Please note this event is being recorded. I would now like to turn the conference over to Ms. Jane, Manager of Capital Markets. Please go ahead. Good morning and good evening, and welcome to CNFinance Fourth Quarter and Fiscal Year of 2022 Financial Results Conference Call. In today's call, our Director and Vice President, Mr. Qian Jun, will walk us through the operating results followed by the financial results from our Acting CFO, Miss Li. After that, we will have a Q&A session. Before we start, I would like to remind you that this conference call contains forward-looking statements within the meaning of Section 21 E of the Securities and Exchange Act of 1934 as amended and as defined in the US Private Securities Litigation Reform Act of 1995. This forward-looking statement can be identified by terminology such as view, expects, anticipates, future, intends, plans, beliefs, estimates, targets, going forward, outlook and similar statements. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict, and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding this and other risks, uncertainties and factors is included in the company's filings with the US Securities and Exchange Commission. The company does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise, except as required under law. Now, please welcome Mr. Qian Jun. 谢 谢 大 家 抽 出 宝 贵 的 时 间 来 收 听 本 次 电 话 会 议 。 本 次 电 话 会 议 上 呢, 我 们 将 向 大 家 介 绍 富华金融 2022 年 第四季度 已 经 全 年 的 运 营 财 务 情 况 。 随 后 我 们 将 会 回答 大 家 的 问 题 。 Thank you everyone for joining us in this conference call. On today's call, we will introduce the company's financial and operational results in the fourth quarter and fiscal year of 2022, followed by a Q&A session. 公 司 在 二 零 二 年 全 年 利 息 收 入 约 十 七 亿 人 民 币 。 银 行 模 式 下 那 个 服 务 费 收 入 约 五 千 八 百 万 元 人 民 币 ， 最 终 实 现 净 利 润 约 一 点 四 亿 人 民 币 ， 比 去 年 同 期 增 长 约 百 分 之 一 百 一 十 一 。 在 二 零 二 年 中 国 维 持 了 较 长 时 间 的 严 格 疫 情 防 控 政 策 的 背 景 下 ， 公 司 业 务 规 模 以 及 盈 利 状 况 仍 旧 取 得 同 比 增 长 ， 主 要 在 于 完 成 了 以 下 几 点 工 作 。 The company generated interest income of RMB 1.7 billion and net revenue under the commercial bank partnership model of RMB 58 million for the fiscal year of 2022, ultimately achieving a net profit of RMB 140 million, an increase of 111% over the same period of last year. Given the strict pandemic prevention and control policies maintained in 2022, the company still achieved year-on-year growth in business growth as well as profitability, mainly due to the accomplishment of the following. 第 一 ， 大 力 推 广 新 产 品 ， 并 借 此 扩 大 了 客 户 群 体 。 自 2021 年 推 出 以 来 ， 银行助贷模式 逐 渐 获 得 了 市 场 和 合 作 伙 伴 的 认 可 。 在 本 年 加 深 与 包 括 Sanxiang Bank 和 Yilian Bank 在 内 的 民 营 银 行 合 作 以 后 ， 银行助贷模式 在 2022 年 下 半 年 开 始 快 速 发 展 ， 并 在 年 底 形 成 一 定 的 规 模 。 本 年 公 司 共 为 银 行 推 荐 贷 款 CNY 2.5 billion ， 达 成 年 初 的 目 标 。 银行助贷模式 下 的 服 务 费 收 入 所 占 整 体 收 入 比 重 也 有 所 上 升 。 We rigorously promoted the new products and expanded our customer base through it. Since it launched in 2021, the commercial bank partnership model has gradually gained recognition from the markets and our partners. After deepening cooperation with private banks, including Sanxiang Bank and Yilian Bank in 2022, the commercial bank partnership model began to grow rapidly in the second half of 2022 and took shape at sharp at the end of the year. In 2022, the company recommended a total of RMB 2.5 billion of loan to banks, meeting the target set at the beginning of the year. The net revenue under the commercial bank partnership model also increased. 第 二 ， 压 降 信 托 端 资 金 成 本 。 管 理 层 在 年 初 做 出 了 判 断 ， 今 年 的 整 个 市 场 形 势 将 会 发 生 变 化 ， 资 金 将 相 对 宽 裕 ， 后 续 的 情 况 发 展 符 合 管 理 层 在 年 初 的 预 期 。 因 此 ， 为 了 充 分 地 把 握 金 融 机 构 减 肥 让 利 的 时 机 ， 公 司 在 全 年 不 间 断 地 与 信 托 合 作 机 构 展 开 谈 判 ， 并 在 2022 年 下 半 年 就 降 低 融 资 成 本 达 成 了 一 致 。 We have reduced the funding costs. Management made a judgment at the beginning of the year that market conditions may change this year and that there would be a relative abundance of funds. The subsequent development were in line with the management's expectations at the beginning of the year. Therefore, in order to take full advantage of the fee reductions by financial institutions, the company continued to negotiate with its trust company partners through the year and reach an agreement to reduce funding costs in the second half of 2022. The company began to participate more actively in the capital market during the year. The company continued to push forward for a secondary offering in 2022, and actively engaged with domestic and international investors. Through this context, we feel that both domestic and international investors continue to have a positive view of China's inclusive financial industry, and this has reinforced the company's confidence. Of course, while fully recognizing the achievement of our business, it is important to note that there is still room in improvement. Due to the impact of the pandemic prevention and control policy on this, on borrowers' solvency, as well as the overall efficiency of disposed the NPL, our delinquent ratio has increased, and the sales partner has been under greater pressure to repurchase default loans. Under the circumstances, the company allow more partners to fulfill their repurchase obligation in 2022 using installment payments with CNFinance charging a certain fee. This policy has eased the liquidity pressure of the partners and enriched the company's revenue mix. We also plan to continue to refine our installment repurchase policy in 2023 to further reduce the burden on sales partners. I will elaborate the details later. We believe that 2023 will continue to be a year of uncertainty. Recently released 2023 reports on the work of government also mentioned that China current chief country face many difficulties and challenges in its development. In 2023, the company will cooperate the development of the scale, efficiency and quality, continue the transformation to a service platform in order to achieve high quality development. Our specific work objects includes. We will continue to develop new products, upgrade our models, expand our customer base and grow our scale. In this end, we will continue to deepen our cooperation with commercial banks. Other than negotiate with the current commercial bank partners on the ratio of the deposits and seeking cooperation with more banks, we also plan to introduce sales partners into the commercial bank partnership model. Our goal is to let sales partners provide credit enhancement for the commercial banks, with CNFinance act as a service provider. 第 二 ， 积 极 推 动 资 金 端 模 式 的 升 级 。 在 新 的 一 年 ， 除 了 继 续 压 降 信 托 资 金 成 本 外 ， 我 们 还 将 积 极 地 与 风 险 投 资 机 构 就 利 用 不 良 资 产 进 行 再 融 资 进 行 谈 判 。 通 过 此 特 殊 资 产 基 金 为 合 伙 人 分 期 回 购 进 行 配 资 ， 从 而 扩 大 分 期 回 购 的 覆 盖 范 围 。 Upgrading the funding model. In 2023, other than keep reducing the funding costs, we will actively negotiate with the venture capital institutions on refinancing with non-performing assets and use such capital to fill the repurchase of the sales partners. By doing that, we are hoping to allow more sales partners to fulfill their obligations by installment payments. 第 三 ， 继 续 加 大 科 技 投 入 ， 推 动 数 字 化 转 型 。 公 司 计 划 在 2023 年 进 一 步 加 大 科 技 投 入 ， 推 进 风 -- 智 能 风 控 系 统 通 过 的 建 设 。 我 们 将 通 过 也 -- 调 研 来 收 集 数 据 并 加 以 分 析 ， 建 立 适 合 公 司 的 智 能 审 批 模 型 ， 从 而 优 化 整 个 信 贷 审 批 流 程 ， 最 终 为 业 务 发 展 赋 能 。 We will continue to invest in technology and drive digital transformation. The company plans to further increase investment in technology in 2023 to promote the construction of an intelligent risk control system. We will collect data through research and analyze it to build an screening model suitable for the company, thereby empowering the business development by optimizing the entire loan approval process. 第 四 ， 更 加 关 注 资 产 质 量 ， 平 衡 规 模 增 长 与 资 产 质 量 的 关 系 。 首 先 我 们 将 优 化 信 贷 审 批 模 型 ， 其 次 ， 我 们 将 以 市 场 数 据 为 依 据 ， 适 当 的 对 展 业 侧 重 区 域 进 行 调 整 。 我 们 目 前 的 想 法 是 更 加 聚 焦 一 线 、 新 一 线 城 市 进 行 展 业 ， 从 而 全 面 优 化 资 产 质 量 。 We will pay more attention to asset quality by better cooperating growth and asset quality. Firstly, we will optimize our credit approval model. Secondly, we'll use market data as a base to provide guidance on which region we should put more results in, and therefore, improve the quality of our profile. Our initial plan right now is to focus on expanding our business in Tier one and new Tier one cities. 最 近 发 布 的 2023 年 政 府 工 作 报 告 再 次 强 调 ， 鼓 励 支 持 民 营 经 济 和 民 营 企 业 发 展 壮 大 。 支 持 中 小 微 企 业 和 个 体 工 商 户 的 发 展 ， 证 明 管 理 层 所 提 出 的 中 国 的 普 惠 金 融 行 业 将 继 续 处 于 战 略 机 遇 期 。 这 一 判 断 依 旧 适 用 当 下 的 形 势 。 同 时 ， 管 理 层 认 为 ， 随 着 疫 情 防 控 政 策 的 调 整 ， 以 及 政 府 将 扩 大 内 需 确 定 为 今 年 全 国 经 济 发 展 的 一 项 工 作 重 点 ， 中 国 经 济 可 能 开 始 回 暖 。 我 们 也 将 抓 住 机 遇 ， 继 续 深 化 自 身 改 革 ， 为 更 多 的 小 微 企 业 主 提 供 更 优 质 的 金 融 服 务 ， 也 为 中 国 的 普 惠 金 融 事 业 贡 献 自 己 的 力 量 。 The recently released 2023 report on the work of the government once again emphasized on encouraging and supporting the development and growth of the private economy and private enterprises, and supporting the development of small, medium and micro enterprises and individual enterprises, which proves the management's estimation of China's inclusive financial industry will continue to be in a period of strategic opportunity still applies to the current situation. At the same time, the management believes that with the adjustment of the pandemic prevention and control policy and the government's effort to stimulate domestic demand as one important task for national economy development in 2023, China's economy has the potential to pick up, and we will also seize the opportunity to continue to deepen our own reform to want more micro and small business owners with better financing services, and also contribute our share to the cause of inclusive finance in China. 现 在 我 将 时 间 交 给 我 们 的 那 个 CFO 李 晶 女 士 ， 并 由 她 代 为 介 绍 公 司 2022 年 第 四 季 度 和 全 年 的 财 务 状 况 。 With that, I'd like to hand the call over to Miss Jing Li, the Acting CFO of the company who will walk you through the fourth quarter and fiscal year of 2022 financials. Thanks, Mr. Qian. Thanks again to everyone joining us today. I will walk you through the fourth quarter and fiscal year of 2022 financials. We believe year-over-year comparison is the best way to review our performance. Unless otherwise is stated, all percentage change I'm going to give will be on that basis. Also, unless otherwise is stated, all number I'm going to give will be in RMB. We will start with fourth quarter of 2022 first and followed by the result of the fiscal year. During the first quarter of 2022, total loan origination volume was RMB 3 billion, and the total volume of loans recommended to commercial banks was RMB 2 million. Total interest and fees income were RMB 465 million. Interest income charged to sales partner was RMB 33 million, which represents the fee charged to sales partner who choose to repurchase the default rate loans in installments. Collaboration costs for sales partner represents the sales incentives paid to sales partner decreased to RMB 18 million from RMB 120 million in the same period of last year. This primarily attributable to a lower average rate the company paid to a sales partner in the first quarter of 2022 as compared with last year. The net revenue under the commercial bank partnership model, representing fees charged to commercial banks for service including introducing borrowers, initial credit assessment, facilitating loans from banks to borrowers, and providing technical assessment to borrower and banks. The net of fees paid to third-party insurance company was RMB 56 million. The company has started to collaborate with commercial banks since last year, and such collaboration grew and scaled in the second half of this year. The net income was CNY 13 million, comparing a net loss of RMB 105 million in the same period of last year. Now, let's move to the results for our fiscal year of 2022. The total interest fees and income was CNY 1.7 billion, and the total interest fees and expense was CNY 785 million. The interest income charged to sales partner represents fees charged to sales partner who choose to repurchase default loans in installments increased to CNY 122 million from CNY 33 million in the same period of last year. The collaboration costs for sales partner, representing the sales incentives paid to sales partner, decreased to CNY 321 million from CNY 436 million from the same period of 2021. Net revenue under the commercial bank partnership model, representing fees charged to commercial banks for introducing borrowers, initial credit assessments, facilitating loans from the banks to borrowers, and providing technical assessment to the borrowers and banks. Net of fees paid to the third-party insurance company was CNY 58 million in this year. The net interest fees income after collaboration costs was CNY 693 million, representing an increase of 11% as compared with CNY 615 million in the same period of last year. The provision for credit losses was RMB 248 million for this year, and compared to a reversal of RMB 273 million in same period of last year. The reversal in last year was primarily due to the fact that the company transferred loans under a traditional facilitation model to third parties in bulk during the first quarter of 2021 and a lot of such loans was reversed. The increase in provision for credit losses in this year was mainly due to the economic uncertainties caused by the COVID-19 pandemic and the relevant prevention and control measures, as well as the downward pressure faced by the China's real estate market during 2022. Net loss on sales loans, sales of loans was RMB 35 million for the fiscal year of 2022, compared to RMB 451 million in the same period of last year. Primarily attributable to the fact that the company transferred loans under the traditional facilitation model to third party in bulk during the first quarter of last year. Such loans was all facilitated prior to 2019, and the majority of there were lost of due. Other gains, net of RMB 19 million, compared with RMB 19 million in the same period of last year. This is primarily attributable to the increase of Credit Risk Mitigation Position forfeit by sales partner. Total operating expenses decreased by 11% to RMB 339 million, as compared to RMB 381 million for same period last year. Net income increased by 111% to $138 million for the fiscal year of 2022, compared to $65 million for same period of last year. The delinquency ratio, excluding loans held for sale for loans originated by company, was 18.3% as of 31 December 2021 or 2022. The NPL ratio excluding loans held for sale for loans originated by company decreased from 2.1% as of 31 December 2021 to 1.1% as of December 31, 2022. With that, we now like to open up the call for Q&A. Please. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speaker phone, you will need to pick up your handset before pressing the keys. To withdraw your question, please press star then two. Once again, that was star then one to ask a question. At this time, we will pause momentarily to assemble the roster. Our first question will come from William Gregozeski of Greenridge Global. Please go ahead. Hi. Could you talk about your expectations for origination for the current year, especially between the split between trust and commercial because you did so much commercial origination in the fourth quarter? You know, what is that percentage going to look like across this current year? Our targeted total loan origination volume in 2023 is around RMB 20 billion, which is about 40% increase than that of 2022. We're hoping 40% of that, RMB 20 billion is coming from loans recommended to commercial banks. Okay, great. Given the, you know, general economic uncertainty and property market uncertainty, are you guys seeing any more sales partners, you know, coming to the platform because of the additional, you know, services you guys provide in terms of the risk management and the installment plan compared to doing it on their own as they may have been doing before? Okay. Based on the data, we're happy to see that the number of active sales partners as of the end of 2022 actually increased about 100, which is a 10% increase as compared to the same period of as compared to the end of 2021. I want to mention that besides the better services we can provide them on the better, you know, risk management and external fundings. I think there are two major reasons why the sales partners are more willing to join our platform. The first thing is their confidence in how China's economy is going to pick up. I think the second reason is that the repurchase by installment policy we rolled out in 2022. I think that really could help them ease their liquidity pressure and also help them to better manage their own risks. Okay, great. As far as your current loan to value, do you guys have that ratio where it stood at the end of the year compared to the year-ago period? At the end of 2022, the average L-LTV ratio is around 60%, which remained rather stable to the past three years. Okay. given the, you know, you guys are now breaking out the income charge to sales partners for these installment loans, is this a number that you guys are expecting will rise over the course of the year or will it start to tail off as, you know, the economy and everything improves over the course of the year? How should we look at that line item? Could you repeat the second part of the question, please? Yeah. More just wanting to get an idea of, you know, where you guys see the interest charge to sales partners line item going over the course of 2023. Is it gonna increase throughout or increase and then start tailing off? Okay. Okay. Based on what we are seeing, how the economy is picking up and recovering, I think the overall asset quality of the loans originated by us is going to be better and which is going to drive down the overall delinquency ratio. Therefore, I think the total scale of how much the sales partners have to repurchase is going to go down. Therefore, I think the interest income charged to sales partners is going to remain rather stable in 2023 with a little going down. Okay. Last question is more just general. You know, given the current environment, what do you guys see as the biggest risk for the company and biggest opportunity for the current environment? I think the major challenge to CNFinance is whether we can contain the increase of delinquency ratio given the post the adjustment of you know pandemic prevention and control policies. That means that we have to focus more on the asset quality. To address this challenge, we're going to take a couple measures, including we kinda wanna focus more on expand our businesses in tier one and new tier one cities and on just to lower the proportion we're doing in tier two and tier three cities. Also, we want to, you know, just use technology to refine the whole loan approval process and just to manage risks better. Also, I think, the opportunities presented to us, including that, the first thing is how China's economy is going to pick up, going to recover post the adjustment to the pandemic prevention and control. The second thing is after the past two years; we have finally seen the trading volume and property price in core areas start to recover. Since the majority of our business was conducted in such regions, and I think that's another good news to us. Okay, great. Thank you. Thank you. Once again, if you would like to ask a question, please press star then one. This concludes our question-and-answer session. I would like to turn the conference back over to Ms. Jane for any closing remarks. Thank you for joining us today. If you have any questions, please feel free to contact us at ir@cashchina.cn. Thank you. The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.