Ladies and gentlemen, thank you for standing by, welcome to the 360 DigiTech first quarter 2021 earnings conference call. Please also note today's event is being recorded. At this time, I would like to turn the conference call over to Ms. Mandy Dong, IR Director. Please go ahead, Mandy. Thank you. Hello everyone, and welcome to our first quarter 2021 earnings conference call. Our results were issued earlier today and can be found on our IR website. Joining me today are Mr. Wu Haisheng, our CEO and Director, Mr. Alex Xu, our CFO and Director, Mr. Zheng Yan, our CRO. Before we begin the prepared remarks, I'd like to remind you of the company's safe harbor statement. Except for historical information, the material discussed here may contain forward-looking statements based on current plan estimates and projection. Therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risk and uncertainty. We caution that a number of important factors could cause actual results to differ materially. For information about potential risks and uncertainties, please refer to company SEC filings. Also, this call includes discussion of certain non-GAAP measures. Please refer to our earnings release for a reconciliation between non-GAAP and GAAP ones. Unless otherwise stated, all figures mentioned are in RMB. I will now turn the call over to our Mr. Wu Haisheng, CEO of our company. [Non-English content] Hello everyone, I'm very happy to report a stellar quarter that far exceeded our expectations across the board. The strong growth momentum that we have seen since 2020 Q2 continued in the first quarter, and we had another set of record-breaking operational results. During the quarter, total loan facilitation was RMB 74.1 billion, up 40% year-over-year. Outstanding loan balance increased by 38% year-over-year to RMB 101.9 billion, exceeding RMB 100 billion for the first time. Total revenue was RMB 3.6 billion, up 13% year-over-year. Non-GAAP net income was RMB 1.4 billion, up 452% year-over-year. As we execute on our various strategy initiatives and the overall market demand continues to recover, we expect to maintain this robust growth momentum in 2021. [Non-English content] While maintaining strong growth, we made significant progress in our technology-driven strategy upgrading and transition. Loan facilitation under the Cap-light model and other tech solution models exceeded 50% of total for the first time. This ratio increased further to 55% in recent months. This marks a fundamental change to the nature of our business. In addition, our tech-empowered business line advanced on multiple fronts. Our smart marketing service product, Intelligent Credit Engine, ICE, delivered rapid growth. In April, key monthly operating metrics of ICE, such as users with approved credit lines, transaction volume, and outstanding balance, doubled from the 2020 year-end levels. In particular, the transaction volume in April went up by an impressive 200% from the 2020 year-end levels. Moreover, our risk management RM SaaS product expanded rapidly. We have now established cooperation with 29 financial institutions under this model and with another nine in the pipeline. [Non-English content] In terms of strategic growth drivers, we are very pleased to report remarkable progress in key initiatives such as Embedded Finance API Model, SME Finance, and the collaboration with Kincheng Bank of Tianjin, in short, KCB. With these, we have successfully upgraded our core growth engines with more comprehensive and diversified operations. [Non-English content] Our Embedded Finance API Model remains very popular among our business partners and connected with more traffic platforms during the quarter. So far, we have established partnerships with 20 leading traffic platforms and further diversified our customer acquisition channels. As of now, the Embedded Finance Model has already contributed over 35% of our new customer acquisition. VPocket, our virtual credit card product, added around 1.14 million new merchants during the quarter, with over RMB 1.5 billion monthly transaction volume. This product continues to lift overall engagement level and the thickness of our customer base. [Non-English content] We launched our SME Finance business last year. The segment delivered significant growth in Q1. Leveraging our risk management expertise in consumer finance, we developed a unique owner plus SME dual-core model. Under this model, an SME is evaluated both as an entrepreneur him or herself and a business enterprise. This substantially improved our risk management capability and efficiency in SME lending. Most of our SME borrowers are engaged in retail, wholesale, hotel, F&B food and beverage, and manufacturing. In the first quarter, the total amount of new approved credit line in SME segment increased 67% on a sequential basis. In addition, our online and offline borrower acquisition channels expanded rapidly. We have established cooperation with 28 leading partners. This puts us among top SME platforms with the broadest channel coverage. Our SME loan products quickly became one of the favorites among partners. Pricing of SME products is generally below 24%, with better risk performance, longer tenure, and a larger ticket size than consumer loans, which results in higher take rates around roughly 8%. With huge market potential, more supportive regulatory environment, and attractive economy return, we believe SME presents a very promising opportunity for our long-term growth. [Non-English content] Our collaboration with KCB essentially kicked off in the first quarter. Our deep-rooted strategic relationship has translated into strong business results. Within just a few months, total cumulative loan facilitation volume from KCB reached around RMB 18 billion, with a loan balance at around RMB 13 billion. KCB now has become our largest partner in terms of volume. Our strong strategic partnership is more than just the scale of the business. More importantly, this trusted partnership has boosted operational efficiency for both parties, and it in turn serves as a showcase and helps us to improve efficiency when we work with other financial institutions. We have seen positive demonstration effects that have led to notable improvements in our overall efficiency. [Non-English content] We continued to improve funding efficiency and optimize asset quality. Our overall funding costs have been on a gradual downward trend over the last few quarters as we build more diversified funding sources. So far this year, we have issued a total of RMB 2.1 billion ABS, ranking number four in the market, with an average coupon rate of 5.6%. Key leading indicators of asset quality further improved and reached a new set of best records in our history. At this point, M1 collection rate increased to over 91%, and Day one delinquency rate dropped further to 4.9%, the best ever. [Non-English content] Last, let me share a few thoughts regarding current regulatory environment. Believe that the guideline of the commercial bank online lending practice issued by CBIRC in July 2020 provided a basic regulatory framework for loan facilitation business. It sets some very specific practice examples of the loan facilitation model. We have always conducted our business in strict compliance with this framework. That is one of the reasons why our loan facilitation model has been well accepted by almost 100 financial institutions partners. We have little exposure in joint lending and student lending and stick to our role as a tech-empowered loan facilitator. We also make sure we do not issue ABS over the leverage limit. As you may know, we were among the 13 major fintech internet platforms that the regulator invited to meet recently. At the meeting, the regulator acknowledged the importance of our role in improving the efficiency of financial service, providing service to unmet demand, and reducing transaction costs. We believe the meeting was a necessary step to apply fair and balanced regulatory supervision to market participants and promote the healthy development of the platform economy. Strengthening supervision of the leading players will increase clarity to the regulatory direction of the industry, reduce regulatory overheads, and promote a healthy and more consolidated market space. Compared to the other fintech companies, our business models are relatively simple and straightforward. We have consistently held our operations to the highest compliance standards. Therefore, we are very confident we can meet any regulatory requirements assigned to this industry. As the regulatory framework becomes more clear, we believe that leading fintech platforms like ourselves will embrace a historical era of growth. [Non-English content] Overall, we are very excited that we are off to a very strong start in 2021. For the first time, loan balance topped over RMB 100 billion, and the technical line model contributed more than half of our loan book. Our strategy initiatives delivered better-than-expected results, and there is more regulatory clarity for the leading fintech platforms. All of this gives us full confidence for our development in 2021 and beyond. [Non-English content] Now, let me turn it over to our CFO, Alex Xu, to run through more details for you. Okay. Thank you, Haisheng Wu. Good morning and good evening, everyone. Welcome to our quarterly earnings call. For the interest of time, I will not go over all the financial line items on the call. Please refer to our earnings release for the details. As Haisheng Wu mentioned, we have experienced robust consumer demand for credit, along with further improvement in asset quality in Q1. As the Chinese economy continued on a steady upward trend and the Chinese New Year related seasonality was muted than normal. Total net revenue for Q1 was 3.6 billion, versus 3.34 billion in Q4 and 3.18 billion a year ago. Revenue from credit-driven service, Cap-heavy, was 2.45 billion, compared to 2.56 billion in Q4 and 2.81 billion a year ago. The sequential and year-on-year decline was in part due to the facilitation volume mix change as Cap-heavy contribution decreased significantly. Although a recovery in average pricing offsets some of the negative impact on a sequential basis. During the quarter, average pricing was about 26.6%, compared to 25.3% in Q4 and 28.2% a year ago. Going forward, we are expecting a relatively stable pricing environment throughout 2021. Revenue from platform service, Cap-light, was 1.15 billion, compared to 780 million in Q4 and 373 million a year ago. The robust growth was mainly driven by a 58% sequential growth in facilitation volume from Cap-light, ICE, and other technology solutions. While the underlying take rate for the platform service were relatively stable. We expect Cap-light contribution percentage to continue increase throughout 2021 and eventually account for a clear majority of our total volume by the year-end. As microeconomic activities continue to recover in China, demand for internet traffic also increased significantly along the way. As a result, we have experienced some uptick in sales marketing expenses. Average customer acquisition cost per user with approved credit line was RMB 217 in Q1, compared to RMB 198 in Q4. Meanwhile, we also noticed a clear pickup in customers' drawdown activity during the quarter. As a result, we were able to maintain a stable and satisfied ROI despite increases in customer acquisition cost. We will continue to use lifecycle ROI as a key metric to determine the pace and scope of our customer acquisition strategy. For 2021, at this point in time, we believe current market conditions support a more proactive approach to accelerate the growth of our business. Non-GAAP net income was 1.41 billion in Q1, versus 1.31 billion in Q4 and 255 million a year ago. We once again set a new record in quarterly profitability, driven by higher facilitation volume and noticeable improvement in asset quality. As we previously communicated to the market, with the transition to a more technology-driven business model, the structure of our financial model has gradually changed. For Q1, we have seen significant improvement in operating margins as increasing contribution from Cap-light and other technology solutions will generally lead to higher margin structure. We continue to expect the overall profitability growth to be more or less keep pace with the facilitation volume growth for 2021. With strong operating results and increased contribution from a Cap-light model in Q1, our leverage ratio, which is defined as a risk-bearing loan balance divided by shareholders' equity, further declined to 5.4 times from 6.6 times in Q4 and 9.5 times a year ago. We expect to see continued de-leveraging in our business, driven by accelerating movement towards Cap-light model and solid operating results. Meanwhile, our provision coverage ratio reached 554% in Q1, compared to 470% in Q4 and 401% a year ago. This was the highest provision coverage ratio in our corporate history, reflecting significant improvement in asset quality and our conservative approach in estimating provisions. As Cap-light become a clear majority of our operations in the future, and we are deeply in the safe zone in terms of the provision coverage, we believe this metric has become less relevant to reflect the nature of our business in the future. Total cash and cash equivalents increased to 9.2 billion in Q1 from 7.7 billion in Q4. Non-restricted cash was approximately 6 billion in Q1 versus 4.4 billion in Q4. A significant portion of our cash was allocated to security deposit with our institutional partners and the registered capitals of different entities to support our daily operations. While we continue to generate strong cash flow through operation, we will also proactively deploy cash to expand our business, invest in key technologies, and satisfy potential regulatory requirements. We believe that sufficient cash position will not only enable us to compete in this ever-changing market, but also position us to capture potential growth opportunities in the market recovery. Let me give you some update about our outlook for 2021. While overall business trend has been stronger than we expected so far this year, we intend to keep our tradition of conservative approach in providing forward guidance. As such, for now, we would like to maintain our 2021 total volume guidance of between 310 billion to 330 billion, representing year-on-year growth of 26%-34%. Meanwhile, we expect total facilitation volume for Q2 should be in the range of 85 billion- 87 billion, representing 15%-17% sequential growth. We will reevaluate full year guidance when we report our Q2 results. As always, this forecast reflects the company's current and the preliminary views, which is subject to material changes. With that, I would like to conclude our prepared remarks. Operator, we can now take some questions. Thank you. We will now begin the question and answer session. All you participants with question to pose, please press 01 on your telephone keypad. You will place in the queue. To cancel the queue, please press 02. For those who can speak Chinese, please kindly ask your question in Chinese first, followed by English translation yourself. In addition, in order to have enough time to address everyone on the call, please keep to one question and a follow-up, and then return to the queue if you have more questions. Once again, 01 on your telephone keypad now. Thank you. Our first question is Jacky Zuo from China Renaissance. Please go ahead. [Non-English content] Thanks for taking my question and congrats for the strong results. I have two questions. Number one is about our SME loan product. I saw we had a very strong Q2 growth in our SME financing. I just want to understand what is the APR, loan size, unique economics about this SME financing product and what is our loan volume target for SME this year? I think Mr. Wu, our CEO mentioned that the take rate is now about 8%. How compare the 8% with our overall loan take rate? Secondly, it's about our tech export business, which is the ICE. Just want to understand what is the difference between ICE and our other Agiloft loan facilitation product, what is the take rate and what are the bank partners for this product? I observed that our reported loan volume definition changed a bit this quarter, I think start to include this ICE loan volume. Just want to check what is the ICE loan volume for this quarter and last quarter. Thank you. [Non-English content] Sure, Jacky, let me handle your first question. Well, you got it. Absolutely right. We see a unique kind of growth in our SME business in the first quarter. As you know, there are actually two types of SME product in the market. The first type actually we view is more related to consumer finance products. A lot of peers, they extended the existing consumer finance product to who are the management or the owner of SME. This actually has some quite similar unit economy with consumer finance products. This is not we are pursuing. The second type is actually what we are pursuing now. It's actually more directly related to SME enterprise itself. We focus on the operational metrics of the SME companies. By doing this risk management of SME products, we leverage our existing expertise in consumer finance and uniquely develop the dual core risk management model. That means we evaluate this SME owner both as owner itself, also as the SME enterprise. This shows a much better unit economy than the general consumer product. [Non-English content] Sure. We focus on the type two, which is more directly related or truly SME loan, because it has larger margin potential and better unit economy return. The average APR of this product is 20%. For those more related to the tax related SME loan or the invoice related, the average APR is around 16%. Ticket size of SME loan is RMB 210,000. We mentioned in the prepared remarks, the take rate is around 8%, which is almost twice, double the size of the consumer finance loans. [Non-English content] For your second question about the ICE product. As you can see, its full name is Intelligent Credit Engine product. It focuses more on the smart marketing service. As you see, we have accumulated around 100 financial institutions due to the very long time cooperation with them. We know their preference and their capability very well, we divided them into different layers according to their capability of risk management. For those who have the intention to improve their risk management probability, or they already have very strong risk management capability, we will deliver the ICE product to them, which just focus on the customer acquisition service. Therefore, as we compare to capital light model, the ICE model just provided a customer acquisition service. The take rate is comparatively lower. [Non-English content] As we cooperate with various types of financial institutions like consumer finance, corporate banks, etc. There are not much difference among the loan assets we allocated to them. As we mentioned in the remarks, last quarter, this volume of ICE reached 2.4 billion, which doubled the size from last quarter. [Non-English content] We already answered Jacky. Thank you, Jacky. Next question is Richard Xu from Morgan Stanley. Please go ahead. [Non-English content] Basically two questions. One is in terms of the funding partners. We're certainly increasing our cooperation with Kincheng Bank. But going forward, how do we allocate the loan allocation among different funding partners and any major differences on the take rate? In terms of that volume allocation between ICE product and other product. Take rate is different. What will be the long-term strategic thinking on the loan allocations? Thank you. [Non-English content] Sure, Richard. Let me address your funding question. First of all, the diversification of funding source is always a goal we pursue in, and we will keep that. Secondly, for KCB, as you know, we have deep rooted relationship with KCB. It's better that KCB as a showcase and to demonstrate it to other financial institutions. In addition, as you see, we carry out a lot strategy initiative this year. It's easier for us to explore the new products with the KCB collaboration. [Non-English content] Yes, due to our deep-rooted relationship with KCB, there might be short-term difference compared to the take rate when we cooperate with the other financial institute. It will take a longer-term view. We are definitely work with all the partners on our same business term. [Non-English content] The fundamental reason is our long product is very competitive in the market. Even there are short-term difference between the KCB business terms with other financial institution business terms, KCB can be as a showcase and in the long term, other financial institutions will catch up with the equal terms. [Non-English content] We always spend no effort becoming the top player in fintech that cover every process or every function of the whole business operations. Therefore, as for your question how we allocate different assets or products among these 100 financial institutions. We look at the business needs from the funding partners. For example, if the funding partner they need a comprehensive product, then we provide Cap-light product. If the funding partner they are very strong in risk management, then we only provide a smart marketing product. If they already have very strong source of customers, then we provide RMS product to them. All in all, we provide a service based on the business needs of our funding partners. [Non-English content] Thank you, Richard. Hope I get your point. Thank you, Richard. Next question is the analyst from CICC. Please go ahead. [Non-English content] Okay, then I will translate my question. Hello management, thanks for taking my question and congrats to our solid results. Today I have two great questions and the first one is regarding our strategic partnership with KCB. I will notice that KCB has become the largest institution partner in terms of the loan facilitation volume. Could you please share with us more information on how much contribution actually comes from the KCB in terms of the loan origination in Q1 2021? The second question is about our progress on the SME loan business. Given our SME loan business has been well on track, could you please elaborate more on how much contribution comes from the SME loan in terms of the loan origination in Q1 2021, and how much contribution it will be by the end of this year? Thanks so much [Non-English content] Yes, you are right. As you can see, in terms of business volume, KCB already become our largest partner. As mentioned in the prepared remarks in Q1, GMV cooperated with KCB totaled RMB 18 billion with loan balance RMB 13.3 billion. As we further advance the business initiative with KCB, we expect to see this number going up in the following. [Non-English content] Second question about the SME loan, as we mentioned that there are two definitions about the SME. For the broader definition that is a consumer finance loan related to SME owner and management. In the last quarter, this part contributes around 30%-40%. We expect to see this number rising up to around 60%-80% year-end. For the second more strict definition of SME, that is definitely the goal we are pursuing that is more related to the SME enterprise itself. We target to reach 10 billion loan balance at year-end. If you recall our guidance of loan total volume is 310 billion- 330 billion at a year-end. Roughly you can get the contribution ratio. [Non-English content] Let me add more color about SME. Although it's at a very early stage of this product, we are trying multiple directions to further develop this product, for example, for very premium SME enterprise borrowers. We may, or granting around 1 million ticket size product, and we expect to share more when we see more results coming out. Sorry. This is Alex Xu, the CFO. I'll probably add a couple of details to your questions. First of all, regarding the KCB's volume. As Haisheng Wu mentioned, up to the month of April, the accumulates volume from KCB is about 18 billion. I guess your question is about the Q1. For Q1, KCB's volume is roughly 10.8 billion, roughly speaking. You can use that 10.8 to calculate the percentage ratio there. Regarding the SME there, because as Haisheng Wu mentioned, there's two definitions. One is more narrowly defined, the other one is more a broad definition. We use the most restrictive definition for SME, meaning for those enterprises with the loans issued to the enterprise, with actual operation, with sales receipt, with taxation information, those kind of things. That's the narrowest definition for SME. For that, the total loan volume to the first quarter it's RMB 5.8 billion. The loan balance for this restricted definition is roughly 7.5 billion at the end of the first quarter. Keep in mind, this sort of narrowly defined SME loans typically has a much longer duration than the consumer loans, which will result in a pretty fast buildup of the balance as time goes. That's my adding a couple points there. Thank you. Thank you, Alex Xu. Next question is Steven Chan from Haitong International. Please go ahead. [Non-English content] I'll translate it. Two questions. One is about the follow-up question on the SME loan facilitation business. I would like to understand the share of SME loans with collateral or secure SME loans and unsecured SME loans so far up to maybe April. How do you compare the asset quality of SME loans relative to the consumer finance loans we have done in, say, different asset quality indicators? That's the first question. Second question is, could you share with us why we have a rise in customer acquisition costs in Q1 on a QOQ basis, and what will be our outlook on the trend of customer acquisition costs for the rest of 2021? Thanks. [Non-English content] In fact, the risk of our SME customer is lower than the overall market. About 70%-80% of overall levels. We use the dual-core call engine to control the SME product, which means that the enterprise plus business owner and the use of the Thor engine can match the suitable product. Otherwise, we will cooperate more business owners than individual customers. This is obviously a difference between individuals and small business. [Non-English content] As we share with market before that when we actually conduct our real operations, it's not the basic cost we are looking at, it's the ROI, return on the investment of customers we look at. As for in the first quarter, we believe we successfully conducted the better customer acquisition strategy. It's demonstrated by higher customer approval rate and larger ticket size, which in turn improve the ROI. [Non-English content] We expand the SME business, if we purely look at CAC metrics, since SME, they have the larger ticket size, longer tenure, and lower APR on the safety level, it will push up this number. In actual business operation, we believe expanding SME is a much better business decision for us. The quality is better and a higher ROI and better unit in our economy. [Non-English content] Very clear. Thanks. Steven, this is Alex. I just want to add one follow-up point from Haisheng Wu's point. As Haisheng Wu mentioned that as we expand into the SME, one nature of the SME business is that large ticket size, longer duration loans, which also associated with a much higher per ticket customer acquisition cost. Because we are kind of a growing SME business in the Q1 more, I guess, proactively, that mix change also results in a little bit higher per credit line customer acquisition cost as we reported. If you sort of get rid of SME portion, just look at the consumer portion, the change was not as high as the well-reported number. Just one add up to the point. Thank you. [Non-English content] Thank you, Steven. Due to time constraints, I will now hand the session back to management for closing debrief. Please go ahead. Okay. Thank you everyone join us for the conference call. If you have additional questions, please feel free to contact us. That's it for the call. Thank you. [Non-English content] Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.