and I will answer questions. Operator, please proceed.

[Operator Instructions] Our first question comes from Yuxuan Chen with Huatai Securities.

[Foreign Language] I got 2 questions here. The first one is about the risk. Could management share how your risk metrics have been trending in the fourth quarter of 2025 and year-to-date in 2026? Given the recent volatility in the industry, how have you adjusted your customer acquisition strategy?

The second one is about the regulation. With the regulatory environment in China continuing to tighten, what are your expectations for growth this year? In particular, how do you see the key metrics like loan facilitation volume and profitability trending?

[Foreign Language]

[Interpreted] Mr. Chen, I will answer your first question, and Mr. Fan will answer your second question. So as you know, risk for this year is highly related to the regulation. So I won't go into too much detail on the interpretation of the new policy and new regulation because I believe most of the investors in the sector are already quite familiar with the dynamics.

[Foreign Language]

[Interpreted] So from Jiayin perspective, compared with the previous cycle, the increase in risk last year was more pronounced and more prolonged. And particularly in the first 4 to 6 weeks leading up to the peak at the new borrower level, we observed the market reached its peak around late September and to early October. So the exact timing is a little bit different across different channels of different quality, but risk levels remain elevated through November before starting to decline in December.

[Foreign Language]

[Interpreted] So during this period, we proactively adjusted our channel mix. We tightened our standards in the new borrower models and strategies and control the absolute volume of new borrower acquisition.

[Foreign Language]

[Interpreted] So from the repeat borrower side, for the incremental assets from the repeat borrowers, risk peaked in November and then gradually declined starting in December. So in response, we adopted a more selective and disciplined approach to risk management, focusing on higher quality and more resilient borrowers for approval. So we also applied more stringent underwriting and credit limit management for customers who are higher risk with multiple outstanding debt, weaker asset profiles and limited financing capacity, particularly among the near prime or marginal borrowers.

[Foreign Language]

[Interpreted] So overall, our structured risk management approach has delivered tangible results. And based on our internal analysis, amid the broad industry-wide risk cycle, our measures contributed to an improvement in risk metrics by approximately 25% to 30%.

[Foreign Language]

[Interpreted] Since January, we have been closely monitoring the overall industry volume trends. Both the platforms and our financial institutional partners are really still digesting the impact of last year's risk volatility. With that said, we're still seeing continued improvement in our new risk vintages. Since your question is on the customer acquisition front, we remain cautious in ramping up volumes. In terms of channel strategy, we're really prioritizing the leading traffic platforms and lower cost acquisition channels so that we can optimize our customer mix for the long term.

[Foreign Language]

[Interpreted] So for the second question, I'll hand it over to our CFO, Mr. Charlie Fan.

[Foreign Language]

[Interpreted] So Mr. Chen, your second question is on the effects of the regulation and metrics. So for the full year of 2025, we achieved total facilitation volume of RMB 129 billion, with revenue and net profit reaching RMB 6.2 billion and RMB 1.54 billion, respectively, representing a net margin of 24.7%.

[Foreign Language]

[Interpreted] So we see since the second quarter of 2025, particularly following the formal implementation of the new regulation, industry liquidity has gradually tightened and risk levels have shown a clear upward trend. So against this backdrop, we proactively tightened our standards and restructured our risk management strategies. So after reaching a historical quarterly peak of RMB 37.1 billion in facilitation volume in Q2, we continue to scale back in Q3 and Q4 with Q4 volume declining to RMB 24.2 billion. Revenue and net profit for the quarter were RMB 1.09 billion and RMB 100 million, respectively, with net margin declining to 9.2%.

[Foreign Language]

[Interpreted] Similar to other leading players in the industry, we have faced short-term pressure on profitability due to declining pricing, volatility in risk metrics and diseconomies of scale resulting from rapid volume contraction.

[Foreign Language]

[Interpreted] So with that said, as we've iterated in previous earnings calls, the implementation of the new regulation is expected to raise industry entry barriers and increase market concentration. As a leading platform, we believe that Jiayin technology can navigate through this period of short-term risk volatility and scale adjustment. We are well positioned to enter a new phase of high-quality moderate growth over the medium to long term. And encouragingly, after several quarters of rising risk across the industry, we are beginning to observe the early signs of stabilization and improvement in asset quality.

[Foreign Language]

[Interpreted] So looking ahead, we'll continue to operate with the compliance as our foundation, closely monitoring changes in risk trends and market liquidity and dynamically adjusting our strategy in line with the evolving industry fundamentals. Given that the industry is still undergoing a transition period following the new regulations, we will maintain a high degree of flexibility and review our target on a quarterly basis. As Mr. Yan mentioned, for the first quarter of 2026, we expect the facilitation volume to be in the range of RMB 18.5 billion to RMB 19.5 billion.

Our next question comes from [ Roxy Liu with Kaiyu Capital ].

[Foreign Language] Given the rapid growth of the company's overseas business in 2025, could the management elaborate on Jiayin's strategy road map and the future outlook in the overseas market?

[Foreign Language]

[Interpreted] Roxy, I'll answer your question on the overseas part. So in today's fintech landscape, the international business has really become a key growth pillar that we're actively cultivating. As Mr. Yan mentioned earlier, our operations in Indonesia and Mexico have both been growing at a strong pace with volumes roughly doubling year-over-year in 2025. So we expect this momentum to continue.

[Foreign Language]

[Interpreted] So from the scale perspective, we look to do the same in 2026. So another year of doubling in scale. At the same time, on the quality front, both markets are expected to reach important strategic milestones and moving towards profitability.

[Foreign Language]

[Interpreted] So from a business model perspective, we will continue to deepen our localization strategy, expanding partnerships with local financial institutions and enhancing our ability to serve and empower the local financial ecosystem. At the same time, we'll continue to broaden our collaboration with international financial institutions to capture synergies from our global strategy.

[Foreign Language]

[Interpreted] For the new countries and markets, we've been actively laying the groundwork for expansion into new markets. So we look forward to sharing more progress with you later in 2026.

[Foreign Language]

[Interpreted] Thank you. That's my answer on the international part.

Seeing no more questions, I will return the call back to Sam for closing remarks. Please go ahead.

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

Thank you all again. This concludes the call. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good day, ladies and gentlemen. Thank you for standing by, and welcome to Jiayin Group's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call. If you disconnect at this time, I will now turn the call over to Mr. [ Sam Lee ] from Investor Relations of Jiayin Group. Please proceed.

Thank you, operator. 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 2025. We released our earnings results earlier today. 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. Fan Chunlin, Chief Financial Officer; and Ms. Xu Yifang, Chief Risk Officer.

Before we continue, please note that today's discussion 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 actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.

Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese renminbi. With that, let me now turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese, and I will follow up with corresponding English translation. Please go ahead, Mr. Yan.

[Foreign Language]

[Interpreted] Good afternoon, everyone. Thank you for joining Jiayin Group's Third Quarter 2025 Earnings Conference Call.

[Foreign Language]

[Interpreted] In the third quarter, China's GDP grew by 4.8% year-on-year, slowing from 5.2% in the previous quarter, but remaining stable overall. Consumption continued to play a dominant role, contributing 56.6% to growth. Meanwhile, demand for consumer finance has been rising steadily with a narrow consumer credit balance up 4.2% year-on-year as of September 30.

Signals from the recent regulatory policies indicate that coordinated efforts to stabilize growth, boost consumption, and advance inclusive finance are creating a favorable environment for a long-term healthy and sustainable development of the industry. In this quarter, the company facilitated RMB 32.2 billion in loan volume, a year-on-year increase of approximately 20.6% and reported non-GAAP income from operation of RMB 490 million, up around 50.3% year-on-year, achieving our previously issued guidance.

[Foreign Language]

[Interpreted] During the reporting period, the company maintained cooperation with 75 financial institutions with another 64 under negotiation. We have been included in the white list by most of our partner financial institutions, providing a solid foundation for stable funding supply. Leveraging our technological strength, capital management capabilities and risk control expertise, we enhanced our funding partners' capital allocation efficiency, accurately aligned with their risk preferences and actively explore new models for business collaboration.

[Foreign Language]

[Interpreted] Against the backdrop of industry contraction and tightening liquidity, we observed pressure on overall risk indicators and fluctuations in asset quality. In response, we rapidly iterated our risk control models, continuously tightening strategies for high-risk, high-volatility users and introduced models combining long-term and short-term perspectives to enhance the flexibility and timeliness of risk monitoring, thereby enabling sharp insights into risk trends and enabling timely responses. At the end of the third quarter, the 90-plus day delinquency rate stood at 1.33%. We will remain committed to prudent operations and continue to reinforce our competitive edge in risk management.

[Foreign Language]

[Interpreted] To optimize resource allocation efficiency, we adopted a cautious strategy for new customer acquisition with a stronger focus on high-quality borrower segments. All newly added channels are leading Internet platforms, and we continue to optimize our credit limit management to enhance user stickiness and facilitate repeat borrowing. Additionally, as the cornerstone of business growth, repeat borrowers saw their share of facilitation volume rise further to 78.6%. This drove the overall average borrowing amount per borrowing up to RMB 9,115, representing a year-on-year increase of approximately 19.5%.

[Foreign Language]

[Interpreted] Since the beginning of this year, the company's AI development has entered a new phase. Through increased resource investment and organizational restructuring, we have achieved multiple significant innovations, establishing a technical benchmark of high performance, low cost and lightweight. In terms of deepening business empowerment, we focused on deploying multimodal anti-fraud systems and AI-powered agent assistance. Compared to external models, our in-house model not only directly reduced cost by over RMB 1 million but more importantly, building our own technological moat while fundamentally enhancing our AI capability.

[Foreign Language]

[Interpreted] By establishing a historical voice print database and a high-quality voice print processing pipeline, we conducted real-time fraud identification for incoming calls, identifying over 4,000 new fraudulent voice prints to date. For image recognition, by capturing contextual features of applicants and screening clues from high-risk scenarios, we achieved an accuracy rate exceeding 90% in identifying associations with organized fraud. With the integration of these multimodal capabilities, the timeliness of fraud detection was compressed from a week to within 2 hours, forging a new tech-driven line of defense against fraud.

In the customer service process, our AI product matrix covers the entire business process from initial agent training and real-time conversation support to post-event analysis with 100% agent coverage and over 90% accuracy. It significantly boosted staff efficiency and service quality.

[Foreign Language]

[Interpreted] In terms of broadening business coverage, the launch of the [ Tianlu ] Intelligent Agent R&D platform has significantly lowered the development threshold for AI agents. So far, the number of such agents has exceeded 300 with an internal monthly active penetration rate exceeding 40%, effectively enhancing department efficiency and enthusiasm in independently developing AI agents.

The FUXI model management platform is dedicated to improving model deployment efficiency, reducing the time required for models to go from R&D to production from 32 days to 16 days and nearly tripling the number of models put into production. These two platforms have enabled various business departments to transition from stand-alone applications to an integrated collaborative ecosystem. Looking ahead, we will continue to further advance the 4+2 strategy, focusing on four major application directions and leveraging two key infrastructure platforms to integrate existing AI models and tools, further achieving an upgrade and innovation from technological breakthroughs to value creation.

[Foreign Language]

[Interpreted] Overseas markets serve as both a game-changing engine for us to break through regional growth boundaries and a core pillar in building our global strategic footprint. In the third quarter, our Indonesian business maintained engagement with multiple financial institutions, driving business scale increased by nearly 200% year-on-year and the number of borrowers rising by approximately 150% compared to the same period last year. Recognizing its growth potential, we have significantly increased our investment in the local operator, acquiring a stake of more than 20% through capital injection, demonstrating our strong commitment to local market development.

In Mexico, the loan volume and user base have maintained rapid growth with initial success in market expansion. Currently, we remain in a critical phase of product innovation and foundational capacity building, aiming to lay a solid foundation for in-depth local operations.

[Foreign Language]

[Interpreted] With the implementation of the new loan facilitation regulation in October, the industry is undergoing numerous changes and challenges. The company projects its loan facilitation volume at RMB 23 billion to RMB 25 billion for Q4 2025, with full-year volume expected to be in the range of RMB 127.8 billion to RMB 129.8 billion, representing a year-on-year increase of approximately 26.8% to 28.8%.

The full-year non-GAAP operating profit guidance is set at RMB 1.99 billion to RMB 2.06 billion, reflecting a growth of approximately 52.3% to 57.6%. Amid a complex, volatile, and increasingly competitive external environment, we aim to navigate cyclical headwinds with lean operational capabilities and forge long-term resilience for steady, sustainable growth.

[Foreign Language]

[Interpreted] And with that, I will now turn the call over to our CFO, Mr. Fan Chunlin. Please go ahead.

Thank you, Mr. Yan, and hello, everyone, for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB and all percentage changes refer to year-over-year comparisons, unless otherwise noted. As Mr. Yan noted earlier, we demonstrated robust business resilience in Q3 and successfully achieved our financial guidance. Loan facilitation volume was RMB 32.2 billion, representing an increase of 20.6% from the same period of 2024. Our net revenue was RMB 1,470.2 million, representing an increase of 1.8% from the same period of 2024.

Moving on to costs. Facilitation and servicing expense was RMB 286.5 million compared with RMB 419.1 million for the same period of 2024. This was primarily due to decreased expenses related to financial guarantee services. Allowance for uncollectible receivables, contract assets, loans receivable and others was RMB 1.5 million, representing a decrease of 87.1% from the same period of 2024, primarily due to decreased allowance for overseas loans as a result of disposal of Nigeria entities during 2024 and the growth slowdown of receivables from loan facilitation business.

Sales and marketing expense was RMB 544.2 million, representing a decrease of 1.1% from the same period of 2024. General and administrative expense was RMB 72.4 million, representing an increase of 29% from the same period of 2024, primarily driven by an increase in share-based compensation. R&D expense was RMB 108.7 million, representing an increase of 13.3% from the same period of 2024, primarily driven by an increase in expenditures for employee compensation and related expenses.

Non-GAAP income from operations was RMB 490.6 million compared with RMB 326.5 million in the same period of 2024. Consequently, our net income for the third quarter was RMB 376.5 million, representing an increase of 39.7% from the same period of 2024. Our basic and diluted net income per share was RMB 1.83 compared with RMB 1.27 in the third quarter of 2024. Basic and diluted net income per ADS was RMB 7.32 compared with RMB 5.08 in the third quarter of 2024. We ended this quarter with RMB 124.2 million in cash and cash equivalents compared with RMB 316.2 million at the end of the previous quarter. With that, we can open the call for questions. Ms. Xu, our Chief Risk Officer, and I will answer your questions. Operator, please proceed.

[Operator Instructions] And now we're going to take our first question, and it comes from the line of [ Yiwen Xu ] from Guojin Securities.

[Foreign Language] I'm [ Yiwen ] from Sinolink Securities. I have two questions. The first one is that after the new regulation took effect in October, what impact have you seen on the business? And could management provide more color on any strategic adjustments and the outlook going forward? This is my first question.

[Foreign Language]

[Interpreted] I will do the translation for Ms. Xu. So following the implementation of the new regulation, the impact on the industry has been pretty significant. Most of the changes have been primarily on the downward pressure of pricing to '24 and the continued emphasis on consumer protection. So as of October, the asset pricing of our loan facilitation business is fully compliant with the regulatory requirement of our funding partners. So as liquidity tightened, we've responded -- we've had response to the pricing pressure and liquidity pressure in the broader industry and the volatility industry. So we have really intensified adjustment in traffic acquisition and placed a greater focus on cross-industry platforms and optimizing our traffic mix, adopting a more cautious customer acquisition strategy under the current environment.

[Foreign Language]

[Interpreted] So for our existing borrower base, we've enhanced borrower segmentation. So really, on one hand, we want to improve our risk identification for higher risk groups. We're utilizing measures such as managing outstanding balances and accelerating runoff based on indicators like risk cycle elasticity, pricing and recent application frequency to address the segments that are more challenging to operate under lower pricing. On the other hand, through product and pricing adjustments, we've strengthened the efforts to retain and reengage high-quality borrowers who may potentially churn. So taken together, these initiatives are helping us optimize the overall portfolio structure. And regarding asset pricing, it's foreseeable that the downward trend will continue. Our focus is not only navigating through the current period of volatility, but also continuously strengthening our ability to operate through risk cycles over the long term.

[Foreign Language]

[Interpreted] That's my answer for the first question.

[Foreign Language] I will do the translation. So given the current environment, how should we think about the revenue take rate and the margin expectations going forward?

[Foreign Language]

Thank you, Xu. I will answer this question. So in the third quarter of 2025, the company facilitated RMB 32.2 billion in volume and delivered RMB 491 million in non-GAAP income from operations, in line with the guidance we previously provided. And the net profit for the quarter was RMB 376 million, representing a net margin of 25.6%. So in terms of the net margin, it's a slight decrease from the 27.5% net margin in Q2. For the first three quarters, we achieved RMB 1.435 billion in net profit, up 84% year-over-year and already well above the full year 2024 figure of RMB 1.056 billion. For the full year of 2025, we expect profitability to be significantly higher than 2024.

[Foreign Language]

So as Ms. Xu mentioned, the new regulation brought short-term pressure to industry-wide liquidity and asset quality. As a highly agile technology-driven company and drawing on our past experience navigating regulatory credit cycles, we made timely and prudent adjustments to our business scale, risk posture, and pricing strategy in response to market conditions.

[Foreign Language]

Over the long term, the enforcement of the new regulation will raise industry entry barriers and help drive the sector towards a healthier, more orderly, more compliant and more sustainable development. As the industry shifts towards higher-quality borrower segments, pricing, therefore, revenue take rate is expected to moderate and margins will return to a healthier and more sustainable level. The company is entering a new phase of high-quality development.

[Foreign Language]

I want to reiterate Mr. Yan's guidance that he provided earlier. We expect Q4 volume to reach RMB 23 billion to RMB 25 billion, bringing full-year facilitation volume to RMB 127.8 billion to RMB 129.8 billion, approximately 26.8% to 28.8% year-over-year growth. And full-year non-GAAP income from operation guidance is RMB 1.99 billion to RMB 2.06 billion, approximately 52.3% to 57.6% growth year-over-year.

[Operator Instructions] There are no further questions for today. I would now like to hand the conference over to Sam Lee for closing remarks.

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

Thank you all again. This concludes the call. You may now disconnect.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Jiayin Group's Second Quarter 2025 Earnings Conference Call.

[Operator Instructions] As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time.

I will now turn the call over to [ Mr. Sam Lee ] from Investor Relations of Jiayin Group. Please proceed.

Thank you, operator. Hello, everyone. Thank you all for joining us today -- on today's conference call to discuss Jiayin Group's financial results for the second quarter of 2025. We released our earnings results earlier today. 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. Fan Chunlin, Chief Financial Officer; and Ms. Xu Yifang, Chief Risk Officer.

Before we continue, please note that today's discussion 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 actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Please note, unless otherwise stated, all figures mentioned during the conference call are in Chinese renminbi.

With that, let me turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese, and I will follow up with corresponding English translation. Please go ahead, Mr. Yan.

[Foreign Language]

[Interpreted] Good afternoon, everyone. Thank you for joining Jiayin Group's Second Quarter 2025 Earnings Conference Call.

[Foreign Language]

[Interpreted] In the first half of this year, China has vigorously advanced its special initiatives to boost consumption with total retail sales of consumer goods rising by 5% year-on-year. Additionally, 6 government departments jointly issued the guiding opinions on financial support for boosting and expanding consumption, aiming to further expand financial supply in the consumption sector. Against this backdrop, the company has seized market opportunities, leveraged its core strength, accelerated the matching of consumer credit supply and demand and supported the release of household consumption potential.

In the second quarter, the company achieved loan facilitation volume of RMB 37.1 billion, representing a year-on-year increase of approximately 54.6%, setting a new record. Non-GAAP income from operations reached RMB 738 million, up approximately 182% year-on-year, while net income reached RMB 519 million, a year-on-year increase of approximately 117.8%. while ensuring compliant operations, the company has successfully achieved its established operational targets and maintained a positive development momentum.

[Foreign Language]

[Interpreted] During the reporting period, the company maintained in-depth cooperation with 70 financial institutions with another 58 under active negotiation. We have also been included in the wide list of loan facilitation partners by multiple institutions, which not only recognizes our compliance capabilities, technological strength and brand influence but also helps enhance the sustainability and diversity of funding supply, providing long-term support for stable operations.

Meanwhile, the company is also jointly exploring new business development path under the new regulatory framework with funding partners. Examples include launching joint operation projects to assist financial institutions in connecting with targeted traffic channels, achieving resource integration and complementary advantages through refined scenario engagement and risk control modeling. To date, we have collaborated with over 10 banks and consumer finance companies with a number and scale of projects continuing to grow, effectively empowering institutional partners and significantly strengthening ecosystem synergies.

[Foreign Language]

[Interpreted] In the second quarter, we have further enhanced our asset generation and risk pricing capability. Leveraging precise borrower segmentation strategies and more competitive credit limits, the average borrowing amount per repeat borrower increased by 4.8% quarter-on-quarter and the share of loan facilitation volume rose from 71.9% in the previous quarter to 75.6% in the current quarter, effectively boosting borrower stickiness.

We have also achieved multipoint borrower outreach through continuously expanding acquisition channels and a diversified partnership ecosystem. The number of borrowers in the current quarter reached 908,000, representing a year-on-year increase of approximately 33.5%, achieving balanced growth between new and repeat borrowers, which together form the growth resilience of the company.

[Foreign Language]

[Interpreted] In terms of risk management, we have continued to increase investment in technology and adhere to a data-driven risk control framework. Key efforts have been focused on building a multimodal anti-fraud system. By extracting voice prints from tens of millions of calls, we have established our own voice print database, which has been applied in multiple business processes such as identifying black and gray market activities and preventing fraud.

Through multidimensional data cross verification and real-time dynamic intelligent recognition, we blocked approximately 320,000 malicious fraud applications in the first half of 2025 and cumulatively identified and intercepted over 460,000 high-risk habitual fraud applications. To address market fluctuations, we customized risk models to assess high-volatility, high-risk users, enhancing risk prediction capabilities. As of the end of second quarter, the 90-day plus delinquency ratio remained stable at 1.12%.

[Foreign Language]

[Interpreted] To continuously strengthen the value of AI technology and empowering our business, the company has focused on building foundational capabilities and scenario-based applications, expanding the breadth and depth of business intelligence. In the second quarter, we launched a data intelligence assistant with 3 key agents, effectively reducing the threshold for business R&D and improving data R&D efficiency. In the agent intelligence domain, we have gradually replaced some commercial large language models with post-train self-optimized models, resulting in significant cost reductions and efficiency improvements. For example, in agent assistance scenarios, the cost of AI-generated conversation summaries decreased by approximately 80% year-on-year.

In terms of infrastructure development, our models optimized through reinforcement learning ranked fifth on the internationally authoritated BIRD evaluation leaderboard, securing the top position among models with the same amount of parameters with a generation accuracy rate reaching 71%. this lays a solid foundation for the subsequent implementation in loan facilitation scenarios and the construction of our core competitiveness in data engineering.

Meanwhile, the company has built a one-stop self-service R&D platform that supports various business departments in developing and deploying exclusive AI agents as needed. Within just 1 month, over 200 such agents have been deployed, strengthening internal empowerment and systematically advancing the in-depth implementation of AI across the business ecosystem.

[Foreign Language]

[Interpreted] Overseas markets remain a critical component of the company's long-term strategic layout. In the second quarter, our Indonesian partners saw robust business growth with loan disbursements increasing by over 200% year-on-year and registered users growing by approximately 170%. While maintaining compliance, we continue to enhance user accumulation and operational efficiency.

In Mexico, loan disbursement and registered users both increased by nearly 40% quarter-on-quarter with a focus on product innovation and optimizing risk control systems. Guided by an open and win-win philosophy, we will continue to collaborate with local partners to unlock the potential of overseas markets.

[Foreign Language]

[Interpreted] Recently, we released our 2024 ESG report, which highlights substantial progress in sustainable development. At the corporate governance level, we adhere to leveraging technological innovation to advance inclusive finance. In terms of social responsibility, we have carried out multiple public welfare initiatives focusing on educational support, mental health care for environmental protection. We have reduced energy intensity and carbon emission intensity through optimized energy and emission management. We have deeply integrated ESG practices into our business operations, fostering a positive cycle among economic returns, social value and low-carbon operations.

[Foreign Language]

[Interpreted] Regarding shareholder returns, in July of this year, the company distributed its annual cash dividend. The Board of Directors approved a cash dividend of USD 0.8 per ADS with a total dividend amount of approximately USD 41.1 million, representing an increase of over 50% compared to last year. In terms of share repurchases, in June, the Board approved extending the current repurchase program's validity period to June 12, 2026. In August, we increased the existing share repurchase plan by an additional USD 50 million. We will flexibly adjust cash dividend and share repurchase policies to share development achievements with shareholders and achieve mutual value creation.

[Foreign Language]

[Interpreted] Looking ahead to the second half of the year, as new loan facilitation regulations are gradually implemented, the policy environment in the Internet finance sector is becoming clearer. We will adhere to the principle of compliance as the foundation and prudent operations, dynamically adjusting our operational pace.

The company expects its third quarter 2025 loan facilitation volume guidance to be RMB 32 billion to RMB 34 billion, with non-GAAP income from operation guidance set at RMB 0.49 billion to RMB 0.56 billion. Moving forward, we will take compliance as our cornerstone and innovation as our wing, accelerate the building of differentiated competitive barriers and ensuring sustainable and steady growth for the company.

[Foreign Language]

[Interpreted] With that, I will now turn the call over to our CFO, Mr. Fan Chunlin. Please go ahead.

Thank you, Mr. Yan. And hello, everyone, for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB and all percentage changes refer to year-over-year comparisons, unless otherwise noted. As Mr. Yan noted earlier, we maintained robust growth momentum throughout the second quarter, setting a new record high in business scale. Loan facilitation volume was RMB 37.1 billion, representing an increase of 54.6% from the same period of 2024. Our net revenue was RMB 1,886.2 million, representing an increase of 27.8% from the same period of 2024.

Moving on to costs. Facilitation and servicing expense was RMB 285.1 million representing a decrease of 53.1% from the same period of 2024. This was primarily due to decreased expenses related to financial guarantee services. Allowance for credible assets, loans receivable and others were RMB 32.5 million compared with RMB 3.3 million reversal in the second quarter of 2024, primarily due to the additional cap of overseas guarantees, which the company provided for loan facilitation business conducted by the company's investee in the second quarter of 2025.

Sales and marketing expense was RMB 710.5 million, representing an increase of 46% from the same period of 2024, primarily due to an increase in borrower acquisition expenses and commission expenses. G&A expense was RMB 110.5 million, representing an increase of 70% from the same period of 2024, primarily driven by an increase in payroll expenses and share-based compensation.

R&D expense was RMB 108.4 million, representing an increase of 16.8% from the same period of 2024, primarily due to higher share-based compensation as well as increased professional service fees. Non-GAAP income from operations was RMB 737.6 million compared with RMB 261.6 million in the same period of 2024. Consequently, our net income for the second quarter was RMB 519.1 million, representing an increase of 117.8% from RMB 238.3 million in the same period of 2024.

Our basic and diluted net income per share was RMB 2.46 compared with RMB 1.12 in the second quarter of 2024. Basic and diluted net income per ADS was RMB 9.84 compared with RMB 4.48 in the second quarter of 2024. We ended this quarter with RMB 316.2 million in cash and cash equivalents compared with RMB 190.3 million at the end of the previous quarter.

With that, we can open the call for questions. Ms. Xu, our Chief Risk Officer, and I will answer questions. Operator, please proceed.

[Operator Instructions] And our first question comes from [indiscernible].

[Interpreted] I have 2 questions. The first one is company's loan facilitation business has sustained high growth. How does management view the impact of the new regulations on business going forward?

And my second question is what are management's plans around shareholders' returns?

[Foreign Language]

[Interpreted] Thank you for your question. So we sustained high growth this quarter, and this proves our consistent investing and focus in the digitalization and credit technology of our company. And in the future, we'll continue to focus on enhancing operational capabilities through data and AI empowerment to enable financial institutions with our expertise to pursue long-term and quality growth.

[Foreign Language]

[Interpreted] Speaking of the new regulation, the specific implementation will probably become more clear in the fourth quarter. At the present, not only for us, but for the entire industry, licensed financial institutions seem to be adopting a more cautious approach to funding supply. And of course, the decisions of which platforms to cooperate with, they're also being made with a greater consideration.

[Foreign Language]

[Interpreted] In terms of the wide list of institutional partners, earlier, Mr. Yan referenced it but we're proactively ensuring that these requirements don't impact our existing loan facilitation business. On the business model side, we're actively preparing multiple contingency and product plans so that in the next couple of months, we can quickly respond to product model requirements of our institutional partners related to the new regulation.

[Foreign Language]

[Interpreted] So the company's operational and management focus will continue to be on strengthening our capabilities in credit technology, data, risk management and operations. Really, regardless of how the product and cooperation models evolve under the new regulations, these capabilities are our core competitive advantages in the loan facilitation and credit tech industry. And that's what really makes us appealing to our partners.

As the new regulations become clear and fully implemented, we expect this to drive a long-term healthy industry development growth and ensuring that fair healthy competition. So for long-standing established players like us in the industry, this is a positive signal.

[Foreign Language]

[Interpreted] For the second question, Mr. Fan will answer your question.

[Foreign Language]

[Interpreted] For dividends, Mr. Yan touched upon it earlier, the company will maintain an annual dividend policy with the total amount being approximately 30% of the previous year's net income after tax. In July of this year, the company distributed a cash dividend of USD 0.8 per ADS, representing a 60% increase compared to last year's USD 0.5 per ADS.

[Foreign Language]

[Interpreted] For share repurchase, at the recent Board meeting in August, an additional USD 50 million was approved for the share repurchase plan, bringing the total authorized repurchase amount to USD 80 million. As of August 2025, the total repurchase amount is approximately USD 30.4 million.

[Foreign Language]

[Interpreted] To summarize, as always, we will continue to share the results of the company's development with our shareholders and seek to provide excellent returns to our investors.

Our next question comes from Yuxuan Chen with HCSC.

[Foreign Language] Okay. Let me do the translation. I'm Chen Yuxuan from Huatai Securities. I have 2 questions. The first one, we noticed the company's profitability has improved over the past 2 quarters. In light of new regulations, what is your outlook for profit margin going forward?

And the second one is we have observed continued improvement in risk performance this quarter. What are the key drivers behind this? And how has the risk performance trended so far in the third quarter? Also, some funding partners have become more cautious in lending, resulting in tighter market liquidity. Could this create volatility in asset quality? And what measures has management taken in response?

[Foreign Language]

[Interpreted] Thank you, Yuxuan, for your question. I will answer the first question, and Ms. Xu will answer the second question. In Q2 2025, the company's non-GAAP income from operations reached RMB 738 million, really exceeding our guidance range of RMB 660 million to RMB 730 million previously given. And the net income reached RMB 519 million, a year-on-year increase of 117.8%. The net income margin stood at 27.5%, significantly up from 16.1% in the same period last year. The strong profit margin performance over the past 2 quarters can be attributed to the following key factors.

[Foreign Language]

[Interpreted] First, there's a significant increase in the company's loan facilitation volume. In Q2 of 2025, the loan facilitation volume reached RMB 37.1 billion, a year-on-year increase of almost 55%, marking a new record since the company listing. So the economies of scale has really helped improve the profit margin.

[Foreign Language]

[Interpreted] The second factor is the continued optimization of the company's revenue mix. This is the key point we have consistently emphasized to our investors. The high-quality growth in the loan facilitation service revenue and the significant reduction in the proportion of guaranteed service revenue really have effectively optimized our profit margin. With the rapid year-on-year growth in facilitation transaction volume in Q2, the company's facilitation service revenue reached RMB 1.609 billion, about a 70% increase compared to the previous year.

In terms of revenue contribution, facilitation service revenue share of the total revenue increased from 64% in Q2 last year to 85% in Q2 this year. Correspondingly, the proportion of lower margin guarantee-related service revenue decreased from about 29% in Q2 2024 to less than 7% in Q2 2025. The continued optimization of the revenue mix has significantly improved the company's profit margin.

[Foreign Language]

[Interpreted] Third, the company's continued strategic investment in AI technology and R&D have led to significant improvement in operational efficiency. Our ongoing investment, combined with the implementation of AI applications across various operational processes has really laid a solid foundation for sustained improvements in operational efficiency for Q2 and over the long term.

[Foreign Language]

[Interpreted] The implementation of the new regulations, as Ms. Xu mentioned earlier, in the short term will require institutions to adjust their strategies, pricing strategies and cooperation models. However, in the long term, these regulations will benefit the entire industry by fostering healthier, more compliant and more sustainable development. As the new regulation become implemented, Jiayin will further strengthen our long-term advantages given the new regulations become -- given the details of the new facilitation regulations are yet to be clarified, we're taking a prudent approach in providing the Q3 loan facilitation volume guidance of RMB 32 billion to RMB 34 billion.

For Q3, the non-GAAP income from operation guidance is RMB 490 million to RMB 560 million. For the full year, we're keeping our guidance the same, RMB 137 billion to RMB 142 billion for the loan facilitation volume.

[Foreign Language]

[Interpreted] That's my answer for the first question. And the second question, I'll turn it over to Ms. Xu.

[Foreign Language]

[Interpreted] The second question are -- other questions are related to risk performance. So this quarter, the risk performance has continued to improve for us, mainly due to several factors. First, the ongoing investment in risk data and models, focusing on the changes in characteristics during risk cycle, automating the monitoring of leading risk indicators and trends and quickly responding with corresponding risk strategy and frameworks and solutions.

[Foreign Language]

[Interpreted] The second reason is that the denominator, our loan volume has continued to increase at a fast speed. So that's another contributing factor.

[Foreign Language]

[Interpreted] The third reason is technological. We've increased our investment in forward-looking research on risk cycles. So beginning at the end of Q1 and first -- the earlier part of Q2 of this year, we've already begun the research and quantification on sensitive borrower segment. We anticipate that in the context of cautious funding supply, there will be short-term adjustments and fluctuations are inevitable, especially among the cyclical sensitive borrowers and those with tail-end pricing. So as liquidity decreases, the performance for these borrower groups is expected to decline.

[Foreign Language]

[Interpreted] For the repeat borrowers, we're proactively managing the exposure and transaction criteria. For new borrowers, what we're doing is we're focusing on the concentration of sensitive borrower segments within the acquisition channels and adjusting the scale, proportion and volume and structure of these channels. So throughout this credit cycle, we will continue to monitor and research the customer segment characteristics and enhancing the differentiated credit and operational strategies for our top-tier, high-quality borrowers to ensure the healthy development of our overall risk profile in the broader context of the industry environment.

[Foreign Language]

[Foreign Language] That's my answer for the risk indicators and risk performance.

Thank you. Seeing no more questions, I'll return the call to [ Sam ] for closing remarks. Please go ahead.

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

Thank you all again. This concludes the call. You may now disconnect.