X Financial (XYF) 2022 Q3 法說會逐字稿

Hello, and welcome to the X Financial Third Quarter 2022 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Victoria Yu. Please go ahead.

您好，歡迎來到 X Financial 2022 年第三季度收益電話會議。 （操作員說明）請注意，正在記錄此事件。我現在想把會議轉交給 Victoria Yu。請繼續。

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 from 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're all available to answer your questions during the Q&A session.

謝謝你，運營商。大家好，感謝您今天加入我們。公司的業績今天早些時候發布，可在公司的 IR 網站 ir.xiaoyinggroup.com 上查閱。今天來自 X Financial 的電話是總裁 Kan Li 先生；首席財務官鄭福亞先生。李先生將簡要介紹公司的業務運營和亮點，隨後鄭先生將介紹財務情況。他們都可以在問答環節回答您的問題。

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 management's current expectations and current market and operating conditions and relate to events that involve known and unknown 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 actual results, performance and achievements to differ materially from those in the forward-looking statements.

我提醒您，根據 1995 年《私人證券訴訟改革法案》的安全港條款，本次電話會議可能包含前瞻性陳述。此類陳述基於管理層當前的預期以及當前的市場和運營狀況，並與涉及已知和未知的事件相關風險、不確定性和其他因素，所有這些都難以預測，其中許多因素超出了公司的控制範圍，可能導致公司的實際結果、業績和成就與前瞻性陳述中的存在重大差異。

Further information regarding these 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 law.

有關這些和其他風險、不確定性和因素的更多信息包含在公司向美國證券交易委員會提交的文件中。公司不承擔因新信息、未來事件或其他原因而更新任何前瞻性陳述的任何義務，除非法律要求。

It is now my pleasure to introduce Mr. Kan Li. Mr. Li, please go ahead.

現在我很高興向大家介紹李侃先生。李先生，請繼續。

Hello, everyone. We are pleased with our operational and financial results in the third quarter. The loan facilitation amount reached the high end of our previous guidance. Asset quality steadily improved, and both top line and bottom line saw sequential growth. Against the macro headwinds such as economic slowdown and consumption softness amid the COVID-19 resurgence, our performance further demonstrates our healthy fundamentals, effective strategic positioning, program strategy and strong execution capabilities.

大家好。我們對第三季度的運營和財務業績感到滿意。貸款促成金額達到了我們之前指導的上限。資產質量穩步提升，收入和利潤環比增長。面對 COVID-19 復甦期間經濟放緩和消費疲軟等宏觀逆風，我們的業績進一步證明了我們健康的基本面、有效的戰略定位、計劃戰略和強大的執行能力。

During the third quarter, our total loan amount facilitated and originated reached about RMB 20 billion, an increase of 31% year-over-year and 17% quarter-over-quarter. We continued to improve our asset quality with prudent risk management. On a sequential basis, the delinquency rates for all outstanding loans past due for 31 to 60 days decreased from 0.93% to 0.77% as of the end of September. In addition, we further expanded our premium borrower base.

第三季度，我們促成和發起的貸款總額達到約人民幣200億元，同比增長31%，環比增長17%。我們通過審慎的風險管理持續改善資產質量。按順序計算，截至 9 月底，所有逾期 31 至 60 天未償還貸款的拖欠率從 0.93% 下降至 0.77%。此外，我們進一步擴大了優質借款人基礎。

Our number of active borrowers increased to 1.4 million in the third quarter, a new record in the company's history. This expanding premium borrower base has underpinned our quality growth during challenging times and laid a solid foundation for our future development.

我們的活躍借款人數量在第三季度增加到 140 萬，創下了公司歷史上的新紀錄。這種不斷擴大的優質借款人基礎支撐了我們在充滿挑戰的時期的高質量增長，並為我們未來的發展奠定了堅實的基礎。

Moving ahead, we will continue to enhance our risk management and borrow acquisition efforts. We believe China's consumer and micro and small business financing market still have great potential, and we are confident of delivering sustainable growth in the long term. During recent months, we continued to execute our share repurchase program initiated earlier this year.

展望未來，我們將繼續加強風險管理和借款收購工作。我們相信中國的消費和小微企業融資市場仍有巨大潛力，我們有信心實現長期可持續增長。最近幾個月，我們繼續執行今年早些時候啟動的股票回購計劃。

This share repurchase program is aligned with our commitment to enhancing shareholder value and reflects the Board's confidence in the company's long-term prospects. Our Board further increased our share repurchase program to USD 30 million. We believe that our business strategy and execution will continue to further enhance shareholder value in the long term.

該股票回購計劃符合我們提高股東價值的承諾，反映了董事會對公司長期前景的信心。我們的董事會進一步將我們的股票回購計劃增加到 3000 萬美元。我們相信，從長遠來看，我們的業務戰略和執行將繼續進一步提升股東價值。

Now I will turn the call to Frank, who will go through our financials.

現在我將把電話轉給弗蘭克，他將檢查我們的財務狀況。

Thank you, Kan, and hello, everyone. We are pleased to deliver a steady financial performance in the third quarter. The total net revenue increased by 9% quarter-over-quarter to RMB 895 million, while net income increased by 14% quarter-over-quarter to RMB 212 million. We continue to deepen our collaboration with institutional funding partners to serve diverse personal financing needs and disciplined cost control measures to improve operational efficiency.

謝謝你，Kan，大家好。我們很高興在第三季度實現穩定的財務業績。總淨收入環比增長 9% 至人民幣 8.95 億元，而淨利潤環比增長 14% 至人民幣 2.12 億元。我們繼續深化與機構資金合作夥伴的合作，以滿足多樣化的個人融資需求和嚴格的成本控制措施，以提高運營效率。

Despite macro uncertainties ahead, we believe we are well positioned in the market with our trusted brand, strong technology and underlying earnings strength. We will strike a balance to drive long-term growth and increase shareholder value through sound capital allocation strategy.

儘管未來存在宏觀不確定性，但我們相信我們憑藉值得信賴的品牌、強大的技術和潛在的盈利能力在市場上處於有利地位。我們將通過穩健的資本配置策略在推動長期增長和增加股東價值之間取得平衡。

Now I would like to review some financial performance for the third quarter. Please note that all numbers stated are in RMB and rounded up. Total net revenue decreased by about 7% to RMB 895 million from RMB 964 million in the same period of 2021, partially due to a decrease in average total borrowing cost of the borrower and also partially offset by an increase in the total loan amount facility and originated this quarter compared with the same period of 2021. Origination and servicing expenses increased by 12% to RMB 540 million from RMB 484 million in the same period of 2021, primarily due to the following factors: one, an increase in commission fees resulting from the increase in the total loan amount facilitated originated this quarter; second, an increase in interest expenses as a result of increased payable to the institutional fund partners; third, the partial offset by a decrease in insurance fee paid to the insurance company.

現在我想回顧一下第三季度的一些財務業績。請注意，所有數字均以人民幣為單位並四捨五入。總淨收入從 2021 年同期的人民幣 9.64 億元下降約 7% 至人民幣 8.95 億元，部分原因是藉款人的平均總借貸成本下降，也部分被總貸款額度的增加和本季度發起與 2021 年同期相比。發起和服務費用從 2021 年同期的人民幣 4.84 億元增長 12% 至人民幣 5.4 億元，主要是由於以下因素：一是佣金費用增加本季度促成的貸款總額增加；二是應付機構基金合夥人增加導致利息支出增加；第三，部分被支付給保險公司的保險費減少所抵消。

Provisions for the loans receivable was RMB 70 million compared with RMB 10 million in the same period of 2021 primarily due to an increase in loans receivables held by the company as a result of increase in the total loan amount facilitated and originated this quarter compared with the same period of 2021, partially offset by a decrease in the average SME default rate compared with the same period of 2021.

應收貸款撥備為人民幣 7,000 萬元，2021 年同期為人民幣 1,000 萬元，主要原因是本季度促成發放的貸款總額較上年同期增加，導致公司持有的應收貸款增加。 2021 年同期，部分被中小企業平均違約率與 2021 年同期相比的下降所抵消。

Income from operations was RMB 300 million compared with RMB 411 million in the same period of 2021. Net income was RMB 212 million compared with RMB 267 million in the same period of 2021. Non-GAAP adjusted net income was RMB 231 million compared with RMB 277 million in the same period of 2021. For further financial information, please refer to the earnings release on our IR website.

營業收入為 3 億元人民幣，2021 年同期為 4.11 億元人民幣。淨收入為 2.12 億元人民幣，2021 年同期為 2.67 億元人民幣。非美國通用會計準則調整後淨收入為 2.31 億元人民幣，2021 年同期為 2.31 億元人民幣。 2021 年同期為 2.77 億美元。有關更多財務信息，請參閱我們 IR 網站上的收益發布。

Regarding our share repurchase plan. On September 30, 2022, we announced that our Board authorized an increase in our share repurchase program to USD 20 million from USD 50 million effective through September 2023. Today, we had purchased an average of about 218,000 ADS and approximately 38 million Class A volume shares for a total consideration of USD 18 million. On November 16, 2022, we announced that our Board had authorized to further increase the share purchase program to USD 30 million. The share repurchase program will remain effective through September 2023.

關於我們的股票回購計劃。 2022 年 9 月 30 日，我們宣布董事會授權將我們的股票回購計劃從 5000 萬美元增加到 2000 萬美元，有效期至 2023 年 9 月。今天，我們平均購買了約 218,000 股美國存託憑證和約 3800 萬股 A 類股票股份，總代價為 1800 萬美元。 2022 年 11 月 16 日，我們宣布董事會已授權將股票購買計劃進一步增加至 3000 萬美元。股票回購計劃將一直有效到 2023 年 9 月。

Now for our business outlook. We expect total loan amount facilitated and for originated for the fourth quarter of 2022 to be between RMB 19.5 billion and RMB 21 billion. For the full year of 2022, we expect total loan amount facilitated and originated to be between RMB 71.5 billion and RMB 73 million. This forecast reflects our current and limited views which are subject to change.

現在是我們的業務前景。我們預計 2022 年第四季度促成和發放的貸款總額將在 195 億元人民幣至 210 億元人民幣之間。對於 2022 年全年，我們預計促成和發起的貸款總額將在 715 億元人民幣至 7300 萬元人民幣之間。該預測反映了我們當前的有限觀點，這些觀點可能會發生變化。

Now this concludes our prepared remarks, and we would like to open the call to the questions. Operator, please?

現在我們準備好的發言到此結束，我們想開始提問。接線員，請說？

(Operator Instructions) The first question comes from Brad Hines with Equinox Capital.

（操作員說明）第一個問題來自 Equinox Capital 的 Brad Hines。

Can you discuss your outlook for the take rate? And just any kind of discussion about how the interest rates have been trending since Q3?

你能談談你對接受率的看法嗎？關於自第三季度以來利率趨勢如何的任何討論？

Regarding our take rate, because as a business still in the process to meet the demand regarding the products all should be below 24%, that is not a hard target, but it's a soft target. So we are somewhere -- the take rate for the different products between 2% to 3% all the way to like 8% to 9%, so for different products, for different takeout. We do not give overall takeout rate for ourselves.

關於我們的 take rate，因為作為一個仍在滿足產品需求過程中的企業，應該低於 24%，這不是一個硬目標，而是一個軟目標。所以我們在某個地方——不同產品的取貨率從 2% 到 3% 一直到喜歡 8% 到 9%，所以對於不同的產品，對於不同的外賣。我們不給自己整體的外賣率。

Right. So my question is really, do you think that interest rates that you can charge borrowers, has that sort of stabilized? Is it -- or is it still continuing to go down? What kind of competitive pressures, regulatory pressures are you continuing to see?

正確的。所以我的問題是，你認為你可以向借款人收取的利率已經穩定下來了嗎？是——還是繼續下降？您繼續看到什麼樣的競爭壓力和監管壓力？

The pressure from interest rate is mainly from the regulatory pressure. We expect we'll continue to go down to be stabilized in -- sometime in the middle of next year. That's the best answer I can give you right now.

利率壓力主要來自監管壓力。我們預計我們將繼續下降以穩定在 - 明年年中的某個時候。這是我現在能給你的最好答案。

Okay. And how are you able to continue to generate such strong loan demand? You spend relatively very little on sales and marketing. How are you finding customers that fit your risk model?

好的。您如何能夠繼續產生如此強勁的貸款需求？您在銷售和營銷上的花費相對較少。您如何找到適合您的風險模型的客戶？

Well, actually, we -- this year, we spent more on sales and marketing compared with the same period last year. And I think that mainly, the demand for our products, demand, the potential market is very, very large. And we only -- I mean, for all the players put together, we still tap a very small percentage of those demands.

好吧，實際上，與去年同期相比，我們今年在銷售和營銷上的支出更多。我認為主要是對我們產品的需求，需求，潛在市場非常非常大。我們只是 - 我的意思是，對於所有參與者來說，我們仍然只滿足這些需求中的一小部分。

And one factor maybe as a benefit to us is that [Mali] is regulated very -- from capital requirement perspective, it's been being regulated very strongly by the regulator for the last year or so. So their volumes shrink a lot. So everybody else in the -- every other player in the market all cause some got some share from them. But overall market, I believe, still quite stabilized, never shrink much.

一個可能對我們有利的因素是 [馬里] 受到嚴格監管 - 從資本要求的角度來看，監管機構在過去一年左右的時間裡對其進行了非常嚴格的監管。所以他們的體積縮小了很多。因此，市場中的其他所有人——市場上的所有其他參與者都會導致一些人從他們那裡獲得一些份額。但我相信，整體市場仍然相當穩定，不會縮水太多。

And are you continuing to target more individuals as opposed to SME?

您是否繼續針對更多個人而不是中小企業？

Well, I think most of our customer is individuals, even though I'm not quite sure, somewhere between maybe 10% to 20% among them are small business owners or small business. But we don't have an exact figure. We don't -- we never have a pool on those figures, but we guess it's between 10% to 20% belong to -- they are small business owners also.

好吧，我認為我們的大部分客戶都是個人，儘管我不太確定，其中大約 10% 到 20% 是小企業主或小企業。但我們沒有確切的數字。我們沒有——我們從來沒有這些數字的集合，但我們猜測它有 10% 到 20% 屬於——他們也是小企業主。

One other question about your share buyback. What is the shares outstanding for your Class A shares as of the end of the quarter? So not the weighted average, but what is the actual share count as of September 30?

關於您的股票回購的另一個問題。截至本季度末，您的 A 類股票的流通股是多少？所以不是加權平均數，而是截至 9 月 30 日的實際份額數是多少？

Okay. I think the share, maybe -- I have maybe like a November 13 number but that number is maybe a little bit not quite a big difference from what you want to know. So we have a Class A share, it's about 193,429,088 plus A shares, and we have 97,600,000 plus B share. We -- in aggregate, we bought back about 38,088,855 common Class A shares equivalent because some of them -- among them, about 21,000 is ADS. On ADS is counted for about 6 ordinary shares. The Class A share, Class B shares, is the same thing, but except the voting power.

好的。我認為份額，也許 - 我可能喜歡 11 月 13 日的數字，但這個數字可能與你想知道的有一點不同。所以我們有 A 類股，大約 193,429,088 股加 A 股，我們有 97,600,000 股加 B 股。我們 - 總共回購了約 38,088,855 股普通 A 類股票，因為其中一些 - 其中約 21,000 股是 ADS。在美國存託憑證中，約有 6 股普通股。 A 類股份、B 類股份是一回事，只是投票權不同。

Right. And how many of those -- so that -- the 38 million, was that repurchased entirely in the quarter?

正確的。其中有多少 - 所以 - 3800 萬是在本季度完全回購的？

In the quarter -- I think in the quarter, we did about 218,178 shares ADS and 28,201,772 ordinary class A share. And actually, we already did in -- it's -- another 9 million, almost 10 million, in October.

在這個季度——我認為在這個季度，我們做了大約 218,178 股 ADS 和 28,201,772 股普通 A 股。實際上，我們已經在 10 月份完成了——它是——另外 900 萬，將近 1000 萬。

Okay. So it's interesting how you're executing the buyback. It seems that you're not able to do it in the open market here in the U.S. because of the volume -- the trading volume is very low.

好的。所以你如何執行回購很有趣。由於交易量，您似乎無法在美國這裡的公開市場上這樣做——交易量非常低。

Yes. The volume is indeed is very low, and we are under the law like 10b5 and 10b18. So we only can buy like only like below 25% growth and on a daily basis. Also, we could not get anybody higher than that. So among 218,000,000 share, only about 86 million is brought from open market during the opening window.

是的。音量確實很低，我們在10b5和10b18之類的法律下。所以我們只能購買低於 25% 的增長並且每天都這樣。此外，我們找不到比這更高的人。因此，在 218,000,000 股中，只有大約 8600 萬股是在開盤窗口期間從公開市場帶來的。

Another 132,000 share ADS is bought back from one of the employees who have ADS also during the open window. The order shares also did in open window and 9 million is -- we signed a contract with them in open window because they took them some time to set up an account to receive U.S. dollar. So until like October, we pay out money.

另外 132,000 股美國存託憑證是從一名在開放窗口期間也擁有美國存託憑證的員工手中買回的。訂單份額也在開放窗口中完成，900 萬是——我們在開放窗口中與他們簽訂了合同，因為他們花了一些時間來建立一個賬戶來接收美元。所以直到十月，我們才付錢。

Yes. I hope you will continue to repurchase stock at these levels. You're obviously trading well below book value. Your price earnings multiple are very, very low.

是的。我希望您將繼續以這些水平回購股票。您的交易價格顯然遠低於賬面價值。你的市盈率非常非常低。

Yes. We expanded our repurchase program, which has demonstrated our intention to continue to do the buyback. But I think based on current volume, we still expect very low volume will be bought back from open market unless the situation change. But we have -- we still have a few 1 or 2 individuals willing to sell their Class A share back to us directly. So you will see -- the next quarter we'll see more, but not as big as the number we just already did, really small.

是的。我們擴大了回購計劃，這表明我們打算繼續進行回購。但我認為，根據目前的成交量，除非情況發生變化，否則我們仍預計將從公開市場回購的成交量非常低。但是我們 - 我們仍然有一些 1 或 2 個人願意將他們的 A 類股票直接賣回給我們。所以你會看到——下個季度我們會看到更多，但不會像我們剛剛所做的那樣大，真的很小。

But those number, we -- I calculate, we already bought back total over 11% of the Class A, Class B share equivalent back from the market. And we'll continue to do that. We may be another -- have another few percentage points to do that. After that, I think we situation will be depending on the market volume. And for the next year, I think we will use a combination of the stock buyback and the dividend payout to return to shareholder value.

但這些數字，我們——我計算過，我們已經從市場上回購了總計超過 11% 的 A 類、B 類股票。我們將繼續這樣做。我們可能是另一個——還有幾個百分點可以做到這一點。在那之後，我認為我們的情況將取決於市場容量。明年，我認為我們將結合股票回購和派息來回報股東價值。

That sounds great. Can you -- are you able to...

聽起來不錯。你能——你能不能……

Most likely in the second half of the year. Most likely, the dividend payout most likely will be happening in the second half of next year because as I talked about, 1 year to set a mechanism to get RMB converted into the U.S. dollar with like the 5% tax on those dividend payout to the Hong Kong because China has a currency control mechanism where China until now don't have free conversion for the RMB and the U.S. dollar or other currency, trying to have capital control at place.

最有可能在今年下半年。最有可能的是，股息支付最有可能發生在明年下半年，因為正如我所說，1 年內建立一種機制，將人民幣兌換成美元，並對這些股息支付徵收 5% 的稅香港，因為中國有貨幣管制機制，中國直到現在還沒有人民幣和美元或其他貨幣的自由兌換，試圖在適當的地方進行資本管制。

So if you want to do that kind of thing, you need to have some mechanism to set up. We are doing that. And we expect to be -- next year to be finished in the first half of next year. And the money we use right now, we use our current U.S. dollar, we got through IPO.

所以如果你想做那種事情，你需要有一些機制來建立。我們正在這樣做。我們預計明年將在明年上半年完成。我們現在使用的錢，我們使用當前的美元，我們通過 IPO 獲得。

Right. How are you feeling about next fiscal year? Do you still -- you've obviously dealt with a lot of headwinds, regulatory, economic in fiscal year '22. Some of those appear to be lifting going forward. So I would presume that -- and you've still been able to grow your loan originations even in the face of that. How are you feeling about what the potential growth could be for fiscal for next year?

正確的。您對下一個財政年度感覺如何？你是否仍然——你顯然在 22 財年處理了很多不利因素、監管和經濟方面的問題。其中一些似乎正在向前發展。所以我會假設——即使面對這種情況，你仍然能夠增加你的貸款發放。您如何看待明年財政的潛在增長？

For the next year, I think we still have a great uncertainty regarding next year. I think that's why you never heard anybody -- even at end of year, any player give you any concrete forecast for the next year. I think the big uncertainty is still regulatory stuff. And -- but the general feeling is after finishing the 2020 Party Congress, the leadership would be set up, and overall, all the industries expect there will be no more draconian measure, additional measure to be issued.

對於明年，我認為我們對明年仍有很大的不確定性。我認為這就是為什麼你從來沒有聽到任何人——即使是在年底，任何球員都會給你明年的任何具體預測。我認為最大的不確定性仍然是監管問題。而且——但總體感覺是在 2020 年黨代會結束後，領導層將成立，總體而言，所有行業都預計不會有更多嚴厲的措施、額外的措施出台。

And we will -- all the industry regarding to the regulatory will be focused on implementation for the current -- all the stuff they've been issued before. So we will -- fortunately, for us, because we are not in the first here to be kept those rule. And we will definitely follow up like [Mali], and we have hope they will give us some examples. But once again, we are cautiously optimistic for the next year, but no guarantee.

我們將 - 所有與監管有關的行業都將專注於當前的實施 - 他們之前發布的所有內容。所以我們會——幸運的是，對我們來說，因為我們不是第一個要遵守這些規則的人。我們肯定會像[馬里]一樣跟進，我們希望他們能給我們一些例子。但我們再次對明年持謹慎樂觀態度，但不能保證。

Okay. Last question and then I'll drop off. In terms of your stock and the listing here in the U.S., I think one of the big concerns that investors have is that you could be delisted for various reasons. What assurance can you give investors that you're going to be able to find some way to help remove that risk of delisting? I mean, would you consider taking the company private if it came to that?

好的。最後一個問題，然後我就結束了。就您的股票和在美國上市而言，我認為投資者最擔心的問題之一是您可能會因各種原因被退市。你能向投資者保證你將能夠找到某種方法來幫助消除退市風險嗎？我的意思是，如果到了那個時候，你會考慮將公司私有化嗎？

We don't have an intention to delisting, and we don't have a plan to do second listing in Hong Kong because we couldn't do second listing in Hong Kong because our market size is just not big enough. So that's not an option for us. But we are very pleased to know that the examiner from PCLV, they wrapped up their early work in Hong Kong earlier, about 2 weeks. I think in -- within the next 2 months, I think the SEC will have some kind of revaluation with Chinese Finance Minister. I think that those will, to a large extent, will resolve the issue regarding potential risks -- Chinese-listed company in the U.S. to be delisted because of the U.S. law.

我們沒有退市的打算，也沒有去香港二次上市的打算，因為我們的市場規模不夠大，不能去香港二次上市。所以這不是我們的選擇。但我們很高興得知來自 PCLV 的考官，他們提前完成了在香港的早期工作，大約 2 週。我認為在接下來的兩個月內，我認為 SEC 將與中國財政部長進行某種形式的重估。我認為這些在很大程度上會解決潛在風險的問題——在美國上市的中國公司因為美國法律而被退市。

To be honest with you, the delisting is mainly is a concern from the U.S. side, not from Chinese side. So if that issue to be resolved, so which means our auditing firms in China, their working paper could be -- will be subject to examination by the PCLV in the future. I think most of the company, maybe except a few state-owned company, there may be exceptions, but all the private company listing in the U.S. will continue to be listed in the U.S. That's the best I can tell you.

老實說，退市主要是美方的擔憂，而不是中方的擔憂。因此，如果該問題得到解決，那麼這意味著我們在中國的審計公司，他們的工作文件可能會——將在未來接受 PCLV 的審查。我想大部分公司，可能除了少數國有公司，可能會有例外，但是所有在美國上市的私營公司都會繼續在美國上市。我能告訴你的是最好的。

The next question comes from Matthew Larson with (inaudible).

下一個問題來自 Matthew Larson（聽不清）。

The previous caller covered a lot of ground and so probably answered a number of my questions. But let me ask you all this. On the share buyback, you did little, if any, in the ADS because 212,000 x roughly $2 is $400,000, $500,000. I think that's what you had said you had done last quarter. So the transactions have been done in the Class A or B shares, which reduces your outstanding and increases your earnings nicely. So that's a positive. But I guess we won't see a bid in the market here for the ADS because it's not very liquid.

之前的來電者涵蓋了很多方面，因此可能回答了我的一些問題。但是讓我問你這一切。在股票回購中，你在 ADS 中幾乎沒有做任何事情，因為 212,000 x 大約 2 美元等於 400,000 美元，500,000 美元。我認為這就是你所說的上個季度所做的。所以交易是在 A 類或 B 類股票中完成的，這減少了你的流通股並很好地增加了你的收入。所以這是積極的。但我想我們不會在這裡看到市場上對 ADS 的出價，因為它的流動性不強。

But why do you think your company trades at 1x its earnings, okay? It's entire capitalization you earn and you also got a cash balance that is almost equal to the entire market cap. There's another company, I'll just mention it, it's U &I, which trades at 1/5 of its cash. They have no debt. And it trades at less than 1x earnings, and levels that make no sense at all because trading below the cash on the balance sheet, particularly if you're growing the way you are.

但是你為什麼認為你的公司的交易價格是其收益的 1 倍，好嗎？這是您賺取的全部資本，您還獲得了幾乎等於整個市值的現金餘額。還有另一家公司，我只是提一下，它是 U & I，它以 1/5 的現金進行交易。他們沒有債務。而且它的市盈率不到 1 倍，而且這個水平根本沒有意義，因為交易低於資產負債表上的現金，特別是如果你按照自己的方式增長的話。

So my question is, why do you think that's the case? And to add to that, what do fintechs or lending platforms like you have, what sort of multiple do they trade at, say, in Shenzhen or Shanghai or even Hong Kong? So as a comparison, we could see how U.S. investors are unwilling to pay up versus if you were to somehow get relisted or to go private and sell to somebody else or -- there must be a frustration on your part that the company is priced as low as it is.

所以我的問題是，你認為為什麼會這樣？除此之外，像你們這樣的金融科技或借貸平台有什麼，它們在深圳、上海甚至香港的交易倍數是多少？因此，作為比較，我們可以看到美國投資者是如何不願意支付的，而如果你以某種方式重新上市或私有化並出售給其他人，或者 - 你一定會對公司的定價感到沮喪低，因為它是。

So I'll take that question. I think it's really difficult to determine what is the right price for the stock, right? Someone asked us before. And my answer has always been, well, this is really not the question that I'm trying to answer. I think this is a question that the U.S. investors probably have a better answer than we as the management of the company. Even though it's difficult to determine the real price, but I think that we all agree that our valuation is certainly much, much lower than what we should be. So in that sense, that we still hope that some people will take interest in us and buying our stocks.

所以我會回答這個問題。我認為確定股票的合適價格真的很難，對吧？之前有人問過我們。我的回答一直是，好吧，這真的不是我要回答的問題。我想這是一個美國投資者可能比我們作為公司管理層有更好答案的問題。儘管很難確定實際價格，但我認為我們都同意我們的估值肯定比我們應該的低很多很多。所以從這個意義上說，我們仍然希望有些人會對我們感興趣併購買我們的股票。

That being said, I think right now the fintech valuation has been extremely, extremely low. And you asked us what is a comparable company to us in terms of either Asia or in Mainland China or Hong Kong market. And I can tell you that there is no fintech stocks in Asia. So they're absolutely np comparison. There are some -- the so-called fintech company, but I'm really not paying attention.

話雖如此，我認為目前金融科技的估值已經非常非常低了。你問我們在亞洲或中國大陸或香港市場方面與我們有可比性的公司是什麼。我可以告訴你，亞洲沒有金融科技股。所以他們絕對是np比較。有一些——所謂的金融科技公司，但我真的沒有註意。

As a management of the company that we don't really pay too much attention on our stock. But our goal has always been trying to deliver stable growth in terms of both scale and profit for our company. And that has always been our goal. And no matter what is the price of our stock, we are always trying to achieve that goal.

作為公司的管理層，我們並沒有真正關注我們的股票。但我們的目標一直是努力為公司實現規模和利潤的穩定增長。這一直是我們的目標。無論我們的股票價格是多少，我們都在努力實現這一目標。

And in terms of what is the right valuation model for our company, I think many people can see that we continue to deliver very stable growth, very stable profit. But the concern has always been, number one, the supervision -- the Supervisory Committee will allow our company to survive or whatever that is. And I think that's always been the number one. And the second one, of course, is due to the so-called conflict between China and the U.S. There has always been some uncertainty with regard to how long that our company can be listed in the market, I think that both you and the previous caller have been asking the same question, right?

就我們公司正確的估值模型而言，我想很多人都可以看到我們繼續實現非常穩定的增長，非常穩定的利潤。但問題一直是，第一，監督——監事會會讓我們的公司生存或其他什麼。我認為這一直是第一位的。還有第二個，當然是因為所謂的中美之間的衝突，我們公司能上市多久，我覺得你和之前的那個，一直有一些不確定性來電者一直在問同樣的問題，對嗎？

Because of these 2 huge uncertainties, I don't think that you will see not high value, not even fair valuation for the fintech companies. So my prediction can be that as long as these 2 uncertainty exists, that we won't see a very high valuation or even a fair valuation for our company.

由於這兩個巨大的不確定性，我認為你不會看到金融科技公司的價值不高，甚至不公平。所以我的預測是，只要這兩個不確定性存在，我們就不會看到我們公司的估值非常高，甚至是公平估值。

Let me add some more color for your question. I think that your observation is correct, which means our -- not just our stock, but our peers, in this space, all the so-called fintech company in China or buyer for some cases have been on strike for some time now. The reason -- the biggest reason I think I could come up with, the first one is legal risk.

讓我為您的問題添加更多顏色。我認為你的觀察是正確的，這意味著我們 - 不僅僅是我們的股票，還有我們的同行，在這個領域，所有所謂的中國金融科技公司或某些情況下的買家現在已經罷工一段時間了。原因——我認為我能想到的最大原因，第一個是法律風險。

Legal risk is -- you see something like some educational company in China investing like one day -- the day you legally could operate; the second day, you are out of business. That's -- by those kind of risks, without any warning, definitely could be applied to anyone.

法律風險是——你看到某家教育公司在中國投資，就像有一天——你可以合法經營的那一天；第二天，你倒閉了。那就是——通過那種風險，在沒有任何警告的情況下，絕對可以適用於任何人。

We -- our fintech industry because we charge maybe -- the market that we focus on is the supply market. So it's not that politically correct or favorable in China. I believe you understand that. The second one is, I think that, say, lightly all at buyers -- all the purchaser in the U.S. is pretty spooked to say the least, because I know that all the institutional, they have a legal responsibility to responsibly manage client's money. And therefore invest something could be out of the business or legally out the business in 1 day is just something could not be accepted. That kind of risk is not something you can calculate. I think that's the big -- legal risk is the biggest reason.

我們——我們的金融科技行業，因為我們可能收費——我們關注的市場是供應市場。所以這在中國不是那麼政治正確或有利。我相信你明白這一點。第二個是，我認為，所有的買家都輕描淡寫——至少可以說，美國的所有買家都非常害怕，因為我知道所有的機構，他們都有法律責任負責任地管理客戶的資金。因此，投資的東西可能會在 1 天內退出業務或合法退出業務，這是無法接受的。那種風險不是你可以計算的。我認為這是最大的 - 法律風險是最大的原因。

The other reason is the phenomena is like that, it's not just we are trading below -- around or below the cash, it's even for the contract so nobody seems like losing money. And the only reasonable conclusion is all the management in the tech, fintech company in China will manage the company very irresponsible way.

另一個原因是現象就是這樣，不僅僅是我們在低於現金的價格附近或低於現金交易，甚至是合約，所以沒有人似乎在虧錢。唯一合理的結論是所有的管理都在科技，中國的金融科技公司會以非常不負責任的方式管理公司。

They're not just not going to increase shareholder value and they will be squander all the money they already have. Otherwise, how can you like price those stuff at such ridiculous way. But I think that the time will tell.

他們不僅不會增加股東價值，而且會揮霍他們已經擁有的所有資金。否則，你怎麼會喜歡以這種荒謬的方式給那些東西定價。但我認為時間會證明一切。

And I think the PCAOB have ability and can examine the -- auditing all different operate in China will -- maybe will alleviate those kinds of concerns over time. And also, I think is the maybe a circus, I think for the U.S. investor. They probably we would like to see the regulatory situation to be stabilized somewhat before to any invest -- meaningful investment.

而且我認為 PCAOB 有能力並且可以檢查 - 審計在中國的所有不同業務 - 可能會隨著時間的推移減輕這些擔憂。而且，我認為對於美國投資者來說，這可能是一場馬戲團表演。他們可能希望看到監管情況在任何投資之前有所穩定 - 有意義的投資。

For us, I think we are just take this advantage and do our -- do all that we can to manage the company the best way know-how and do more buyback and that kind of stuff. I think that over the long run, maybe whatever we do right now will be correct. Thank you.

對我們來說，我認為我們只是利用這一優勢並儘我們所能——盡我們所能以最好的方式管理公司，並做更多的回購和類似的事情。我認為從長遠來看，也許我們現在所做的一切都是正確的。謝謝。

I have one -- I guess one more question. You've touched a couple of times about the threat of regulatory change that could eliminate your business model. So that was one of the risks. What would be the incentive of authorities in the PRC to eliminate a model that is presumably helping with consumption, getting money to people who need it to consume and you're doing it effectively at a rate that isn't frankly much different than here in the United States if somebody has credit cards, which are very common.

我有一個——我想還有一個問題。您已經多次談到可能會消除您的商業模式的監管變化的威脅。所以這是風險之一。中國當局消除一種可能有助於消費的模式的動機是什麼，把錢送到需要消費的人手中，而且你正在以一種坦率地說與這裡沒有太大不同的速度有效地做到這一點美國如果有人有信用卡，那是很普遍的。

But why -- what incentive for the authorities is there to do away with an industry that increases consumption and it's something that people rely on to manage their own cash flow needs, whether it's to buy PCs for school or whatever the case might be. So why would that be a risk?

但為什麼 - 當局有什麼動機取消一個增加消費的行業，這是人們依賴的東西來管理自己的現金流需求，無論是為學校購買 PC 還是其他情況。那為什麼會有風險呢？

Well, I'm sorry. We can't comment on what the government thinks, right? But we work closely with them. So if there's any way that we will -- that the government and us can reach good results, then I think that will be great for us and for our industry.

好吧，對不起。我們不能評論政府的想法，對吧？但我們與他們密切合作。因此，如果我們有任何辦法 - 政府和我們可以取得良好的結果，那麼我認為這對我們和我們的行業來說都是很好的。

All right. And then I guess, finally, how come there are no fintech companies that trade in Shenzhen or Shanghai? There's 4 or 5 that trade here in the United States. There was more, but some of them weren't managed very well. I'm thinking -- well, you know the ones I'm referring to, Velexa Fintech or 360 Digital. But why -- how come none are trading over there in the PRC?

好的。然後我想，最後，為什麼沒有在深圳或上海交易的金融科技公司？在美國這裡有 4 或 5 個交易。還有更多，但其中一些管理得不好。我在想——嗯，你知道我指的是 Velexa Fintech 或 360 Digital。但為什麼——為什麼沒有人在中國進行交易？

Well, I guess that already answered your previous question, right?

嗯，我想這已經回答了你之前的問題，對吧？

Actually -- go ahead.

實際上 - 繼續。

I'm sorry?

對不起？

No, that's it. I think that your observation is very acute. And I think that I basically answered your previous question.

不，就是這樣。我覺得你的觀察很敏銳。我認為我基本上回答了你之前的問題。

All right. I mean the only one that note -- not the notice Ant Financials had trouble coming, and it's a massive company. But there is expectations, I guess, that they will be listed at some point. But anyway, that's a different discussion.

好的。我的意思是唯一一個注意到的——不是螞蟻金服遇到麻煩的通知，它是一家大公司。但我想，人們期望它們會在某個時候上市。但無論如何，這是一個不同的討論。

Very well. And again, I hope you continue to do what you're doing,; which is returning money to shareholders. We're finally getting some sort of positive response as your stock is lifting along with many stocks listed in the form of ADS here. I look forward to following your progress.

很好。再一次，我希望你繼續做你正在做的事情；這是向股東返還資金。我們終於得到了某種積極的回應，因為您的股票與這里以 ADS 形式列出的許多股票一起上漲。我期待著關注你的進步。

Thank you for your questions.

謝謝你的問題。

And we have a follow-up from [Boyd Heinz] with Equinox Capital.

我們有 [Boyd Heinz] 與 Equinox Capital 的後續行動。

Just to follow on that discussion and conversation about how to increase interest in the stock here in the U.S. I don't know that you're followed by any analysts out there. So it's often very difficult for investors outside of China to even hear or learn about the company.

只是為了跟進關於如何增加對美國股票的興趣的討論和對話。我不知道那裡有任何分析師關注你。因此，中國以外的投資者通常很難聽到或了解該公司。

And the other thing that you could do, the management team could purchase shares here in ADS form and make some note of that publicly so that it's a reiteration of your confidence in the outlook of the company and in the company shares, which I think the delisting concern is and the risk is real because, as you've said, you were not large enough to relist in Hong Kong. So the concern that I have, as always, is that if you do lose your listing here in the U.S., I don't have any recourse as an investor in your company. So if you could somehow speak to those concerns, that would be great.

你可以做的另一件事是，管理團隊可以在這里以美國存託憑證的形式購買股票，並公開記錄下來，以重申你對公司前景和公司股票的信心，我認為退市的擔憂是存在的，風險是真實存在的，因為正如你所說，你的規模還不夠大，無法在香港重新上市。因此，一如既往，我擔心的是，如果你真的失去了在美國的上市資格，作為貴公司的投資者，我沒有任何追索權。因此，如果您能以某種方式解決這些問題，那就太好了。

No, we could consider that. Thank you.

不，我們可以考慮一下。謝謝。

Yes, the only one another (inaudible) I just write off IPO and because of the stock performance, I think most people think it's not worthwhile to cover us. I think maybe in the second half of next year after regulatory investing situation are more or less clear, and I'll finish, we will initiate those efforts to recruit someone to cover us. Thanks for your suggestion.

是的，唯一的另一個（聽不清）我剛剛註銷 IPO 並且由於股票表現，我認為大多數人認為不值得報導我們。我想也許在明年下半年監管投資情況或多或少清楚之後，我會完成，我們將啟動這些努力來招募人員來覆蓋我們。謝謝你的建議。

And we have a follow-up from [Matthew Larson] with (inaudible).

[Matthew Larson] 跟進了（聽不清）。

The threat of delisting, I had historically not dismissed but thought it was overrated for many companies because there have some that have just been delisted for other reasons historically here. Maybe they didn't their auditing done in time, their 20-Fs or something. And they went to the bulletin board or pink sheets, But they still traded, and many of them that I've owned that have went private, not always at the premium I would have liked.

退市的威脅，我歷來沒有駁回，但認為對許多公司來說被高估了，因為歷史上有些公司剛剛因其他原因退市。也許他們沒有及時完成審計，他們的 20-F 之類的。他們去了公告牌或粉紅色的床單，但他們仍然交易，我擁有的許多已經私有化，並不總是以我想要的溢價。

But if your company is too small to be listed in Hong Kong, what would be the recourse? Would you take -- taking it private would be the only thing because you would need to -- your majority shareholders, the people -- the founders of the company would need some vehicle to manage. Or is there a threat really that as you're too small to list in Hong Kong?

但如果你的公司規模太小，無法在香港上市，有什麼辦法？你會接受 - 將它私有化是唯一的事情，因為你需要 - 你的大股東，人們 - 公司的創始人需要一些工具來管理。或者真的有威脅，因為你太小而不能在香港上市？

I mean, there must be many small companies in your other exchanges on the Mainland. Or would you sell out to a larger entity that trades at 10x earnings? I mean, you're trading at 1x. So you could sell out if that was the only alternative at many times your current value, and it would be accretive to any borrower -- I'm sorry, any buyer.

我的意思是，你們在內地的其他交易所肯定有很多小公司。或者你會賣給一個以 10 倍收益交易的更大的實體嗎？我的意思是，你的交易價格是 1 倍。因此，如果這是您當前價值的許多倍的唯一選擇，您可以賣掉它，這對任何借款人來說都是增值的——對不起，任何買家。

I mean, are these options you've considered? Because there's been many small companies that have gone private, generally by the founder and at a premium because they went public 10 years ago at like $10. And now they're $1. I mean, what a great transaction. You raised money at $10 and you buy yourself back at a fraction of that, even though you've grown five or tenfold. So I guess if you could just address a little more about the risks of delisting, what recourse outside of going private is there?

我的意思是，您是否考慮過這些選項？因為有很多小公司已經私有化，通常由創始人私有化，而且價格較高，因為它們在 10 年前以大約 10 美元的價格上市。現在它們是 1 美元。我的意思是，多棒的交易啊。你以 10 美元的價格籌集資金，並以其中的一小部分回購自己，即使你已經增長了五倍或十倍。所以我想如果你能多說一點關於退市的風險，除了私有化之外還有什麼追索權？

No, no. I know. First of all, we believe the chances our -- to be delisting, this is very small because we always manage our business and even manage our book very responsibly. We do not afraid any audit work or to be checked by anyone.

不，不。我知道。首先，我們相信我們的 - 被退市的機會非常小，因為我們始終管理我們的業務，甚至非常負責任地管理我們的賬簿。我們不害怕任何審計工作或被任何人檢查。

So that chance is, first of all, it's very low. And 100% our effort is, I think, is continue to do what we do, and I think we will be keep listing in the U.S. And for the stock price, if it's -- as far as I know, the delisting required is about USD 15 million. I think -- I fully believe we will not trade below that threshold and because of increase the value of our business, of our company. So once again, we do not believe the chance of delistings, any have -- it's just not real. We're not doing that, okay?

所以這個機會首先是非常低的。我認為，我們 100% 的努力是繼續做我們所做的事情，我認為我們將繼續在美國上市。就股價而言，如果它——據我所知，所需的退市大約是1500萬美元。我認為 - 我完全相信我們的交易不會低於該門檻，因為會增加我們公司的業務價值。所以再一次，我們不相信退市的機會，任何人都有 - 這不是真實的。我們不會那樣做，好嗎？

So -- and talk about what-if contingency, that is just not our focus. And we are -- our focus is running our business the best we know how. And I don't believe that the listing is the very imminent issue for us for the next year or so. I just don't believe that, okay? That's the best way I can answer your question.

所以 - 談論假設的意外情況，這不是我們的重點。我們是——我們的重點是以我們所知的最佳方式經營我們的業務。而且我不認為上市是我們明年左右迫在眉睫的問題。我只是不相信，好嗎？這是我能回答你問題的最好方式。

This concludes our question-and-answer session. I would like to turn the conference back over to Victoria Yu for any closing remarks.

我們的問答環節到此結束。我想把會議轉回 Victoria Yu 做閉幕詞。

Okay. Thank you. Thank you, everyone, for joining us on the call today. If you haven't got a chance to raise your questions, we will be pleased to answer them through follow-up contacts. We look forward to speaking with you again in the near future. Thank you.

好的。謝謝。謝謝大家今天加入我們的電話會議。如果您沒有機會提出您的問題，我們很樂意通過後續聯繫方式為您解答。我們期待在不久的將來再次與您交談。謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。