Hello, ladies and gentlemen. Thank you for participating in the second quarter 2021 earnings conference call for FinVolution Group. I will now turn the call over to your host, Jimmy Tan, head of investor relations for the company. Jimmy, please go ahead. Hello everyone, welcome to our second quarter 2021 earnings conference call. The company results were issued via newswire services earlier today and are posted online. You can download the earnings release and sign up for the company email alerts by visiting the IR section of our website at ir.finvgroup.com. Mr. Feng Zhang, our Chief Executive Officer, and Mr. Jiayuan Xu, our Chief Financial Officer, will start the call with their prepared remarks and conclude with a Q&A session. During this call, we will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For information about these non-GAAP measures and reconciliation to GAAP measures, please refer to our earnings press release. 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 results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties are included in the company filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Finally, we post a slide presentation on our IR website providing details of our results for the quarter. I will now turn the call over to our CEO, Mr. Feng Zhang. Please go ahead, sir. Thanks, Jimmy. Hello everyone, and thank you so much for joining us today. We continue to provide value for both users and institutional partners in different aspects. Leveraging our cutting-edge technology, we have been providing value for users across multiple segments such as consumer finance, small business owners, and different types of financial institutions. Through our platform, users are able to enjoy the convenience of finance at their fingertips, accessing credit lines in a timely and efficient manner. On the other hand, our institutional partners are able to access and evaluate quality borrowers with efficiency. Along with the value created, we are thrilled to be reporting another set of record-breaking operational and financial results in the second quarter. As we harness our technological capabilities effectively to acquire new and better -quality borrowers and constantly increase our acquisition channels. Our total number of new borrowers acquired globally once again crossed the 1 million mark to a new record high of 1.18 million, an increase of over 500% year-over-year and 18% quarter-over-quarter. More specifically, number of new borrowers acquired in China reached 812,000, representing an increase of over 380% year-over-year and 31% sequentially. The number of new borrowers acquired in the international markets reaches 371,000, approximately 13-fold increase compared to the same quarter last year. Another clear indication that we are resuming high -quality growth is that our total transaction volume for the quarter reached a new record high to 33.4 billion RMB, a 153% jump year-over-year and a sequential increase of 25%. Specifically, transaction volume in China climbed 148% year-over-year and 25% quarter-over-quarter to RMB 32.5 billion, while transaction volume for international markets grew exponentially by 1,780% year-over-year and a 23% sequentially to RMB 940 million. Simultaneously, our outstanding loan balance further expanded to RMB 39.4 billion, representing year-over-year growth of 87% and 21% sequentially increase. In order to better support the healthy growth of our facilitation operations, we have been making consistent investments in acquiring new, better-quality borrowers through an array of online and offline channels. We have diversified our online channels and have also established an offline team of over 600 employees, covering around 80% of China's provinces. In the second quarter, our offline channels contributed around 10% of total new transaction volume. Offline acquisition is not only an alternative channel but also validates our technologies can be seamlessly integrated in different scenarios to enhance efficiency. Going forward, we intend to expand the offline team to beyond 1,000 employees in a year or so. Since 2020, we made our services available to small business owners in China, aiming to capitalize on the significant opportunity presented by these groups' underserved needs for operational funds. In the second quarter, growth momentum for our small business owner segment remained robust, with transaction volume increasing 41% sequentially to 6.2 billion RMB. Notably, the total number of small business owners served in the quarter exceeded 408,000 compared to just the 220,000 in total for the full year 2020. We believe serving the needs of small business owners is in line with national policies and play a part in meeting the needs of this segment of the society. Going forward, we will maintain our strategic focus on serving this segment and expect this portion of our business to account for around 20% of total transaction volume in the second half of 2021. In line with regulatory directions, we preemptively continued to lower borrowing rates in the second quarter to IRR 26.2% for our borrowers. More recently in August, the rate was further reduced to IRR 25.4%. We are also pleased to share that the recent percentage of transaction volume with borrowing rates at or below IRR 24% has risen to around 60%. We plan to continue acquiring better quality borrowers, expanding new funding sources across regions, and enhancing operation efficiency to provide more attractive rates and terms for our borrowers while maintaining a healthy take rate and operating margin. On the international front, with our state-of-the-art technologies and swift execution, we have continued delivering strong performances. In particular, we successfully launched a pilot testing operation in Vietnam, which demonstrates encouraging growth prospects. More excitingly, this marks the fourth country in our global roadmap in addition to our international presence in Indonesia, Philippines, and Singapore. We are very pleased with the accelerating pace in broadening our global footprint and thrilled that our recent entry in Vietnam is already demonstrating great potential with positive user feedback. We attribute our success in building out our first-mover advantages in emerging markets to our fundamental capabilities, talented and efficient team with global perspective, proprietary technologies, operational expertise, and deep-rooted corporate values. Our technologies support us in successfully navigating our business transition in China and also play a crucial role in our expansion across different international markets. We're confident in our global roadmap and remain firmly committed in our mission to make financial services more accessible and inclusive for borrowers around the world. Going forward, we will continue to advance our technological capabilities and solidify our operations in these countries while working with our local partners to explore new opportunities that will enable us to diversify our business models. Leveraging our technologies, operational expertise, and in-depth understanding of our institutional partners, we are able to provide diversified products and solutions for them in multiple scenarios. In particular, through cooperation with eight different institutional partners, we increased the portion of capital -light models on our platform from 2.3% in the previous quarter to 13% in this quarter. All these achievements are further testament to the solid trust and the confidence that our funding partners have in FinVolution, as we remain committed to building credibility and a strong corporate reputation amid ever-evolving market dynamics. Supported by our enhanced credit management model built on targeting higher -quality borrowers, our delinquencies have shown further improvement across multiple risk metrics. For example, our day one delinquency rate remained stable at 5.4% in August, compared with 7.5% in the same period last year. We expect vintage delinquency rates to continue improving to a level below 2.3% in the second quarter, while our 90-day -plus delinquency ratio reached a historical low of 1.01% from 7.13% in the same period last year. Our loan collection recovery rate also stabilized at around 91%. As we look ahead, our primary objectives for 2021 and beyond are to continue pursuing high-quality growth in China, leverage technologies to strengthen our first-mover advantage in the international markets and diversify our business models, continue empowering financial institutions through business-as-a-service solutions, and empower a variety of businesses globally through our digitization capabilities to create long-term value for our stakeholders. During the past several years, we have encountered and overcome many difficult challenges, such as exiting the P2P business, shifting our funding sources, moving towards better -quality borrowers, and many more. We have the technological know-how, capabilities, and the resources to deliver better results and achievements in this rapidly evolving environment. Our dynamic business model and operating strength, coupled with our strategic investments in multiple sectors, will drive our success with a sustainable return for all our stakeholders in the long term. Last but not least, I would also like to report our progress on corporate social responsibilities. During the past several years, we have consistently fulfilled our duties as a responsible corporate citizen. For example, during the recent flood in Henan, we have donated CNY 10 million as post-disaster aid and activated our local employees to distribute food supplies for those in need. Together with our institutional partners, a low-interest loan program for small business owners has also been introduced. Our third annual ESG report was also published recently, and for those who are interested in having more information, do visit our website for a copy. In summary, leveraging our technologies and digitalization capabilities to create long-term value for our stakeholders, we are confident in our ability to maintain our position as the leading fintech platform in China while capturing tremendous growth opportunities ahead globally. With that, I will now turn the call over to Jiayuan Xu, who will discuss our financial results for the quarter. Thank you, Feng Zhang, and hello everyone. With continued improvement across multiple operations metrics in the second quarter, we delivered a non-GAAP operating income of CNY 726 million, an increase of 26% year-over-year, and a sequential increase of 8%. Further validating the viability of our business model, our robust balance sheet with CNY 4.9 billion in unrestricted cash and short-term investments, coupled with our strong technology capabilities, positions us well to explore opportunities both in domestic and international markets. Now turning to the financial results for the second quarter. In the interest of time, I will not walk through each item line by line on this call. Please refer to our earnings release for more details. Net revenue increased by 32% to 2.4 billion RMB for the second quarter of 2021 from 1.8 billion RMB in the same period of 2020, primarily due to increase in transaction volume and partially offset by the decrease in guarantee income as a result of improved asset quality. Loan facilitation service fees increased by 135% to 952 million RMB for the second quarter of 2021 from 405 million RMB in the same period of 2020, primarily due to the increase in transaction volume, which was partially offset by the decrease in average rate of transaction fees. Post-facilitation service fees increased by 96% to 300 million RMB for the second quarter of 2021 from 153 million RMB in the same period of 2020, primarily due to the increase in outstanding loans serviced by the company and the low impact of deferred transaction fees. Guarantee income was CNY 666 million for the second quarter of 2021 compared to CNY 821 million in the same period of 2020 as a result of improved asset quality. Net interest income decreased by 7% to CNY 309 million for the second quarter of 2021 from CNY 333 million in the same period of 2020, mainly due to the reduction in outstanding loan balance of consolidated trust, partially offset by the higher transaction volume in the international markets. Other revenue increased by 61% to CNY 158 million for the second quarter of 2021 from CNY 198 million in the same period of 2020, mainly due to increased customer referral fees to other third-party platforms. Non-GAAP adjusted operating income, which excludes share-based compensation expenses before tax, was CNY 726 million for the second quarter of 2021, representing an increase of 26% from CNY 576 million in the same period of 2020. Net profit was CNY 620 million for the second quarter of 2021, representing an increase of 37% compared to CNY 454 million in the same period of 2020. We have a well-capitalized balance sheet, and our leverage ratio remains low. Leverage ratio across our business was only 3.8 times, and our strong liquidity position, consisting CNY 4.9 billion of cash and short-term investments as at the end of June 2021, positions us well in the evolving environment and gives us significant flexibility. With the COVID-19 recent resurgence in China and other regions around the world, the company will continue to closely monitor the situation of the pandemic and remain vigilant in its business operations. As such, the company holds a cautious view on its operations and anticipates steady growth in its transaction volume for the third quarter of 2021, which is expected to be in the range of CNY 35 billion-CNY 37 billion. With that, I will conclude my prepared remarks. We will now open the call to questions. Operator, please continue. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch -tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. For the benefit of all participants on today's call, if you wish to ask your question to the management in Chinese, we ask that you please kindly repeat your question in English. At this time, we will pause momentarily to assemble our roster. Our first question comes from Thomas Chong with Jefferies. Please go ahead. Hi management. Thanks for taking my question. Congratulations on the strong results. First, I have two questions here. First, could you please share some updates about the regulatory environment and how much of our loans already have an APR below 24%? How should we think about the trend in APR going forward? My second question is, what about our outlook on loan origination volume in the second half in 2022? Thank you. [Non-English content] Okay. Let me do the translation for Mr. Xu. From our understanding, the cap on IRR 24% is a window guidance from the CBRC for consumer finance companies. Thus, it is not evenly implemented across the country, as there are different timelines for different institutions. For example, some determine that the outstanding loan balance of all loans above 24% will be reduced to zero by the end of next June, whereas for some institutions will follow the guidelines that there will be no new originations above 24% by the end of next June. [Non-English content] This is actually something within our expectation, and we have been preemptively been reducing interest rates for our borrowers. For example, in the call earlier, our CEO, Mr. Feng Zhang, has mentioned that in the first quarter our borrowing rate was 26.2%, and in the second quarter this borrowing rate was reduced to 26.2%. I mean, in the first quarter was 26.8%, and it has been further reduced to 25.4% in August. Also, the proportion of loans facilitated at or below 24% has reached 60% in August. [Non-English content] Okay. We have been making the preparations; we believe we are close to shifting our loans to under 24%. Based on the static assumption stress test, we believe the impact will be around 0.5% to 1%; our take rate will be reduced to around 3.5% from the current level of 4.4% in the second quarter when the cap has been fully implemented. [Non-English content] Do note that this is based on a static assumption, and we are confident to further improve our funding cost, delinquency rates, and operating efficiency going forward. All these will actually help to make an improvement in our take rate going forward. [Non-English content] We believe there is a grace period involved over here. Based on this assumption, we are very confident in achieving our full -year guidance that we have given out at the beginning of the year. We are confident in beating the upper end of the guidance that we have given out, which is CNY 120 billion. [Non-English content] The next question comes from Alex Ye with UBS. Please go ahead. Hi, Benjamin. Thanks for taking my questions. I have a few questions. First one also on the margin outlook, the impact from the price cutting. After you have implemented a lower price recently in August, how has that affected your take rate so far, and how is the outlook for the next year? The second question is on your sales and marketing trend. I saw that you have continued to go up quite substantially and outpace your overall growth. I'm wondering, can you share more color on what the drivers behind your sales marketing trend are, and when could we start to expect some sort of a stabilized trend in terms of the sales marketing as a percentage of your loan volume? Third question is about your overseas market strategy. It's quite encouraging to see the progress on that front. It currently accounts for around 3% of your total loan volume. I'm wondering if you could share with us if you have any targeted loan volume contribution from overseas markets, like in the next two-three years. Thanks. Alex, [Non-English content] Okay, this question is still related to the earlier question of interest rate being capped at 24%. Our current take rate is around 4.4%. Based on the static stress test, we believe our take rate will be reduced by 0.5%-1% to around 3.5%. As for the pace of the reduction, we will still need to discuss with our partners in order to determine the right pace for this reduction. [Non-English content] Okay, although there are challenges in the take rate in the future, I would also like to update that we have achieved significant progress in our ABS application, and in the future, we believe the ABS will diversify our funding sources. [Non-English content] Okay. In the second quarter, our customer acquisition cost was around 400. The CPS in China was about CNY 470 in the second quarter versus CNY 450 in the first quarter. For our CPS for the international market, it was around 230 RMB in the second quarter. [Non-English content] In the future, we believe this trend will be stable. In China, we expect our customer acquisition cost to be in the range of CNY 400-CNY 450. For the international market, it will be around the range of 200 + RMB. [Non-English content] I would also like to update on my different customer acquisition channels. For example, our information feed channels consist about 60%-70% of new customer acquisition. Our app stores have about 15%, and our offline customer acquisition team has been making very fast progress, and it consists of about 10% of our new customer acquisition today. [Non-English content] In the second quarter, our loan origination for our international markets was about CNY 940 million. On a quarter-on-quarter growth, it has increased by about 24%, and we have also penetrated and begun operations in our fourth country, Vietnam. [Non-English content] There has been some research of the COVID-19 in Southeast Asia recently. We believe we are still confident to be able to achieve about four times growth compared to last year, which is about RMB 4 billion of loan volume in Southeast Asia market. [Non-English content] Alex。 This is Feng. I would just add that Southeastern Asian market, in terms of total population size, is roughly half of mainland China. In terms of GDP growth and financial markets, it's at an early stage. Our business there is also at a much earlier stage compared to where we are in mainland China. If we look at a three- to five -year horizon, we definitely expect our growth rate in Southeast Asian market to be faster than the domestic market. It's hard to predict because it also depends on how much growth we get in the domestic market, which does have uncertainties given the regulatory environment. We would certainly hope that within three to five years, our international business can account for maybe in the range of 20% for our total transaction volume. The next question is from Eric Lu with China Renaissance. Please go ahead. Hi. Thanks, management, for giving me this chance to ask questions, and congrats for the great performance in the second quarter. I got two questions. The first question is about overseas explanation. We know the company has expanded in four countries in Southeast Asia. Can you please provide more color about the unit economics model in each country? For example, the funding source, the asset quality, and the product nature. The second question is for the Capital Light loan facilitation model. Can you please provide some color about the future plan of adopting Capital Light business model? Thanks. [Non-English content] The unique economics for our international business is actually very different from our business in China in terms of pricing, in terms of risk performance. For the international market, the take rate is around 10%-12%. [Non-English content] We have actually achieved the break -even point for our international business. At the moment, our priority is not in turning a profit, but instead our focus is on acquiring more customers to have a faster growth. Capital light model. [Non-English content] Our CEO has actually mentioned that we have made significant progress in our capital -light progress from 2.3% in the previous quarter to 13% in this quarter and contribute about 4.3 billion RMB. [Non-English content] For the quarter, we have worked with eight different institutions under the capital light model. In our potential pipelines, we have another six more institutional partners waiting to work with us on the capital -light model. [Non-English content] If you compare the capital -light model to the capital -heavy model, there is a 1% additional cost involved. [Non-English content] For the rest of the year, our focus on the capital light model is actually on the quality of the cooperation model of the capital light model, meaning that we will continue to work with more partners on this model. As you know, our leverage ratio is also relatively low at only 2.8 times. [Non-English content] The next question is from Hans Fan with CLSA. Please go ahead. Thank you, management, for giving me this opportunity to ask questions. I have two questions. One is about regulation; another one is about app quality. About regulation -wise, I think some other colleagues asked about the APR. I want to ask about the loan facilitation in terms of breaking up the link between the fintech platform and the banks. CNY 1 trillion, right? There was a regulation asking the fintech platforms pass data through the licensed credit scoring company first, who can, in turn, pass data to banks. Based on this regulation, how do we plan to be compliant? What are the impacts on our business, especially on the take rate? What are the potential changes in the model? That's number one. Number two is on app quality. We noticed that our app quality trend was very good. I am just wondering, looking into the most recent two months, what are the trends there? Do we expect continuous improvement in delinquency ratios? Thank you. [Non-English content] The regulators' view on data collection is actually based on minimum required standards. [Non-English content] Our company has been working along in this direction. Based on the past reviews, we believe we have fulfilled the requirements. Our app has actually received the App Security Certification and App Information Security Certification from the China National Computer Virus Emergency Response Center. [Non-English content] I would also like to stress that our core capabilities is actually based on the data utilization and not based on the amount of data collected. Thus, the regulations' direction of the minimum required standard will not actually affect us a lot. [Non-English content] Based on our understanding on breaking up the link, all credit-related activities need to be supervised under licensed regulatory bodies. This means that such activities need to go through a licensed institution, and credit bureau agency is actually one of the channels. [Non-English content] Going forward, we will strengthen our cooperation with the credit bureau agency. We have been working with Baihang since 2018. We have been developing products together with their teams. [Non-English content] As mentioned earlier, all credit -related activities need to be supervised under a licensed regulatory bodies. We are also exploring the possibilities of using our current licenses, such as our micro lending license and financial guarantee license, to process the data. [Non-English content] We will also actively explore the possibilities of participating in the stake in one of the credit bureau agencies. [Non-English content] In conclusion, we think the indirect data transfer only changes the protocol of the process, and it will add some cost, but the cost is not going to be material, and it doesn't impact the outcome of the business and the risk assessment results. [Non-English content] As data management becomes more standardized and transparent, we believe we have the opportunity to secure higher and better data quality sources to further improve our operation efficiency. [Non-English content] High -quality trend. [Non-English content] Throughout the year, our asset quality has been improving progressively. In the second quarter, we expect our vintage delinquency to be around 2.3%. [Non-English content] In the future, we have the confidence to maintain our delinquencies at this level. As you know, lowering the pricing will also help to improve the risk level, like what we have experienced from our P2P transition. [Non-English content] As a reminder, if you have a question, please press star then one to be joined into the queue. Once again, that's star then one to be joined into the question queue. The next question comes from Henry Lian with Gold Dragon. Please go ahead. Good. Congrats on the very strong result. Just two very quick questions to follow up. The first one is, can you provide some more color on the breakdown for your international business, like the loan facilitation volume for different countries? The second thing is, I know that we just talked about the task of your profitability under 24%. Just like you've been, do you have a concrete guidance of rough earnings estimate, like how much earnings downside offside will we have next year when everything is under 24%? [Non-English content] Hey, thanks, Henry. This is Feng. Yeah, just quickly, in terms of international market country breakdown, our Indonesia market accounts for about three quarters of our volume, roughly, and the Philippines and Vietnam in total account for the rest. Vietnam is just starting, so at a very early stage. In terms of the profit impact for the price regulatory change shift, I think we can just do a quick math. As we mentioned, currently, our average RI is about 25.4%, and we have the loans that are facilitated by us; outstanding is about CNY 40 billion. If we do the math, CNY 40 billion times Let's say if we reduce to 24%, that's a drop of roughly 1.5%, so that's CNY 600 million pre-tax profit impact. In reality, we may maintain some of our volumes at a rate below 24%, so the impact may be a little bit more than that. Again, that's the static version. As we mentioned, in reality, what we think will happen is we will continue to drive down our loss rate. We think there's a very good opportunity. With the market, we'll have much more limited asset supply for this sector. There are lots of players; they operate between 24% and 36%. In fact, very close to 36%. It's going to be very difficult for them to adjust their business to below 24%, either will not be able to do that, or they will do that, but with a huge impact on their volume. The asset supply for this sector is going to be very limited. With that, I think there's a great opportunity for us to further improve our funding cost with better negotiation power with our funding partners, with our institutional partners. Lastly, as we increase our business volume, the size of our business, the fixed cost component, which is a big chunk of our total cost, as we are such a research-heavy company, we spend a lot of human capital cost, the efficiency is going to be higher. The fixed cost is going to be a smaller percentage of our total revenue. With all these improvement opportunity ahead of us, we actually think we can limit the profit impact to a significantly smaller impact than the number I just indicated. Hope that helps. Basically, under that math, it looks like we will still have a very material growth. If everything holds constant, we'll still have a material growth of earnings at 2022 from last year's level. This year is still above 2024. Next year versus last year, it's a still material growth. Oh, certainly, I hope so. I think people may have a different understanding of material. Yeah. I do think that the 24% cap is going to have some impact in the short term in terms of profitability. I think that the key message here is, from all these aspects, we believe the impact is going to be fairly manageable for the short term, and we think if we look at the medium to long term, it's going to be a good thing for the industry and for our company. Got it. Just one very quick follow-up. On the international business, have we been considering U.S. as a potential area to enter? Given how strong Upstart has been doing, both on their business, on the share price in that market, are we under any future plan of entering that and share some of the economics there? Yeah. I think we have been paying some attention, but as of now, we don't have a concrete plan to enter U.S. market. I think we mostly are focusing on developing worlds. I understand Upstart has a very high valuation. It's still something we're trying to figure out. Thanks When we look at the medium to long term, we are pretty happy with the mainland market and the developing world, particularly Southeast Asian market. We think it's big enough for us to play for the years to come. Sure. Thank you. Thank you. The next question comes from Harry Wu with China Securities. Thank you. [Non-English content] Will there be any further changes to the regulatory policies on user privacy, especially user data collection, and what kind of response the company will do to ensure that business is not affected? [Non-English content] Okay, last Friday, there was an introduction paper on the scope of personal data protection, and also on the consultation paper on cross-border data transfer. [Non-English content] On the personal data protection front, there hasn't been much change. The focus is always on the minimum required standard. We have also received the App Security Certification and App Information Security Certification with level three rating from National Computer Virus Emergency Response Center. [Non-English content] On cross-border data transfer, we have maintained all the information collected in China to remain in China, whereas all the information collected in the international markets remains in their respective countries. [Non-English content] This regulation is still relatively new and still evolving, and we will continue to closely monitor the developments of the regulations. [Non-English content] Thank you. As a reminder, if you have a question, please press star then one to be joined into the queue. Once again, that's star then one to be joined into the queue. As there are no further questions, now I would like to turn the conference back over to the company for any closing remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact our IR team. Have a nice day. Good night. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.