The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report on Form 20-F. This report contains forward-looking statements. See “Forward-Looking Statements” on page 2 of this annual report. In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report on Form 20-F. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. A. Operating Results 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. 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. 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. 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. In 2025, we generated 75.4% of our revenues from China and 24.6% of our revenues from the overseas markets. Our operating metrics as of any given date, to the extent applicable, include those of Fundo Loans Pty Ltd as of such date. Our operating metrics for a given period, to the extent applicable, include those of Fundo Loans Pty Ltd for the period following its acquisition. 103 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. 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. General Factors Affecting Our Results of Operations Our business and results of operations are affected by general factors affecting the online consumer finance industry in the markets where we operate, which include, among other things: ● overall economic growth; ● per capita disposable income; ● fluctuation of interest rates; and ● development of regulatory environment for the online consumer finance industry in the markets where we operate. Unfavorable changes in any of these general industry conditions could negatively affect demand for our services. Specific Factors Affecting Our Results of Operations While our business is exposed to general factors affecting the online consumer finance industry in China and the overseas markets, we believe our results of operations are more directly affected by company specific factors, including the following major factors. Ability to Maintain and Expand Our Borrower Base in a Cost-effective Manner Our revenues are dependent on our ability to acquire new borrowers and retain and increase engagement of existing borrowers. We use various means, including mobile app stores, search engine marketing, online advertising and online partnerships, to attract new borrowers. We also establish an offline direct sales team to acquire new borrowers across different cities in China and Indonesia. We consistently seek to improve and optimize user experience to achieve a high level of borrower satisfaction, which helps to attract and retain borrowers. We will also continue to develop new loan products to enhance engagement of our borrowers. Our results of operations and ability to sustain and increase loan origination volume will depend, in part, on the effectiveness of our sales and marketing efforts. Our sales and marketing expenses were 15.0%, 15.4% and 16.2% of our total operating revenues in 2023, 2024 and 2025, respectively. The increase in our sales and marketing expenses as a percentage of our total operating revenues in 2025 was attributable to our efforts on acquiring better quality borrowers in both China and overseas markets. We intend to consistently dedicate significant resources to borrower acquisition and improve the effectiveness of these efforts. Ability to Maintain and Expand Our Cooperation with Institutional Funding Partners Our revenues are also dependent on the maintenance and growth of our cooperation with institutional funding partner. As of December 31, 2025, we had cumulatively cooperated with 115 institutional funding partners in China and 18 institutional funding partners in the overseas markets. Going forward, we will continue to retain existing institutional funding partners and attract new institutional funding partners by offering attractive returns and providing enhanced tools to meet their needs. 104 Maintenance of Effective Risk Management Our ability to effectively segment borrowers into appropriate risk profiles impacts our ability to attract and retain borrowers and institutional funding partners. We intend to optimize our fraud detection capabilities, improve accuracy of our credit scoring model and enhance our collection effectiveness on a continuing basis through the combination of our big-data analytical capabilities and the increasing amount of data we accumulate through our operations. For our institutional funding partners, we provide our institutional funding partners with quality assurance commitments for a substantial majority of the loans they have funded. See “Item 4. Information on the Company—B. Business Overview—Quality Assurance Commitments for Our Institutional Funding Partners.” As a result, we are subject to credit risk for such loans. Our ability to accurately estimate loan delinquency rates and our ability to collect delinquent loans have an impact on the amount we need to pay to third-party financing guarantee companies and our institutional funding partners, which have an impact on our consolidated statements of comprehensive income. See “—E. Critical Accounting Estimates—Allowance for Credit Losses,” and “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Regulatory restrictions on institutional funding partners’ acceptance of credit enhancement may adversely affect our business and access to funding.” Ability to Price Accurately Our profitability largely depends on our ability to reasonably price the loans facilitated through our platforms. We implement segmented pricing for our standard loan products, which contributed a majority of our revenues in the periods presented in this annual report. Prospective borrowers for our standard loan products are divided into eight segments based on our proprietary credit scoring model: Level I applicants have the lowest risk of default whereas Level VIII loan applicants, whose applications will be rejected, have the highest risk of default. The transaction service fee rate that we collected from borrowers for standard loan products varies depending on their respective credit levels and duration of the underlying loan. Ability to Innovate Our growth to date has depended on, and our future success will depend in part on, successfully meeting borrower and institutional funding partner demand for new products and services. We have made and intend to continue to make substantial investments to develop products and improve services for borrowers and institutional funding partners. For borrowers, we plan to introduce new features and products that meet their evolving financial needs at different stages of their lives. For our institutional funding partners, we will continue to expand our products and services to meet their needs for target returns, risk preferences, investment horizon and liquidity requirements. Failure to continue to successfully develop and offer innovative products could adversely affect our operating results and we may not recoup the costs of launching and marketing new products. In addition, our success to date is largely attributable to our ability to seamlessly integrate the use of technologies into provision of financial services. We have been focusing on leveraging our big-data analytics and machine learning capabilities to increase the automation level of our platforms and optimize our operational efficiency in various aspects. As our business grows, we will continue to invest in strengthening our technology infrastructure, which may result in the increase of our research and development expenses, and origination and servicing expenses. Ability to Compete Effectively We compete for both borrowers and institutional funding partners with a variety of players in the consumer finance industry, ranging from traditional financial institutions to emerging online finance providers and platforms. We must compete effectively in order to grow our platforms and increase our revenues. We intend to continue to invest in product development, technology infrastructure and our sales and marketing capabilities to address the competition we face. Loan Performance Data 90 Day+ Delinquency Rate We defined the 90+ day delinquency rate as of a given date as the outstanding principal balance of loans in China, excluding the portion of the principal facilitated without credit risk exposure, that are 90 to 179 days past due, expressed as a percentage of the total outstanding principal balance of loans, excluding those facilitated without credit risk exposure, on that date. Loans that are delinquent for 180 days or more are typically considered charged-off and are not included in the delinquency rate calculation. The table below presents our 90+ day delinquency rates for outstanding loans on our platform in China as of December 31, 2023, 2024 and 2025, all calculated based on this latest definition. As of 90 Day+ Delinquency Rate(1) December 31, 2023 1.98 % December 31, 2024 2.13 % December 31, 2025 2.85 % Note: (1) Since the origination amount of our standard loan products accounted for the vast majority of the total origination amount of loans facilitated on our platform in China in the past three years, the 90 day+ delinquency rate in this table mainly reflects the performance of our standard loan products in China. Delinquency Rate by Vintage We refer to loans facilitated during a specified time period as a vintage. We define vintage delinquency rate as (i) the total amount of principal for all the loans in a vintage that become delinquent, less (ii) the total amount of recovered past due principal for all loans in the same vintage, and then divided by (iii) the total amount of initial principal for all loans in such vintage. For purpose of this annual report, loans facilitated during a specified time period are referred to as a vintage. Loans that have been considered charged-off are included in the calculation of vintage delinquency rates. Only the portion of the principal for which we bear risk is included in the delinquent, recovered, and initial principal amounts. 105 The following chart and table display the historical cumulative 30-day plus past due delinquency rates by loan origination vintage for all continuing loan products that we bear risk and are facilitated through our online platform in China. Notes: (1) Our vintage delinquency rate for loans bearing credit risk facilitated through our platform during 2023 was 2.84%, calculated as the volume-weighted average of the quarterly vintage delinquency rates at the end of the 12th month following the inception of each loan in an applicable vintage. (2) Our vintage delinquency rate for loans bearing credit risk facilitated through our platform during 2024 was 2.32%, calculated as the volume-weighted average of the quarterly vintage delinquency rates at the end of the 12th month following the inception of each loan in an applicable vintage. (3) As of December 31, 2025, our vintage delinquency rate for loans bearing credit risk facilitated through our platform during the first three quarters was 1.69%, calculated as the volume-weighted average of the quarterly vintage delinquency rates as of December 31, 2025. As loans bearing credit risk facilitated through our platform during 2023 continue to age, the delinquency rate for the 2025 vintage, calculated as the volume-weighted average of the quarterly vintage delinquency rates at the end of the 12th month following the inception of each loan in an applicable vintage, may be different from the vintage delinquency rate of 1.69% as of December 31, 2025. 106 Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amount and as a percentage of our total operating revenues for the periods presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of our future trends. For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (in thousands except for percentages) Operating revenues: Loan facilitation service fees 4,520,504 36.0 4,694,380 36.0 5,176,457 740,224 38.2 Post-facilitation service fees 1,969,705 15.7 1,740,241 13.3 1,629,777 233,055 12.0 Guarantee income 4,478,995 35.7 5,085,296 38.9 4,124,934 589,858 30.4 Net interest income 1,049,379 8.4 853,779 6.5 1,336,459 191,111 9.8 Other revenue 528,862 4.2 692,128 5.3 1,301,856 186,163 9.6 Net revenues 12,547,445 100.0 13,065,824 100.0 13,569,483 1,940,411 100.0 Operating expenses: Origination, servicing expenses and other cost of revenue (2,111,515 ) (16.9 ) (2,381,839 ) (18.2 ) (2,870,221 ) (410,436 ) (21.1 ) Origination, servicing expenses and other cost of revenue-related party — — — — (29,928 ) (4,280 ) (0.2 ) Sales and marketing expenses (1,887,442 ) (15.0 ) (2,014,254 ) (15.4 ) (2,200,543 ) (314,673 ) (16.2 ) General and administrative expenses (390,022 ) (3.1 ) (413,548 ) (3.2 ) (442,148 ) (63,226 ) (3.3 ) Research and development expenses (510,986 ) (4.1 ) (496,740 ) (3.8 ) (536,617 ) (76,735 ) (4.0 ) Credit losses for quality assurance commitment (4,422,802 ) (35.2 ) (4,587,254 ) (35.2 ) (3,462,384 ) (495,114 ) (25.5 ) Provision for loans receivable (586,843 ) (4.7 ) (320,013 ) (2.4 ) (637,700 ) (91,190 ) (4.7 ) Provision for accounts receivable and contract assets (253,948 ) (2.0 ) (317,049 ) (2.4 ) (425,966 ) (60,912 ) (3.1 ) Impairment of goodwill and intangible assets — — — — (50,676 ) (7,247 ) (0.4 ) Total operating expenses (10,163,558 ) (81.0 ) (10,530,697 ) (80.6 ) (10,656,183 ) (1,523,813 ) (78.5 ) Interest expenses — — — — (28,472 ) (4,071 ) (0.2 ) Other income, net 394,698 3.1 310,123 2.4 216,617 30,975 1.6 Profit before income tax expenses 2,778,585 22.1 2,845,250 21.8 3,101,445 443,502 22.9 Income tax expenses (395,100 ) (3.1 ) (457,405 ) (3.5 ) (556,243 ) (79,542 ) (4.1 ) Net profit 2,383,485 19.0 2,387,845 18.3 2,545,202 363,960 18.8 Revenues Our operating revenues include loan facilitation service fees, post-facilitation service fees, guarantee income, net interest income, and other revenues. 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. Typically, we provided quality assurance service, loan facilitation services and post-facilitation services to the borrowers and institutional funding partners. The quality assurance service is within the scope of Accounting Standards Codification Topic 460 Guarantees and recorded at fair value at the inception of the loans. For loan facilitation services and post-facilitation services we provide, we charged one combined transaction service fee for its delivery of loan facilitation services and post-facilitation services, each of which are distinct performance obligations. We estimate the total consideration to be received over the life of the underlying loan by modeling early termination scenarios. The average rate of transaction service fees, which is computed by dividing the total amount of transaction service fees we received during the period by the total volume of loans originated on our platforms in China during the same period, was 3.1% in 2023, 3.1% in 2024 and 3.1% in 2025. 107 Loan facilitation service fees For each loan facilitated on our platforms, we collect transaction service fees and allocate such fees between loan facilitation services and post-facilitation services that we provide. Loan facilitation service fees are the portion of transaction service fees collected for the work we perform through our platforms in connecting borrowers with institutional funding partners and facilitating the origination of loan transactions. 2025 Compared to 2024. Loan facilitation service fees increased by 10.3% from RMB4,694.4 million in 2024 to RMB5,176.5 million (US$740.2 million) in 2025, primarily due to an increase in the transaction volume and average rate of transaction service fees in the overseas market, partially offset by the decrease in the transaction volume and average rate of transaction service fees in the China market. The loan origination volume decreased from approximately RMB206.2 billion in 2024 to RMB200.3 billion (US$28.6 billion) in 2025. The decrease in the loan origination volume was primarily driven by a decrease in the loan origination volume generated from the China market. 2024 Compared to 2023. Loan facilitation service fees increased by 3.8% from RMB4,520.5 million in 2023 to RMB4,694.4 million in 2024, primarily due to an increase in the loan origination volume. The loan origination volume increased from approximately RMB194.3 billion in 2023 to RMB206.2 billion in 2024. The increase in the loan origination volume was primarily driven by an increase in the loan origination volume generated from the overseas market. Post-facilitation service fees Post-facilitation service fees are the portion of transaction service fees collected for services we provide after loan origination, such as repayment facilitation and loan collection. 2025 Compared to 2024. Post-facilitation service fees decreased by 6.3% from RMB1,740.2 million in 2024 to RMB1,629.8 million (US$233.1 million) in 2025, primarily due to the rolling impact of deferred transaction fees in the China market. 2024 Compared to 2023. Post-facilitation service fees decreased by 11.6% from RMB1,969.7 million in 2023 to RMB1,740.2 million in 2024, primarily due to the rolling impact of deferred transaction fees in the China market. Guarantee income Liabilities of quality assurance commitment are released as guarantee income systematically over the term of the loans subject to quality assurance commitment. 2025 Compared to 2024. Our guarantee income decreased by 18.9% from RMB5,085.3 million in 2024 to RMB4,124.9 million (US$589.9 million) in 2025, primarily due to the decrease in risk-bearing loans in the China market, partially offset by an increase in such loans in the overseas market, as well as the rolling impact of deferred guarantee income. The fair value of quality assurance commitment upon loan origination is released as guarantee income systematically over the term of the loans subject to quality assurance commitment. 2024 Compared to 2023. Our guarantee income increased by 13.5% from RMB4,479.0 million in 2023 to RMB5,085.3 million in 2024, primarily due to the increased outstanding loan balance of the off-balance sheet loans in the overseas markets, as well as the rolling impact of the deferred guarantee income. The fair value of quality assurance commitment upon loan origination is released as guarantee income systematically over the term of the loans subject to quality assurance commitment. Net interest income The following table sets forth the composition of the interest income recorded in the consolidated statement of comprehensive income related to the loans originated on our platforms for the periods presented: For the Year Ended December 31, 2023 2024 2025 (RMB in thousands) Interest income from loans originated through micro-lending company (1) 59,420 79,249 169,375 Interest income from loans originated in the overseas markets (1) 782,379 492,084 575,984 Interest income from loans originated under the trust arrangements 260,694 301,815 628,018 Total interest income 1,102,493 873,148 1,373,377 Note: (1) Typically, for loans originated through micro-lending company and in the overseas markets, these loans are funded by us with no interest bearing liabilities. 108 The following table sets forth the average balances and interest rates of the interest-earning asset and interest-bearing liability under the trust arrangements for the periods presented: Average balance Interest income/ expense Yield/ rate Average balance Interest income/ expense Yield/ rate Average balance Interest income/ expense Yield/ rate 2023 2024 2025 (RMB in thousands) Interest-earning Assets Loans receivable from consolidated trusts 967,289 260,694 27.0 % 1,258,526 301,815 24.0 % 4,220,135 628,018 14.9 % Interest-bearing liabilities Funds payable to investors of consolidated trusts 894,481 53,114 5.9 % 496,439 19,369 3.9 % 860,883 36,918 4.3 % The net yield on interest-earning assets 21.5 % 22.4 % 14.0 % In 2025, we recorded interest income of RMB1,373.4 million (US$196.4 million) and interest expenses of RMB36.9 million (US$5.3 million), compared to interest income of RMB873.1 million and interest expenses of RMB19.4 million in 2024. In 2023, we recorded interest income of RMB1,102.5 million and interest expenses of RMB53.1 million. Our interest income and interest expenses in 2023, 2024 and 2025 were related to loans originated in the China and overseas markets, as well as the trusts we set up in collaboration with trust management companies. In order to provide more flexibility and access a broader range of investors, we have collaborated with third-party trust management companies to set up numerous trusts. Those trusts are administered by third-party trust management companies. We are considered the primary beneficiary of those trusts and therefore consolidated the financial results of those trusts in our consolidated financial statements in accordance with U.S. GAAP. Other revenue Other revenue mainly includes customer referral fees and revenue generated from new businesses. 2025 Compared to 2024. Other revenue increased by 88.1% from RMB692.1 million in 2024 to RMB1,301.9 million (US$186.2 million) in 2025, primarily due to the increased contributions from other revenue streams, including other value-added services. 2024 Compared to 2023. Other revenue increased by 30.9% from RMB528.9 million in 2023 to RMB692.1 million in 2024, primarily due to the increased contributions from other revenue streams. Operating Expenses Our operating expenses consist of origination and servicing expenses, sales and marketing expenses, general and administrative expenses, research and development expenses, credit losses for quality assurance commitment, provision for loans receivable, and provision for accounts receivable and contract assets. 109 Origination, servicing expenses and other cost of revenue Origination, servicing expenses and other cost of revenue consist primarily of expenses for credit assessment, loan origination, salaries and benefits for the personnel who work on credit checking, data processing and analysis, loan origination, customer service, loan collection and other cost of revenue. 2025 Compared to 2024. Our origination, servicing expenses and other cost of revenue increased by 20.5% from RMB2,381.8 million in 2024 to RMB2,870.2 million (US$410.4 million) in 2025, primarily due to higher facilitation costs in both China and overseas markets. Origination, servicing expenses and other cost of revenue for the period included share-based compensation of RMB56.6 million (US$8.1 million). 2024 Compared to 2023. Our origination, servicing expenses and other cost of revenue increased by 12.8% from RMB2,111.5 million in 2023 to RMB2,381.8 million in 2024, primarily due to an increase in the facilitation costs and loan collection expenses as a result of the higher outstanding loan balance. Origination, servicing expenses and other cost of revenue for the period included share-based compensation of RMB39.6 million. Origination, servicing expenses and other cost of revenue-related party Origination, servicing expenses and other cost of revenue-related party consist primarily of expenses with Smart Frontier, which offer operation and support services. 2025 Compared to 2024. Our origination, servicing expenses and other cost of revenue-related party increased from nil in 2024 to RMB29.9 million in 2025, due to transactions with Smart Frontier. Sales and marketing expenses Sales and marketing expenses consist primarily of advertising and online marketing promotion expenses. 2025 Compared to 2024. Our sales and marketing expenses increased by 9.2% from RMB2,014.3 million in 2024 to RMB2,200.5 million (US$314.7 million) in 2025, primarily due to an increase in the advertising and online marketing expenses from RMB1,994.1 million in 2024 to RMB2,183.9 million (US$312.3 million) in 2025. Our advertising and online marketing expenses primarily include expenses paid to internet marketing channels for online advertising and search engine marketing as well as to certain websites that enable us to reach quality borrowers. The increase in the advertising and online marketing expenses was primarily driven by our increased proactive customer acquisition efforts focusing on quality borrowers in both China and the overseas markets. Our sales and marketing expenses as a percentage of our total operating revenues increased from 15.4% to 16.2% during the same period, primarily attributable to the increase in the revenue generated from new borrowers. 2024 Compared to 2023. Our sales and marketing expenses increased by 6.7% from RMB1,887.4 million in 2023 to RMB2,014.3 million in 2024, primarily due to an increase in the advertising and online marketing expenses from RMB1,871.4 million in 2023 to RMB1,994.1 million in 2024. Our advertising and online marketing expenses primarily include expenses paid to internet marketing channels for online advertising and search engine marketing as well as to certain websites that enable us to reach quality borrowers. The increase in the advertising and online marketing expenses was primarily driven by our increased proactive customer acquisition efforts focusing on quality borrowers in both China and the overseas markets. Our sales and marketing expenses as a percentage of our total operating revenues increased from 15.0% to 15.4% during the same period, primarily attributable to the increase in the revenue generated from new borrowers. General and administrative expenses General and administrative expenses consist primarily of salaries and benefits for general management, finance and administrative personnel, rental, professional service fees and other expenses. 2025 Compared to 2024. Our general and administrative expenses increased by 6.9% from RMB413.5 million in 2024 to RMB442.1 million (US$63.2 million) in 2025, primarily due to the increase in rents and renovation expenses, professional service fees and miscellaneous administrative expenses. General and administrative expenses in 2025 included share-based compensation of RMB51.0 million (US$7.3 million). Our general and administrative expenses as a percentage of our total operating revenues increased from 3.2% to 3.3% during the same period. 110 2024 Compared to 2023. Our general and administrative expenses increased by 6.0% from RMB390.0 million in 2023 to RMB413.5 million in 2024, primarily due to the increased benefits we provided to our employees. General and administrative expenses in 2024 included share-based compensation of RMB59.6 million. Our general and administrative expenses as a percentage of our total operating revenues increased from 3.1% to 3.2% during the same period, primarily due to the increased benefits we provided to our employees. Research and development expenses 2025 Compared to 2024. Research and development expenses increased by 8.0% from RMB496.7 million in 2024 to RMB536.6 million (US$76.7 million) in 2025, due to increased investments in technology development. Our research and development expenses in 2025 included the share-based compensation expenses of RMB41.5 million (US$5.9 million). Our research and development expenses as a percentage of our total operating revenues increased from 3.8% to 4.0%, primarily due to higher investments in technology development. 2024 Compared to 2023. Research and development expenses decreased by 2.8% from RMB511.0 million in 2023 to RMB496.7 million in 2024, due to our improved technology development efficiency. Our research and development expenses in 2024 included the share-based compensation expenses of RMB44.9 million. Our research and development expenses as a percentage of our total operating revenues decreased from 4.1% to 3.8%, primarily due to our improved technology development efficiency. Credit losses for quality assurance commitment Credit losses for quality assurance commitment was accounted for in addition to and separately from the guarantee liabilities accounted for under the Accounting Standards Codification 460. 2025 Compared to 2024. Credit losses for quality assurance commitment decreased by 24.5% from RMB4,587.3 million in 2024 to RMB3,462.4 million (US$495.1 million) in 2025, primarily due to the decrease in risk-bearing loans in the China market, partially offset by the increase in risk-bearing loans in the overseas market. 2024 Compared to 2023. Credit losses for quality assurance commitment increased by 3.7% from RMB4,422.8 million in 2023 to RMB4,587.3 million in 2024, primarily due to the increased outstanding loan balances of the off-balance sheet loans in the overseas markets, partially offset by the decrease in the proportion of loans bearing credit risk in China. Provision for loans receivable 2025 Compared to 2024. Our provision for loans receivables increased by 99.3% to RMB637.7 million (US$91.2 million) in 2025 from RMB320.0 million in 2024, primarily due to the increase in the outstanding loan balance of on-balance sheet loans in both China and the overseas market. 2024 Compared to 2023. Our provision for loans receivables decreased by 45.5% to RMB320.0 million in 2024 from RMB586.8 million in 2023, primarily due to the decreases in the transaction volume and the outstanding loan balances of the on-balance sheet loans in the overseas markets. Provision for accounts receivable and contract assets 2025 Compared to 2024. Our provision for accounts receivable and contract assets increased by 34.4% from RMB317.0 million in 2024 to RMB426.0 million (US$60.9 million) in 2025, primarily due to increased transaction volume of off-balance sheet loans in the overseas market. 2024 Compared to 2023. Our provision for accounts receivable and contract assets increased by 24.8% from RMB253.9 million in 2023 to RMB317.0 million in 2024, primarily due to the decrease in provisions from other third-party platforms in 2023. 111 Impairment of goodwill and intangible assets 2025 Compared to 2024. Impairment of goodwill and intangible assets increased from nil in 2024 to RMB50.7 million (US$7.2 million) in 2025. The increase was primarily due to an impairment of goodwill related to a certain micro-lending company acquired by the Group in 2017, following a performance review during the year. Other Income 2025 Compared to 2024. Our other income decreased from RMB310.1 million in 2024 to RMB216.6 million (US$31.0 million) in 2025, primarily due to lower gains from a reduction in investment products, reduced income from investments, and the reduction in government subsidies. 2024 Compared to 2023. Our other income decreased from RMB394.7 million in 2023 to RMB310.1 million in 2024, primarily due to the decrease in government subsidies. Income Tax Expenses 2025 Compared to 2024. Our income tax expenses increased from RMB457.4 million in 2024 to RMB 556.2 million (US$79.5 million) in 2025, primarily due to the increase in pre-tax profit and the increase in effective tax rate. 2024 Compared to 2023. Our income tax expenses increased from RMB395.1 million in 2023 to RMB457.4 million in 2024, primarily due to the increase in pre-tax profit and effective tax rate. Net Profit As a result of the foregoing, our net profit was RMB2.4 billion in 2023, RMB2.4 billion in 2024 and RMB2.5 billion (US$364.0 million) in 2025. Taxation Cayman Islands We are incorporated in the Cayman Islands. The Cayman Islands currently have no income, corporation or capital gains tax. Hong Kong Our subsidiary incorporated in Hong Kong is subject to Hong Kong profits tax at a rate of 16.5%. No Hong Kong profits tax has been levied as we did not have assessable profit that was earned in or derived from the Hong Kong subsidiary during the periods presented. Hong Kong does not impose a withholding tax on dividends. Indonesia Based on Income Tax Law of Indonesia, the subsidiaries incorporated in the Indonesia are subject to income tax of 22% for domestic operations in general and 11% for business entities with gross revenue below IDR4.8 billion. The effective tax rate will be applied on a proportional basis if gross income is above IDR4.8 billion and below IDR 50 billion. Philippines Under Philippines CREATE Law act of 2020, the subsidiaries incorporated in the Philippines are subject to income tax of 25% for domestic corporations in general and 20% for corporations with net taxable income not exceeding PHP5,000,000 and total assets excluding land not exceeding PHP100,000,000. 112 China Generally, our PRC subsidiaries, consolidated variable interest entities and their respective subsidiaries, which are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%. A “high and new technology enterprise” is entitled to a favorable statutory tax rate of 15% and such qualification is reassessed by governmental authorities every three years. Besides, a company qualified as a “software enterprise” is entitled to an exemption of income tax for the first two fiscal years and a favorable tax rate of 12.5% from the third to the fifth year. Such qualification is reassessed by governmental authorities annually. In 2020, one of our PRC subsidiaries was recognized as a “software enterprise” and was entitled to a preferential income tax rate of 12.5% from 2022 to 2024. In 2023, one of our PRC subsidiaries was recognized as “Hainan encouraged industrial enterprise” and was entitled to a preferential income tax rate of 15%. In November 2023, Hainan Shanghu was qualified as HNTE and was entitled to a preferential income tax rate of 15% from 2023 to 2025. In December 2025, Shanghai Gami Technology Co., Ltd. (“Shanghai Gami”) was qualified as HNTE and was entitled to a preferential income tax rate of 15% from 2025 to 2027. In July 2023, Hainan Shenxin was recognized as Hainan encouraged industrial enterprise and was entitled to a preferential income tax rate of 15%. In 2025, tax benefit for Hainan Shenxin expired and the income tax rate reverted to 25%. We are subject to value added tax at a rate of 6% on the services we provide to borrowers and institutional funding partners, less any deductible value added tax we have already paid or borne. We are also subject to surcharges on value added tax payments in accordance with PRC law. Value added tax has been phased in since May 2012 to replace the business tax that was previously applicable to the services we provide. During the periods presented, we were not subject to business tax on the services we provide. Dividends paid by our wholly foreign-owned subsidiary in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the Hong Kong entity satisfies all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and receives approval from the tax authority. We accrued withholding tax liabilities based on a 10% tax rate for certain percentage of the PRC subsidiaries’ profits to be distributed in 2024 and 2025, respectively. If our Hong Kong subsidiary satisfies all the requirements under the tax arrangement and receives approval from the tax authority, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the Enterprise Income Tax Law of the PRC, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. 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.” Discussion of Certain Balance Sheet Items The following table sets forth selected information from our consolidated balance sheet as of December 31, 2023, 2024 and 2025. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The following selected consolidated balance sheet as of December 31, 2023 are derived from our audited consolidated balance sheet as of December 31, 2023 not included in this annual report. As of December 31, 2023 2024 2025 RMB RMB RMB US$ (RMB in thousands) Assets: Cash and cash equivalents 4,969,319 4,672,772 4,285,121 612,764 Restricted cash 1,800,071 2,074,300 1,912,850 273,534 Short-term investments 2,960,821 2,832,382 3,015,226 431,172 Quality assurance receivable, net of credit loss allowance for quality assurance receivable 1,755,615 1,639,591 1,315,184 188,069 Investments 1,135,133 1,173,003 1,141,816 163,278 Loans receivable, net of credit loss allowance for loans receivable 1,127,388 4,157,621 6,471,619 925,429 Accounts receivable and contract assets, net of credit loss allowance for accounts receivable and contract assets 2,208,538 2,405,880 2,028,585 290,084 Total assets 21,293,673 23,607,121 25,413,604 3,634,098 Liabilities and shareholders’ equity Liabilities: Deferred guarantee income 1,882,036 1,515,950 1,119,004 160,015 Liability from quality assurance commitment 3,306,132 2,964,116 2,574,842 368,198 Funds payable to investors of consolidated trusts 436,352 796,122 778,531 111,328 Total liabilities 7,422,775 8,053,446 8,569,617 1,225,438 Total shareholders’ equity 13,870,898 15,553,675 16,843,987 2,408,660 113 Cash and Cash Equivalents Our cash and cash equivalents decreased by 6.0% from RMB5.0 billion as of December 31, 2023 to RMB4.7 billion as of December 31, 2024, primarily due to cash invested via consolidated trust. Our cash and cash equivalents decreased by 8.3% from RMB4.7 billion as of December 31, 2024 to RMB4.3 billion (US$612.8 million) as of December 31, 2025, primarily due to the decrease of cash invested via consolidated trust. Restricted Cash Restricted cash mainly included cash under the quality assurance commitment and in the quality assurance fund, cash received from investors and borrowers that has yet to be disbursed, cash received via consolidated trust that has not been distributed, cash held in escrow accounts, and cash received from borrower to be distributed to funding partners. The following table sets forth a breakdown of our restricted cash as of December 31, 2023, 2024 and 2025: As of December 31, 2023 2024 2025 RMB RMB RMB US$ (in thousands) Restricted cash: Quality assurance commitment and quality assurance fund 342,163 — — — Cash received from investors and borrowers 78,766 111,409 120,391 17,216 Cash received via consolidated trust that has not yet been distributed 265,924 701,928 600,346 85,848 Escrow accounts 608,185 864,440 810,959 115,966 Cash received from borrower to be distributed to funding partners 415,033 396,523 381,154 54,504 Cash held in capital escrow account as paid-in capital 90,000 — — — Total restricted cash 1,800,071 2,074,300 1,912,850 273,534 Restricted cash increased by 15.2% from RMB1.8 billion as of December 31, 2023 to RMB2.1 billion as of December 31, 2024, primarily due to (i) an increase of RMB436.0 million in cash received via consolidated trusts that has not yet been distributed due to the increase in trust investment over the year, and (ii) an increase of RMB256.3 million in escrow accounts due to the increased guarantee amount for our financing guarantee, partially offset by a decrease of RMB342.2 million in cash in quality assurance commitment and quality assurance fund due to the settlement under our quality assurance commitment in 2024. Restricted cash decreased by 7.8% from RMB2.1 billion as of December 31, 2024 to RMB1.9 billion (US$273.5 million) as of December 31, 2025, primarily due to (i) a decrease of RMB101.6 million in cash received via consolidated trusts that has not yet been distributed due to the cash settlement to investors of consolidated trusts by the year end of 2025, (ii) a decrease of RMB53.5 million in escrow accounts jointly managed by our group and institutional funding partners due to the decreased guarantee amount for our financing guarantee. Short-term Investments Short-term investments mainly consist of investments in time deposits placed with banks and investments in short-term wealth management products. 114 Our short-term investments decreased by 4.3% from RMB3.0 billion as of December 31, 2023 to RMB2.8 billion as of December 31, 2024, primarily due to the maturity of some wealth management products we purchased in the past. Our short-term investments increased by 6.5% from RMB2.8 billion as of December 31, 2024 to RMB3.0 billion (US$431.2 million) as of December 31, 2025, primarily due to increase in the purchasing of wealth management products. Quality Assurance Receivable Quality assurance receivable decreased by 6.6% from RMB1.8 billion as of December 31, 2023 to RMB1.6 billion as of December 31, 2024, primarily due to the decreased proportion of loans bearing credit risk in China. Quality assurance receivable decreased by 19.8% from RMB1.6 billion as of December 31, 2024 to RMB1.3 billion (US$188.1 million) as of December 31, 2025, primarily due to the decreased proportion of loans bearing credit risk in China. Loans receivable Loans receivable increased by 268.8% from RMB1.1 billion as of December 31, 2023 to RMB4.2 billion as of December 31, 2024, primarily due to the increase in the on-balance loan origination volume. Loans receivable increased by 55.7% from RMB4.2 billion as of December 31, 2024 to RMB6.5 billion (US$925.4 million) as of December 31, 2025, primarily due to the increase in the on-balance loan origination volume. Accounts Receivable and Contract Assets and Related Provision Accounts receivable and contract assets primarily consists of transaction service fees for facilitation and post facilitation services. Provision for credit loss allowance mainly consist of provision for accounts receivable and contract assets for loan facilitation and post facilitation services. Accounts receivable and contract assets increased by 7.0% to RMB2.7 billion as of December 31, 2024 from RMB2.5 billion as of December 31, 2023, mainly due to an increase in the loan origination volume in 2024. Provision for credit loss allowance decreased from RMB310.4 million as of December 31, 2023 to RMB290.3 million as of December 31, 2024, mainly due to the decreased proportion of loans bearing credit risk in China. Accounts receivable and contract assets decreased by 12.1% to RMB2.4 billion (US$338.8 million) as of December 31, 2025 from RMB2.7 billion as of December 31, 2024, mainly due to a decrease in the loan origination volume in 2025. Provision for credit loss allowance increased from RMB290.3 million as of December 31, 2024 to RMB340.8 million (US$48.7 million) as of December 31, 2025, mainly due to the increased proportion of off-balance sheet loans in the overseas markets. Deferred Guarantee Income Deferred guarantee income was RMB1.5 billion as of December 31, 2024 compared to RMB1.9 billion as of December 31, 2023, primarily due to the decreased proportion of loans bearing credit risk in China, offset by an increase in the loan volume in the overseas markets. Deferred guarantee income was RMB1.1 billion (US$160.0 million) as of December 31, 2025 compared to RMB1.5 billion as of December 31, 2024, primarily due to the decreased proportion of loans bearing credit risk in China, offset by an increase in the off-balance sheet loan volume in the overseas markets. Liability from Quality Assurance Commitment Liability from quality assurance commitment decreased to RMB3.0 billion as of December 31, 2024 from RMB3.3 billion as of December 31, 2023, primarily due to the decreased proportion of loans bearing credit risk in China, offset by an increase in the loan volume in the overseas markets. Liability from quality assurance commitment decreased to RMB2.6 billion (US$368.2 million) as of December 31, 2025 from RMB3.0 billion as of December 31, 2024, primarily due to the decreased proportion of loans bearing credit risk in China, offset by an increase in the off-balance sheet loan volume in the overseas markets. 115 Funds Payable to Investors of Consolidated Trusts Funds payable to investors of consolidated trusts increased to RMB796.1 million as of December 31, 2024 from RMB436.4 million as of December 31, 2023, primarily due to the increase in the loan origination volume of trust products in 2024. Funds payable to investors of consolidated trusts decreased to RMB778.5 million (US$111.3 million) as of December 31, 2025 from RMB796.1 million as of December 31, 2024, primarily due to the settlement of consolidated trust products in the fourth quarter of 2025. Recent Accounting Pronouncements See note 2 to the consolidated financial statements on page F-34 for details on recent accounting pronouncements and our adoption of certain accounting rules. B. Liquidity and Capital Resources Cash Flows and Working Capital To date, we have financed our operations primarily through cash generated by operating activities. As of December 31, 2023, 2024 and 2025, we had RMB5.0 billion, RMB4.7 billion and RMB4.3 billion (US$612.8 million), respectively, in cash and cash equivalents. Our cash and cash equivalents primarily consist of cash on hand. In June 2025, we issued US$150 million aggregate principal amount of 2.50% convertible senior notes due 2030, or the 2030 Notes. The 2030 Notes are senior, unsecured debt. The 2030 Notes will bear interest at a rate of 2.50% per year. The 2030 Notes will mature on July 1, 2030 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The holders of the 2030 Notes shall have the right, at such holder’s option, to convert all or any portion of their 2030 Notes, at any time prior to the close of business on the third scheduled trading day immediately preceding the maturity date. Upon conversion, we will pay or deliver, as the case may be, to such converting holders, cash, ADSs, or a combination of cash and ADSs, at our election. The initial conversion rate of the 2030 Notes is 80.8865 ADSs per US$1,000 principal amount of such 2030 Notes, subject to adjustment upon the occurrence of certain events. Holders of the 2030 Notes may require us to repurchase all or any portion of their 2030 Notes for cash on July 3, 2028, or in the event of certain fundamental changes, at a repurchase price equal to 100% of the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. In addition, we may redeem all but not part of the 2030 Notes in the event of certain changes in the tax laws. Satisfying the obligations of the 2030 Notes could adversely affect the amount or timing of any distributions to our shareholders. We may choose to satisfy, repurchase, or refinance the 2030 Notes through public or private equity or debt financings if we deem such financings available on favorable terms. Based on the outstanding principal amount of the 2030 Notes, and the conversion rate as of the date of this annual report, the maximum number of ADSs that would be issued in connection with the outstanding convertible notes is approximately 12.9 million. We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements and capital expenditures for the next 12 months. We may, however, need additional capital in the future to fund our continued operations. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. 116 Although we consolidate the results of the consolidated variable interest entities and their subsidiaries, we only have access to the assets or earnings of the consolidated variable interest entities and their subsidiaries through our contractual arrangements with the consolidated variable interest entities and their shareholders. See “Item 4. Information on the Company—C. Organizational Structure.” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “—Holding Company Structure.” The majority of our future revenues are likely to continue to be in the form of RMB. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our PRC subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Our PRC subsidiaries are required to set aside at least 10% of its after-tax profits after making up previous years’ accumulated losses each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. These reserves are not distributable as cash dividends. Furthermore, capital account transactions, which include foreign direct investment and loans, must be approved by and/or registered with SAFE and its local branches. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the price of our ADSs.” The following table sets forth a summary of our cash flows for the periods presented: 2023 2024 2025 RMB RMB RMB US$ (RMB in thousands) Summary Consolidated Cash Flows Data: Net cash provided by operating activities 1,360,872 2,893,160 1,867,600 267,064 Net cash provided by (used in) investing activities 1,411,992 (2,295,816 ) (2,183,697 ) (312,263 ) Net cash used in financing activities (2,505,002 ) (622,715 ) (194,696 ) (27,841 ) Net increase (decrease) in cash, cash equivalents and restricted cash 290,303 (22,318 ) (549,101 ) (78,520 ) Cash, cash equivalents and restricted cash at beginning of year 6,479,087 6,769,390 6,747,072 964,818 Cash, cash equivalents and restricted cash at end of year 6,769,390 6,747,072 6,197,971 886,298 Operating Activities Net cash provided by operating activities was RMB1.9 billion (US$267.1 million) in 2025, decreased from RMB2.9 billion in 2024. In 2025, the difference between our net cash provided by operating activities and our net profit of RMB2.5 billion (US$364.0 million) resulted mainly from a net gain from investment in loans of RMB1,336.5 million, a decrease in taxes payable of RMB527.5 million, a decrease in deferred guarantee income of RMB396.9 million and a decrease in liability from quality assurance commitment of RMB389.3 million, an increase in deferred tax assets of RMB478.2 million and an increase of deferred tax liabilities of RMB292.9 million, a provision for loans receivable of RMB637.7 million, a provision for quality assurance receivable of RMB455.5 million, and a provision for accounts receivable and contract assets of RMB426.0 million. The net gain from investment in loans was primarily due to the interest income from the loans originated in the overseas markets and the interest income from the loans held by consolidated trusts. The decrease in taxes payable was primarily due to the lower taxable income as more deduction for bad debt. The decrease in deferred guarantee income and the liability from quality assurance commitment primarily due to the decreased proportion of loans bearing credit risk in China, offset by an increase in the risk-bearing loan volume in the overseas markets. The increase in deferred tax assets was primarily due to the increase in the deferred revenue. The increase in deferred tax liabilities was primarily due to the increase in the unrealized gain in consolidated trusts and the withholding tax for undistributed earnings. The provision for loans receivable, quality assurance receivable, and accounts receivable and contract assets was primarily due to the recognition of the life time credit losses. Net cash provided by operating activities was RMB2.9 billion in 2024, increased from RMB1.4 billion in 2023. In 2024, the difference between our net cash provided by operating activities and our net profit of RMB2.4 billion resulted mainly from a decrease from prepaid expenses and other assets of RMB1.7 billion, an increase in taxes payable of RMB499.1 million, a provision for quality assurance receivable of RMB378.7 million, a provision for loans receivable of RMB320.0 million, a provision for accounts receivable and contract assets of RMB317.0 million, an increase in deferred tax assets of RMB863.3 million, a net gain from investment in loans of RMB853.8 million, an increase in accounts receivable and contract assets of RMB514.4 million, and a decrease in deferred guarantee income of RMB366.1 million. The decrease from prepaid expenses and other assets was primarily due to a decrease in security deposit. The increase in taxes payable was primarily due to higher profit before tax. The provision for quality assurance receivable, loans receivable and accounts receivable and contract assets was primarily due to the recognition of the life time credit losses. The increase in deferred tax assets was primarily due to the increase in the deferred revenue. The net gain from investment in loans was primarily due to the interest income from the loans originated in the overseas markets and the interest income from the loans held by consolidated trusts. The increase in accounts receivable and contract assets was primarily due to the increase in the loan origination volume. The decrease in deferred guarantee income was primarily due to the decreased proportion of loans bearing credit risk in China. 117 Net cash provided by operating activities was RMB1.4 billion in 2023, increased from RMB236.9 million in 2022. In 2023, the difference between our net cash provided by operating activities and our net profit of RMB2.4 billion resulted mainly from a net gain from investment in loans of RMB1.0 billion, an increase in deferred tax assets of RMB705.0 million, an increase in quality assurance fund receivable of RMB440.1 million, a provision for loans receivable of RMB586.8 million, a provision for quality assurance receivable of RMB354.4 million, and a provision for accounts receivable and contract assets of RMB253.9 million. The gain from investment in loans was primarily due to the interest income from the loans originated in the overseas markets and the interest income from the loans held by consolidated trusts. The increase in deferred tax assets was primarily due to the increase in the deferred revenue. The increase in quality assurance receivable was primarily due to the increases in the loan origination volume. The provision for loans receivable was primarily due to the recognition of the life time credit losses. The provision for quality assurance receivable was primarily due to the recognition of the life time credit losses. The provision for accounts receivable and contract assets was primarily due to the recognition of the life time credit losses. Investing Activities Net cash used in investing activities was RMB2.2 billion (US$312.3 million) in 2025, which was mainly attributable to cash paid for investment in loans originated and held by us in an amount of RMB18.4 billion (US$2.6 billion), purchase of short-term investments (mainly time deposits and wealth management products) in an amount of RMB8.1 billion (US$1.2 billion), partially offset by the proceeds from investment in loans originated and held by us in an amount of RMB16.8 billion (US$2.4 billion) and proceeds from short-term investments in an amount of RMB7.9 billion (US$1.1 billion) from maturity of time deposits and wealth management products. Net cash used in investing activities was RMB2.3 billion in 2024, which was mainly attributable to cash paid for investment in loans originated and held by us in an amount of RMB9.4 billion, purchase of short-term investments (mainly time deposits and wealth management products) in an amount of RMB7.3 billion, proceeds from investment in loans originated and held by us in an amount of RMB6.9 billion and proceeds from short-term investments in an amount of RMB7.5 billion from maturity of time deposits and wealth management products. Net cash provided by investing activities was RMB1.4 billion in 2023, which was mainly attributable to proceeds from short-term investments in an amount of RMB12.4 billion from maturity of time deposits and wealth management products, and proceeds from investment in loans originated and held by us in an amount of RMB7.3 billion, partially offset by purchase of short-term investments (mainly time deposits and wealth management products) in an amount of RMB11.9 billion and cash paid for investment in loans originated and held by us in an amount of RMB5.8 billion. Financing Activities Net cash used in financing activities was RMB194.7 million (US$27.8 million) in 2025, which was mainly attributable to cash paid to our institutional funding partners that invested in our consolidated trusts in an amount of RMB1.6 billion (US$228.2 million), repurchase of our ADSs in an amount of RMB767.0 million (US$109.7 million), dividends payout in an amount of RMB510.2 million (US$73.0 million), partially offset by cash received from our institutional funding partners that invested in our consolidated trusts in an amount of RMB1.5 billion (US$220.4 million) and proceeds from convertible senior notes, net of issuance cost in an amount of RMB1.0 billion (US$149.4 million). Net cash used in financing activities was RMB622.7 million in 2024, which was mainly attributable to repurchase of our ADSs in an amount of RMB643.2 million, cash paid to our institutional funding partners that invested in our consolidated trusts in an amount of RMB439.6 million, dividends payout in an amount of RMB441.3 million, partially offset by cash received from our institutional funding partners that invested in our consolidated trusts in an amount of RMB780.0 million and net funds held for customers in an amount of RMB121.7 million. 118 Net cash used in financing activities was RMB2.5 billion in 2023, which was mainly attributable to cash paid to our institutional funding partners that invested in our consolidated trusts in an amount of RMB2.7 billion, repurchase of our ADSs in an amount of RMB694.5 million, and dividends payout in amount of RMB430.4 million, partially offset by cash received from our institutional funding partners that invested in our consolidated trusts in an amount of RMB1.3 billion. Material Cash Requirements Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include our capital expenditures and contractual obligations. We made capital expenditures of RMB538.1 million, RMB27.8 million and RMB84.1 million (US$12.0 million) in 2023, 2024 and 2025, respectively. In 2025, our capital expenditures were mainly used for purchases of property, equipment and software. We expect our capital expenditures for 2026 to be approximately RMB31.7 million (US$4.5 million), primarily due to optimization of server units and IT infrastructure. Our contractual obligations mainly represent leasing obligations relating to our leases of office premises. We lease our office premises under non-cancelable operating lease arrangements. We made payment of RMB24.1 million (US$3.4 million) in 2025. We expect our non-cancelable payment for 2026 to be approximately RMB31.4 million (US$4.5 million). The following table sets forth our contractual obligations as of December 31, 2025: Total Less than 1 year 1-3 years 3-5 years More than 5 years (RMB) (US$) (RMB) (US$) (RMB) (US$) (RMB) (US$) (RMB) (US$) (in thousands) Non-cancellable operating leases 49,848 7,092 31,416 4,470 16,983 2,416 1,449 206 - - We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business. As of December 31, 2025, we had capital commitments, primarily related to equity investments and business combinations, totaling RMB99 million. Other than those discussed above and the obligations related to on-balance sheet loans (presented as “funds payable to investors of consolidated trusts”), “convertible senior notes” and “long-term borrowings” in the consolidated balance sheets and guarantees associated with the loans we facilitated, we did not have any significant capital or other commitments, or long-term obligations as of December 31, 2025. Holding Company Structure FinVolution Group is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries, three consolidated variable interest entities and their subsidiaries in China. As a result, FinVolution Group’s ability to continue paying dividends depends upon dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of our subsidiaries and consolidated variable interest entities is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, each of our subsidiaries may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion, and the consolidated variable interest entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. Our PRC subsidiaries are not able to pay dividends out of China until they generate accumulated profits and meet the requirements for statutory reserve funds. In 2020, Shanghai Guangjian, one of our PRC subsidiaries, paid dividends of RMB79.5 million out of China. 119 C. Research and Development, Patents, and Licenses, etc. See “Item 4. Information On the Company—B. Business Overview—Technology” and “Item 4. Information On the Company—B. Business Overview—Intellectual Property.” D. Trend Information Other than as disclosed in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the current fiscal year that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital reserves, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. E. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the end of each reporting period and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources. The use of estimates is an integral component of the financial reporting process, though actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We consider the policies discussed below to be critical to an understanding of our financial statements as their application places the most significant demands on the judgment of our management. For a detailed discussion of our significant accounting policies and related judgments, please see “Note 2—Summary of Significant Accounting Policies.” You should read the following description of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report. Revenue Recognition Nature of estimate: We operate an online consumer finance platform that matches borrowers with institutional funding partners. Typically, we provided quality assurance service, loan facilitation services and post-facilitation services to the borrowers and institutional funding partners. The quality assurance service is within the scope of the Accounting Standards Codification Topic 460 Guarantees and recorded at fair value at the inception of the loans. For loan facilitation services and post-facilitation services we provide, we charged one combined transaction service fee, each of which we have assessed and concluded that they were distinct performance obligations. Assumptions: The combined transaction price was allocated to loan facilitation and post-facilitation services based on their standalone selling price. We did not have an observable standalone selling price for the loan facilitation or post-facilitation services because we did not provide such services on a standalone basis in similar circumstances to similar customers, and because there was no directly observable standalone selling price that was reasonably available for similar services in the market. As a result, we used an expected “cost plus margin” approach to estimate the standalone selling prices. As part of the expected “cost plus margin” model, we made certain assumptions including estimates of the cost of providing the services, plus a reasonable profit margin. When our estimates of the standalone selling prices for loan facilitation service as a percentage of total consideration increased/decreased by 100 basis points while holding all other estimates constant, our loan facilitation service revenue would increase/decrease by approximately RMB23 million. Our estimate of the key assumptions related to revenue recognition did not change significantly throughout the periods presented. 120 Allowance for Credit Losses We have the following types of financial assets and liabilities that are subject to credit losses of borrowers: accounts receivable and contract assets, quality assurance receivable, loans receivable and liability from quality assurance commitment. Nature of estimate: Measurement of credit losses on financial instruments, which requires us to record the full amount of expected credit losses for the life of a financial asset at the time it is originated or acquired and adjusted for changes in expected lifetime credit losses subsequently, which requires earlier recognition of credit losses. Assumptions: The credit losses related to these financial assets and liabilities are estimated mainly based on historical default experience, known or inherit risks in the portfolio, current economic conditions, and macroeconomic forecasts as well as other factors surrounding the credit risk of borrowers. The estimate of expected credit losses is sensitive to our assumptions in these factors. When change in one of our estimates or a combined effect of changes of multiple estimates, which results in a 100 basis points increase/decrease in our default rate while holding all other estimates constant, there would be approximately RMB1,407 million pre-tax impact to our consolidated results of operations. Our estimate of the key assumptions related to credit losses did not change significantly throughout the periods presented.