Hello ladies and gentlemen. Thank you for participating in the Second Quarter 2019 Earnings Conference Call for PPDAI Group also known as Paipaidai. At this time all participants are in listen-only mode. After management’s prepared remarks there will be a question-and-answer session. Today’s conference call is being recorded. I’d now like to turn the conference over to your host Mr. Jimmy Tan, Investor Relations Director for the company. Jimmy, please go ahead.

Hello, everyone and welcome to PPDAI’s second quarter 2019 earnings conference call. The Company’s results were issued via newswire services earlier today and are posted online. You can download the earnings release and sign up for the company’s distribution list by visiting the IR section of our website at ir.ppdai.com. Mr. Cliff Zhang our Chairman and Co-Chief Executive Officer; Mr. Feng Zhang, Co-Chief Executive Officer; and Mr. Simon Ho, our Chief Financial Officer will start the call with their prepared remarks and conclude with a Q&A session. During this call, we will be referring to several non-GAAP financial measures to review and access our operating performance. These non-GAAP financial measurements are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. GAAP. For information about these non-GAAP measures and reconciliation to the GAAP measures, please refer to our earnings press release. Before we continue, please note that today’s call will contain forward-looking statements under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such the company’s results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company’s filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable laws. Finally, we posted a slide presentation on our IR website providing details of our results for the quarter. I will now turn the call over to our Chairman and Co-CEO Cliff. Please go ahead.

Okay, thank you Jimmy. Hello, everyone. Thank you for joining our second quarter 2019 earnings conference call today. During the second quarter, we continued our focus on driving healthy results and maintaining robust and above standard regulatory compliance. Our solid growth and momentum amidst a dynamic and volatile market environment reflects a constant demand of technology driven consumer finance services in China. We are particularly pleased with the following metrics for the quarter. Firstly, our institutional funding base should continue as progression translated into a 29% year-over-year and 13% quarter-over-quarter increase in our total loan origination volume, which reached RMB21.6 billion. Secondly, our operating revenue achieved a 47% year-over-year and a 7% quarter-over-quarter increase. Now thirdly, our dedicated efforts through both our user and borrower basis continue to show encouraging results as the number of registered user exceeded RMB99 million, and the number of accumulated borrowers exceeded RMB16.5 million at the end of June. Investment in technology and artificial intelligence has been the heart of PPDAI. By leveraging our technologies as a service offering, we are enabling our institutional partners in consumer finance and creating deeper relationships with our partners. The rapid uptake and acceptance by external third party financial service providers reaffirms PPDAI’s presence as a leading consumer finance marketplace with strong technological capabilities. We are also extending our technologies and the capabilities to overseas markets, and have started to operate in Indonesia and the Philippines this year, with plans to explore other source East Asian markets. Looking ahead, we will remain committed to expanding our core strengths, while facing a sharp focus on our business strategies. We expect PPDAI to continue to capture the enormous potential in a consumer finance market both domestically and abroad. Now I'd like to pass the call over to our Co-CEO, Feng to discuss an update of our business.

Thank you, Chris. And hello, everyone. We are thrilled by our second quarter performance that not only illustrates the sustained market demand, but also our high resiliency as a positive vibrant user base, diverse funding structure and a structure and a strong technological capability. As Chris mentioned, we remain confident in our ability to deepen that diversification in funding sources and extend our institutional funding partners, driving healthy growth in the long term. As all of you are aware, the diversification of our funding has been a major strategic initiative for us over the past year. This funding transformation has been rapid. In the second quarter, 45% of our loan origination volume was funded by institutional partners, up significantly from 10% in the same period a year ago, and a further increase from 31% in the previous quarter. The proportion of institutional funding further increased to 53% in July. We now have more than 20 institutional funding partners active on our platform. This has enabled us to deliver a steady growth in loan volume quarter-by-quarter and our loan volume in the second quarter is nearly 30% higher than a year ago. The profitability of our loans funded by institutional partners is healthy. In the second quarter, 40% of our operating revenue came from loans funded by institutional partners, a significant increase from 24% in the first quarter. Now turning to credit, delinquency rates were generally stable in the second quarter, and continued to perform within our expectations. If you look carefully at our first quarter delinquency rates, at the end of June, you will see that there have in fact been small improvements versus the previous quarter, and the delinquency rates are mostly back to the lowest levels since September 2017. Thanks to our strong and effective risk management. We…

Thank you, Feng. And hello, everyone. We are delighted to have achieved solid operational and financial results in the second quarter, as lending volume steadily increased, underscoring the strength of our markets and the growth trajectory of our business. In particular, our operating efficiency and profitability continued strong momentum, highlighted by a 60% year-over-year increase in non-GAAP adjusted operating income and a healthy non-GAAP operating margin of 50%, thanks to our effective cost control. Our balance sheet remains solid with approximately RMB2.4 billion of cash and short term liquidity, notably our quality assurance fund remains sufficient with a total balance of RMB5.8 billion equivalent to 22.5% of the total outstanding loan principal and interest with quality assurance. Our results demonstrate the strength and resilience of our business model, and our ability to navigate changing market dynamics. Now, let me briefly go over the financial results for the second quarter. In the interest of time, I will not walk through each item, line by line on this call. Please refer to our earnings release for more details. Operating revenues for the second quarter of 2019 increased by 47% to approximately RMB1.6 billion from RMB1.1 billion in the same period of 2018, primarily due to the increase in loan facilitation service fees, post facilitation service fees, and interest income from loans invested mainly through trusts. Loan facilitation service fees increased by 25% to RMB940 million for the second quarter of 2019 from RMB753 million in the same period of 2018, primarily due to the increase in loan origination volumes. Loan facilitation service fees from loans funded by institutional funding partners were RMB378 million in the second quarter of 2019. Post facilitation service fees increased by 53% to RMB316 million for the second quarter of 2019 from RMB206 million in the same period…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question today comes from John Cai with Morgan Stanley. Please go ahead.

Hi, thank you management for taking my questions. I have three questions. The first one is about the mix of institution and retail funding. So can you disclose it by balance? How many balance -- outstanding balance funded by institution versus retail? And in terms of balance, what kind of the expenses from balance are funded by P2P towards the end of the year? And related to that, is on the economics of the institution and the retail fund. And it seems the take rate is similar, because the portion from institutional funding in terms of loan volume and the revenue contribution is similar. So my understanding is that the products are quite different, so maybe this --can you provide more colors on the economics? And the second question is about customer acquisition. I noticed that the originations service and expense and sales and marketing pick up on the sequential basis. Can the management share more about the customer acquisition efforts and the cause? And the final question is about some trends, I noticed that customer acquisition pick up and then the repeat ratio, the repeat borrowing ratio also picked up and the average ticket size declined sequentially, and also the tender also declined, so just wonder, my understanding is that if we lend more to the new borrowers potentially, that the ticket size and tender might decline, but it seems the repeat ratios is telling the other story, I just wonder if there's any underlying reasons behind that? Thank you very much.

Sure. John, let me try to attack some of those -- address some of those questions. In terms of the loan balance, our peer-to-peer, sorry our institutional loan balance at the end of the June quarter was roughly around RMB12 billion. This is up about maybe 70% on a quarter-on-quarter basis, and our peer-to-peer balance at the end of the year was close to -- sorry in June was close to about 20, just under RMB20 billion. Okay, that just gives you an idea. We haven't quite extrapolated all that till the end of the year. But I think you get pretty good at your math, so you might be able to do some very well educated guesses given the volume guidance, we've just provided. Now in terms of the -- your questions about obviously, I'm going to jump around to customer acquisition costs. The customer acquisition cost in the second quarter, you're right, did increase somewhat. On average, it was about RMB190 per new borrower in the second quarter. This increase versus the first quarter was due mainly to the shift in the borrower mix towards the higher credit quality segment, which we flagged before and this is in line with the strategy and our focus. And this segment has somewhat higher acquisition costs. But overall, at about RMB190 this is still a relatively low level compared to our peers. Going forward, we do expect customer acquisition costs to somewhat increases our borrowing base continues to shift towards this higher credit quality segment. You did mention about our ticket size, and our loan tenure, our ticket size declined a little bit in the quarter on average, mainly because the proportion of repeat loans went up in the quarter, as you highlighted, and the ticket sizes for repeat loans tend to be a bit smaller than first time loans. Some of these as you know may be just top up loans, utilizing unused credit limits, so there is a bit of an influence there. The loan tenure shortened very slightly during the quarter, and from what I can see, where I can see it, that's mainly because certain, some institutional partners that we were servicing preferred shorter, a bit shorter tenure. So, but there's really no change in our strategy in either of these, either of these areas. Now with regards to your second question John, you mentioned about take rates, economics, institutional retail being you know not too different. What specifically did you wanted to know more about?

Yes. So probably just, can you give us some quarter for the gross customers pay in deducted by a funding cost and probably some estimated credit costs. Yes, sort of the -- or the product difference? Yes.

I think, let me let me put it this way John. I mean, we could we could obviously go through a lot more details afterwards. I think, if you compare the profitability of our institutional funding business versus sort of the P2P side, there are a few differences to take in mind for us. One is, there is a bit of a borrower profile difference. The borrowers that are funded by institutional funds tend to be at the better credit quality end of our range of borrowers that we service. So the expansion in our institutional fund means we are extending into borrowers a better credit quality. And you know generally speaking, we do offer lower borrowing rates to the segment, but they also have lower delinquency rates. In terms of profitability as we've mentioned before, there is obviously some small difference, but not hugely different from our overall profitability, and you can see this obviously by comparing those ratios given the contribution of loan volume versus revenues. And I think overall, if you look at our institutional funded business, I would say that we would think that the overall profitability of this segment will be quite similar to other online lending platforms that are currently funded by mainly by institutions. And I think, the ROAs that we eventually that we generate from this part, will be pretty similar I think with other players in this space as well. So probably in the sort of sort of 5%, 7% mid-to-higher single digit level ROAs, which I think is very respectable and attractive level for a consumer finance business.

Thank you. That's very helpful. So if I may follow up on institutional funding, just want to know what would be any financial impact, I understand the transponders [ph] need to consolidate there before we have tough beat in institutional funding and the chances are roughly at around RMB5 billion. So I just wondered the rest RMB7 billion, whether we have any guarantee liabilities that would need to take on the balance sheet for the Institutional funding. Thank you.

So you're referring to the treatment of the credit risk right for the institution of business. So no, the remainder of the non-trust part of our institutional funded loans do not fit on our balance sheets. They -- where we do give sort of credit, some sort of, we call a risk assurance, a credit assurance, protection. It is accounted for in the same way as what we do for the quality assurance funds. It is under guarantee accounting, it’s considered a guarantee liability on our balance sheet and you see that together at the moment with the quality assurance fund payable and quality assurance fund receivable on our balance sheet.

Thank you very much.

Okay, thanks John.

And our next question comes from Daphne Poon with Citi. Please go ahead.

Hi, thanks for taking my question. So I have a couple of questions on the institutional funding size. So, first is the quality of mix of the funding partners that you have, would like to have an update like in terms of how many are from trust versus how many are from maybe banks and the other consumer finance companies. And also we notice that the take rate for your institutional for the loan was up slightly quarter-over-quarter, so I wonder what would be the drivers behind maybe more specifically the institutional funding cost, what’s the trend of the past quarter. And lastly, is that you mentioned earlier that you have about RMB45 billion in terms of credit commitments of the financial institutions, so does that mean that you can actually like fully replace your P2P funding with this institutional funding like even in the worst case that there’s not P2P registration at all, and I’m not sure that whether there will be any hurdle again in preventing that. So that’s my question. Thank you.

Okay, thanks Daphne. In terms of the breakdown and the mix of institutional funding, currently the majority of our institutional funding comes from commercial banks and consumer finance companies. And we will continue to focus on working with banks and consumer finance companies. As we said, in total we have over 20 institutional funding partners active with us. I would say roughly around half of those are commercial banks and consumer finance companies. Okay, the institutional funding cost trend currently, it’s between around 10% to 11%. The demand that we see from institutions remain strong, and we do see room going forward for the lower funding costs from institutions. Okay, and the take rates for the institutional, for the quarter-on-quarter, I don’t know how you calculate, but I mean from where we are sitting, it’s obviously, it’s largely similar, it hasn’t changed much on a quarter-on-quarter basis so that might just be the way things are accounted for or you might be looking at the trusts as well which there is a lag effect coming in. With respect to the 45 billion credit commitments that I think we’re pretty confident in achieving what we set out to achieve. And so far the performance of institutional funding has been beating our expectations every quarter.

Yes. This is Feng. I would just add to the third question. The way we're looking at, we would expect in the third quarter the volumes from institutional funding will be accounting for about 70% of our total loan origination volume, and this percentage will continue to increase very quickly toward the end of this year. So yes, to your question, we are fairly confident even in a possible scenario that the registration of P2P doesn't happen, we think the impact to us is going to be fairly limited and manageable.

Daphne, does that answer your questions?

Yes, that's very helpful. Thank you.

And our next question comes from Alex Ye with UBS. Please go ahead.

Hi, management, thanks for taking my questions. So, my first question is about the P2P funding. So, in opening remarks you just mentioned that in the second half the company is going to execute the triple decline more rapidly. So I wonder, what's the reason for that? Is it due to the regulator requirements or is it because we are proactively shrinking our P2P balance? And I wonder what is our future strategy on this? And my second question is about the institutional funding part. So obviously we are looking at very strong growth in the second half with the doubling of the loan volume funded by institutions. So, I wonder what's the underlying drivers for that? How are we going to achieve that? So are we expecting more funding to connect with that -- funding partners, connect with us or are we just need to ramp up our current credit lines and that's enough to take us there? And finally, I wonder if you could give us some update on your latest pricing trend and take rate trend and any initiative in your product strategy? Thanks.

Sure, Alex, thanks for your question. With regards to the triple decline, clearly this has been as you read and been aware. This has been the Government policy since the beginning of this year. obviously, we do have an active regular communication of regulators and obviously we believe that at the moment there is still a certain amount of uncertainty and fluidity as we've been guiding – we been emphasizing, but the right way to go is to continue and to more strictly implement this triple decline. But again, if there's any more significant – anything significant to update, we will come back with that, right. This is what we know at the moment. But as Feng mentioned P2P is becoming a less and less important part of our overall business and it will become pretty much a minor part by the end of this year. Maybe I'll handover to Feng to talk about the institutional growth and the credit commitments and what drives our confidence in outlook.

Yes. Sure. As we disclosed that, right now, at this point we about 20 active partners and total online approved by these partners, totaling RBM45 billion. So that essentially means, that is actually more than what we expect to issue loan – the volume that we need from institution partners for the second half of the year. But I don't think we stop there. We have a very healthy pipeline for institutions and we think we're going to continue to expand the base of our institutional partners and we'll continue to expand the total credit line extended to us by our institutions.

And Alex, finally on your question about pricing and the take rate, as we guided on our previous call in for the first quarter we did say our take rate which is -- that we use to disclose that's mainly for – mainly applied to the P2P funded -- retail funded part of the business. That take rate will return to more historical normal levels in the 6% to 7% range as we focus more on borrowers with better credit quality and strengthen our cooperation with institutional funding partners. What we did in the second quarter -- early in the second quarter was we did lower borrowing costs where we thought they are deserved in order to meet the requirements for our institutional partners and also to obviously achieve our mission of wider, broader financial inclusion. And as a result, this take rate in the second quarter did decline. It felt to 6.4% in the second quarter compared to 7.7% in the first quarter, because of these pricing changes and adjustments we implemented into the second quarter. But from here going forward we expect this take rate to be relatively stable in the near-term. So I hope this answers your question. Does it? Alex, is it okay.

Yes. Thanks. I have no further questions.

Okay. Thank you.

The next question comes from Sanjay Sakhrani with KBW. Please go ahead.

Thank. Just a follow-up questions. I guess on the institutional funding, that commitment that you have for RBM45 billion, what's the duration of that commitment? And I guess are you guys thinking about sort of longer-term funding sources outside of sort of the shorter-term stuff that you've done thus far?

I think typically if we look at the structure for institutional funding, they tend to be minimum of 12 months, they tend to be longer than 12-month plus in tenure and duration. And given the ramp-up of our institutional funding which we really start to ramping up big way over the last 12 months; I think lot of these commitments are pretty new commitments that have come on to the books in recent months. And obviously you been tracking us for a while this progression that we seen in institutional funding I think has been accelerating on quarterly basis. In terms of long-term funding, it's clearly something that we love to have and we continue to explore. Clearly there are certain limitations within the Chinese market, happy to sit down and walk through those with you in more detail, but suffice to say that, if the options become available we would definitely consider using it.

And as far as the QAF, sort of like how relevant is it going forward? I mean is that still being used for even the institutions or should we expect that to decline overtime?

The QAF – a large part of the QAF mainly services at the moment or relates to the retail P2P funded part of the business. So in fact, retail P2P part of the business declined then in relative terms that it'll also decline in the QAF. Amongst the institutional funding that we do there is some QAF in there. So the buffer is not as large as what we have for P2P – retail P2P investors. So there is going to be a mixed effect that will play through, but largely it will continue to be relevant going forward.

Okay. I guess final question. We've heard obviously the economy is mixed around the world and in China. I mean, it's interesting that we're not really seeing that in your credit metric. Is that partly because you're growing up market? Or is it that you're seeing relative strength within your portfolios generally speaking?

No. I personally think it's partly the nature of the segment we service our internal risk management ability. And if you look at our numbers we haven't seen a huge impact coming through from the softening of the economy and all that, and I just want to highlight. If you look at our credit numbers, delinquency numbers, the context of this over the last 12 months, we've been through a lot of volatility in this industry from the [Indiscernible] via credit cycle, we saw at the end of 2017, early 2018 we had the closure of a significant number of P2P platforms over the past 12 months, over 1000 P2P closed down. And we also had quite a liquidity squeeze in the last summer and periodically, so we been through a lot and I think its also testament of obviously our own ability at the same time.

Yes, absolutely. And I guess, I am sorry, one final question. On the regulatory process, when do we know in finality your guess sort of which direction this will go? And has anyone else in the market gotten close or even is operating under any license or any preview on the peer-to-peer side?

No. I don't think any platform has gotten any license or registration as you suggested. And in terms of the timing, I think its – again its not certain from where we sit and its fluid and we just have to keep in touch and we'll keep you updated.

Simon, this is Feng, Sanjay. Agree with Simon, we don't know for sure whether this will happen and if so, when, but I think I want to reemphasize, as I mentioned that we would expect that by end of this year, the proportion of P2P funded loans, loan originations is going to be accounting for various small percentage of our total loan origination. So by that point and I think whether this happen is not going to be that important to us.

I appreciate it. All right. Thank you.

[Operator Instructions] And your next question comes from Tian Hou with T.H. Capital. Please go ahead.

Yes. Good evening management. The questions related to recent news. And -- so the regulatory agencies asking P2P venders to what that term is you know access to certain government system and not access, is I have to say -- means your system and government system has to be -- your system has to be accessible by the government's something like that. So I wonder if PPDAI has -- PPDAI has already finished that. And the reason I ask for that because in this government policy that they quote number like a 22 something, they say, if you are not bring your system to their system, so you may not be able to practice P2P business. So it looks like really serious policy measurements. So that my question comes from just wonder what's the progress on that front?

Okay. Tian, there's various systems that are required for P2P platforms to connect into government systems to be compliant. Yes. And frankly, we are live and feeding data with all systems that are required by us. I can tell you that. And that is not a reason in our case for rejecting any of our applications in our view. So we are committed to all those systems that you need. Yeah.

That's very helpful. Make me feel better. And then also this thing says that you guys got lots of institution money and to institution funding. So I wonder what are those institutions? And so we saw some local bank like volatile income [ph], they have some problems. So I just wonder what kind of institution you are teaming upward today. And I just hope you guys are not exposed to other people's risk? Thank you.

Yes. Tian, I think that's a great question. Let me just address a few things of course for the consumer finance companies clearly they all belong to the nationwide consumer finance companies and in trust space we work with basically all the leading trust companies that are active in consumer finance assets for the banks. We do work with a number of city commercial banks and I think the concern is around there. We in terms of city commercial banks we don't partner, work with any of the names that have been in the press lately with their issues. And we do have criteria for selecting a bank partners. We look for those that have solid operating history, healthy financials, liquidity, capital adequacy. And at the end of the day we do see still a lot of demand from this space, because there are you know still over even in the city commercial bank, smaller regional banks there's 4000 or over 4000 of these city and rural commercial banks in China. And our balance sheet isn't that large relatively to these names. So I think there is still quite a lot of room for us to expand and service these players. These banks are also fairly well suited to working with us because at the moment they don't have the sufficient capability to obviously to do consumer lending and therefore they most need our services and support.

Okay. That's very helpful. Thank you.

Thank you, Tian.

And our next question is a follow-up from John Cai with Morgan Stanley. Please go ahead.

Hi. Thank you for taking my questions again. So this one ratio then I would like to follow-up in particular is related to the QAF loan balance. I think now we have QAF fund that's equivalent to 22.5% of the loans. Just wonder how do we see these ratios going forward, because now it's -- I think it's a blended or weighted average of institution and retail. My understanding is that potentially there's room for this to decline because institution and overall we are looking for better quality customers. And another question about customer acquisition of growth actually, because -- first of all, can you talk about the total customer acquisition costs we spend in this quarter? I think there's some sales and marketing and origination and service. And the second question is what is the total cost we should expect going forward because it seems the acquisition cost is reasonable, and the rest is controllable and we have sufficient funding obviously. And it seems that we can spend more on customer acquisition to fuel growth going forward. And I think the final question is about maybe Plan B because I'd say now we are moving to institutions and the other players I heard they are trying to get some online [Indiscernible] I just wonder other than the loan facilitation, we have institution. Are there any other plan we are working in preparation of the potential no registration scenario for P2P? Thank you very much.

Yes. Okay, John. Thanks for your questions. I think that in terms of the Quality Assurance fund, the coverage ratio 22.5%, yes I do think the future trend will be lower and exactly for the reasons that you mentioned because of the mix effects, the fact that we're shifting towards a somewhat different segment of borrowers. But also to bear in mind that the buffer, the Quality Assurance buffer that we've had that we do have between individual P2P funding versus institutional funding is a bit different is that the P2P funding historically has been very, very strongly over reserve as you understand right and that's how we ended up winning over 20% coverage ratio which is pretty big. Now, so they'll come down, but I think we continue to maintain fairly prudent and conservative view on quality -- on our quality assurance buffer and funds, right. And then, with regards to our customer acquisition costs, yes, you're right. There's -- the majority of our sales and marketing expenses I think like maybe 80%, 90% of that is customer acquisition related. And there's also some that is sitting in origination and servicing and having a call from them that maybe about 20% or so of the origination and servicing relates to again customer acquisition. So, I think that'll help you just get a sense of the total amount that we're spending. I think the total amount we spending would be similar in aggregate number to maybe the sales and marketing expenses we reported. And that you know as we as we build this business out we will -- obviously we will need to spend more. But still I think the long term and lifetime value of the customers that we are getting and acquiring is still very, very profitable. As we mentioned earlier on the call about the profitability expectations for the institutional funded business. And finally, in terms of the micro lending licenses and other licenses, I think you know we already have an Internet micro lending company ourselves, but obviously if we offered the opportunity for another one and we would definitely certainly consider. So this is definitely one option down the road that we think will present itself. Yes. But generally we will keep an open mind and we will consider.

Yes. Thank you. So the total customer acquisition cost. How do we see that in the second half of this year? Any trends that it might go up significantly because we want to go faster? Thank you.

I think if you -- it depends on obviously the overall growth. I think we are slowing down in the P2P side. We've guided towards pretty – we've guided toward positive loan origination growth in the third quarter. But it's still obviously within moderate bounds. And likely similar situation possibly in the fourth quarter as well. So we're not at the moment growing by 100% at that rate. So I don't think you need to overly worry about that and we'll try to keep good control over our overall costs.

Yes. I'm actually thinking if the environment and the acquisition efficiency is okay, it's probably okay to spend more. But yes, it's up to the company. So thank you again for taking my six or seven questions in total. Thank you very much.

Thank you, John for your interest.

And our next question is a follow-up from Alex Ye with UBS. Please go ahead.

Hi. I just had two quick questions. So first is – so we have 20 funding partners active for now and couple of them banks or consumer finance company and we have RMB45 billion of credit lines. So I just wonder if we can have a comparative numbers in the last quarter. So let's just have a sense of how much progress we have made in just the past quarter? And my second question is on the loan volume of about RMB21 billion in Q2. So could you give us a breakdown of that in terms of the accounting shipment by on and off balance sheet? Thanks.

So I think for the last quarter we were probably looking at about I think it was like 10 to 15-ish institutional funding partners. I might have to confirm that last quarter 10 to 15, I think it was around there. We're now over 20. We're not at 20, we're over 20 by the way. I don't recall what the -- I don't recall it the credit line is for last quarter. Again you're stressing me out. But I think I think the growth is pretty fast. It has been pretty fast during the quarter, right. If you look at the loan balance, the outstanding balance of institutional funding basically on a quarterly basis we're growing at like close to 100% a quarter. So if you think about that type of rate then it'll be quite different, three months ago or three months after. And Alex what is your sort of your last final part of the question I slipped my mind, sorry could you repeat that? Alex?

Yes. Hi. So of the RMB21.6 billion of loan volume in the second quarter, right? So we have 45%, 48% [ph] of that from institutions. So I just wonder if you could give us a breakdown of that further into how much of them go directly to the on balance sheet and how much go to the off balance sheet? Thanks.

The only part of the institutional funding that goes on balance sheet is the trust component and in the third -- in the second quarter that component was roughly speaking about maybe 30 odd percent 30 percent-ish around there. The rest is off balance.

So just confirm. Is it 30% on balance sheet, right?

Yes, yes.

Okay. Thanks.

And this will conclude our question and answer session. I'd like to turn the conference back over to the company for closing remarks.

Thank you once again for joining us today. If you have further questions please feel free to contact PPDAI Investor Relations through the contact information provided on our website or in the press release.

This concludes today's conference. You may now disconnect your lines at this time. Have a great day.