A：The overall performance and strategies discussed in the conference call revolved around the company's efforts to stabilize scale and mitigate risks in the fourth quarter within the new regulatory framework, emphasizing the unique business ecosystem's differentiated advantages and the resilience of the multi-business synergy. CEO Mr. J Wen Jiao provided an update on these performance and strategies.

A：Updates on risk management included the optimization of risk strategies, maintaining stringent standards for new loan quality, and enhancing the proactiveness and precision of risk identification. The company also focused on high-quality asset operations, which included refining credit line allocations and implementing a differentiated pricing framework. Financial performance was highlighted by a net profit of 1.7 billion RMB and an active user growth of 300 million, with 84 million new active users for the full year of 2025.

A：The business ecosystem demonstrated greater strength during the industry transition, with the company ramping up marketing efforts and optimizing supply chains to grow user engagement and transaction volume. Investments in customer acquisition and engagement with high-quality existing customers were also mentioned, underscoring the diversified ecosystem's resilience.

A：AI technology was integrated to improve user service experiences by deploying customer service AI agents in core scenarios like credit approvals, transactions, and repayments. These agents achieved over 90% response accuracy with an average response time under 3 seconds, and the company planned to expand these services to 24/7 coverage.

A：Key achievements in risk management and decision-making processes included the implementation of AI in key risk management processes such as compliance and the adjustment of credit lines. An AI-assisted system replaced traditional monitoring,提高了质检准确性和策略生成的效率, and credit line adjustment AI agents provided self-service guidance to customers.

A：The company prioritizes consumer rights protection as a core competitive advantage by standardizing service processes, optimizing intelligent routing, and enhancing its tiered customer service model. These efforts led to a measurable improvement in overall efficiency and response times, and the self-service platform was driven to increase user satisfaction.

A：Macro policies supporting consumption and county-level economy were mentioned, along with the company's investments in interest-free and low-interest promotions for micro and small business owners. These investments were complemented by an enriched product supply and comprehensive services to support the consumption rebound and inject financial vitality into the growth of micro and small businesses.

A：The company intensified the identification and management of high-risk customers, accelerated the iteration of risk models with weekly updates, and integrated a broader range of real-time data dimensions. They also reinforced day one delinquency management and improved the identification of high-risk cohorts at the earliest stage of delinquency.

A：In December, the day one delinquency ratio declined by 8% compared to a peak in October.

A：The company provided credit support for large ticket purchases, particularly in the EDC and consumer electronics categories. For top-tier prime customers, they launched installment campaigns with interest-free options to accelerate high-quality volume growth.

A：In the first quarter of 2026, the company plans to continue strengthening risk controls over both existing and new loans and intensify efforts in managing and phasing out high-risk segments to ensure a sustained downward trend in risk levels.

A：The new regulatory requirement to cap the comprehensive interest rate at or below 24% led to elevated industry-wide credit risk and complex market conditions. This resulted in a sequential net income decrease, volatility-driven increased credit costs, and more conservative provisioning, impacting performance in the fourth quarter.

A：The overall decline in net revenue for the credit business in the fourth quarter was driven by a 132 million drop in credit facilitation service income, a 145 million increase in credit costs, and a decrease in tax empowerment service income, partially offset by revenue growth in value-added services.

A：The company's core business segments performed as follows: the credit business experienced a net revenue decrease, while the e-commerce business had a slight decrease in net revenue. Expenses increased by 11% or 147 million, leading to a total decrease in net revenue of 223 million.

A：The company's ecosystem demonstrated resilience by providing critical stability, especially through the adjustment cycle. The product matrix, with a wide range of interest rates, allowed for effective user matching with the right products, which maximized reach and retention despite regulatory changes.

A：The three key business highlights mentioned are the resilience of the V ecosystem, prudent provision coverage, and the reduction in funding costs.

A：The impact of industry risk volatility on the company's financials included an increase in total credit costs by 185 million to 1.3 billion. This was despite early signs of improvement in December following credit tightening measures, but overall risk indicators remained at an elevated level.

A：The provision ratio for new loans grew by 27 basis points from the third quarter to 7.24%, and the funding costs declined substantially from 4.4% in the third quarter to 3.8%.

A：The company expects total loan origination to remain relatively stable in the first quarter of 2026.

A：In the new regulatory environment, the company's key strategy is centered around quality and compliance. They have built a solid foundation for future development by focusing on a user-centric approach, leveraging a unique business ecosystem to serve customers across different segments. The company also plans to further lower overall loan rates, remain committed to the offline inclusive finance market, and serve the micro and small business owner segment by enriching the supply of products across essential life service categories. They are expanding their technology solutions, empowerment, and overseas business, diversifying their revenue structure, and adhering to a consumer protection focus to enhance operational resilience.

A：The company provides a financial performance outlook for 2026 indicating that with risk levels stabilizing, they will adopt a more proactive user acquisition strategy to bring the business back onto a path of steady, normalized growth. They expect loan volume to gradually return to a normalized growth range following a period of bottoming out, assuming no new macroeconomic shocks. For the first quarter of 2026, the company expects to continue strengthening risk control while intensifying efforts on high-risk loans to ensure sustainable risk levels.

A：The company's dividend policy involves a dividend payout ratio of 30% of outstanding net profit starting from the second half of 2025. They have also completed 80% of their current repurchase program and have executed a personal share repurchase plan. Following the earnings release, the company will continue with the remaining portion of their share repurchase program to enhance shareholder returns.