Hello, and welcome to the X Financial First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tanya Wen. Please go ahead. Thank you, operator. Hello, everyone, and thank you for joining us today. The company's results were released earlier today and are available on the company's IR website at ir.xiaoyinggroup.com. On the call today for X Financial are Mr. Kan Li, President, and Mr. Frank Fuya Zheng, Chief Financial Officer. Mr. Li will give a brief overview of the company's business operations and highlights, followed by Mr. Zheng, who will go through the financials. They are all available to answer your questions during the Q&A section. I remind you that this call may contain forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the management's current expectations and current market and operating conditions, and relate to events that involve known 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 direct actual results, performance, or achievements to differ materially from those in the forward-looking statements. For the information regarding this and other risks, uncertainties, and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under the law. It is now my pleasure to introduce Mr. Kan Li. Mr. Li, please go ahead. Hello, everyone. We are pleased to start 2022 with a solid performance for the first quarter, despite multiple challenges from the resurgence of COVID-19 and the economic slowdown in China. The total loan amount facilitated and provided in the first quarter increased on both a yearly and a quarterly basis. We also saw our asset quality remained stable during the quarter. However, given the uncertainties of the macroeconomic environment, we are cautious about the business outlook for the coming quarters. We will continue to closely monitor the market dynamics and stay vigilant to any inefficiencies and issues related to the pandemic in China. During the first quarter, our total loan amount facilitated and provided reached RMB 15 billion, up 40% year-over-year, and 17% quarter-over-quarter, in line with our previous guidance. The delinquency rate for all outstanding loans that are past due for 31-60 days as of March 31, 2022. De creased to 1.31% from 1.48% as of December 31, 2021. We are pleased to see that our tightened risk control measures have successfully stabilized our asset quality amid the complex environment, and especially during the recent COVID-19 resurgence and lockdowns. In the meantime, we have been actively working with various partners to jointly explore new opportunities in the personal financing market. In the fourth quarter of 2021, we became an indirect minority shareholder of the New Up Bank of Liaoning. Since the second quarter of 2022, we have started to provide loan facilitation services to New Up Bank. Now, we are in active discussions with the New Up Bank of Liaoning to jointly design and develop products and programs that cater to the financing needs of small and micro business, in line with the government call for support the development of small and medium enterprises in China. We look forward to deepening our cooperation with the New Up Bank of Liaoning by leveraging our extensive experience in the personal financing market and our capabilities in cutting edge and tech-driven risk control and assessments. We believe helping licensed financial institutions to grow their business will benefit both parties in the long run. On the regulatory side, the Chinese government recently highlighted the importance of promoting the healthy development of the platform economy in China. We believe a more visible market with clear and standardized regulations will benefit all the market participants, including us. We fully comply with and support the government's initiatives and policies to promote the long-term development of the industry. We have laid a strong foundation and are very confident of our expertise to capture growth opportunities amid a healthy regulatory environment. Recently, we were included in the list for the first year under the Holding Foreign Companies Accountable Act, which allows the U.S. regulator to delist companies if they fail to comply with American audit standards for three consecutive years. According to the Foreign Ministry of China, the Chinese securities regulator has regularly been in communicating with U.S. regulators in this regard. Whether these companies will be delisted or not from the U.S. stock exchange depends on the progress and results of the China-U.S. audit supervision cooperation. We hope and look forward to the two governments reaching an agreement in the near future. In the meantime, we have been proactively exploring possible solutions to protect the interest of our shareholders and maintain our listing status on the New York Stock Exchange. Now I will turn the call to Frank, who will go through our financials. Thank you, Ken, and hello everyone. We are pleased to see our top line increased 8% quarter- over- quarter sequentially in the first quarter. As per the guiding principles of the government, we are on track to further reduce the total borrowing cost of the borrowers in order to jointly promote and stimulate economic growth. We have been stepping up our efforts to acquire more high-quality borrowers and securing a large user basis for a long-term sustainable growth. This strategy has put some pressure on our bottom line due to our increased user acquisition cost. We believe that a solid foundation of the borrowers is critical to long-term development of our business. We will continue to strengthen our user acquisition while implementing disciplined cost control measures to deliver a balanced top line and bottom-line growth. I would like to brief some financial performance for the first quarter. Please note that all numbers stated are in RMB and rounded up. Total net revenue decreased by 2% to RMB 888 million from RMB 906 million in the same period of 2021, primarily due to a decrease in average total borrowing cost of the borrowers, also partially offset by an increase in the total loan amount facilitated and provided this quarter compared with the same period of 2021. Origination and servicing expense decreased by 19% to RMB 465 million from RMB 573 million in the same period of 2021, primarily due to a decrease in insurance fee paid to the insurance company. General and administration expenses increased by 7% to CNY 45 million from CNY 43 million in the same period of 2021, primarily due to an increase in consulting service fee expenses in the first quarter of 2022. Provision for accounts receivable and the contract asset was CNY 26 million, compared with CNY 17 million in the same period of 2021, primarily due to an increase in the accounts receivable from facilitation services as a result of an increase in the total loan facilitation amount in the first quarter of 2022 compared with the same period of 2021. Provision for loans receivable was RMB 34 million compared with RMB 27 million in the same period of 2021, primarily due to an increase in the loan receivable held by the company as a result of increase in total loan amount facilitated and provided in the first quarter of 2022 compared with the same period of 2021. Income from operations was RMB 314 million compared with RMB 215 million in the same period of 2021. Net income was RMB 140 million compared with RMB 189 million in the same period of 2021. non-GAAP adjusted net income was RMB 154 million compared with RMB 212 million in the same period of 2021. For further financial information, please refer to the earnings release at the company's IR website. Now for our business outlook. We expect total loan amount facilitated and provided for the second quarter of 2022 to be between RMB 15 billion and RMB 16 billion, and the range of incremental in total loan amount facilitated and provided for 2022 to be from 15%- 25%. This forecast reflects our current and preliminary views, which are subject to changes. Now, this concludes our prepared remarks, and I would like to open the call to the questions. Operator, please. 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, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Once again, that's star then one if you have a question, and we will pause momentarily to assemble our roster. Today's first question comes from Boyd Hines with Equinox Capital. Please go ahead. Hi, thank you for taking my questions. I have three at the moment. What was your average interest rate in the quarter that you charged customers? The second question is on the tax rate. Why was it so high this quarter and in Q4, and what is your outlook for tax rate for the full fiscal year? The last question is, can you provide us with any update on your share repurchase program? Thanks. Okay. Regarding your first question, we do not provide exact number regarding the rate we charge for the borrower. I will tell you the general trend, you know, it's going down. We also can provide, you know, regarding the, like, you know, the 24% borrowing rate for the loan is about in the first quarter of this year about between 40%-50% range. We are on track, you know, to have a majority our business will be based on 24% rate, you know, going forward. I think that process will all the way to end of this year. Regarding the tax rate, you know, for the last quarter or this quarter, especially this quarter, we have one subsidiary, you know, in China. It has deferred tax assets. Since that business is that business of the subsidiary, you know, it would not generate enough revenue in the future to offset those deferred tax assets. For example, like this quarter, we have around 90 million RMB written in the line of that tax line. Our overall, you know, our tax rate and effective is a relatively stable. It's around a little bit over 20% but below somewhere between 20% and 25% overall net. For the first quarter of this, the tax amount is so high because that special CNY 90 million something special charge. That's the second question. Regarding the share buyback program, you know, the company's share buyback program still subject to the insider trading rule, specifically 10b-5, 10b-18. We will start doing buyback, you know, starting this Friday. In other words, we haven't have any buyback yet, so far, you know, up to this point because there's no buyback window allowed to us to do so. We will start doing you know buying back our shares starting this Friday. Okay. Let me just follow up on the tax rate question. I'm trying to understand what you're implying. Are you saying that the tax rate is going to drop going forward so that starting in second quarter it should be closer to that 20%-25% statutory rate? No. I try to say for the last quarter of last year and the first quarter of this year, the number on the tax line is abnormal in the sense, you know, because we have one subsidiary as we know, all the way back, you know, like in 2020 we have some loss. So we have a tax credit available on that Chinese subsidiary.CNY Normally, you will earn the income in the future, you generate a profit, you can offset those tax credits in order to, you know. That means, you know, that subsidiary business will have a lower tax rate or zero tax rate for foreseeable future in order to absorb those tax credits. Because something happened, you know, for that subsidiary, we do not have enough revenue to cover those debts. That's why we prudently took a charge of CNY 90 million in the first quarter of this one. For the quarter of this year, this quarter of this year, that tax amount is abnormal and will be back to normal between 20%-25%, starting next quarter. Great. Thank you. Okay. My last question is really to the management team. Have you considered taking this company private? No. We understand that, you know, our valuation is very low. Like P/B is well below 1%. We are still, you know, making money. We are not losing money. Except like a, you know, like a special year, like 2020, either because of COVID situation mainly in China. On a normal year, we are making money, right? It's kind of unreasonable why we cannot, you know, make a reasonable valuation for the shareholder. I believe, we believe and that that's normal, a normal situation, this depressed valuation level, mainly due to uncertain regulatory environment right now in China. As we give you the script in, you know, this quarter, you know, you know, if you pay attention to Chinese government news, you will see we feel, you know, at this moment, we will the Chinese government maybe will refrain to have a so-called arm twisting regulatory measure for this industry. We will maybe we will have a you know normal so-called normal will not stop we will normal normal regulatory environment. And you know in the future. It doesn't mean we are we will not have a new measure coming up. We will still, but that those measures we believe is normal stuff. It's like consumer protection, whatever, you know, is, you know, it's like every company is like you know, you know, like any country you will expect to have the same kind of regulation come from those areas. We'll not have like an earthquake event, you know, for something like the last few years, you know, that kind of a thing. We believe those depressed valuation measures like a P/B or P/E will back to normal. Well, you know, we believe, we feel it will back to like back to one. You know, maybe not reach the 1.0 maybe, but definitely is much higher than you know, like a like a you know 0.23% P/B rate right now. We still on the regulatory front, we think the thing will turn around. We are still very believe the business we are involved is contribute to the consumer in China. We contribute to society, and we are for the long term, we will have a maybe have a big role for us to play. Maybe on regulatory front, which we believe is the most biggest factor affecting negative effect our you know our not just our company, the whole sector. All players the same thing. They will be back to normal, but we don't know how and when, but in terms of the trend, we believe it will be back to normal. Right. Well, most of your competitors have initiated stock repurchase plans. They have followed through. They also pay a dividend, and some of them actually I've seen some of their top senior executives have purchased stock instead of selling stock. If you believe that your shares are undervalued and they are not going to be delisted, I would urge you to aggressively do all of that. All our management team, nobody, as far as I know, do not sell any shares. Certainly I myself haven't sold any share yet. My, our company's biggest shareholder is Justin. Justin own a very substantial share personally. It's more than like 30%. I believe and I think with his means, he did some small purchase also. If you compare with his holding, you know, at end of last year, which is a disclosure in 20-F, he did buy some, you know, he did buy some shares, as you know, not big one, but small one, yes. He did buy. I think for the share buyback program, we will do the share buyback. Every opportunity, every day available for us, we will do the buyback. As we communicated before, in the due time, we will not exclusively in terms of the dividend thing. Let's see this share buyback thing work first. You know, maybe we'll have something else, but there's no promise for that. I agree that share dividends don't make as much sense as share repurchases. Yeah. You could aggressively purchase, repurchase 10%-15% of the company right now for very little. If they allow us to do that, we will do that. As you say, we put out $15 million for doing that. Definitely in terms of the current market cap, we is about 15%. But you know, 10b-18, they allow you only buy 25% of volume every day. You know, the volume right now is very slow. That's, you know. You know what I mean? We will buy every single share available for us to buy, but we still have to follow the rule. Okay. Thank you. I appreciate you answering my questions. Thank you. Thank you. Ladies and gentlemen, this concludes your question and answer session. I'd like to turn the conference back over to Tanya Wen for closing remarks. Okay. Thank you everyone for joining us on the call today. We look forward to speaking with you again in the near future. Thank you. Thank you. Ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation.