Good morning and good evening everyone. Thank you for standing by and welcome to Pintec Technology Holdings' third quarter 2018 earnings call. At this time all participants are in a listen-only mode. After today's presentation there will be an opportunity to ask questions. Now I'll turn the call over to your speaker and host today Mr. Jack Wang from ICR, the Company's Investor Relations partner. Jack, please go ahead.

Thank you operator. Hello everyone. Thank you all for joining us on today's call. Pintec has announced its quarterly financial results today before the market open. Earnings release is now available on the company's IR website. Today you will hear from Pintec's CEO Mr. William Wei, who will start up the call with the review of recent company development and strategies. And he will be followed by the company's CFO Mr. Steven Sim who will address the financial results in more details. The President of Pintec, Ms. Jing Zhou is also on the call and will be available during the Q&A session that follows the prepared remarks. Before we proceed please note that this call may contain forward-looking statements made pursuant to the Safe Harbor Provisions for the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations and involve known and unknown risks, uncertainties and other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors and details of the company's filings with the SEC. The company does not assume any obligations to revise, or update any forward-looking statement as a result of new information, future event, changes in market and market conditions or otherwise, except as required by law. Please also know that the company will discuss non-GAAP measures, which are more thoroughly explained and reconciled to the most comparable measures reported under the generally accepted accounting principles in the company's earnings release and filings with the SEC. You are reminded that such non-GAAP measures should not be held in isolation or as an alternative to GAAP measures and certain non-GAAP measures are not uniformly defined by all companies, including those in the fin industry. Now with that said, I'm pleased to present Mr. William Wei, CEO of Pintec. Please go ahead, sir.

Thank you, Jack. Hello everyone, and welcome to Pintec's first earnings conference call as U.S. listed company. So despite the market volatility we successfully completed our IPO in mid-October. I would like to appreciate all existing and new shareholders for your loads of confidence in our business model and growth prospects. We continue to execute our strategies and deliver shareholder value. We believe that more investors will recognize already and growing our shareholder base. So recently there has been much discussion about the global economy slowing down in Q3 rising consumers spending, [indiscernible] and the capital market experiencing stress. In addition into this economy the uncertainty there is also regulatory pressure on the fintec industry. However Pintec was able to overcome through the macro trends and deliver another quarter of solid growth. We grew our target total revenue by 43% year-over-year on the RMB247 million in the third quarter of 2018 from RMB172 million in the same period last year. While we also improved our net income to a positive RMB3.4 million from a net loss of RMB19 million during the comparable period. Now please let me provide some highlights about our business operation. We offer five types of financial solutions with value add tools and services to satisfy the needs of our business and the financial partners including point-of-sale financial e solutions, personal installment loan solutions, business installment loan solutions, wealth management solutions, and insurance solutions. We keep updating these solutions and improving our services systems for institutional clients. Pintec 2-d services including [indiscernible]. First we are utilizing our extensive experience in the development and self creation of online financial products to provide advisory services for financial institutions, helping them acquire end user and optimize user experience more effectively. Following the successful implementation of our advisory services we hope…

Thank you, William, and hello everyone on the call. Before I start please note that all numbers stated in my following remarks are in RMB terms unless otherwise noted. In the third quarter of 2018 our total revenues grew by 43.4% year-over-year to 246.8 million from 172.1 million in the same period last year. Specifically revenues from our technical services fee which accounted for 70.2% of total revenues grew by 31.7% to 173.3 million in the third quarter of 2018 from 131.6 million in the same period of 2017. The year-over-year growth was mainly attributable to the significant increase in monthly services fee which resulted from growth in outstanding balance of loans in particular personal installment loans. Revenues from our installment services fee which accounted for 28.7% of our total revenues increased by 81% to 71.4 million in the third quarter of 2018, from the 39.4 million in the same period last year. The growth was driven by an increase in the on-book installment loans with the improved fee arrangements as well as the trend moving towards developing the installment loans with higher margins and longer terms. Revenue from our wealth management services fee increased to 2 million in the third quarter of 2018 from 1 million in same period last year. The increase was primarily attributable to the development and expansion of wealth management services. Our cost of revenue increased by 5.1% in the third quarter of 2018 to 120.9 million from 115.1 million in the same period last year. As a percentage of total revenue our cost of revenue decreased to 49% in the third quarter from 66.9% in the same period last year. The reduction was mostly due to the 32.8% decrease in our provision for credit losses to 28.1 million in the third quarter of 2018,…

Ladies and gentlemen we will now begin the question-and-answer session [Operator Instructions] Your first question comes from the line of [Chang Zihau] from Goldman Sachs. Please ask your question.

Hi, this is [Chang Zi] calling from Goldman Sachs. My question is about your on balance sheet low and I wish you already made any new launch through this on balance sheet. And as we expect to issue reduce – on time. Thank you.

Thank you, Zihau. This is Steven. So, the trend as you can see from past results is that there’ll be a continuous decline in financing receivable balance. And this is attributable to temporary and long-term strategy factors. Temporary factors as we mentioned previously in our prospectus and also in the good today that we see that the B2B being the main funding source of our accounts and loans before second quarter of 2018 is shrinking. And we believe that that is temporary and we’ll reflect the recovery as the market improves. Secondly for management strategy in the long run, we still strongly focus on the providing technical solutions rather than taking more and more on book loans. Whether as to it will go down to a set of percentage, I think we do not have such targets, but at the same time we obviously expect the overall balance to decrease overtime. And that’s part of what we believe Pintec core value is in terms of providing technology. So this is rather than taking on credit.

Your next question comes from the line of Edward Du from Deutsche Bank. Please ask your question.

Hi. Thank you management for taking my question. I have three small questions. My first one question is about can you share more color about your new business partners. And for your existing banner and flex revenue contribution from your like top five business partner and like the trade – Telco and VIP shop. And my second question is about your funding division and, can you share just that plus your proposal P2P and compared to other financial institutions and it was the funding cost of each category? And my third question is, can you share more color and the outlook for your asset quality in Q4 and next year?

So let me take your question in parts. As far as the end of Q3 we have 186 business partners and 86 financial partners. This is a net results of some incoming and outgoing business and financial partners. And as William mentioned earlier in his remarks we have quite a few new business partners during this quarter. This includes [indiscernible] for financial solutions. They are not managing [indiscernible] came in for wealth management solutions and [indiscernible] came in for insurance solutions. So again we believe that this is a proof that despite a pretty volatile market our solutions is well respected and well regarded in the market and we believe that having this new very well we got a financials proof that our business is going in the right direction. The next part of your question, so in terms of the total revenue and contribution for the cooperation with our top five business patterns approximately for the first nine months the approximate about 40%. And again, although the bigger partners as few from the OTA line [indiscernible] we do have a low diversification and as we go forward their contribution is actually lower on a total basis. On the next part of your question, the P2P funding as of the end of Q3 currently outstanding balance is at 66%. Again William remarked on this earlier. This compared to 81% at the end of 2016 and 74% at the end of 2017. Again this is showing a positive trends towards diversification. Although we still believe that in the long-term the P2P funding source is an important one but we actively work through gain more and more financial partners over the long-term. And typical funding costs for the P2P and other financial institutions remained in the low double digits range. As we scale towards more and more partners obviously we will have higher competitiveness and more optimized cost of funding we believe that we can see a positive trend on this end next year. On the asset quality I think we did disclose this. We talked about we have M1 of 4.8% at the end of Q3 compared to M1 of 3.5% at the end of Q2. And I'll pass over to [Jing Zhou] our President to may be give more qualitative color to the trend in those asset qualities.

So basically as we have disclosed during this seeing Q3 were 20% higher compared to more for 2.5% in the Q3 and the reason loan balance down in Q3 and in Q2 the company approximately managing our financial business as mentioned earlier, we continue to manage some of improve with management work and let that customers. And therefore drop and therefore there is denominator effect on this ratio. In terms of vintage losses Q3 is similar to Q2 and we expect those trends to be stable going forward in Q4 and also into next year.

[Operator Instructions] Your next question comes from the line of [Joshua Shu] from ICBC International, please ask your question.

First of all congratulations on the company’s very strong performance starting this third quarter. I understand that the company basis on certain regulatory involvements while developing new business lines with a evolving business focus and my first question is how do you see the regulatory environment evolving over the next six months to one year and my second question is what is context plan for the wealth management and insurance services business lines. Thank you.

This is William, firstly so impacts in most of the business line were now the direct entity to be regulated. Because of many of our derived customers financial institution, so they have impacting on the near-trend from the regulation point of view. So we can see that in this couple of quarter I would say regulations are taking more and more predictable and stable. What we can saw in this, in the last quarter is we saw some of the approval in the regulation through traditional financial institution to regulate how to participate on the online lending with the help of technical companies. So they probably regulations ask for comments if not the final official one. We see some positive trend that to give very clear positioning on this kind of things the low ending of the bank to participate some of the online been this with half of enablement technical company, so it's clear trend so with several year of understanding the market the regulators are getting more and more confident. So we see this, we can see this in last quarter and going forward for the next six months to one year I think the biggest challenge for the whole industry how to make through the [indiscernible] efficient and going well. So from the information we get from the market that so far the progress is pretty okay and most of the platform they finish that they’re self track. In last month and next step is to be track by local government and controller, regulator. So, let’s the anyway I think from the regulators the activity that can see, getting more and more stable. This is to answer your question on the regulation. So, yeah for our plan and what our plan for the wealth management and some useful services, I think '20 offset is very clear, so we use [indiscernible] engine as our I’ll say killer applications to convince the financial institutions including the banks and security companies and next step we try to extend this first two influence products to help them to sell more insurance product to the end users. Second step is to deeply embedded into their own assets products, to make sure our global advisory engine can enrol their own assets. And not only the standard one. The third is trying to get out the connections with our digital and solutions also just to try to make sure that our potential financial partners except all followed to this market. Yeah, thank you.

Your next question comes from the line of Daphne Poon from Citi. Please ask your question.

Hi. Thank you for taking my questions. So, I got two questions. So first one is on the funding side. So to understand I know it’s been 3Q, the institutional funding partners some of them were turning more cautious because of the, of what’s happening on the P2P side. So I just want to get a update on the, of the latest trend of these institutional funding partnership like whether they have been any improvement that you see. And the second one is, follow up on the asset quality side so as you mentioned earlier that regarding the more challenging macro outlooks that you treading more cautious in terms of your loan approval. So, can you give us more color in terms of what, if there is any specific adjustment that you have made in your these model. And any particular parameters that before this more relevant also what would be the current loan approval rate versus like previously. Thank you.

Okay. This is William. So, what we can see is that you’ll be third quarter just because of our progress in the institutional partnership, the financial institutional allow us to keep good progress in the new business. So, what we can see is that they the financial institutions rather than risk, peer to peer lending platform contributes the majority products in the funding side. So this is a progress we see continuous. So all said is very clear, try to build up partnership with the 15 funding partners. So we have in the last quarter we have successfully signed two strategic partnerships with the two biggest our financial partners one is an international one, Silicon, and another one is a local one called [indiscernible], so both already in our corporation for a quite long time. And in terms of our start year corporation seem to be beginning of this year. And now they already became our biggest financial institution partner already and they also show strong willingness to give that even more close and strategic partnership with us and to welcome our enablement services in all lending related things like so this is the big achievement. And also the [indiscernible] we had made very good strategic partnership with [indiscernible] in the third quarter and because of the system integration it takes time. So we didn’t see much number in this quarter but in the next quarter we can see the contributions in both quality of [indiscernible]. So looking forward I think such similar cases will come more and getting more and more normal that traditional financial institutions they can offset enablement [indiscernible].

And regarding the question about the credit qualities versus approval rate. The answer is yes, in Q3 we proactively lower our approval rate to make sure that we are more prudent in terms of its management because even though we are now taking on a lot of these factors on balance sheet so we want to make sure that risk management and asset quality to go in top priority for what we do. And therefore we actually proactively tightened credit criteria in Q3. At the same time we actually continued to improve all these models using a methodology that’s follows data sources to increase the differentiation of our models performances. And like Q4 we are seeing the recovery in trends while the risk is remained stable and we expect this trend to continue going forward as well.

There are no further questions at this moment, and I'll hand back to the management for their closing remarks.

Thank you very much for attending today. We appreciate your support and we look forward to updating you on our next quarter's conference call in few month's time. In the meantime please feel free to get in touch with us who have further questions or comments. Thank you.

Ladies and gentlemen, that does conclude the conference for today. Thank you for participating you may all disconnect.