Xiaoxiong Ye • UBS Group AG

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CFO Jiayuan Xu explained that loan application demand held steady in April and May, with May's demand surpassing March levels. He noted that while the company has selectively adjusted its risk appetite for marginal assets due to macro uncertainty, they remain confident in their full-year guidance. Mr. Xu attributed the 10 basis point sequential increase in China's take rate to a 10 basis point reduction in funding costs and a slight extension in loan tenure, expecting the take rate to stabilize.

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CFO Jiayuan Xu explained that international operating costs and profitability are dependent on the maturity of each market. He noted that Indonesia achieved a $5 million profit in 2024, which is expected to at least double in 2025, while the Philippines is projected to reach profitability in 2025. Regarding shareholder returns, Mr. Xu highlighted the revised dividend policy, which increases the payout to 20-30% of net income, and the new $150 million share repurchase program. He affirmed the company's capacity to balance strategic investments in global expansion with increasing shareholder returns.

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CFO Jiayuan Xu, translated by Jimmy Tan, explained that the China loan volume growth was driven by a 12% sequential increase in customer applications and the acquisition of 400,000 new, high-quality borrowers. He noted that while demand slowed slightly in late October, it remains significantly improved from H1, with confidence for Q4 bolstered by government stimulus. Regarding Indonesia, Mr. Xu stated that the company has completed its transition to the new 0.3% daily rate pricing cap, has not received notice of further declines, and expects the Indonesian cash loan business to contribute more meaningful profits under the stable pricing environment.

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President Kan Li attributed the growth outlook to the company's strategy of acquiring new customers and graduating them to better products, stating this path will continue. He expressed confidence in navigating potential regulatory shocks. Regarding regulations, Mr. Li confirmed active discussions with funding partners and a commitment to full compliance by the October deadline. CFO Fuya Zheng added that strong customer acquisition since late last year supports the growth, and while the company is confident in its 30% annual volume growth target, there is some uncertainty for Q4. He also noted that the company is technologically prepared to adapt to new policies.

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CRO Yan Zheng explained that a strategic reduction in early repayment reminders to improve user experience caused a slight, non-impactful rise in Day 1 delinquency and collection rates, while the core C2M2 risk metric remained stable and at its lowest level of the year. CFO Zuoli Xu added that the net take rate approached 6% in Q4 and that for 2025, the company has sufficient margin to test strategies for incremental profitability, targeting a full-year take rate above 5%.

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CFO Zuoli Xu explained that the large write-back was due to a prudent provisioning policy where new provisions (around 4.3-4.4%) exceed expected vintage losses, combined with significant improvements in risk metrics. He expects sizable write-backs to continue. CEO Haisheng Wu addressed competition by stating that Qifu operates in a differentiated market and its upgraded platform model enhances customer retention and makes the business more resilient compared to single-service loan providers.

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