A. History and Development of the Company We commenced our online consumer finance platform business in June 2007. Starting in January 2011, our business operations have gradually migrated to Shanghai PPDai Financial Information Service Co., Ltd., or Shanghai PPDai, which is currently a subsidiary of the consolidate variable interest entity named Beijing Paipairongxin Investment Consulting Co., Ltd., or Beijing Paipairongxin. 68 In 2012, we formed our offshore corporate structure to facilitate offshore financing. In June 2012, we incorporated FinVolution Group (formerly known as PPDAI Group Inc.) under the laws of the Cayman Islands as our holding company and incorporated FinVolution (HK) Limited (formerly known as PPDAI (HK) LIMITED) as its wholly-owned subsidiary in November 2019. In June 2012, Beijing Paipairongxin was incorporated, with its current shareholders being the four founders of our company. In June 2017, Shanghai Guangjian Information Technology Co., Ltd., or Shanghai Guangjian was incorporated as a wholly-owned PRC subsidiary of FinVolution (HK) Limited. Shortly after its incorporation, Shanghai Guangjian established a wholly-owned subsidiary, Shanghai Shanghu Information Technology Co., Ltd., or Shanghai Shanghu. Shanghai Guangjian has entered into a series of contractual arrangements with Beijing Paipairongxin and its shareholders, enabling us to direct the operational activities of Beijing Paipairongxin. Please refer to “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements” for further details. In August 2012, Beijing Prosper Investment Consulting Co., Ltd., or Beijing Prosper, was incorporated as a wholly-owned PRC subsidiary of FinVolution (HK) Limited. In December 2016, we established Hefei PPDai Information Technology Co., Ltd., as an operating entity to provide customer services with a focus on loan collection. On November 10, 2017, our ADSs commenced trading on the NYSE under the symbol “PPDF.” We raised from our initial public offering approximately US$205.0 million in net proceeds after deducting underwriting discounts and the estimated offering expenses payable by us. Concurrently with our initial public offering, we also raised approximately US$49.5 million in net proceeds through issuing 19,230,769 Class A ordinary shares to a wholly-owned subsidiary of Sun Hung Kai & Co. Limited. In January 2018, we established Bluebottle Limited in Hong Kong. Shortly after its incorporation, Bluebottle Limited established Shanghai Manyin Information Technology Co., Ltd., or Shanghai Manyin, as its wholly-owned PRC subsidiary in China. In July 2017, Shanghai Zihe Information Technology Group Co., Ltd., or Shanghai Zihe, was incorporated, with its shareholders also being the four founders of our company. Shanghai Manyin has a series of contractual arrangements with Shanghai Zihe and its shareholders, allowing us to direct the operational activities of Shanghai Zihe. In January 2019, Shanghai Ledao Information Technology Co., Ltd., or Shanghai Ledao, was incorporated, with its shareholders being family relatives of two of our founders. Shanghai Manyin has entered into contractual arrangements with Shanghai Ledao and its shareholders, enabling us to direct the operational activities of Shanghai Ledao. Please refer to “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements” for further details. In April 2018, Shanghai Erxu Information Technology Co., Ltd. was incorporated as a wholly-owned PRC subsidiary of Shanghai Zihe to operate business related to loan facilitation services. In June 2018, PT Pembiayaan Digital Indonesia was incorporated in Indonesia. We currently hold an ultimate 80% equity interest in PT Pembiayaan Digital Indonesia. In December 2019, PT Pembiayaan Digital Indonesia obtained a license as an information technology-based lending and borrowing service provider from the Financial Services Authority of Indonesia (OJK) to engage in technology-based lending services. In August 2018, Hainan Shanghu Information Technology Co., Ltd. was incorporated as a subsidiary indirectly and wholly owned by Shanghai Manyin to operate technology service business. In November 2019, Fujian Zhiyun Financing Guarantee Co., Ltd. was incorporated as a wholly-owned PRC subsidiary of Shanghai PPDai to provide financing guarantees services to our institutional funding partners for loans funded by them to the borrowers we introduced. In November 2019, the name of the Company was changed from “PPDAI Group Inc.” to “FinVolution Group” and that “信也科技” was adopted as the dual foreign name of the Company. In addition, the Company’s ticker symbol on the New York Stock Exchange was also changed from “PPDF” to “FINV.” However, we continue to conduct a portion of our business under the name PPDai. 69 As we expanded our operations to overseas markets, in 2018, we commenced online lending services in Indonesia under the AdaKami brand. In 2020, we expanded our online lending services to the Philippines under the JuanHand brand. In April 2024, we acquired a supermajority stake in an Indonesian multi-finance company, and subsequently completed its full acquisition in December 2025. In October 2025, we acquired a licensed lender and entered the Australian online lending market under the Fundo brand, extending our platform’s reach to both emerging and developed markets. Corporate Information Our principal executive offices are located at Building G1, No. 999 Dangui Road, Pudong New District, Shanghai 201203, the People’s Republic of China. Our telephone number at this address is +86 21 8030 3200. Our registered office in the Cayman Islands is located at the offices of PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is Law Debenture Corporate Services Inc., located at 801 2nd Avenue, Suite 403, New York, NY 10017. Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. The information we file with the SEC can be found on www.sec.gov. You can also find information on our website ir.finvgroup.com. The information contained on our website or other information contained on the SEC website is not a part of this annual report. B. Business Overview Overview We are a leading fintech platform with strong brand recognition across China and key overseas markets. Launched in 2007, we have been a pioneer in China’s online consumer finance industry. Since 2018, we have expanded our operations to overseas markets such as Indonesia and the Philippines. In 2025, we further expanded into the Australian market through the acquisition of a licensed lender, extending our platform’s reach to both emerging and developed markets. In 2025, we generated 75.4% of our revenues from China and 24.6% of our revenues from the overseas markets. We strategically focus on serving borrowers of the young generation that is typically more receptive to internet financial services and whose borrowing needs are unserved or underserved by traditional financial institutions. This segment of borrowers is poised to become the major driving force of the consumer finance market. Our borrowers are primarily acquired online and stretch across a large number of cities and counties in the markets where we operate. We primarily offer short-term loans to our borrowers to meet their immediate credit needs while allowing them to gradually establish their credit history through activities on our platforms. In 2023, 2024 and 2025, the average principal amount of loans originated on our platform in China was RMB8,318, RMB10,402 and RMB10,914 (US$1,561), respectively, with an average term of 8.3 months, 8.0 months and 8.3 months, respectively. Borrowers come to our platforms for convenient, simple and fast loan transaction process. We generally have a high level of borrower stickiness. In 2023, 2024 and 2025, 87.2%, 86.5% and 84.9% of the total loan origination volume, respectively, on our platform in China was generated from repeat borrowers who had at least one drawdown before. Our platforms appeal to institutional funding partners by offering a wide spectrum of loan assets. We provide our institutional funding partners with an opportunity to locate high quality borrowers and achieve attractive returns. Institutional funding partners may provide loans to borrowers that we introduce to them, making use of the preliminary credit assessment services as well as other services we provide to them. We offer attractive risk-adjusted returns supported by a set of risk management procedures and implement protection mechanisms to control and mitigate risk exposure. 70 We have built an extensive database that contains first hand through-the-cycle credit data as well as data from various third-party sources. We have established systematic risk management procedures which have proven to be effective in various macro-economic environments. Our proprietary and big-data-based credit scoring model, the Magic Mirror Model, has been continually testing and refining its credit decision-making rules as we continue to study the increasing amount of data accumulated through our loan facilitation. We have also made progress in optimizing operational efficiency as we apply big-data analytics and machine learning capabilities to other aspects of our business operations, such as sales and marketing activities and loan collection. We generate revenues primarily by collecting transaction service fees from institutional funding partners for our services provided to them such as borrower introduction and preliminary credit assessment, as well as other services we provide along the lifecycle of loans. Our net revenues grew from RMB12.5 billion in 2023 to RMB13.1 billion in 2024 and further to RMB13.6 billion (US$1.9 billion) in 2025. Our net profit was RMB2.4 billion in 2023, RMB2.4 billion in 2024 and RMB2.5 billion (US$0.4 billion) in 2025. China and Overseas Markets We operate a Credit-Tech platform that bridges the credit gap for underserved consumers. Our business is managed through two strategic segments: China, our foundational market providing scale and cash flow, and International Markets, characterized by growth and user acquisition. Our “LEGO” (Local Excellence, Global Outlook) strategy facilitates international expansion by integrating expertise in regulatory navigation, risk analytics, and product development across jurisdictions. This integrated approach allows us to accelerate market entry and de-risk expansion by leveraging proven capabilities from one jurisdiction to the next. We primarily operate in China under the PPDai brand. The number of our cumulative registered users in China increased from 155.6 million as of December 31, 2023 to 172.6 million as of December 31, 2024 and further to 187.4 million as of December 31, 2025. Our loan origination volume in China in 2023, 2024 and 2025 was RMB186.4 billion, RMB196.1 billion and RMB186.3 billion (US$26.6 billion), respectively. Our outstanding loan balance in the China market in 2023, 2024 and 2025 was RMB66.1 billion, RMB69.8 billion and RMB68.3 billion (US$9.8 billion), respectively. In 2023, 2024 and 2025, revenues generated from the China markets were RMB10.4 billion, RMB10.5 billion and RMB10.2 billion (US$1.5 billion), representing 83.0%, 80.6% and 75.4% of net revenues for the respective years. We have been actively expanding into overseas markets, and have successfully executed the “zero-to-one” journey in multiple jurisdictions. ● Indonesia: We provide online lending services in Indonesia under the AdaKami brand. To further diversify, we completed the full acquisition of an Indonesian multi-finance company in December 2025, enabling us to offer offline consumption finance solutions, such as installment loans. ● The Philippines: We are a leading player in the online lending space in the Philippines, under the brand JuanHand. Our operations in the Philippines have seen significant growth, driven by adoption of online lending across different consumption scenarios. ● Australia: In October 2025, we strategically expanded into the Australian market through the acquisition of Fundo, a licensed lender holding an Australian Credit Licence from the Australian Securities and Investments Commission (ASIC). This acquisition represents a significant upgrade in our international expansion strategy, moving beyond emerging Southeast Asian markets into a more regulated, developed economy. Our extensive experience in delivering online lending solutions to near-prime customers, position us strongly to capitalize on the opportunities within Australia’s established financial ecosystem. The number of cumulative registered users in the overseas markets increased from 24.6 million as of December 31, 2023 to 35.7 million as of December 31, 2024 and further to 52.1 million as of December 31, 2025. Our loan origination volume in the overseas markets increased from RMB7.9 billion as of December 31, 2023 to RMB10.1 billion as of December 31, 2024 and further to RMB14.0 billion (US$2.0 billion) as of December 31, 2025. Our outstanding loan balance in the overseas markets increased from RMB1,262.3 million as of December 31, 2023 to RMB1,696.2 million as of December 31, 2024 and further to RMB2,570.1 million (US$367.5 million) as of December 31, 2025. In 2023, 2024 and 2025, revenues generated from the overseas markets were RMB2,136.9 million, RMB2,532.5 million and RMB3,331.5 million (US$476.4 million), representing 17.0%, 19.4% and 24.6% of net revenues for the respective years. 71 Our business models in both the PRC and overseas markets share substantial similarities, albeit with variations in specific loan products stemming from localization strategies and regulatory requirements. Generally, borrowers in overseas markets are younger on average, with lower average loan amounts and shorter tenors compared to those in China. Borrowers Since our inception and up to December 31, 2025, we had facilitated loans for over 29.0 million borrowers in China from substantially all cities and counties across China. In 2025, over 63% of our borrowers in China were between 20 and 40 years of age. We strategically cultivate customer loyalty, aiming to capture the vast growth opportunities as our borrowers enter into different stages of their lives and qualify for higher credit limits. The number of unique borrowers in a given year means the total number of borrowers whose loans on our platforms were funded during such year. The number of our unique borrowers in China were approximately 4.4 million in 2023, 4.1 million in 2024 and 4.6 million in 2025. Our platforms feature a high proportion of repeat borrowers. In China, 87.2%, 86.5% and 84.9% of the total loan origination volume facilitated through our platform in 2023, 2024 and 2025, respectively, was generated from repeat borrowers who had successfully borrowed on our platform before. Since the launch of our operations in the overseas markets and up to December 31, 2025, we had facilitated loans for approximately 11.7 million borrowers in Indonesia, the Philippines and Australia. The borrowers in the overseas markets are typically younger individuals, compared to borrowers in the Chinese market. The number of unique borrowers for the overseas markets were approximately 1.9 million in 2023, 2.9 million in 2024 and 5.9 million in 2025. For the overseas markets, 83.5%, 86.2% and 87.6% of the total loan origination volume facilitated through our platforms in 2023, 2024 and 2025, respectively, was generated from repeat borrowers who had successfully borrowed on our platforms before. Institutional Funding Partners Since 2020, all new loans facilitated on our platform in China have been funded by institutional funding partners or our own microloan companies. Currently, we primarily cooperate with commercial banks, internet or digital banks, private banks, consumer finance companies, micro-loan companies and trust management companies to diversify the funding sources on our platform in China. As of December 31, 2025, we had cumulatively cooperated with 115 institutional funding partners in China. The loan origination volume on our platform in China in 2023, 2024 and 2025 was RMB186.4 billion, RMB196.1 billion and RMB186.3 billion (US$26.6 billion), respectively. In 2025, most of the new loans facilitated on our platforms in the overseas markets were funded by institutional funding partners, with a small portion from our capital. Currently, we primarily cooperate with commercial banks and internet banks in the overseas markets. As of December 31, 2025, we had cumulatively cooperated with 18 institutional funding partners in our overseas markets. The loan origination volume on our international platforms increased from RMB7.9 billion in 2023 to RMB10.1 billion in 2024 and further to RMB14.0 billion (US$2.0 billion) in 2025. Our Products and Services Loan Services Offered to Borrowers We primarily offer standard loan products in China and also typically offer another kind of standard loan products in the overseas markets. The loan products offered on our platforms do not require any form of security or guarantee from the borrowers to secure the loan, and we generally provide loan applicants with a credit decision in around 10 minutes of application for first-time applicants and in as little as one minute for repeat borrowers. Approved borrowers typically receive loan disbursements within 24 hours following the loan listing. We believe these features are essential to meeting borrowers’ often imminent financing needs. Subject to the credit assessment result for each loan application, a borrower is allowed to take out multiple loans on our platforms if the aggregate outstanding principal amount does not exceed such borrower’s credit limit for the type of loans the borrower applies for. 72 Standard loan products in China Borrowers in China have the flexibility to conveniently apply for our standard loan products through mobile devices. To initiate the application process, they provide essential information such as bank account details, educational background, marital status, occupation, and income range. Additionally, they furnish one or two alternative contact mobile phone numbers, alongside the mandatory identity card details required for initial user registration. Small business owners also have the option to upload their business license to our system. Upon completion of the credit assessment, eligible borrowers may apply for loans within the approved credit limit, with repayment terms spanning from 1 month to 24 months. The average loan amounts for our standard loan products in China were RMB8,318 in 2023, and RMB10,402 in 2024 and RMB10,914 (US$1,561) in 2025. Borrowers across various credit score tiers are subject to different credit limits and borrowing costs. The borrowing costs associated with our standard loans encompass loan interest payable to institutional funding partners. Borrowers may also incur a guarantee service fee for services rendered by financing guarantee companies. Our standard loan products in China feature fixed monthly repayments, primarily consisting of principal, interest, loan facilitation service fees and, where applicable, guarantee service fees. In 2025, the total origination volume of our standard loan products in China amounted to RMB182.0 billion (US$26.0 billion), accounting for 97.7% of the total loan origination volume on our platform in China for the same period. In 2025, borrowers of our standard loan products in China included 719 thousand small business owners, with the total loan origination volume constituting 29.1% of the overall loan origination volume on our platform in China for the same year. Standard loan products in the overseas markets Our standard loan products in the overseas markets offer borrowers the convenience of applying through mobile devices. To commence the application process, borrowers provide essential information, including bank account details, existing credit card information, educational background, marital status, occupation, and income range. Upon completion of the credit assessment, eligible borrowers may apply for loans within the approved credit limit, with repayment terms spanning from 1 month to 12 months for cash loans. The average loan amounts for our standard loan products in Indonesia in the past three years were RMB1,066 in 2023, RMB1,091 in 2024 and RMB1,018 (US$146) in 2025. The average loan amounts for our standard loan products in the Philippines in the past three years were RMB620 in 2023, RMB651 in 2024 and RMB692 (US$99) in 2025.Borrowers across various credit score tiers are subject to different credit limits and borrowing costs. The associated borrowing costs for our standard loan products in the overseas markets typically include loan interest payable to institutional funding partners. Borrowers may also incur a guarantee service fee in certain instances for services provided by insurance companies. Our standard loan products in the overseas markets typically feature fixed monthly repayments, primarily consisting of principal, interest, loan facilitation service fees and, if applicable, guarantee service fees. Other loan products In addition, we offer other products and will continue to develop new products from time to time. For example, we collaborate with several third parties to offer their customers loan products similar to our standard ones but with varied features, such as more preferential interest rates. As part of our strategy to expand loan product offerings, we have developed and are developing new loan products. As our business develops, we will continue to expand our loan product offerings to meet demands from different tiers of borrowers. 73 Services Offered to Institutional Funding Partners We introduce borrowers to our institutional funding partners and offer preliminary credit assessment services, along with quality assurance commitments for the repayment of a substantial majority of the loans they fund, and provide other post-loan services to them throughout the loan cycle. Currently, our institutional funding partners primarily include commercial banks, internet or digital banks, private banks, consumer finance companies, micro-loan companies and trust management companies. Generally, these institutional funding partners directly provide loans to the borrowers we introduce using their own funds. Capital light model in China We launched our capital light model in 2020 as part of our strategic transition from a traditional, credit risk-bearing loan facilitator to a technology enabler. Under this model, we facilitate transactions between prospective borrowers and institutional funding partners without assuming credit risk on the loans extended by our funding partners to the borrowers we introduce. For loans facilitated under our capital light model, we generate income through service fees provided by our financial institutions, third-party lending platforms, and other partners based on pre-negotiated terms, which vary by case. Our service fee rate is typically a percentage of the pricing rate set by our partners on the loans. Our Platforms and Transaction Process We incorporate advanced technology into the transaction process on our platforms to provide a better experience to our borrowers and our institutional funding partners. The entire process appears simple, seamless and efficient but our platforms leverage sophisticated, proprietary technology to make it possible. Set forth below is a general description of the transaction process of our standard loan products facilitated on our platform in China. The transaction process for our standard loan products facilitated on our platforms in overseas markets is largely similar. Step 1: Initial Application Prospective borrowers can initiate applications online anytime, anywhere through our mobile applications. The application process for our standard loan products typically takes only a few minutes. If the application is initiated via mobile applications, applicants may provide requested personal details and take a real-time selfie holding their identity documentation. Small business owners are also given the option to upload their business license to our system. Step 2: Fraud Detection and Credit Assessment After receiving loan applications, our system gathers data from various sources, including information provided by applicants, third-party data partners, and internet sources with authorization. This data includes background details, behavior patterns and credit history. For repeat borrowers, historical loan performance data accumulated on our platforms is also incorporated into the borrowers’ profile. We use an anti-fraud model to detect fraudulent behavior, employing advanced methods to analyze individual and collusive fraud. If fraud is detected, we notify the applicant or proceed with the application if no fraud is found. Following the fraud detection, we initiate a credit review process using our proprietary Magic Mirror Model to generate a Magic Mirror score for the prospective borrower. Each Magic Mirror score corresponds to a credit level in the range of I to VIII, with Level I representing the lowest risk and Level VIII representing the highest risk. See “—Risk Management—Proprietary Credit Scoring and Risk Pricing Models.” Applicants classified as Level VIII will be declined, and applicants falling under other credit levels will be assigned by our risk pricing system the approved credit amounts, maximum loan terms and applicable interest rates and other loan characteristics which are determined based on their respective Magic Mirror scores. In 2025, almost all of loan applications in China were automated without manual review. Approved applicants are connected with our institutional funding partners, while others are directed to third-party platforms. If they pass those platforms’ assessments, we charge service fees to the platforms. Step 3: Loan Listing and Funding Our institutional funding partners typically provide loans with their own funds directly to the borrowers we introduced. After obtaining our preliminary credit assessment and approval, borrowers may submit the final loan amount and loan term within the parameters of the credit approval. Our proprietary system then matches and refers qualified borrowers to our institutional funding partners based on their specific requirements of borrower profiles, such as credit limits or ticket size. Our institutional funding partners will then review the credit application and our preliminary credit assessment of the borrower we introduced in accordance with their own credit assessment standards and decide to approve or decline the loan application. Once the borrower’s credit application is approved, our institutional funding partners will then directly disburse the loan amounts to the borrower’s bank account. 74 For a substantial majority of loans we facilitate on our platform in China, we engage third-party guarantee companies or use our own guarantee company to provide financing guarantees to our institutional funding partners for the full repayment of loans. However, there are instances where we provide financing guarantees for only a portion of the loan repayment, or in some cases, none at all. Please refer to “Item 4. Information on the Company—B. Business Overview—Quality Assurance Commitments for Our Institutional Funding Partners” for further details. For a small portion of loans, we collaborate with third-party trust management companies. Our collaboration with those third-party trust management companies involves setting up trusts, in some of which we invested to provide loans to borrowers we introduce. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We collaborate with third-party trust management companies to set up trusts. We may be deemed to be an illegal financial institution under such trust arrangement, which may materially and adversely affect our business and financial condition.” Step 4: Loan Servicing and Collection Borrowers can repay loans through our online platform based on the terms and conditions outlined in the loan agreements between borrowers and institutional funding partners. For borrowers unable to repay loans online, we accept bank transfers on behalf of our institutional funding partners. Borrowers and institutional funding partners can monitor loan performance in real-time. Before each scheduled repayment date, borrowers are required to deposit adequate funds, covering the principal, interest, and any applicable late payment penalties and guarantee service fees, into their respective accounts. Additionally, they authorize institutional funding partners, us, and third-party payment companies designated by us or institutional funding partners to transfer the corresponding amounts on the repayment date. This transfer includes the principal, interest, and, if applicable, late payment penalties and guarantee service fees to the respective institutional funding partners and third-party guarantee companies. Our institutional funding partners subsequently pay us transaction service fees for the services we provided. Additionally, we may also receive transaction service fees from third-party guarantee companies under certain circumstances for services rendered to them. We have a collection team of over 1,100 employees in China as of December 31, 2025 and have developed a systematic process to handle collection of delinquent loans. Upon becoming delinquent, a loan enters into our collection process, which is divided into stages based on severity of delinquency. The first 90-day collection period is typically handled by our collection team although we also engage third-party loan collection service providers to assist us from time to time. Primary collection measures, including text message reminders, phone calls, legal letters and legal proceedings, are taken in succession as a loan becomes increasingly overdue. If a loan remains overdue after the 90-day period, we then outsource loan collection to third-party service providers to optimize collection efficiency. Risk Management Our strong risk management capabilities are one of the key competitive advantages that enable us to make credit available to the large unserved or underserved population in each market, whose credit histories have yet been recorded in this market’s developing credit system, while maintaining a sustainable business at a healthy profitability level. 75 Data Aggregation We have invested significant resources in building up a comprehensive credit database since our inception. Today, we own an extensive database with several thousands of variables for our borrowers, covering a wide range of information pertinent to a borrower’s creditworthiness and presenting a user profile from a 360-degree view. Data are aggregated from a number of sources. We have cooperation with a number of organizations, such as industry associations, who grant us the access to their respective data. Our strong data-mining capabilities, which we believe differentiate us from many other players in the online consumer finance industry. We have developed a number of proprietary automated programs that are capable of searching, aggregating and processing data from the internet in a short period of time. Another important component of our credit database is the payment histories of our prior and existing borrowers. We take various measures to ensure high level of reliability and accuracy of data. The following are typical data that we seek to collect for each loan application: ● historical credit data accumulated through our online platform; ● behavioral data that we glean from an applicant’s behaviors as they apply for loans; ● personal identity information maintained by an organization operated under the Ministry of Public Security; ● background information, such as income level, education level and marital status, collected from prospective borrowers; ● list and database of fraud cases; and ● credit data from the credit bureau in the markets where we operate. Upon the data aggregation, our system converts the originally unstructured data and structured data into credit scores using machine learning techniques. Fraud Detection We have been working closely with multiple partners in a joint effort to identify emerging fraudulent schemes, scams, trends, threats, and criminal organizations and have accumulated data related to fraud. The database we maintain helps us to fine-tune the rules we set and enhance our fraud detection capabilities. We have adopted a multifaceted fraud detection method. First, we set up rules based on known fraud cases to filter activities for fraudulent behaviors. Afterwards, we apply advanced network techniques to identify relationships pertinent to fraud and connect the individual fraudulent activities to uncover complex fraud schemes and criminal organizations. In addition, we run anomaly detection to detect individual and aggregated abnormal patterns in order to catch unknown fraud behaviors. If available information is insufficient for our system to draw a conclusion, the loan applications will be forwarded to our anti-fraud team for offline verification, which involves members of our anti-fraud team speaking with applicants to inquire after any inconsistencies in a loan application. Proprietary Credit Scoring and Risk Pricing Models In August 2014, we developed and launched a proprietary credit scoring model, known as the Magic Mirror Model, which we believe represents one of our key competitive advantages. Our Magic Mirror Model leverages a huge database that we have built up gradually through our years of operations. Such a vast amount of data lays a strong foundation for our use of machine learning to optimize the Magic Mirror Model on a continuing basis. Following data aggregation and fraud detection, prospective borrowers enter into the credit assessment phase. Different algorithms are applied to prospective borrowers with different features in assessing the potential risks associated with them. Based on the assessment results, our credit scoring model generates Magic Mirror scores for each of the prospective borrowers. A new Magic Mirror credit score is generated each time a borrower applies for a loan, which may change the borrower’s credit limit for that type of loan. We apply various machine learning techniques to the data collected. Through monitoring model performance as well as variable consistency, our system is able to evaluate the effectiveness of existing variables while discovering new ones. The Magic Mirror Model then is optimized by adjusting the group of variables used. The following factors are associated with variables that are important for assessing the probability of delinquency: ● repayment history ● personal identity information 76 ● education ● consumption behavior ● credit reports ● fraudulent records ● third-party supplementary data For applicants of our standard loan products, the Magic Mirror score derived from our proprietary credit scoring model is used to determine which of the eight segments in our existing credit grid such applicants fall into. Among the eight segments, Level I represents the lowest risk associated with the borrowers, while Level VIII represents the highest risk. Level VIII loan applications will be rejected. Once a credit level is assigned to a specific loan, it will not be changed during the tenor of the loan. We review and modify our segmented pricing from time to time, taking into consideration not only the borrower credit risk but also other factors, such as market interest rates, adequacy of investor protection mechanisms and competition in the market. Quality Assurance Commitments for Our Institutional Funding Partners We provide quality assurance commitments to our institutional funding partners for the majority of the loans they have funded. Financing guarantee. We collaborate with licensed third-party financing guarantee companies to provide financing guarantees to our institutional funding partners. In cases of borrower default, the corresponding third-party guarantee company is obligated to repay the full overdue amount to the institutional funding partner. Upon the guarantee company’s repayment, we are then obliged to purchase creditor’s rights from them at a price equivalent to the amount repaid. In certain instances, we also offer security deposits to third-party financing guarantee companies for loans funded by specific institutional funding partners as an additional quality assurance commitment. Furthermore, we established three financing guarantee companies in Fujian, Tianjin, and Hainan in 2019 and 2020. Our own financing guarantee companies may directly provide financing guarantees to institutional funding partners for loans they funded. Technology The success of our business is dependent on our strong technological capabilities that support us in delivering superior user experience, protecting information on our platforms, increasing operational efficiency and enabling innovations. Principal components of our state-of-the-art technology include: ● Data Science. We use data science technology extensively in various aspects of our operations. Our data mining and user behavior analytics capabilities allow us to build a comprehensive credit profile for each borrower. Our multi-dimensional real-time analytics capabilities enable fast and accurate credit decisions. We also use data-based machine learning in numerous applications, such as improving fraud detection, optimizing marketing resource allocation and increasing collection efficiency. ● Artificial Intelligence. We integrate artificial intelligence across our operations, leveraging our proprietary E-LADF LLM Application Framework in machine learning, graph algorithms, computer vision, and natural language processing. These technologies are applied to precision marketing, fraud detection, risk assessment, and post-loan management to enhance operational efficiency and risk mitigation. Key proprietary platforms include Ming Mirror, which utilizes knowledge graph technology for fraud detection; RTA, a high-capacity, low-latency precision marketing system; and BluAI, an intelligent voice assistant that automates customer interactions across marketing and collections. We also employ large language models to analyze unstructured data for credit assessment, and have implemented AI-powered tools such as XCoder and intelligent virtual agents to support coding, customer acquisition, and compliance processes. 77 ● Security. We are committed to maintaining secure online platforms. We have built a firewall that monitors and controls incoming and outgoing traffic on our platforms around the clock. Once any abnormal activity is detected, our system will immediately notify our IT team and at the same time automatically take measures, such as activating third-party traffic control service, to prevent any harm to our platforms. For any transmission of user information, we use data encryption to ensure confidentiality. Within our organization, we have adopted a series of policies on internal control over information systems, including physical security measures, such as entry and equipment control, and network access management, such as identification, authentication and remote access control. We employ data slicing and distribute the storage of a user’s data points across several servers. We also maintain redundancy through a real-time multi-layer data backup system to prevent loss of data resulting from unforeseen circumstances. We conduct periodic reviews of our technology platforms, identifying and correcting problems that may undermine our system security. ● Stability. Our systems infrastructure is primarily hosted in data centers at two separate locations in Shanghai. We maintain redundancy through a real-time multi-layer data backup system to ensure the reliability of our network. Our platforms adopt modular architecture that consists of multiple connected components, each of which can be separately upgraded and replaced without compromising the functioning of other components. This makes our platforms both highly reliable and scalable. ● Scalability. With modular architecture, our platforms can be easily expanded as data storage requirements and user visits increase. In addition, load balancing technology helps us improve distribution of workloads across multiple computing components, optimizing resource utilization and minimizing response time. ● Automation. In addition to the foregoing technologies we employ to support our highly automated platforms, we have taken various measures to ensure the uninterrupted operation of our platforms. For example, we have adopted self-recovery technology that enables our system to perceive malfunctions and make the necessary adjustments to restore itself to normal operation without any human intervention. Also, our system is connected with systems of multiple data providers that serve as backups for each other. If services provided by one data provider are suspended, our system will shift to the backup sources automatically to ensure no interruption to our operation. Intellectual Property We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. As of March 31, 2026, we had (i) 228 patent applications and 53 registered patents in China and other jurisdictions, including our proprietary facial recognition technology used for fraud detection, (ii) 317 registered computer software copyrights, (iii) 280 registered domain names, including www.ppdai.com, and (iv) 413 trademark registrations in China and other jurisdictions, including our “Finvolution,” “PPDAI,” “信也,” “拍拍贷” and “魔镜” trademarks. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology. Monitoring unauthorized use of our technology is difficult and costly, and we cannot be certain that the steps we have taken will prevent misappropriation of our technology. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources. In addition, third parties may initiate litigation against us alleging infringement of their proprietary rights or declaring their non-infringement of our intellectual property rights. In the event of a successful claim of infringement and our failure or inability to develop non-infringing technology or license the infringed or similar technology on a timely basis, our business could be harmed. Even if we are able to license the infringed or similar technology, license fees could be substantial and may adversely affect our results of operations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position” and “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.” 78 Sales and Marketing Our market position benefits significantly from our large user base and our strong brand recognition throughout China and overseas markets. We believe that our variety of loan products that offer attractive returns, as well as our effective risk management and various protection mechanisms, lead to strong word-of-mouth promotion, which drives awareness of our brand among our users and business partners. We use a variety of traditional and internet marketing channels to acquire borrowers although most of our borrowers are acquired online. Our borrower acquisition channels mainly include: ● Online Advertising. From time to time, we work with App Stores to promote our mobile applications and with internet companies to place online advertisements. ● Online Partnerships. We team up with certain websites that are able to reach quality borrowers to provide consumer finance services to their customer. ● Search Engine Marketing. We also use paid placement on major online search engines in the markets where we operate. ● Offline Direct Sales Team. We have also established an offline direct sales team with deep experience in customer acquisition in offline small and micro enterprise scenarios. Competition Online consumer finance is an emerging industry. It provides a new means for consumers to obtain financing. As a leading player in the online consumer finance market in China and the overseas markets, we face intensive competition from other online platforms, online finance service providers, and technology giant backed internet finance platforms, as well as traditional financial institutions. Consumer finance platforms which operate online platforms connecting borrowers and institutional funding partners compete directly with us for both borrowers and institutional funding partners. We also compete with traditional financial institutions, including credit card issuers, consumer finance business units in commercial banks and other consumer finance companies. Some of our larger competitors have substantially broader product or service offerings and rich financial resources to support heavy spending on sales and marketing. We believe that our ability to compete effectively for borrowers and institutional funding partners depends on many factors, including the variety of our products, user experience on our platforms, effectiveness of our risk management, the return offered to institutional funding partners, our partnership with third parties, our marketing and selling efforts and the strength and reputation of our brands. Seasonality We experience seasonality in our business, reflecting seasonal fluctuations in internet usage and traditional personal consumption patterns, as our borrowers typically use their borrowing proceeds to finance their personal consumption needs. For example, we generally experience lower transaction volume on our online consumer finance platform during public holidays in China, particularly during the Chinese New Year holiday season in the first quarter of each year. As we cooperate with institutional funding partners, such as commercial banks, our business may also be affected by liquidity seasonality in the banking system. For example, liquidity in China’s banking sector has historically had a tendency to be looser at the beginning of each calendar year and tighter towards the end of each calendar year. Overall, the seasonality of our business may increase in the future. Regulations in the PRC This section sets forth a summary of the most significant laws, rules and regulations that affect our business activities in the PRC and our shareholders’ rights to receive dividends and other distributions from us. 79 Regulations Relating to Online Consumer Finance Services Regulations on lending activities In December 2017, the Notice on Regulating and Rectifying “Cash Loan” Business was promulgated by the Internet Finance Rectification Office and the Online Lending Rectification Office. This notice specifies the features of “cash loans” as not relying on consumption scenarios, with no specified use of loan proceeds, unsecured, and with no qualification requirement on customers, among others. It also sets forth several general requirements regarding “cash loan” business, including but not limited to: (i) the aggregated borrowing costs of borrowers charged by financial institutions in the forms of interest and various fees should be annualized and subject to the limit on the interest rate of private lending set forth in the Provisions on Several Issues Concerning Laws Applicable to Trials of Private Lending Cases issued by the Supreme People’s Court; (ii) all financial institutions are required to follow the “know-your-customer” principle and prudentially assess and determine the borrower’s eligibility, credit limit, and cooling-off period; (iii) all financial institutions are required to enhance internal risk control and prudentially use the “data-driven” risk management model; (iv) all financial institutions are prohibited from providing any loans to any persons without a repayment source or repayment capacity, or loans with no designated use of proceeds; (v) funds from banks cannot be used for “cash loans” or “campus loans”; and (vi) in cases where a financial institution participates in the “cash loan” business, third parties are not allowed to charge borrowers any interest or fees. This notice further provides that financial institutions cooperating with third parties to engage in lending business (i) are not allowed to outsource any core lending business operations, such as credit assessment and risk management, to third parties, (ii) are not allowed to accept any credit enhancement provided by third parties without a license or approval to provide guarantees, including credit enhancement services in the form of a commitment to assume default risks, (iii) should comply with the judicial interpretations by the Supreme People’s Court of the PRC regarding interest rates in private lending concerning the annual borrowing cost charged to a borrower, i.e., interest plus other fees, and (iv) should ensure that third parties do not collect any interest or fees from borrowers. Any violation of the Notice on Regulating and Rectifying “Cash Loan” Business may result in penalties, including but not limited to suspension of operation, orders to rectify, condemnation, revocation of a license, orders to cease business operations, and even criminal liabilities. On January 30, 2024, the National Financial Regulatory Administration promulgated the Measures on the Administration of Personal Loans, which stipulate that (i) several conditions must be met to apply for a personal loan, including, but not limited to: (a) clear and legal purposes for the loan, (b) reasonable amounts, terms, and currencies as indicated in the loan application, and (c) willingness and ability of the borrower to make repayments, with a good credit standing and no record of bad credit; (ii) loan investigations must cover, but are not limited to, the borrower’s basic information, earnings, loan purposes, source of funds, ability to repay, and repayment method; and (iii) the lender may not delegate core risk management matters, such as assessing the borrower’s genuine intentions, earnings, indebtedness, source of funds, and the evaluation of service providers, to a third party. On August 6, 2015, the Supreme People’s Court issued the Provisions on Several Issues Concerning Laws Applicable to Trials of Private Lending Cases. These provisions state that agreements between lenders and borrowers on loans with interest rates below 24% per annum are valid and enforceable. For loans with interest rates per annum between 24% (exclusive) and 36% (inclusive), if the interest has already been paid to the lender, and as long as such payment has not damaged the interests of the state, community, or any third parties, the courts will reject the borrower’s request to demand the return of excess interest payments. If the annual interest rate of a private loan exceeds 36%, the agreement on the excess interest is invalid. If the borrower requests the lender to return the portion of interest exceeding 36% of the annual interest that has been paid, the courts will support such requests. All interest rates of our loan products are below 36%. On August 4, 2017, the Supreme People’s Court issued the Circular of Several Suggestions on Further Strengthening Judicial Practice Regarding Financial Cases, which provides, among other things, that (i) borrowers’ claims under financial loan agreements to adjust or reduce interest exceeding 24% per annum, based on the aggregate amount of interest, compound interest, default interest, liquidated damages, and other fees claimed by the lender being excessively high, shall be supported by PRC courts; (ii) in the context of Internet finance disputes, if online lending information intermediary platforms and lenders circumvent the judicially protected interest rate limit by charging intermediary fees, it shall be deemed invalid; and (iii) private lending transactions are defined as loans between individuals, legal persons, and other organizations. Loans funded by financial institutions licensed by financial regulatory authorities are not considered private lending transactions. 80 On August 20, 2020, the Supreme People’s Court issued the Decision on Amending the Provisions on Several Issues Concerning Laws Applicable to Trial of Private Lending Cases, which was further amended by the Supreme People’s Court on December 29, 2020. These amendments revised the upper limit of private lending interest rates under judicial protection. The amendments provide that when the lender requests the borrower to pay interest in accordance with the agreed-upon interest rate in the agreement, the people’s court will support such request, except where the interest rate agreed by both parties exceeds four times the one-year Loan Prime Rate at the time of the establishment of the agreement, or the Quadruple LPR Limit. The one-year Loan Prime Rate refers to the one-year loan market quoted interest rate issued by the National Bank Interbank Funding Center, authorized by the People’s Bank of China on the 20th of each month since August 20, 2019. According to these amendments, the upper limit of interest rates of 24% and 36% provided in the 2015 Private Lending Judicial Interpretation are replaced by the Quadruple LPR Limit. Moreover, if the lender and the borrower agree on both the overdue interest rate and the liquidated damages or other fees, the lender may choose to claim any or all of them, but the portion in total exceeding the Quadruple LPR Limit may not be supported by the people’s court. These amendments apply to new first-instance cases of private lending disputes accepted by the People’s Court after the implementation of the Judicial Interpretation Amendment on August 20, 2020. If the lending occurred before August 20, 2019, the upper limit of the protected interest rate can be determined by referring to four times the one-year Loan Prime Rate at the time of the plaintiff’s filing of the lawsuit. On January 21, 2021, in the response letter to the Guangdong High People’s Court regarding the inquiry on the scope of application of these amendments issued by the Supreme People’s Court, it further clarifies that seven types of financial organizations, including micro-loan lending companies and financing guarantee companies, are financial institutions licensed by the financial administrative authorities, and the disputes arising out of their financial business activities do not apply to these amendments. However, as the regulatory authorities have wide discretion in the administration, interpretation, and enforcement of the laws and regulations, we cannot rule out the possibility that the regulatory authorities may hold different opinions on whether the Quadruple LPR Limit applies to the loans funded by financial institutions on our platforms. For example, according to the Notice on Regulating and Rectifying “Cash Loan” Business, promulgated by the Internet Finance Rectification Office and the Online Lending Rectification Office in December 2017, in the context of “cash loan” business operated by various types of institutions, the aggregated borrowing costs of the borrower charged in the forms of interests and all kinds of fees should be annualized and subject to the upper limit on interest rate of private lending set forth in the judicial interpretations issued by the Supreme People’s Court. On March 31, 2021, the People’s Bank of China released PBOC No. 3 Announcement, which stipulates, among others, that the annual interest rate of a loan should be the annualized form of ratio calculated based on the percentage of all expenses charged from the borrower for the borrowing to the principal actually borrowed by this borrower. The expenses charged from the borrower include the interests and the various expenses directly related to the borrowing. If the loan is repaid in installments, the remaining principal after the deduction of the total repaid principal should be deemed as the actual borrowed principal when calculating the annual interest rate. Compound interest rate and simple interest rate are both allowed to be used to calculate the annual interest rate, provided that if the simple interest rate is used, it should be explicitly disclosed to the borrower. PBOC No. 3 Announcement applies to deposit-taking financial institutions, consumer finance companies, microloan companies, and internet platforms providing loan application services like us. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Interest rates of certain of our loan products may exceed the statutory interest rate limit and therefore part of the interests may not be enforceable through the PRC judicial system.” On April 3, 2025, the National Administration of Financial Regulation issued the Notice on Strengthening the Supervision of Online Lending Business and Promoting Financial Services, effective from October 1, 2025. It mandates, among other things, the following key provisions: (i) bank headquarters shall maintain and publicly disclose on their official websites and mobile applications a whitelist of partnered online lending platforms; (ii) banks shall implement risk-based pricing mechanisms aligned with borrowers’ credit risks; (iii) banks shall make sure in the cooperative agreements that online lending platforms are prohibited from charging interest or other fees to borrowers, and credit enhancement service providers are prohibited from charging service or consultation fees, as such practices are deemed to increase credit enhancement fees in a disguised form; (iv) banks shall ensure that borrowers’ comprehensive costs are in compliance with Circular of Several Suggestions on Further Strengthening the Judicial Practice Regarding Financial Cases promulgated by the Supreme People’s Court on August 4, 2017, which stipulates that the aggregate amount of interest, compound interest, default interest, liquidated damages and other fees exceeding 24% should not be supported by the PRC courts; and (v) banks and online lending platforms must fully disclose key information, including but not limited to lenders, annualized interest rates, credit enhancement providers and fees, annualized funding costs, post-default interest and costs, and must clearly state that no other fees will be charged to borrowers. These requirements also apply to consumer finance companies and trust companies engaged in online lending business. 81 On September 11, 2025, the National Financial Regulatory Administration promulgated the Measures for the Administration of Trust Companies, which came into force on January 1, 2026. The Measures for the Administration of Trust Companies requires that the business scope of trust companies includes asset service trusts, asset management trusts, charitable public welfare trusts, etc. Channel business, fund pool business, and illegal related-party transactions are prohibited. The Measures require trust companies to establish and improve mechanisms for corporate governance, risk management, information disclosure, and internal and external audit, and to strengthen management of net capital and risk reserves. On March 15, 2026, the National Financial Regulatory Administration and the People’s Bank of China jointly promulgated the Provisions on Disclosure of the Comprehensive Borrowing Costs for Personal Loan Business, effective from August 1, 2026. The provisions require financial institutions to itemize items such as interest rates, installment fees, credit enhancement fees, and contingent costs arising from defaults, as well as identify the financial institutions or their cooperating entities that collect such interest and fees. On April 24, 2026, the People’s Bank of China, National Financial Regulatory Administration, Cyberspace Administration of China, and five other regulatory authorities jointly promulgated Administrative Measures for Online Marketing of Financial Products, or the Online Marketing Measures, which will take effect on September 30, 2026. It provides, among others, that (i) financial products include a wide array of products and services, among which are loan products; (ii) financial institutions with operational regional restrictions shall identify the client’s region and provide the financial products only to clients in the permitted regions; (iii) online platforms shall not direct financial clients to other third-party platforms without financial license; (iv) online platforms are prohibited from inducing clients by preferential initial payment fees, and from using misleading terms such as “low threshold”, “drawdown in seconds”, “low interest rate”, etc; and (v) online platforms are prohibited from utilizing algorithm model to induce excessive consumption. The Online Marketing Measures has recently been promulgated and there are a lot of uncertainties about its interpretations and impact on our business. We may need to adjust our business models with our institutional funding partners and third-party online lending platforms. We cannot assure you that such adjustments can be made in a timely or cost-efficient manner, nor that cooperation with third-party platforms will continue in the future. Additionally, we may be required to change our online ads for compliance with the Online Marketing Measures, which would affect user acquisition. Failure to comply may result in penalties, including business termination, fines, and potential criminal liability As our institutional funding partners include commercial banks, consumer finance companies, and trust companies, they are required to evaluate and review us as mandated by the Notice on Strengthening the Supervision of Online Lending Business and Promoting Financial Services and the subsequent laws and regulations issued by the regulation authorities. If any of our institutional funding partners identifies any inadequacies in our evaluation and review, they may terminate their cooperation with us, which could materially and adversely affect our business and operating results. Furthermore, as an intermediary between institutional funding partners and borrowers, we cannot assure you that all the institutional funding partners we cooperate with have been and will continue to be in strict compliance with the Notice on Strengthening the Supervision of Online Lending Business and Promoting Financial Services and the relevant laws and regulations issued by regulatory authorities. Regulations on illegal financial institutions and intermediaries Under the Measures for the Ban on Illegal Financial Institutions and Illegal Financial Business Operations, issued by the State Council on July 13, 1998, any entity engaging in financial activities without approval from the People’s Bank of China may be classified as an illegal financial institution. This includes providing loans without the necessary approval from the People’s Bank of China, which is considered an illegal financial business operation. Given the rapid evolution of the online consumer finance industry and the changing regulatory landscape since the enactment of these measures, there is ambiguity surrounding their interpretation and applicability to our operations. If we are deemed an illegal financial institution, we may be subject to penalties, including confiscation of illegal gains together with a fine from one to five times the illegal gains, or a fine of RMB100,000 to RMB500,000 if there are no illegal gains, and criminal liability if the violation constitutes a criminal offense. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may be deemed to use our own funds to finance certain loans and therefore be subject us to regulatory risks.” In addition, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice jointly issued the Guidance on Several Issues Regarding Illegal Lending in Criminal Cases on July 23, 2019. This guidance provides, among other things, that (i) if any entity or individual engages in providing loans to unspecified individuals consistently for profit and without approval from regulatory authorities or outside its business scope, thus disturbing the stability of financial markets, such entity or individual may face a criminal charge of unfair competition and may be subject to criminal liability in accordance with applicable laws and regulations. “Providing loans to unspecified individuals consistently” refers to providing loans to entities and individuals no fewer than ten times within two years; and (ii) if the actual annual interest rate of loans provided by such entity or individual exceeds 36%, it would be deemed an aggravating circumstance when such entity or individual faces the aforementioned criminal charge of unfair competition. There are uncertainties regarding the interpretation of this guidance, and it is still unclear how regulatory authorities will interpret and implement it in the future. Regulations on financial guarantee The Regulations on the Administration of Financing Guarantee Companies were promulgated by the State Council on June 21, 2017, and took effect on October 1, 2017. According to these regulations, the establishment of financing guarantee companies should be subject to the approval of the competent government authority, and unless otherwise stipulated, no entity is allowed to operate the financing guarantee business without such approval. If any entity operates the financing guarantee business without such approval, the entity may face penalties, including termination or suspension of business, fines of RMB500,000 to RMB1,000,000, confiscation of illegal gains if any, and if the violation constitutes a criminal offense, criminal liability shall be imposed in accordance with the applicable laws and regulations. 82 In October 2019, the China Banking and Insurance Regulatory Commission, together with eight other regulatory agencies, jointly promulgated the Supplemental Rules to the Administration of Financing Guarantee Companies, which provides that any entity providing client referral or credit assessment services to the lending institutions may not provide financing guarantee services in a direct or a disguised form without the regulatory approval. If any entity operates financing guarantee business without appropriate approval, its business operations will be banned by the regulatory authorities, and it will be required to properly settle existing business. On December 31, 2021, the People’s Bank of China published the Regulations on the Local Financial Supervision and Administration (Draft for Comments), which stipulate that, among others, (i) the local financial organizations should primarily serve their local clients; (ii) the guidance for local financial organizations to carry out business outside provinces where they are registered should be made by the State Council or financial regulatory authorities designated by the State Council; (iii) six types of financial organizations, including financing guarantee companies and micro-lending companies, are deemed as local financial organizations; (iv) a transition period will be given to the organizations carrying out business outside provinces before the effectiveness of the draft by the financial regulatory authorities; and (v) organizations carrying out business outside provinces without approval of the competent provincial regulatory authorities may be subject to penalties, including correction orders, confiscation of illegal gains or fines, cessation of business operations, and revocation of business license. As of the date of this annual report, the draft regulations have not yet been promulgated into law. Regulations on anti-money laundering The PRC Anti-money Laundering Law, promulgated by the People’s Bank of China on October 31, 2006, and effective since January 2007, stipulates that special non-financial institutions, which are required by applicable regulations to fulfill anti-money laundering obligations, must comply with these obligations. The People’s Bank of China and other governmental authorities issued a series of administrative rules and regulations to specify the anti-money laundering obligations of financial institutions and special non-financial institutions. In October 2018, the People’s Bank of China, the China Banking and Insurance Regulatory Commission, and the CSRC jointly issued the Anti-money Laundering and Anti-terrorism Financing Administrative Measures for Internet Finance Institutions, providing that internet finance institutions are obliged to accept the anti-money laundering and anti-terrorism financing inspections conducted by the People’s Bank of China and its branches. These measures also authorized the establishment of the internet finance anti-money laundering and anti-terrorism financing monitoring platform by the National Internet Finance Association, under the instruction of the People’s Bank of China and other financial governmental authorities, to enhance online monitoring mechanisms and information sharing among institutions. Regulations Relating to Credit Reference Activities On January 21, 2013, the State Council promulgated the Regulations on Credit Reference, which provide that any person or organization conducting personal credit reference business without approval from the competent credit reference administrative department of the State Council may face penalties. These penalties include cessation of business operations, confiscation of illegal gains, fines ranging from RMB50,000 to RMB500,000, and even criminal liability. On September 27, 2021, the People’s Bank of China issued the Measures for Regulating Credit Reference, which came into effect on January 1, 2022. These measures stipulate that credit information includes basic information, loan information, other related information, and analysis and evaluation information generated from the foregoing information of enterprises and individuals for identifying their credit status. Credit reference business refers to the activities of collecting, sorting, storing, and processing the credit information of enterprises and individuals, and providing them to the information users. The individual credit reference institution license issued by the People’s Bank of China is required for engaging in the individual credit reference business. Licensed individual credit reference institutions must report to the People’s Bank of China regarding their cooperation with any information provider for collecting, sorting, storing, and analyzing individual credit information. Additionally, financial institutions are not allowed to cooperate with any commercial entity that does not hold a credit reference license to obtain credit reference service. Violators of these rules may face penalties, including cessation of business operations, confiscation of illegal gains, fines ranging from RMB50,000 to RMB500,000, and even criminal liability. 83 Regulations Relating to Foreign Investment Investment activities in the PRC by foreign investors are governed by the Guidance Catalog of Industries for Foreign Investment, which is promulgated and amended from time to time by the Ministry of Commerce of the PRC and the National Development and Reform Commission. This guidance divides industries into three categories in terms of foreign investment: “encouraged,” “restricted,” and “prohibited,” and all industries not listed under one of these categories are generally deemed to be permitted. Unless otherwise provided by applicable laws and regulations, foreign investors are generally not allowed to own more than 50% of the equity interests in value-added telecommunications service providers in China, as stipulated by the Guidance Catalog of Industries for Foreign Investment promulgated in 2007, most recently amended by the Special Administrative Measures for the Access of Foreign Investment (Negative List) in 2021. According to these measures, the foreign equity interest ownership of entities that engage in value-added telecommunications business (except for e-commerce, domestic multi-party communications, storage and forwarding classes, and call centers) may not exceed 50%. Foreign investors investing in sectors with restrictions must comply with the specified requirements outlined in these measures. On March 15, 2019, the National People’s Congress enacted the Foreign Investment Law of the PRC, which came into effect on January 1, 2020, and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law, and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law of the PRC sets a general principle that foreign investors and their investments in China will enjoy national treatment and are subject to a negative list. It embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, uncertainties still exist regarding its interpretation and implementation. For instance, under the Foreign Investment Law of the PRC, “foreign investment” refers to investment activities directly or indirectly conducted by foreign individuals, enterprises, or other entities in China. Though it does not explicitly classify contractual arrangements as a form of foreign investment, there is no assurance that foreign investment via contractual arrangement would not be interpreted as a type of indirect foreign investment activity under the definition in the future. In addition, the definition contains a catch-all provision that includes investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. On December 26, 2019, the State Council promulgated the Implementation Regulations on the Foreign Investment Law, which came into effect on January 1, 2020. However, the Implementation Regulations on the Foreign Investment Law still do not explicitly define whether contractual arrangement would be deemed as a form of foreign investment. Therefore, it still leaves leeway for future laws, administrative regulations, or provisions promulgated by the State Council to provide for contractual arrangements as a form of foreign investment. Foreign investment in telecommunications companies in the PRC is governed by the Provisions for the Administration of Foreign-Invested Telecommunications Enterprises, which were promulgated by the State Council on December 11, 2001, and most recently amended on April 7, 2022. These provisions prohibit a foreign investor from holding over 50% of the total equity interest in any value-added telecommunications service provider in China, unless otherwise provided. Regulations Relating to Internet Companies Regulations on value-added telecommunication services The Telecommunications Regulations of the PRC, promulgated by the State Council on September 25, 2000 and amended on February 6, 2016, provide a regulatory framework for telecommunications services providers in the PRC. These regulations require telecommunications services providers to obtain an operating license prior to the commencement of their operations. These regulations categorize telecommunications services into basic telecommunication services and value-added telecommunications services. According to these regulations, information services provided via fixed network, mobile network and Internet fall within value-added telecommunications services. In July 2006, the Ministry of Information Industry, the predecessor of the Ministry of Industry and Information Technology, issued the Circular on Strengthening the Administration of Foreign Investment in the Operation of Value-added Telecommunications Business, which prohibits holders of these services licenses from leasing, transferring or selling their licenses in any form, or providing any resource, sites or facilities, to any foreign investors intending to conduct such businesses in China. 84 In July 2017, the Ministry of Industry and Information Technology promulgated the Administrative Measures on Telecommunications Business Operating Licenses. Under these regulations, a commercial operator of value-added telecommunications services must first obtain a license for value-added telecommunications business from the Ministry of Industry and Information Technology or its provincial level counterparts. Foreign ownership of internet-based businesses, such as distribution of online information, is subject to restrictions under current PRC laws and regulations. These regulations require that the foreign investors may acquire up to 50% equity interests in foreign-invested value-added telecommunications enterprises in China. PRC regulations impose sanctions for engaging in commercial internet information services, which is a sub-set of value-added telecommunication business, without a value-added telecommunication service license for internet content provider, and sanctions for engaging in the operation of online data processing and transaction processing, which is another sub-set of value-added telecommunication business, without a value-added telecommunication service license for online data processing and transaction processing. These sanctions include rectification orders and warnings from the PRC communication administrations, fines, confiscation of illegal gains, and suspension or termination of operating of the websites and mobile applications in question. Furthermore, as we are providing mobile applications to mobile device users, it is uncertain if any of our subsidiaries will be required to obtain a separate operating license in addition to the value-added telecommunication business operation license. We have not applied for such separate license since we have not obtained the value-added telecommunication business operation license. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” Regulation on mobile internet applications information services In addition to the Telecommunications Regulations of the PRC and other regulations above, mobile applications are especially regulated by the Administrative Provisions on Mobile Internet Applications Information Services, which was promulgated by the Cyberspace Administration of China on June 28, 2016 and amended on June 14, 2022. The APP Provisions regulate mobile application information service providers. According to these provisions, the Cyberspace Administration of China and local offices of cyberspace administration shall be responsible for the supervision and administration of nationwide or local mobile application information, respectively. Under these provisions, mobile application information service providers are required to obtain qualifications prescribed by laws and regulations and shall be responsible for the supervision and administration of mobile application information required by laws and regulations and implement the information security management responsibilities strictly, including but not limited to: (i) to authenticate the identity information of the registered users, (ii) to protect user information, and obtaining the consent of users while collecting and using users’ personal information in a lawful and proper manner. Mobile app operators may not deny users’ access to basic functions and services of the app in the event that the users disagree with collection of unnecessary personal information, and (iii) to establish information content management mechanism, and take against any information content in violation of laws or regulations depending on circumstances. On August 4, 2023, the Ministry of Industry and Information Technology promulgated the Notice of the Ministry of Industry and Information Technology on the Filing of Mobile Apps, which provides that app operators engaged in internet information services within China must fulfill the filing process in accordance with the applicable regulations and such operators may not engage in the app internet information service without completion of such filing. Regulations on internet security The National People’s Congress has enacted legislation that prohibits use of the internet that breaches the public security, disseminates socially destabilizing content or leaks state secrets. Breach of public security includes breach of national security and infringement on legal rights and interests of the state, society or citizens. Socially destabilizing content includes any content that incites defiance or violations of PRC laws or regulations or subversion of the PRC government or its political system, spreads socially disruptive rumors or involves cult activities, superstition, obscenities, pornography, gambling or violence. State secrets are defined broadly to include information concerning PRC national defense, state affairs and other matters as determined by the PRC authorities. 85 Internet information in China is regulated and restricted from a national security standpoint. The Standing Committee of the National People’s Congress has enacted the Decisions on Maintaining Internet Security on December 28, 2000 and further amended on August 27, 2009, which may subject violators to criminal punishment in China for any effort to: (i) gain improper entry into a computer or system of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information; or (v) infringe intellectual property rights. In 1997, the Ministry of Public Security has promulgated measures that prohibit use of the internet in ways which, among other things, result in a leakage of state secrets or a spread of socially destabilizing content. If an internet information service provider violates these measures, the Ministry of Public Security and the local security bureaus may revoke its operating license and shut down its websites. The Cyber Security Law, which was promulgated by the Standing Committee of the National People’s Congress on November 7, 2016 and became effective on June 1, 2017. It was subsequently amended on October 28, 2025. Under this regulation, network operators, including online lending information service providers, shall comply with laws and regulations and fulfill their obligations to safeguard security of the network when conducting business and providing services, and take all necessary measures pursuant to laws, regulations and compulsory national requirements to safeguard the safe and stable operation of the networks, respond to network security incidents effectively, prevent illegal and criminal activities, and maintain the integrity, confidentiality and usability of network data. On May 1, 2021, the Regulations on the Scope of Necessary Personal Information Collected by the Frequently Used Mobile Applications, jointly promulgated by the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation came into effect, which provides, among others, that: (i) the application operators may not refuse to provide fundamental function services to the users for reason that such users refuse to provide the personal information out of the scope of necessity; (ii) the fundamental function service of online lending applications is to facilitate loans provided to the users online for use of personal consumption and business operation; and (iii) the necessary personal information includes the borrower’s mobile phone number, name, bank account, as well as type, number and valid period of its identity card. The different governmental authorities, including the Ministry of Industry and Information Technology, Shanghai Communications Administration, and Cybersecurity Branch of Shanghai Public Security Bureau, have been inspecting various mobile applications on the market on the enforcement of data protection and cybersecurity and may continue to do so in the future, even with more stringent scrutiny. The Standing Committee of the PRC National People’s Congress published the Data Security Law, which took effect on September 1, 2021. The Data Security Law requires data processing, which includes the collection, storage, use, processing, transmission, provision, publication of data, to be conducted in a legitimate and proper manner. The Data Security Law provides for data security and privacy obligations on entities and individuals carrying out data activities. The Data Security Law provides a national security review procedure for those data activities which affect or may affect national security and imposes export restrictions on certain data and information. In addition, the Data Security Law also provides that any organization or individual within the territory of the PRC may not provide any foreign judicial body and law enforcement body with any data without the approval of the competent PRC governmental authorities. On July 6, 2021, certain PRC regulatory authorities issued Opinions on Strictly Cracking Down on Illegal Securities Activities, which, among others, provides for improving laws and regulations on data security, cross-border data transmission, and confidential information management. It provided that efforts will be made to revise the regulations on strengthening the confidentiality and file management relating to the offering and listing of securities overseas, to implement the responsibility on information security of overseas listed companies, and to strengthen the standardized management of cross-border information provision mechanisms and procedures. On July 30, 2021, the State Council issued the Regulations on Protection of Critical Information Infrastructure. Pursuant to these regulations, critical information infrastructure shall mean the important network facilities or information systems of key industries or fields such as public communication and information service, energy, transportation, water conservation, finance, public services, e-government affairs and national defense science, and important network facilities or information systems which may endanger national security, people’s livelihood and public interest once there occur damage, malfunctioning or data leakage to them. These regulations provide that no individual or organization may carry out any illegal activity of intruding into, interfering with, or sabotaging any critical information infrastructures, or endanger the security of any critical information infrastructures. These regulations also require that critical information infrastructure operators shall establish a cybersecurity protection system and accountability system, and that the main responsible person of a critical information infrastructure operator shall take full responsibility for the security protection of the critical information infrastructures operated by it. In addition, administration departments of each important industry and sector shall be responsible for formulating the rule of critical information infrastructure determination applicable to their respective industry or sector, and determine the critical information infrastructure operators in their industry or sector. 86 On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021, requires, among others, that (i) the processing of personal information should have a clear and reasonable purpose which should be directly related to the processing purpose and should be conducted in a method that has the minimum impact on personal rights and interests, and (ii) the collection of personal information should be limited to the minimum scope as necessary to achieve the processing purpose and avoid the excessive collection of personal information. Personal information processors shall adopt necessary measures to safeguard the security of the personal information they handle. The offending entities could be ordered to correct, or to suspend or terminate the provision of services, and face confiscation of illegal income, fines or other penalties. On January 4, 2022, the Cyberspace Administration of China, the National Development and Reform Commission, the Ministry of Industry and Information Technology, and several other administrations jointly published the amended Measures for Cybersecurity Review, which became effective on February 15, 2022. The amended Measures for Cybersecurity Review further restates and expands the applicable scope of the cybersecurity review. Pursuant to the amended Measures for Cybersecurity Review, (i) when the purchase of network products and services by a critical information infrastructures operator or the data processing activities conducted by a network platform operator affect or may affect national security, a cybersecurity review shall be conducted pursuant to the Review Measures. The operators shall file for a cybersecurity review with Cybersecurity Review Office under the Cyberspace Administration of China if their behavior affects or may affect national security; (ii) an application for cybersecurity review shall be made by an issuer who is a network platform operator holding personal information of more than one million users before such issuer applies to list its securities on a foreign stock exchange; and (iii) the PRC governmental authorities may initiate cybersecurity review if such governmental authorities determine that the issuer’s network products or services, or data processing activities affect or may affect national security. The amended Measures for Cybersecurity Review focuses on assessing the following national security risks factors: (i) the risk of illegal control, interference or destruction of critical information infrastructure, arising from the purchase and utilization of network products and services; (ii) the harm on the business continuity of critical information infrastructure incurring from a disruption of network products and services supply; (iii) the safety, openness, transparency, diversity of sources of network products and services; the reliability of suppliers; and the risk of supply disruption due to political, diplomatic, trade and other reasons; (iv) the level of compliance with the PRC laws, administrative regulations and ministry rules of the suppliers of network products and services; (v) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or illegally exited the country; (vi) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments and the network information security risk regarding listing abroad; and (vii) other factors that may harm critical information infrastructure, cyber security and/or data security. The amended Measures for Cybersecurity Review was promulgated recently, and there are substantial uncertainties on the interpretation and application of the amended Measures for Cybersecurity Review. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Any failure to comply with existing or future laws and regulations related to data protection, data security, cybersecurity or personal information protection could lead to liabilities, administrative penalties or other regulatory actions, which could negatively affect our operating results and business.” On July 7, 2022, the Cyberspace Administration of China published the Measures for Security Assessment of Cross-border Data Transfer, which came into effect on September 1, 2022. These regulations stipulates that if the cross-border data transfer to be conducted by a “data processor” has any of the following circumstances, the “data processor” shall apply to the national cyberspace administration authority for security assessment via the provincial cyberspace administration authority in the place where the said “data processor” is located: (i) any data processor transfers important data to overseas recipients; (ii) any “critical information infrastructure operator,” or any “data processor” processing the personal information of more than one million individuals transfers personal information to overseas recipients; (iii) the personal information of more than 100,000 individuals or the sensitive personal information of more than 10,000 individuals has been provided overseas since January 1 of the previous year on a cumulative basis; and (iv) other circumstances where the security assessment is required as prescribed by the national cyberspace administration authority. Furthermore, on August 31, 2022, the Cyberspace Administration of China promulgated the Guidelines to the Application for Security Assessment of Cross-border Data Transfer (First Edition), which provides that the activities of “cross-border data transfer” include (i) overseas transmission and storage by data processors of data generated during operations in mainland China; (ii) the access to, use, download or export of the data collected and generated by data processors and stored in mainland China by overseas institutions, organizations or individuals; and (iii) other acts as specified by the Cyberspace Administration of China. 87 On September 24, 2024, the State Council promulgated the Regulations on Network Data Security, which came into effect on January 1, 2025. These regulations reinforce and clarify legal requirements related to personal information protection, important data management, cross-border data transfers, network platform services, and overall data security. Notably, network data processing activities that affect or may affect national security must undergo a national security review in accordance with applicable laws and regulations. The regulations also introduce a new requirement for risk assessments of important data. Non-compliance may result in penalties, including fines, suspension of services, or the revocation of business permits or licenses. Regulations on personal information protection The Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Administration for Market Regulation jointly promulgated the Notice on Rectification of Illegal Collection of Personal Information on Application on January 23, 2019, which requires application operators to strictly comply with the Cyber Security Law and strengthens the personal information protection. Application operators should, among others, (i) clearly state the authorized purpose, methods and scope of the collection and usage of personal information, and obtain the consent of users for collecting and processing such users’ personal information, and (ii) establish appropriate user information protection systems with remedial measures. To further implement and interpret such notice, the Measures on Identifying Illegality of Personal Information Collection Conducts on Application was promulgated on November 28, 2019. On November 28, 2019, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation jointly issued the Methods of Identifying Illegal Acts of Apps to Collect and Use Personal Information. This regulation further illustrates certain commonly-seen illegal practices of apps operators in terms of personal information protection, including “failure to publicize rules for collecting and using personal information,” “failure to expressly state the purpose, manner and scope of collecting and using personal information,” “collection and use of personal information without consent of users of such app,” “collecting personal information irrelevant to the services provided by such app in violation of the principle of necessity,” “provision of personal information to others without users’ consent,” “failure to provide the function of deleting or correcting personal information as required by laws” and “failure to publish information such as methods for complaints and reporting.” On March 12, 2021, the Cyberspace Administration of China and three other authorities jointly issued the Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications. These rules specifie the scope of necessary personal information to be collected each for a variety of common mobile internet applications, such as maps and navigation apps, online ride-hailing apps, instant messaging apps, online community apps. Operators of such apps may not refuse to provide basic services to users on the ground of users’ refusal to provide their personal non-essential information. The basic service of online lending applications is to facilitate loans provided to the users online for use of personal consumption and business operation, and the necessary personal information for an online lending application includes the borrower’s mobile phone number, name, bank account, as well as type, number and valid period of its identity card. On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021. The Personal Information Protection Law integrates provisions from several rules with respect to personal information rights and privacy protection. According to the Personal Information Protection Law, personal information refers to information related to identified or identifiable natural persons which is recorded by electronic or other means (excluding the anonymized information). The Personal Information Protection Law provides the circumstances under which a personal information processor could process personal information, such as where the consent of the individual concerned is obtained and where it is necessary for the conclusion or performance of a contract to which such individual is a party to such contract. It also stipulates certain specific provisions with respect to the obligations of a personal information processor. In addition, it imposes further obligations on a personal information processor that provides for basic internet platform services, has large amount of users, has complicated business activities, including formulating of an independent institution mainly comprising of outside members to supervise personal information processing activities, termination of provision of services for product or service providers on the platform whose personal information processing activities are in material violation of laws and regulations, and issuing personal information protection social responsibilities reports regularly. 88 Regulations Relating to Foreign Exchange Regulations on foreign currency exchange The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, most recently amended in August 2008. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital account items, such as direct investments, repayment of foreign currency-denominated loans, repatriation of investments and investments in securities outside of China. On February 13, 2015, SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment. After this notice became effective on June 1, 2015, instead of applying for approvals regarding foreign exchange registrations of foreign direct investment and overseas direct investment from SAFE, entities and individuals will be required to apply for such foreign exchange registrations from qualified banks. The qualified banks, under the supervision of SAFE, will directly examine the applications and conduct the registration. On March 30, 2015, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, to expand the reform nationwide. SAFE Circular 19 allows foreign-invested enterprises to make equity investments by using RMB fund converted from foreign exchange capital. Under SAFE Circular 19, the foreign exchange capital in the capital account of foreign-invested enterprises upon the confirmation of rights and interests of monetary contribution by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operation needs of the enterprises. The proportion of discretionary settlement of foreign exchange capital of foreign-invested enterprises is currently 100%. SAFE can adjust such proportion in due time based on the circumstances of international balance of payments. However, SAFE Circular 19 and another circular promulgated by SAFE in June 2016, SAFE Circular 16, continues to, prohibit foreign-invested enterprises from, among other things, using RMB fund converted from its foreign exchange capitals for expenditure beyond its business scope, investment and financing (except for security investment or guarantee products issued by bank), providing loans to non-affiliated enterprises or constructing or purchasing real estate not for their own use. On October 23, 2019, SAFE promulgated the Notice of the Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade and Investment. It provides that non-investment foreign-invested entities may use foreign exchange capital or Renminbi funds converted from the foreign exchange capital to make equity investments, provided that such investments should comply with the Negative List and other PRC laws and regulations. On April 10, 2020, SAFE issued the Notice on Optimizing Foreign Exchange Administration to Support the Development of Foreign-related Business. It provides that on the premise of ensuring the true and compliant use of funds and compliance with the existing regulations on use of income under the capital account, enterprises which satisfy the criteria are allowed to use income under the capital account, such as capital funds, foreign debt and overseas listing for domestic payment, without prior provision of proof materials for veracity to the bank for each transaction. However, there are substantial uncertainties of the further implementation of these two notices. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our offshore financing to make loans to or make additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 89 Regulations on foreign exchange registration of overseas investment by PRC residents SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Round-trip Investment through Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014, which replaced the former circular commonly known as “SAFE Circular 75.” SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. On February 13, 2015, SAFE released Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, under which local banks are authorized to examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, starting from June 1, 2015. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.” Regulations on employee stock incentive plans of overseas publicly-listed company Pursuant to the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, issued by SAFE in February 2012, individuals participating in any stock incentive plan of any overseas publicly listed company who are PRC citizens or non-PRC citizens who reside in China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. We and our executive officers and other employees who are PRC citizens or non-PRC citizens who reside in China for a continuous period of not less than one year and have been granted options are subject to these regulations. Failure by these individuals to complete their SAFE registrations may subject us and them to fines and other legal sanctions. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.” The State Administration of Taxation has issued certain circulars concerning employee share options and restricted shares. Under these circulars, our employees working in China who exercise share options will be subject to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee share options with tax authorities and to withhold individual income taxes of those employees who exercise their share options. If our employees fail to pay or we fail to withhold their income taxes according to laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities. 90 Regulations on Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names. Copyright. Copyright in the PRC, including copyrighted software, is principally protected under the Copyright Law and related rules and regulations. Under the Copyright Law, the term of protection for copyrighted software is 50 years. Patent. The Patent Law provides for patentable inventions, utility models and designs, which must meet three conditions: novelty, inventiveness and practical applicability. The State Intellectual Property Office under the State Council is responsible for examining and approving patent applications. The duration of a patent right is either 10 years or 20 years from the date of application, depending on the type of patent right. Trademark. The PRC Trademark Law and its implementation rules protect registered trademarks. The PRC Trademark Law has adopted a “first-to-file” principle with respect to trademark registration. The Trademark Office under the State Administration of Industry and Commerce is responsible for the registration and administration of trademarks throughout the PRC, and grants a term of ten years to registered trademarks and another ten years if requested upon expiry of the initial or extended term. Trademark license agreements must be filed with the Trademark Office for record. Domain Name. Domain names are protected under the Administrative Measures on the China Internet Domain Names promulgated by the Ministry of Industry and Information Technology in 2004, which will be replaced by the Administrative Measures on the Internet Domain Names effective on November 1, 2017. The Ministry of Industry and Information Technology is the major regulatory authority responsible for the administration of the PRC Internet domain names. The registration of domain names in PRC is on a “first-apply-first-registration” basis. A domain name applicant will become the domain name holder upon the completion of the application procedure. Our major domain name “ppdai.com” has been registered. Regulations Relating to Dividend Distribution Under our current corporate structure, our Cayman Islands holding company may rely on dividend payments from our subsidiaries incorporated in China to fund any cash and financing requirements we may have. The principal regulations governing distribution of dividends of foreign-invested enterprises include the Foreign-Invested Enterprise Law, as amended in September 2016, and its implementation rules. Under these laws and regulations, wholly foreign-owned enterprises in China may pay dividends only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned enterprises in China are required to allocate at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until these reserves have reached 50% of the registered capital of the enterprises. Wholly foreign-owned companies may, at their discretion, allocate a portion of their after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserves are not distributable as cash dividends. Regulations Relating to Employment The PRC Labor Law and the Labor Contract Law require that employers must execute written employment contracts with full-time employees. All employers must compensate their employees with wages equal to at least the local minimum wage standards. Violations of the PRC Labor Law and the Labor Contract Law may result in the imposition of fines and other administrative sanctions, and serious violations may result in criminal liabilities. 91 Enterprises in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance funds, namely a pension plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses or where they are located. According to the Social Insurance Law, an employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the required contributions within a stipulated deadline and be subject to a late fee of up to 0.05% or 0.2% per day, as the case may be. If the employer still fails to rectify the failure to make social insurance contributions within the stipulated deadline, it may be subject to a fine ranging from one to three times the amount overdue. In addition, the PRC Individual Income Tax Law requires companies operating in China to withhold individual income tax on employees’ salaries based on the actual salary of each employee upon payment. The General Office of the Central Committee of the Communist Party of the PRC and the General Office of the State Council of the PRC issued the Reform Plan of the State Tax and Local Tax Collection Administration System on July 20, 2018, which provides that commencing from January 1, 2019, tax authorities would be responsible for the collection of social insurance contributions. We have not made adequate contributions to employee benefit plans, as required by applicable PRC laws and regulations, but we have recorded accruals for the estimated underpaid amounts for the current employees in our financial statements. However, we have not made any accruals for the interest on underpayment and penalties that may be imposed by the PRC government authorities in the financial statements as we believe it would be unlikely that the PRC government authorities will impose any significant interests or penalties. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Failure to make adequate contributions to various employee benefit plans and withhold individual income tax on employees’ salaries as required by PRC regulations may subject us to penalties.” Regulations Relating to Tax Dividend withholding tax Pursuant to the Enterprise Income Tax Law of the PRC and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% provided certain conditions could be met if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise. Pursuant to the Notice of the State Administration of Taxation on the Issues Concerning the Application of the Dividend Clauses of Tax Agreements, a Hong Kong resident enterprise must meet the following conditions, among others, in order to enjoy the reduced withholding tax: (i) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (ii) it must have directly owned such percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends. There are also other conditions for enjoying the reduced withholding tax rate according to other tax rules and regulations. In August 2015, the State Administration of Taxation promulgated the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties, which became effective on November 1, 2015. These measures provide that non-resident enterprises are not required to obtain pre-approval from the tax authority in order to enjoy the reduced withholding tax rate. Instead, non-resident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the tax authorities. Accordingly, our Hong Kong subsidiaries may be able to enjoy the 5% withholding tax rate for the dividends they receive from our PRC subsidiaries, if it satisfies the conditions prescribed under the applicable tax rules and regulations. However, according to these regulations, if the tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the tax authorities may adjust the favorable withholding tax in the future. Enterprise income tax The Enterprise Income Tax Law of the PRC, and its implementing rules, which became effective on January 1, 2008, are the principal regulations governing enterprise income tax in the PRC. The Enterprise Income Tax Law of the PRC imposes a uniform enterprise income tax rate of 25% on all resident enterprises in the PRC, including foreign-invested enterprises. 92 Uncertainties exist with respect to how the Enterprise Income Tax Law of the PRC applies to the tax residence status of FinVolution Group and our offshore subsidiaries. Under the Enterprise Income Tax Law of the PRC, an enterprise established outside China with its “de facto management bodies” located within China is considered a “resident enterprise,” which means that it is treated in a manner similar to a PRC domestic enterprise for enterprise income tax purposes. The implementing rules of the Enterprise Income Tax Law of the PRC define de facto management body as a managing body that in practice exercises “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. The State Administration of Taxation issued the Circular of the State Administration of Taxation on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the Actual Standards of Organizational Management in 2009. According to this regulation, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the primary location of the day-to-day operational management is in China; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in China; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholders meeting minutes are located or maintained in China; and (iv) 50% or more of voting board members or senior executives habitually reside in China. We believe that FinVolution Group and our offshore subsidiaries should not be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in this circular were deemed applicable to us. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we may be treated as a resident enterprise for PRC tax purposes under the Enterprise Income Tax Law of the PRC, and we may therefore be subject to PRC income tax on our global income. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders” for further details. The State Administration of Taxation issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Resident Enterprises, or SAT Public Notice 7, on February 3, 2015, which replaced or supplemented certain previous rules under the Circular on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-Resident Enterprises, or SAT Circular 698. Under SAT Public Notice 7, an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to SAT Public Notice 7, “PRC taxable assets” include assets attributed to an establishment in China, immoveable properties in China, and equity investments in PRC resident enterprises. In respect of an indirect offshore transfer of assets of a PRC establishment, the relevant gain is to be regarded as effectively connected with the PRC establishment and therefore included in its enterprise income tax filing, and would consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer relates to the immoveable properties in China or to equity investments in a PRC resident enterprise, which is not effectively connected to a PRC establishment of a non-resident enterprise, a PRC enterprise income tax at 10% would apply, subject to available preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation. There is uncertainty as to the implementation details of SAT Public Notice 7. If SAT Public Notice 7 was determined by the tax authorities to be applicable to some of our transactions involving PRC taxable assets, our offshore subsidiaries conducting the relevant transactions might be required to spend valuable resources to comply with SAT Public Notice 7 or to establish that the relevant transactions should not be taxed under SAT Public Notice 7. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.” Under applicable PRC laws, payers of PRC-sourced income to non-PRC residents are generally obligated to withhold PRC income taxes from the payment. In the event of a failure to withhold, the non-PRC residents are required to pay such taxes on their own. Failure to comply with the tax payment obligations by the non-PRC residents will result in penalties, including full payment of taxes owed, fines and default interest on those taxes. 93 PRC value-added tax Pursuant to applicable PRC regulations promulgated by the Ministry of Finance of China and the State Administration of Taxation, entities or individuals conducting business in the service industry are required to pay a valued-added tax at a rate of 6% with respect to revenues derived from the provision of online information services. A taxpayer is allowed to offset the qualified input valued-added tax paid on taxable purchases against the output valued-added tax chargeable on the revenue from services provided. Regulations Relating to Overseas Listing and M&A On August 8, 2006, six PRC governmental and regulatory agencies, including the Ministry of Commerce and the CSRC, jointly promulgated the Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, a new regulation with respect to the mergers and acquisitions of domestic enterprises by foreign investors that became effective on September 8, 2006 and revised on June 22, 2009. Foreign investors shall comply with the M&A rules when they purchase equity interests of a domestic company or subscribe for the increased capital of a domestic company, and thus changing the nature of the domestic company into a foreign- invested enterprise; or when the foreign investors establish a foreign-invested enterprise in the PRC for the purpose of purchasing the assets of a domestic company and operating the asset; or when the foreign investors purchase the asset of a domestic company, establish a foreign-invested enterprise by injecting such assets, and operate the assets. The M&A rules, among other things, purports to require that an offshore special vehicle, or a special purpose vehicle, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals, shall obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. On July 6, 2021, the PRC government authorities issued the Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. On December 27, 2021, the National Development and Reform Commission and the Ministry of Commerce of the PRC jointly issued the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), which became effective on January 1, 2022. The Negative List (2021 Version) was subsequently replaced by the Negative List (2024 Version). Pursuant to these measures, if a domestic company engaging in the prohibited business stipulated in the negative list seeks an overseas offering and listing, it shall obtain the approval from the competent governmental authorities. Besides, the foreign investors of the company may not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the applicable regulations on the domestic securities investments by foreign investors. In a Q&A released on the official website of the National Development and Reform Commission on January 18, 2022, the official of the National Development and Reform Commission indicated that these requirements are only imposes on PRC domestic companies that directly offer or list their securities in an overseas market. On February 17, 2023, the CSRC published the Trial Administrative Measures on the Overseas Issuance and Listing of Securities by Domestic Companies, or the CSRC Filing Measures, and five supporting guidelines, effective on March 31, 2023. Pursuant to the CSRC Filing Measures, PRC domestic companies that directly or indirectly offer or list their securities in an overseas market, which include (i) any PRC company limited by shares, and (ii) any offshore company that conducts its business operations primarily in China and contemplates to offer or list its securities in an overseas market based on its onshore equities, assets or similar interests, are required to file with the CSRC within three business days after submitting their listing application documents to the regulator in the place of intended listing. 94 The CSRC Filing Measures proposes to establish a new filing-based regime to regulate overseas offerings and listings by domestic companies. According to the CSRC Filing Measures, an overseas offering and listing by a domestic company, whether directly or indirectly, shall be filed with the CSRC. Specifically, the examination and determination of an indirect offering and listing will be conducted on a substance-over-form basis, and an offering and listing shall be considered as an indirect overseas offering and listing by a domestic company if the issuer meets the following conditions: (i) the operating income, gross profit, total assets, or net assets of the domestic enterprise in the most recent fiscal year was more than 50% of the line item in the issuer’s audited consolidated financial statement for that year; and (ii) senior management personnel responsible for business operations and management are mostly PRC citizens or are ordinarily resident in the PRC, and the main place of business operations is in the PRC or carried out in the PRC. According to the CSRC Filing Measures, the issuer or its affiliated domestic company, as the case may be, shall file with the CSRC for its initial public offering, follow-on offering and other equivalent offering activities. Particularly, the issuer shall submit the filing with respect to its initial public offering and listing within three business days after its initial filing of the listing application, and submit the filing with respect to its follow-on offering within three business days after completion of the follow-on offering. Failure to complete the record-filing under the CSRC Filing Measures may subject a PRC domestic company to a warning or a fine ranging from RMB1 million to RMB10 million, and its controlling shareholders, actual controllers, the persons directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. According to the Notification to the Administrative Arrangement of the Overseas Issuance and Listing of Securities by Domestic Companies, the CSRC expressed that the record-filing requirement would not be imposed on the existing public companies, like us, until they refinance their securities in an overseas market based on its onshore equities, assets or similar interests. The CSRC Filing Measures also set forth certain regulatory red lines for overseas offerings and listings by domestic enterprises: (i) if the intended securities offering and listing is specifically prohibited by national laws and regulations and applicable provisions; (ii) if the intended securities offering and listing may constitute a threat to or endangers national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) if, in the past three years, the domestic enterprise or its controlling shareholders or actual controllers have committed corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist market economy, (iv) if the domestic company is currently under judicial investigation for suspicion of criminal offenses, or are under investigation for suspicion of major violations and no decision has been made; (v) if there are material ownership disputes over the stocks controlled by the controlling shareholder, or by the shareholders controlled by the controlling shareholder or actual controller. On February 24, 2023, the CSRC, Ministry of Finance of the PRC, National Administration of State Secrets Protection, and National Archives Administration of China published the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies. These provisions, among others, provides that: (i) a domestic company that seeks to offer and list its securities in an overseas market, either via direct offering or indirect offering, and the securities companies and securities service providers that undertake securities business, shall strictly abide by applicable laws and regulations of the PRC, enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system, and take necessary measures to fulfill confidentiality and archives administration obligations. They may not divulge any state secret or harm national security and public interest; (ii) a domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to entities or individuals including securities companies, securities service providers, and overseas regulators, documents and materials that contain state secrets or government work secrets, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level. If there is ambiguity or dispute over the identification of a state secret, a request shall be submitted to the competent secrecy administrative department for determination; if there is ambiguity or dispute over the identification of a government work secret, a request shall be submitted to the competent government authority for determination; (iii) a domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to entities or individuals including securities companies, securities service providers, and overseas regulators, other documents and materials that, if divulged, will jeopardize national security or public interest, shall strictly obey the procedures stipulated by applicable national regulations; (iv) archives, including working papers, that have been produced in mainland China by securities companies and securities service providers for overseas securities offering and listing by domestic companies shall be retained in mainland China, and, without prior approval by competent authorities, may not be brought, mailed or otherwise transferred to outside mainland China, or transmitted to any institutions or individuals outside mainland China through any methods including via the use of information technologies. Where archives or copies of archives that have important conservation value to the nation and the society need to be transferred or transmitted to outside mainland China, approval procedures stipulated by national regulations shall be followed; and (v) overseas securities regulators and competent overseas authorities may request to investigate, including to collect evidence for investigation purpose, or inspect a domestic company that has been listed or offered securities in an overseas market or securities companies and securities service providers that undertake securities business for such domestic companies. Such investigation and inspection shall be conducted under a cross-border regulatory cooperation mechanism, and the CSRC and competent authorities of the Chinese government will provide necessary assistance pursuant to bilateral and multilateral cooperation mechanisms. Before cooperating with the investigation and inspection by, or providing documents and materials to overseas securities regulators or other competent overseas authorities, such domestic companies, securities companies and securities service providers shall report to the CSRC or other competent authorities. 95 Regulations in Other Jurisdictions Due to our global operations, we are also subject to the rules and regulations of the other jurisdictions in which we operate. For example, the Indonesian regulator, the Financial Services Authority of Indonesia (OJK), has lowered the maximum interest rate that online lenders can charge their borrowers on consumptive loans. The rules, effective as of January 1, 2024, progressively reduce the interest rate cap imposed on fintech lenders from the maximum of 0.4% per day in 2023 to 0.3% in 2024, to 0.2% in 2025, and further to 0.1% by 2026. On December 31, 2024, the Financial Services Authority of Indonesia (OJK) revised its interest rate policy, which was subsequently reiterated by a regulation issued on July 31, 2025. The earlier plan to uniformly reduce the cap to 0.2% by 2025 was replaced with differentiated pricing based on loan tenor: loans with a tenor of six months or less remain capped at 0.3%, while those exceeding six months are capped at 0.2%. In addition, the Philippines Securities and Exchange Commission has issued a memorandum, effective April 1, 2026, imposing recalibrated ceilings on interest rates and fees charged by financing and lending companies on small consumer loans, setting a 12% monthly cap on effective interest rates for loans of up to P10,000 with terms of up to four months. C. Organizational Structure The following diagram illustrates our corporate structure as of the date of this annual report, including our principal subsidiaries and our principal consolidated variable interest entities and their principal subsidiaries. Notes: (1) Beijing Paipairongxin currently has four shareholders: Jun Zhang, our co-founder and director, Tiezheng Li, our co-founder, vice chairman and chief executive officer, Honghui Hu, our co-founder and director, and Shaofeng Gu, our co-founder, chairman and chief innovation officer, each holding 13.22%, 4.81%, 12.85%, and 69.12% of Beijing Paipairongxin’s equity interests, respectively. (2) Shanghai Zihe currently has four shareholders: Jun Zhang our co-founder and director, Tiezheng Li, our co-founder, vice chairman and chief executive officer, Honghui Hu, our co-founder and director, Shaofeng Gu, our co-founder, chairman and chief innovation officer, each holding 25% of Shanghai Zihe’s equity interests, respectively. (3) Shanghai Ledao currently has two shareholders: Lizhong Chen, a family relative of Tiezheng Li, and Yejun Jiang, a family relative of Honghui Hu, each holding 50% of Shanghai Ledao’s equity interests, respectively. 96 (4) The remaining 20% equity interests is held by an unrelated third party. (5) The remaining 51% equity interest is held by our company through an intermediate entity. Contractual Arrangements PRC laws and regulations impose restrictions on foreign ownership and investment in internet-based businesses. We are a Cayman Islands company and our PRC subsidiaries are considered foreign-invested enterprises. To comply with PRC laws, regulations and regulatory requirements, we have entered into a series of contractual arrangements, (i) through Shanghai Guangjian, our wholly foreign owned entity, with Beijing Paipairongxin, the consolidated variable interest entities, and the shareholders of Beijing Paipairongxin and certain subsidiary of Beijing Paipairongxin to direct the activities of Beijing Paipairongxin and their subsidiaries, and (ii) through Shanghai Manyin, our wholly foreign owned entity, with Shanghai Zihe and Shanghai Ledao, the consolidated variable interest entities, and the shareholders of Shanghai Zihe and Shanghai Ledao to direct the activities of Shanghai Zihe and Shanghai Ledao and their subsidiaries. The contractual arrangements with the consolidated variable interest entities allow us to: ● enable us to direct the activities of operation of the consolidated variable interest entities and their respective subsidiaries; ● receive substantially all of the economic benefits of the consolidated variable interest entities and their respective subsidiaries; and ● have an exclusive option to purchase all or part of the equity interests in the consolidated variable interest entities and their respective subsidiaries when and to the extent permitted by PRC law. As a result of these contractual arrangements, we have become the primary beneficiary of the consolidated variable interest entities under U.S. GAAP. We have consolidated the financial results of the consolidated variable interest entities and their respective subsidiaries in our consolidated financial statements in accordance with U.S. GAAP. Contractual Arrangements with Beijing Paipairongxin and Its Shareholders The following is a summary of the currently effective contractual arrangements by and among our wholly-owned subsidiary, Shanghai Guangjian and its wholly-owned subsidiary, Shanghai Shanghu (with respect to the business operation agreement and the exclusive technology consulting and service agreement only), the consolidated variable interest entity, Beijing Paipairongxin, the shareholders of Beijing Paipairongxin, and Shanghai PPDai (with respect to the exclusive technology consulting and service agreement only). Agreements that enable us to direct the activities of operation of Beijing Paipairongxin Loan Agreement. In March 2018, Shanghai Guangjian entered into loan agreements with each of the shareholders of Beijing Paipairongxin, namely Mr. Jun Zhang, Mr. Tiezheng Li, Mr. Honghui Hu, and Mr. Shaofeng Gu, who are our co-founders and shareholders. Under these agreements, Shanghai Guangjian granted an interest-free loan of RMB100.0 million to the shareholders of Beijing Paipairongxin solely for their capital contributions to the company. Upon written notice by Shanghai Guangjian, the loan shall be repaid by the shareholders of Beijing Paipairongxin from the proceeds received by transferring their equity interests in Beijing Paipairongxin to Shanghai Guangjian, pursuant to the terms and conditions of the call option agreement among Shanghai Guangjian, Beijing Paipairongxin, Beijing Prosper, and the shareholders of Beijing Paipairongxin. If the proceeds received by the shareholders of Beijing Paipairongxin from such transferring exceed the principal of the loan, the surplus shall be deemed as the cost for using the principal and shall be paid, to the extent permitted by laws, to Shanghai Guangjian together with the principal. Shanghai Guangjian reserves the right to request repayment of the loan before maturity. 97 Restated Business Operation Agreement. In March 2018, Shanghai Guangjian, Shanghai Shanghu, Beijing Paipairongxin, along with its shareholders, and Beijing Prosper entered into a restated business operation agreement. According to this agreement, Beijing Paipairongxin and its shareholders agree, within the limits permitted by law, to accept and unconditionally execute instructions from Shanghai Guangjian and Shanghai Shanghu regarding business operations, including the appointment of directors and executive officers. Additionally, Beijing Paipairongxin and its shareholders commit not to take any action that could materially adversely affect its assets, businesses, human resources, rights, obligations, or business operations without the prior written consent of Shanghai Guangjian and Shanghai Shanghu. Furthermore, the shareholders of Beijing Paipairongxin undertake to promptly and unconditionally transfer any dividends or similar income they receive as shareholders to Shanghai Guangjian and Shanghai Shanghu. Moreover, this restated agreement mandates that each of Beijing Paipairongxin’s shareholders issue an irrevocable power of attorney, enabling Shanghai Guangjian or any person(s) designated by them to execute shareholders’ rights on behalf of such shareholders. Unless terminated in advance by Shanghai Guangjian and Shanghai Shanghu, this restated agreement will remain effective until the dissolution of Beijing Paipairongxin pursuant to PRC law. Restated Power of Attorney. Under a restated power of attorney dated March 21, 2018, each shareholder of Beijing Paipairongxin irrevocably authorizes Shanghai Guangjian or any person(s) designated by them to act as their attorney-in-fact. This authorization empowers Shanghai Guangjian or their designees to exercise all of the shareholder’s voting and other rights associated with their equity interest in Beijing Paipairongxin. Such rights include the authority to appoint directors, supervisors, and officers, as well as the right to sell, transfer, pledge, and dispose of all or a portion of the shares held by the shareholder. The power of attorney will remain valid for ten years unless terminated earlier by the restated business operation agreement. Upon request by Shanghai Guangjian, the shareholders of Beijing Paipairongxin shall extend the term of this power of attorney accordingly. Restated Equity Pledge Agreement. Shanghai Guangjian, Beijing Paipairongxin, the shareholders of Beijing Paipairongxin, and Beijing Prosper entered into a restated equity pledge agreement in March 2018. According to the terms of the equity pledge agreement, each shareholder of Beijing Paipairongxin has pledged all of their equity interest in Beijing Paipairongxin to Shanghai Guangjian. This pledge serves as a guarantee for the performance by each shareholder and Beijing Paipairongxin of their respective obligations under several agreements, including the restated business operation agreement (which includes the power of attorney), the restated option agreement, the restated exclusive technology consulting and service agreement, and the loan agreement. In the event that Beijing Paipairongxin or any of its shareholders breaches any obligations under these agreements, Shanghai Guangjian, as the pledgee, will be entitled to dispose of the pledged equity and have priority in being compensated by the proceeds from the disposal of the pledged equity. Each shareholder of Beijing Paipairongxin agrees that until their obligations under the contractual arrangements are discharged, they may not dispose of the pledged equity interests, create or allow any encumbrance on the pledged equity interests, or take any action that may result in a change of the pledged equity without obtaining prior written consent from Shanghai Guangjian. The restated equity pledge agreement will remain effective until Beijing Paipairongxin and its shareholders discharge all their obligations under the contractual arrangements, and the pledgee consents to such discharge in writing. We have completed the registration of the equity pledge with the office of the Administration of Market Regulation in accordance with the PRC Property Rights Law. Agreement that allows us to receive economic benefits from Beijing Paipairongxin and Shanghai PPDai Restated Exclusive Technology Consulting and Service Agreement. Shanghai Guangjian and Shanghai Shanghu, along with Beijing Paipairongxin, Shanghai PPDai, and Beijing Prosper, entered into a restated exclusive technology consulting and service agreement in March 2018. According to this agreement, Shanghai Guangjian, Shanghai Shanghu, or their designated party has the exclusive right to provide technical support, consulting services, and other services to Beijing Paipairongxin and Shanghai PPDai. Without prior written consent from Shanghai Guangjian and Shanghai Shanghu, Beijing Paipairongxin and Shanghai PPDai may not accept any technical support and services covered by this agreement from any third party. The service fees that Beijing Paipairongxin and Shanghai PPDai need to pay to Shanghai Guangjian and Shanghai Shanghu shall be determined on a case-by-case basis. Factors considered include the level of difficulty and complexity, time spent by Shanghai Guangjian and Shanghai Shanghu and their employees in providing the services, the specific scope and commercial value of the services, the revenue generated by Beijing Paipairongxin and Shanghai PPDai resulting from such services, and other relevant factors. Shanghai Guangjian and Shanghai Shanghu own the intellectual property rights arising out of the provisions of services under this agreement. Unless terminated in advance by Shanghai Guangjian and Shanghai Shanghu, this restated agreement will remain effective until the dissolution of Beijing Paipairongxin and Shanghai PPDai in accordance with PRC law. Although termination of this restated agreement can be achieved by mutual agreement among Shanghai Guangjian, Shanghai Shanghu, Beijing Paipairongxin, Shanghai PPDai, and Beijing Prosper, Beijing Paipairongxin and Shanghai PPDai do not have the right to unilaterally terminate this agreement. 98 Agreement that provides us with the option to purchase the equity interest in Beijing Paipairongxin Restated Option Agreement. Shanghai Guangjian, Beijing Paipairongxin, the shareholders of Beijing Paipairongxin, and Beijing Prosper entered into a restated option agreement in March 2018. According to this agreement, the shareholders of Beijing Paipairongxin have irrevocably granted Shanghai Guangjian or any third party designated by Shanghai Guangjian an exclusive option to purchase all or part of their respective equity interests in Beijing Paipairongxin. The purchase price is equal to the registered capital corresponding to the concerning equity interest. Unless otherwise agreed, the shareholders of Beijing Paipairongxin will immediately transfer the purchase price to Shanghai Guangjian or any third party designated by Shanghai Guangjian after Shanghai Guangjian or any third party designated by Shanghai Guangjian exercises the option. The shareholders of Beijing Paipairongxin agree that without their separate consent, Shanghai Guangjian may transfer all or part of its option under this agreement to a third party. Without prior written consent from Shanghai Guangjian or its designated third party, Beijing Paipairongxin may not, among other things, amend its articles of association, increase or decrease the registered capital, sell, dispose of or set any encumbrance on its assets, business, or revenue outside the ordinary course of business, enter into any material contract, merge with any other persons, make any investments, distribute dividends, or enter into any transactions which have material adverse effects on its business. The shareholders of Beijing Paipairongxin also jointly and severally undertake that they will not transfer, gift, or otherwise dispose of their equity interests in Beijing Paipairongxin to any third party or create or allow any encumbrance on their equity interests within the term of this restated agreement. This restated agreement will remain effective until Shanghai Guangjian has acquired all equity interests of Beijing Paipairongxin from its shareholders. Contractual Arrangements with Shanghai Zihe and Its Shareholders The following is a summary of the currently effective contractual arrangements by and among our wholly-owned subsidiary, Shanghai Manyin, the consolidated variable interest entity, Shanghai Zihe, and the shareholders of Shanghai Zihe. Agreements that enable us to direct the activities of operation of Shanghai Zihe Loan Agreement. Shanghai Manyin entered into a loan agreement with each of the shareholders of Shanghai Zihe, namely Mr. Jun Zhang, Mr. Tiezheng Li, Mr. Honghui Hu, and Mr. Shaofeng Gu, who are our co-founders and shareholders, in March 2018. Under the loan agreements, Shanghai Manyin has granted an interest-free loan of RMB100.0 million to the shareholders of Shanghai Zihe solely for their capital contributions to Shanghai Zihe. Upon written notice by Shanghai Manyin, the loan shall be repaid by the shareholders of Shanghai Zihe from the proceeds received by transferring their equity interests in Shanghai Zihe to Shanghai Manyin pursuant to the terms and conditions of the exclusive call option agreement among Shanghai Manyin, Shanghai Zihe, and the shareholders of Shanghai Zihe. If the proceeds received by the shareholders of Shanghai Zihe from such transferring are higher than the principal of the loan, the amount exceeding the principal shall be deemed as a cost for using the principal and shall be paid, to the extent permitted by laws, to Shanghai Manyin together with the principal. Shanghai Manyin has the right to request repayment of the loan before maturity. Business Operation Agreement. Shanghai Manyin, Shanghai Zihe, and the shareholders of Shanghai Zihe entered into a business operation agreement on March 21, 2018. Pursuant to this agreement, Shanghai Zihe and its shareholders agree that to the extent permitted by law, they will accept and strictly execute instructions from Shanghai Manyin on business operations, such as the appointment of directors and senior management. Shanghai Zihe and its shareholders further agree that, without the prior written consent of Shanghai Manyin, Shanghai Zihe will not take any action that may have material effects on its assets, businesses, human resources, rights, obligations, or business operations. This agreement also requires each of Shanghai Zihe’s shareholders to issue an irrevocable power of attorney authorizing Shanghai Manyin or any person(s) designated by Shanghai Manyin to execute shareholders’ rights on behalf of such shareholder. Unless terminated in advance pursuant to this agreement, this agreement will remain effective for 30 years, renewable upon advance written notice by Shanghai Manyin. Power of Attorney. Through a power of attorney dated March 21, 2018, each shareholder of Shanghai Zihe irrevocably authorizes Shanghai Manyin or any person(s) designated by Shanghai Manyin to act as his or her attorney-in-fact to exercise all of such shareholder’s voting and other rights associated with the shareholder’s equity interest in Shanghai Zihe, such as the right to call a shareholders’ meeting, join a shareholders’ meeting, and sign any shareholders’ resolutions; the right to nominate and appoint the legal representative, directors, supervisors, general manager, chief financial officer, and other officers, as well as all rights a shareholder may have as a shareholder under laws and constitutional documents. The power of attorney will remain in force and irrevocable during the term each shareholder remains as a shareholder of Shanghai Zihe. 99 Equity Pledge Agreement. Shanghai Manyin, Shanghai Zihe, and the shareholders of Shanghai Zihe entered into an equity pledge agreement on March 21, 2018. Pursuant to the equity pledge agreement, each shareholder of Shanghai Zihe has pledged all of his equity interest in Shanghai Zihe to Shanghai Manyin to guarantee the performance by such shareholder and Shanghai Zihe of their respective obligations under the loan agreement, the business operation agreement (including the power of attorney), the exclusive call option agreement, and the exclusive technology consulting and service framework agreement. If Shanghai Zihe or any of its shareholders breaches any obligations under these agreements, Shanghai Manyin, as pledgee, will be entitled to dispose of the pledged equity and have priority to be compensated by the proceeds from the disposal of the pledged equity. Each of the shareholders of Shanghai Zihe agrees that before his obligations under the contractual arrangements are discharged, he will not dispose of the pledged equity interests, create or allow any encumbrance on the pledged equity interests, or take any action that may result in the change of the pledged equity that may have material adverse effects on the pledgee’s rights under this agreement without the prior written consent of Shanghai Manyin. The equity pledge agreement will remain effective until Shanghai Zihe and its shareholders discharge all their obligations under the contractual arrangements and the pledgee consents to such discharge in writing. We have completed the registration of the equity pledge with the office of the Administration of Market Regulation in accordance with the PRC Property Rights Law. Agreement that allows us to receive economic benefits from Shanghai Zihe Exclusive Technology Consulting and Service Framework Agreement. Shanghai Manyin and Shanghai Zihe entered into an exclusive technology consulting and service framework agreement on March 21, 2018. Pursuant to this agreement, Shanghai Manyin or its designated party has the exclusive right to provide Shanghai Zihe with technical support, consulting services, and other services. Without prior written consent from Shanghai Manyin, Shanghai Zihe may not accept any technical support and services covered by this agreement from any third party. The service fees that Shanghai Zihe needs to pay to Shanghai Manyin shall be determined on a case-by-case basis based on the content of technology consulting and service, level of difficulty and complexity, time spent by Shanghai Manyin and its employees, the commercial value of the technology consulting and service to be provided by Shanghai Manyin, and the revenue Shanghai Zihe generates due to the technology consulting and service provided by Shanghai Manyin. Shanghai Manyin shall own the intellectual property rights arising out of the provisions of services under this agreement. Unless Shanghai Manyin terminates this agreement in advance, this agreement will remain effective for 30 years, renewable upon Shanghai Manyin’s advance written notice. Although this agreement can be terminated by mutual agreement between Shanghai Manyin and Shanghai Zihe, Shanghai Zihe has no right to unilaterally terminate this agreement. Agreement that provides us with the option to purchase the equity interest in Shanghai Zihe Exclusive Call Option Agreement. Shanghai Manyin, Shanghai Zihe, and the shareholders of Shanghai Zihe entered into an exclusive call option agreement on March 21, 2018. Pursuant to the exclusive call option agreement, the shareholders of Shanghai Zihe have irrevocably granted Shanghai Manyin or any third party designated by Shanghai Manyin an exclusive option to purchase all of their respective equity interests in Shanghai Zihe at the lowest price permitted by the PRC laws. The shareholders of Shanghai Zihe will immediately gift Shanghai Manyin or any third party designated by Shanghai Manyin with the purchase price after Shanghai Manyin or any third party designated by Shanghai Manyin exercises the option. The shareholders of Shanghai Zihe agree that without their separate consent, Shanghai Manyin may transfer all or part of its option under this agreement to a third party. Without prior written consent from Shanghai Manyin or its designated third party, Shanghai Zihe may not, among other things, amend its articles of association, increase or decrease the registered capital, sell, dispose of or set any encumbrance on its assets, business, or revenue outside the ordinary course of business, enter into any material contract, merge with any other persons, or make any investments, distribute dividends, or enter into any transactions which have material adverse effects on its business. The shareholders of Shanghai Zihe also jointly and severally undertake that they will not transfer, gift or otherwise dispose of their equity interests in Shanghai Zihe to any third party or create or allow any encumbrance on their equity interests within the term of this agreement. This agreement will remain effective for 30 years, renewable upon Shanghai Manyin’s advance written notice. 100 Contractual Arrangements with Shanghai Ledao and Its Shareholders The following is a summary of the currently effective contractual arrangements by and among our wholly-owned subsidiary, Shanghai Manyin, the consolidated variable interest entity, Shanghai Ledao, and the shareholders of Shanghai Ledao. Agreements that enable us to direct the activities of operation of Shanghai Ledao Loan Agreement. Shanghai Manyin entered into a loan agreement with each of the shareholders of Shanghai Ledao, namely Mr. Lizhong Chen and Mr. Yejun Jiang on January 14, 2019, who are family relatives of two of our founders. Under the loan agreements, Shanghai Manyin has granted an interest-free loan of RMB50.0 million to the shareholders of Shanghai Ledao solely for their capital contributions to Shanghai Ledao. Upon written notice by Shanghai Manyin, the loan shall be repaid by the shareholders of Shanghai Ledao from the proceeds received by transferring their equity interests in Shanghai Ledao to Shanghai Manyin pursuant to the terms and conditions of the exclusive call option agreement among Shanghai Manyin, Shanghai Ledao, and the shareholders of Shanghai Ledao. If the proceeds received by the shareholders of Shanghai Ledao from such transferring are higher than the principal of the loan, the amount exceeding the principal shall be deemed as a cost for using the principal and shall be paid, to the extent permitted by laws, to Shanghai Manyin together with the principal. Shanghai Manyin has the right to request repayment of the loan before maturity. Business Operation Agreement. Shanghai Manyin, Shanghai Ledao, and the shareholders of Shanghai Ledao entered into a business operation agreement on January 14, 2019. Pursuant to this agreement, Shanghai Ledao and its shareholders agree that to the extent permitted by law, they will accept and strictly execute instructions from Shanghai Manyin on business operations, such as the appointment of directors and senior management. Shanghai Ledao and its shareholders further agree that, without the prior written consent of Shanghai Manyin, Shanghai Ledao will not take any action that may have material effects on its assets, businesses, human resources, rights, obligations, or business operations. This agreement also requires each of Shanghai Ledao’s shareholders to issue an irrevocable power of attorney authorizing Shanghai Manyin or any person(s) designated by Shanghai Manyin to execute shareholders’ rights on behalf of such shareholder. Unless terminated in advance pursuant to this agreement, this agreement will remain effective for 30 years, renewable upon advance written notice by Shanghai Manyin. Power of Attorney. Through a power of attorney dated January 14, 2019, each shareholder of Shanghai Ledao irrevocably authorizes Shanghai Manyin or any person(s) designated by Shanghai Manyin to act as his or her attorney-in-fact to exercise all of such shareholder’s voting and other rights associated with the shareholder’s equity interest in Shanghai Ledao, such as the right to call a shareholders’ meeting, join a shareholders’ meeting and sign any shareholders resolutions; the right to nominate and appoint the legal representative, directors, supervisors, general manager, chief financial officer and other officers, as well as all rights a shareholder may have as a shareholder under laws and constitutional documents. The power of attorney will remain in force and irrevocable during the term each shareholder remains as a shareholder of Shanghai Ledao. Equity Pledge Agreement. Shanghai Manyin, Shanghai Ledao, and the shareholders of Shanghai Ledao entered into an equity pledge agreement on January 14, 2019. Pursuant to the equity pledge agreement, each shareholder of Shanghai Ledao has pledged all of his equity interest in Shanghai Ledao to Shanghai Manyin to guarantee the performance by such shareholder and Shanghai Ledao of their respective obligations under the loan agreement, the business operation agreement (including the power of attorney), the exclusive call option agreement and the exclusive technology consulting and service framework agreement. If Shanghai Ledao or any of its shareholders breaches any obligations under these agreements, Shanghai Manyin, as pledgee, will be entitled to dispose of the pledged equity and have priority to be compensated by the proceeds from the disposal of the pledged equity. Each of the shareholders of Shanghai Ledao agrees that before his obligations under the contractual arrangements are discharged, he will not dispose of the pledged equity interests, create or allow any encumbrance on the pledged equity interests, or take any action that may result in the change of the pledged equity that may have material adverse effects on the pledgee’s rights under this agreement without the prior written consent of Shanghai Manyin. The equity pledge agreement will remain effective until Shanghai Ledao and its shareholders discharge all their obligations under the contractual arrangements and the pledgee consents to such discharge in writing. We have completed the registration of the equity pledge with the office of the Administration of Market Regulation in accordance with the PRC Property Rights Law. 101 Agreement that allows us to receive economic benefits from Shanghai Ledao Exclusive Technology Consulting and Service Framework Agreement. Shanghai Manyin, and Shanghai Ledao entered into an exclusive technology consulting and service framework agreement on January 14, 2019. Pursuant to this agreement, Shanghai Manyin or its designated party has the exclusive right to provide Shanghai Ledao with technical support, consulting services and other services. Without prior written consent from Shanghai Manyin, Shanghai Ledao may not accept any technical support and services covered by this agreement from any third party. The service fees that Shanghai Ledao needs to pay to Shanghai Manyin shall be determined on a case-by-case basis based on the content of technology consulting and service, level of difficulty and complexity, time spent by Shanghai Manyin and its employees, the commercial value of the technology consulting and service to be provided by Shanghai Manyin and the revenue Shanghai Ledao generates due to the technology consulting and service provided by Shanghai Manyin. Shanghai Manyin shall own the intellectual property rights arising out of the provisions of services under this agreement. Unless Shanghai Manyin terminates this agreement in advance, this agreement will remain effective for 30 years, renewable upon Shanghai Manyin’s advance written notice. Although this agreement can be terminated by mutual agreement between Shanghai Manyin and Shanghai Ledao, Shanghai Ledao has no right to unilaterally terminate this agreement. Agreement that provides us with the option to purchase the equity interest in Shanghai Ledao Exclusive Call Option Agreement. Shanghai Manyin, Shanghai Ledao, and the shareholders of Shanghai Ledao entered into an exclusive call option agreement on January 14, 2019. Pursuant to the exclusive call option agreement, the shareholders of Shanghai Ledao have irrevocably granted Shanghai Manyin or any third party designated by Shanghai Manyin an exclusive option to purchase all of their respective equity interests in Shanghai Ledao at the lowest price permitted by the PRC laws. The shareholders of Shanghai Ledao will immediately gift Shanghai Manyin or any third party designated by Shanghai Manyin with the purchase price after Shanghai Manyin or any third party designated by Shanghai Manyin exercises the option. The shareholders of Shanghai Ledao agree that without their separate consent, Shanghai Manyin may transfer all or part of its option under this agreement to a third party. Without prior written consent from Shanghai Manyin or its designated third party, Shanghai Ledao may not, among other things, amend its articles of association, increase or decrease the registered capital, sell, dispose of or set any encumbrance on its assets, business or revenue outside the ordinary course of business, enter into any material contract, merge with any other persons or make any investments, distribute dividends, or enter into any transactions which have material adverse effects on its business. The shareholders of Shanghai Ledao also jointly and severally undertake that they will not transfer, gift or otherwise dispose of their equity interests in Shanghai Ledao to any third party or create or allow any encumbrance on their equity interests within the term of this agreement. This agreement will remain effective for 30 years, renewable upon Shanghai Manyin’s advance written notice. In the opinion of Hui Ye Law Firm, our PRC counsel: ● the structures of the consolidated variable interest entities and our WFOEs are in compliance with PRC laws or regulations currently in effect; and ● the agreements under the contractual arrangements between our WFOEs, the consolidated variable interest entities and their shareholders governed by PRC law are valid, binding and enforceable under PRC law, and do not and will not result in any violation of applicable PRC laws or regulations currently in effect. However, as of the date of this annual report, the legality and enforceability of our contractual arrangements, as a whole, have not been tested in any PRC court, and we cannot guarantee you that the contractual arrangements, as a whole, would ultimately be legal or enforceable if they were to be tested in a PRC court. In addition, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may in the future take a view that is contrary to the above opinion of our PRC counsel. If the PRC government finds that the agreements that establish the structure for the operation of the consolidated variable interest entities do not comply with PRC government restrictions on foreign investment in our business, we could be subject to severe penalties, including being prohibited from continuing operations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government deems that the contractual arrangements regarding the consolidated variable interest entities do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations,” “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations” and “—Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to us.” 102 D. Property, Plants and Equipment Our corporate headquarters is located in Shanghai. In February 2024, we acquired an office building, which we used to lease, of 17,179 square meters, along with the underlying land use rights in Shanghai, to serve as our global headquarters. For our customer services and loan collection services, we leased an area of approximately 3,948 square meters in Changsha, approximately 5,743 square meters in Hefei, and approximately 2,585 square meters in Zhengzhou. For our operations in the overseas markets, we leased areas of approximately 5,198 square meters in Indonesia and approximately 4,855 square meters in the Philippines. We also leased office space in other places, primarily including Beijing, Hainan and Fujian in 2025. We lease our premises from unrelated third parties under operating lease agreements. The lease term varies from one year to four years. Our servers are primarily hosted at internet data centers owned by major domestic internet data center providers. We believe that our existing facilities are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate future growth.