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What changed in Yiren Digital Ltd.'s 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of Yiren Digital Ltd.'s 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+1015 added−1053 removedSource: 20-F (2024-05-15) vs 20-F (2023-04-28)

Top changes in Yiren Digital Ltd.'s 2023 20-F

1015 paragraphs added · 1053 removed · 729 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

318 edited+102 added−149 removed521 unchanged
Biggest changeRisk Factors—Risks Relating to Doing Business in China—We 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 adverse effect on our ability to conduct our business,” and “—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 initial public offering and the concurrent private placement 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.” Financial Information Related to the Consolidated Variable Interest Entities The following table presents the condensed consolidating schedule of financial position for the consolidated variable interest entities and other entities as of the dates presented: Selected Condensed Consolidated Statements of Income Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Net revenue — 2,063 2,541 — (1,169) 3,435 Net (loss)/income (43) 370 848 17 3 1,195 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB ​ (in millions) Net revenue — 1,773 3,282 — (577) 4,478 Net (loss)/income (37) 790 349 (75) 6 1,033 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB ​ (in millions) Net revenue — 3,858 2,663 — (2,559) 3,962 Net (loss)/income (29) 1,592 (2,122) (129) (5) (693) ​ 11 Table of Contents Selected Condensed Consolidated Balance Sheets Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Cash and cash equivalents 24 1,452 2,796 — — 4,272 Restricted cash — — — 89 — 89 Accounts receivable — 120 101 — — 221 Contract assets, net — 519 108 — — 627 Contract cost — — 1 — — 1 Prepaid expenses and other assets 2 204 114 1 — 321 Loans at fair value — — — 54 — 54 Financing receivables — — 514 — — 514 Amounts due from related parties 1,398 1,163 1,112 — (2,407) 1,266 Held-to-maturity investments — 1 — 2 — 3 Available-for-sale investments 49 481 595 — (152) 973 Property, equipment and software, net — 14 63 — — 77 Deferred tax assets — — 84 — — 84 Right-of-use assets — 24 10 — — 34 Investments in its subsidiaries and the consolidated VIEs 4,572 1,432 — — (6,004) — Total assets 6,045 5,410 5,498 146 (8,563) 8,536 Accounts payable — 5 9 — — 14 Amounts due to related parties — 318 2,312 5 (2,407) 228 Deferred revenue — 56 9 — — 65 Payable to investors at fair value — — — 232 (232) — Accrued expenses and other liabilities 14 169 1,132 — — 1,315 Secured borrowings — — 768 — — 768 Deferred tax liabilities — 63 17 — — 80 Lease liabilities — 26 9 — — 35 Total liabilities ​ 14 ​ 637 ​ 4,256 ​ 237 ​ (2,639) ​ 2,505 ​ 12 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Cash and cash equivalents 6 1,465 1,393 — — 2,864 Restricted cash — 24 — 57 — 81 Accounts receivable — 88 217 — — 305 Contract assets, net — 543 563 — — 1,106 Contract cost — 4 9 — (3) 10 Prepaid expenses and other assets — 206 145 1 — 352 Loans at fair value — — — 74 — 74 Financing receivables — — 1,698 — — 1,698 Amounts due from related parties 1,408 3,661 2,284 — (6,474) 879 Held-to-maturity investments — — — 2 — 2 Available-for-sale investments 89 155 5 — (72) 177 Property, equipment and software, net — 22 81 — — 103 Deferred tax assets — — 7 — — 7 Right-of-use assets — 35 46 — — 81 Investments in its subsidiaries and the consolidated VIEs 3,332 1,432 — — (4,764) — Total assets 4,835 7,635 6,448 134 (11,313) 7,739 Accounts payable — — 19 — — 19 Amounts due to related parties — 2,826 3,964 42 (6,399) 433 Deferred revenue — 2 10 — — 12 Payable to investors at fair value — — — 203 (152) 51 Accrued expenses and other liabilities 14 214 954 1 — 1,183 Secured borrowings — — 1,029 — — 1,029 Refund liabilities — 6 — — — 6 Deferred tax liabilities — 72 41 — — 113 Lease liabilities — 33 39 — — 72 Total liabilities ​ 14 ​ 3,153 ​ 6,056 ​ 246 ​ (6,551) ​ 2,918 ​ 13 Table of Contents Selected Condensed Consolidated Cash Flows Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ Variable Backed ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ ​ Parent ​ Subsidiaries ​ Entities ​ Entities ​ Eliminations ​ Total ​ ​ RMB ​ ​ (in millions) Net cash (used in)/provided by operating activities ​ (23) ​ 483 ​ 1,375 ​ 4 ​ 10 ​ 1,849 Net cash provided by/(used in) investing activities ​ 43 ​ (522) ​ 428 ​ 35 ​ 69 ​ 53 Net cash (used in)/provided by financing activities (4) — (400) (6) (79) (489) Effect of foreign exchange rate changes 1 1 — — — 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Net cash (used in)/provided by operating activities ​ (10) ​ (35) ​ 250 ​ (35) ​ (12) ​ 158 Net cash (used in)/provided by investing activities ​ (31) ​ 81 ​ (359) ​ 66 ​ (104) ​ (347) Net cash (used in)/provided by financing activities (3) — 501 (187) 116 427 Effect of foreign exchange rate changes (1) — — — — (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Net cash (used in)/provided by operating activities ​ (13) ​ 1,091 ​ (828) ​ 42 ​ (10) ​ 282 Net cash (used in)/provided by investing activities ​ — ​ (1,203) ​ (1,249) ​ 33 ​ 622 ​ (1,797) Net cash (used in)/provided by financing activities (3) (66) 1,542 94 (612) 955 Effect of foreign exchange rate changes (1) (2) — — — (3) ​ Selected Financial Data In July 2019, we consummated a business realignment transaction with CreditEase, the controlling shareholder of our company, pursuant to which we have assumed from CreditEase and its affiliates the Acquired Businesses.
Biggest changeRisk Factors—Risks Relating to Doing Business in China—We 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 adverse effect on our ability to conduct our business,” and “—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 initial public offering and the concurrent private placement 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.” Financial Information Related to the Consolidated Variable Interest Entities The following table presents the condensed consolidating schedule of financial position for the consolidated variable interest entities and other entities as of the dates presented: Selected Condensed Consolidated Statements of Income Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Net revenue — 3,610 2,878 — (1,592) 4,896 Net (loss)/income (39) 904 1,335 (86) (34) 2,080 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB ​ (in millions) Net revenue — 2,063 2,541 — (1,169) 3,435 Net (loss)/income (43) 370 848 17 3 1,195 ​ 11 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB ​ (in millions) Net revenue — 1,773 3,282 — (577) 4,478 Net (loss)/income (37) 790 349 (75) 6 1,033 ​ Selected Condensed Consolidated Balance Sheets Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Cash and cash equivalents 23 2,405 3,363 — — 5,791 Restricted cash — — — 267 — 267 Trading securities ​ — ​ — ​ 76 ​ — ​ — ​ 76 Accounts receivable — 442 57 — — 499 Contract assets, net — 824 154 — — 978 Prepaid expenses and other assets — 375 46 6 — 427 Loans at fair value — 389 — 289 — 678 Financing receivables — 2 114 — — 116 Amounts due from related parties 1,350 1,767 1,237 — (3,534) 820 Held-to-maturity investments — — — 10 — 10 Available-for-sale investments 30 695 — — (285) 440 Property, equipment and software, net — 51 62 — (34) 79 Deferred tax assets — — 73 — — 73 Right-of-use assets — 12 11 — — 23 Investments in its subsidiaries and the consolidated VIEs 6,690 126 — — (6,816) — Total assets 8,093 7,088 5,193 572 (10,669) 10,277 Accounts payable — 12 18 1 — 31 Amounts due to related parties — 908 2,625 15 (3,534) 14 Deferred revenue — 54 — — — 54 Payable to investors at fair value — — — 731 (285) 446 Accrued expenses and other liabilities 7 248 1,243 2 — 1,500 Deferred tax liabilities — 102 20 — — 122 Lease liabilities — 14 10 — — 24 Total liabilities ​ 7 ​ 1,338 ​ 3,916 ​ 749 ​ (3,819) ​ 2,191 ​ 12 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Cash and cash equivalents 24 1,452 2,796 — — 4,272 Restricted cash — — — 89 — 89 Accounts receivable — 120 101 — — 221 Contract assets, net — 519 108 — — 627 Contract cost — — 1 — — 1 Prepaid expenses and other assets 2 204 114 1 — 321 Loans at fair value — — — 54 — 54 Financing receivables — — 514 — — 514 Amounts due from related parties 1,398 1,163 1,112 — (2,407) 1,266 Held-to-maturity investments — 1 — 2 — 3 Available-for-sale investments 49 481 595 — (152) 973 Property, equipment and software, net — 14 63 — — 77 Deferred tax assets — — 84 — — 84 Right-of-use assets — 24 10 — — 34 Investments in its subsidiaries and the consolidated VIEs 4,572 1,432 — — (6,004) — Total assets 6,045 5,410 5,498 146 (8,563) 8,536 Accounts payable — 5 9 — — 14 Amounts due to related parties — 318 2,312 5 (2,407) 228 Deferred revenue — 56 9 — — 65 Payable to investors at fair value — — — 232 (232) — Accrued expenses and other liabilities 14 169 1,132 — — 1,315 Secured borrowings — — 768 — — 768 Deferred tax liabilities — 63 17 — — 80 Lease liabilities — 26 9 — — 35 Total liabilities ​ 14 ​ 637 ​ 4,256 ​ 237 ​ (2,639) ​ 2,505 ​ 13 Table of Contents Selected Condensed Consolidated Cash Flows Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ Variable Backed ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ ​ Parent ​ Subsidiaries ​ Entities ​ Entities ​ Eliminations ​ Total ​ ​ RMB ​ ​ (in millions) Net cash (used in)/provided by operating activities ​ (25) ​ 742 ​ 1,379 ​ 26 ​ 49 ​ 2,171 Net cash provided by/(used in) investing activities ​ 72 ​ 102 ​ 792 ​ (900) ​ 34 ​ 100 Net cash (used in)/provided by financing activities (48) 114 (1,604) 1,052 (83) (569) Effect of foreign exchange rate changes — (4) — — — (4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Net cash (used in)/provided by operating activities ​ (23) ​ 483 ​ 1,375 ​ 4 ​ 10 ​ 1,849 Net cash provided by/ (used in) investing activities ​ 43 ​ (522) ​ 428 ​ 35 ​ 69 ​ 53 Net cash (used in)/provided by financing activities (4) — (400) (6) (79) (489) Effect of foreign exchange rate changes 1 1 — — — 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ Parent Subsidiaries Entities Entities Eliminations Total ​ ​ RMB ​ ​ (in millions) Net cash (used in)/provided by operating activities ​ (10) ​ (35) ​ 250 ​ (35) ​ (12) ​ 158 Net cash (used in)/provided by investing activities ​ (31) ​ 81 ​ (359) ​ 66 ​ (104) ​ (347) Net cash (used in)/provided by financing activities (3) — 501 (187) 116 427 Effect of foreign exchange rate changes (1) — — — — (1) ​ A. [Reserved] B.
It may exert more oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations, including data security or anti-monopoly related regulations, in this nature may cause the value of such securities to significantly decline.
It may exert more oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations, including data security or anti-monopoly related regulations, in this nature may cause the value of such securities to significantly decline.
Pursuant to the exclusive technical and consulting services agreements between our wholly-owned PRC subsidiaries and the consolidated variable interest entities, the amount of service fees shall be calculated in such manner as determined by both the consolidated variable interest entities and our wholly-owned PRC subsidiary from time to time based on the nature of service and paid.
Pursuant to the exclusive technical and consulting services agreements between our wholly-owned PRC subsidiaries and the consolidated variable interest entities, the amount of service fees shall be calculated in such manner as determined by both the consolidated variable interest entities and our wholly-owned PRC subsidiary from time to time based on the nature of service paid.
(4) The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise, or FIE, to its immediate holding company outside of China.
(4) The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise, or the FIE, to its immediate holding company outside of China.
Risk Factors Risks Related to Our Business We operate in emerging and evolving industries, and our operations, services and products have been and may need to be modified in answering to the latest market trends, which makes it difficult to evaluate our future prospects.
Risk Factors Risks Related to Our Business We operate in emerging and evolving industries, and our operations, services and products have been and may need to be modified in answering to the latest market trends, which makes it difficult to evaluate our future prospects. We operate in emerging and evolving industries.
We may be from time to time in the future subject to legal proceedings and claims relating to the intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights, know-how or other intellectual property rights that are infringed by our products, services or other aspects of our business without our awareness.
We may from time to time in the future be subject to legal proceedings and claims relating to the intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights, know-how or other intellectual property rights that are infringed by our products, services or other aspects of our business without our awareness.
Department of State in August 2020 and new authorities granted to the Department of Commerce to prohibit or restrict the use of information and communications technology and services, or ICTS, and Executive Order on Protecting America’s Sensitive Data from Foreign Adversaries published in June 2021.
Department of State in August 2020 and new authorities granted to the Department of Commerce to prohibit or restrict the use of information and communications technology and services, or ICTS, and the Executive Order on Protecting America’s Sensitive Data from Foreign Adversaries published in June 2021.
After the initial outbreak of COVID-19, some instances of COVID-19 infections emerged in various regions of China from time to time, including the infections caused by the Omicron variants since early 2022, and varying levels of temporary restrictions and other measures were reinstated to contain the infections, such as those in Shanghai since March 2022.
After the initial outbreak of COVID-19, some instances of COVID-19 infections emerged in various regions of China from time to time, including the infections caused by the Omicron variants since early 2022. Varying levels of temporary restrictions and other measures were reinstated to contain the infections, such as those in Shanghai in March 2022.
However, as the Overseas Listing Regulations was recently promulgated, it remains uncertain as to its interpretation, implementation and enforcement, in particular, for companies with VIE structures, and there also remain uncertainties how they will affect our operations in China and our future capital-raising activities.
However, as the Overseas Listing Regulations was recently promulgated, it remains uncertain as to its interpretation, implementation and enforcement, in particular, for companies with VIE structures, and there also remain uncertainties as to how they will affect our operations in China and our future capital-raising activities.
Some government policies and internal rules may not be published on a timely manner.
Some government policies and internal rules may not be published on a timely manner.
The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. We have accrued the employee benefit according to the local governments’ regulations in financial statements, but we have not made adequate employee benefits payments as of the date of this annual report.
The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. We have accrued the employee benefits according to the local governments’ regulations in financial statements, but we have not made adequate employee benefits payments as of the date of this annual report.
If MOFCOM or any of its local counterparts challenges aforementioned the transaction structure or requires us to complete relevant approval process, we may have to adjust the transaction structure, amend or terminate the definitive agreements or be subject to fines and other administrative sanctions. If such situations occur, our business, financial condition and prospects would be materially and adversely affected.
If MOFCOM or any of its local counterparts challenges the aforementioned transaction structure or requires us to complete relevant approval process, we may have to adjust the transaction structure, amend or terminate the definitive agreements or be subject to fines and other administrative sanctions. If such situations occur, our business, financial condition and prospects would be materially and adversely affected.
The PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests in a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing Circular on Issues Concerning Treatment of Enterprise Income Tax in Enterprise Restructuring Business promulgated by the State Administration of Taxation, which became effective in January 2008, or Circular 59, the Announcement of the State Administration of Taxation on Several Issues concerning the Enterprise Income Tax on the Indirect Transfers of Properties by Non-Resident Enterprises promulgated by the State Administration of Taxation in February 2015, or Circular 7, and the Announcement of the State Administration of Taxation on Matters Concerning Withholding of Income Tax of Non-resident Enterprises at Source promulgated by the State Administration of Taxation in October 2017 and taken into effect in December 2017 and amended in June 2018, or SAT Circular 37.
The PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests in a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing Circular on Issues Concerning Treatment of Enterprise Income Tax in Enterprise Restructuring Business promulgated by the State Administration of Taxation, which became effective in January 2008, or Circular 59, the Announcement of the State Administration of Taxation on Several Issues concerning the Enterprise Income Tax on the Indirect Transfers of Properties by Non-Resident Enterprises promulgated by the State Administration of Taxation in February 2015, or Circular 7, and the Announcement of the State Administration of Taxation on Matters Concerning Withholding of Income Tax of Non-resident Enterprises at Source promulgated by the State Administration of Taxation in October 2017, taken into effect in December 2017 and amended in June 2018, or SAT Circular 37.
Sales of these registered shares in the form of ADSs in the public market could cause the price of our ADSs to decline. We have adopted share incentive plans in September 2015, July 2017 and June 2020, under which we have the discretion to grant a broad range of equity-based awards to eligible participants. See “Item 6.
Sales of these registered shares in the form of ADSs in the public market could cause the price of our ADSs to decline. We adopted share incentive plans in September 2015, July 2017 and June 2020, under which we have the discretion to grant a broad range of equity-based awards to eligible participants. See “Item 6.
Furthermore, any negative development in the online consumer finance marketplace industry, such as bankruptcies or failures of consumer finance marketplaces as part of the industry, and especially a large number of such bankruptcies or failures, or negative perception of the industry as a whole, such as that arises from any failure of other consumer finance marketplaces to detect or prevent money laundering or other illegal activities, even if factually incorrect or based on isolated incidents, could compromise our image, undermine the trust and credibility we have established and impose a negative impact on our ability to attract new borrowers and wealth clients.
Furthermore, any negative development in the online consumer finance marketplace industry, such as bankruptcies or failures of consumer finance marketplaces as part of the industry, and especially a large number of such bankruptcies or failures, or negative perception of the industry as a whole, such as that arises from any failure of other consumer finance marketplaces to detect or prevent money laundering or other illegal activities, even if factually incorrect or based on isolated incidents, could compromise our image, undermine the trust and credibility we have established and impose a negative impact on our ability to attract new borrowers and clients.
The Provisions on Strengthening Confidentiality and Archives Management of Overseas Securities Issuance and Listing by Domestic Enterprises, or the Confidentiality and Archives Management Provisions, which became effective on March 31, 2023, provides that the investigation and evidence collection in relation to the oversea securities offering and listing of the PRC domestic companies by the overseas securities regulatory authorities and relevant authorities shall be conducted through the cross-border cooperation mechanism for supervision and administration and the domestic companies in China shall obtain the prior consent from the CSRC or relevant authorities before cooperating with such overseas securities regulatory authorities or relevant authorities in connection with relevant inspections or investigations or providing relevant documents to such overseas securities regulatory authorities or relevant authorities.
The Provisions on Strengthening Confidentiality and Archives Management of Overseas Securities Issuance and Listing by Domestic Enterprises, or the Confidentiality and Archives Management Provisions, which became effective on March 31, 2023, provides that the investigation and evidence collection in relation to the overseas securities offering and listing of the PRC domestic companies by the overseas securities regulatory authorities and relevant authorities shall be conducted through the cross-border cooperation mechanism for supervision and administration and the domestic companies in China shall obtain the prior consent from the CSRC or relevant authorities before cooperating with such overseas securities regulatory authorities or relevant authorities in connection with relevant inspections or investigations or providing relevant documents to such overseas securities regulatory authorities or relevant authorities.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC may render you unable to enforce a judgment against our assets or the assets of our directors and officers. 68 Table of Contents Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final and conclusive, (iv) is not in respect of taxes, a fine or a penalty, (v) is not inconsistent with a Cayman Islands judgment in respect of the same matter, or (vi) is not impeachable on the grounds of fraud and was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC may render you unable to enforce a judgment against our assets or the assets of our directors and officers. 64 Table of Contents Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final and conclusive, (iv) is not in respect of taxes, a fine or a penalty, (v) is not inconsistent with a Cayman Islands judgment in respect of the same matter, or (vi) is not impeachable on the grounds of fraud and was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including: ● difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; ● inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; ● difficulties in retaining, training, motivating and integrating key personnel; ● diversion of management’s time and resources from our normal daily operations; ● difficulties in successfully incorporating licensed or acquired technology and rights into our platform and loan products; ● difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations; ● difficulties in retaining relationships with customers, employees and suppliers of the acquired business; ● risks of entering markets in which we have limited or no prior experience; ● regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; 38 Table of Contents ● assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; ● failure to successfully further develop the acquired technology; ● liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; ● potential disruptions to our ongoing businesses; and ● unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions.
Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including: ● difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; ● inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; ● difficulties in retaining, training, motivating and integrating key personnel; ● diversion of management’s time and resources from our normal daily operations; ● difficulties in successfully incorporating licensed or acquired technology and rights into our platform and loan products; ● difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations; ● difficulties in retaining relationships with customers, employees and suppliers of the acquired business; ● risks of entering markets in which we have limited or no prior experience; ● regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; ● assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; ● failure to successfully further develop the acquired technology; ● liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; ● potential disruptions to our ongoing businesses; and ● unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions.
The Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business, issued by the MIIT in July 2006, prohibits domestic telecommunication service providers from leasing, transferring or selling telecommunications business operating licenses to any foreign investor in any form, or providing any resources, sites or facilities to any foreign investor for its illegal operation of a telecommunications business in China.
In addition, the Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business, issued by the MIIT in July 2006, prohibits domestic telecommunication service providers from leasing, transferring or selling telecommunications business operating licenses to any foreign investor in any form, or providing any resources, sites or facilities to any foreign investor for its illegal operation of a telecommunications business in China.
Negative publicity about our partners, outsourced service providers or other counterparties, such as negative publicity about their debt collection practices and any failure by them to adequately protect the information of borrowers and wealth clients, to comply with applicable laws and regulations or to otherwise meet required quality and service standards could harm our reputation.
Negative publicity about our partners, outsourced service providers or other counterparties, such as negative publicity about their debt collection practices and any failure by them to adequately protect the information of borrowers and clients, to comply with applicable laws and regulations or to otherwise meet required quality and service standards could harm our reputation.
If the company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, it may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.
If the company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, it may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.
However, despite such collection efforts, we cannot assure you that we will be able to collect the relevant payments as expected. Failure to collect payments and maintain low default rates for loans facilitated by our platform will have an adverse effect on our business operations, financial position and results of operations.
Despite such collection efforts, we cannot assure you that we will be able to collect the relevant payments as expected. Failure to collect payments and maintain low default rates for loans facilitated by our platform will have an adverse effect on our business operations, financial position and results of operations.
If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our services and our ability to serve borrowers and wealth clients could diminish, resulting in a material adverse effect on our business. Increases in labor costs in the PRC may adversely affect our business and results of operations.
If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our services and our ability to serve borrowers and clients could diminish, resulting in a material adverse effect on our business. Increases in labor costs in the PRC may adversely affect our business and results of operations.
Our revenues and financial results may be adversely affected by any economic slowdown in China as well as globally. In particular, general economic factors and conditions in China or worldwide, including the general interest rate environment and unemployment rates, may affect borrower willingness to seek loans and wealth client ability and desire to invest.
Our revenues and financial results may be adversely affected by any economic slowdown in China as well as globally. In particular, general economic factors and conditions in China or worldwide, including the general interest rate environment and unemployment rates, may affect borrower willingness to seek loans and client ability and desire to invest.
The tax consequences that would apply if we are classified as a PFIC would be different from those described above if a U.S. holder of ADSs or ordinary shares were able to make a valid qualified electing fund, or QEF, election, or, in some circumstances, a “mark-to-market” election.
The tax consequences that would apply if we were classified as a PFIC would be different from those described above if a U.S. holder of ADSs or ordinary shares were able to make a valid qualified electing fund, or QEF, election, or, in some circumstances, a “mark-to-market” election.
In particular, the Regulatory Measures require online insurance transactions being conducted through online interfaces operated by insurance institutions only, and prohibit insurance institutions to set default option for customer and impose any restriction on the cancellation of automatic payment to affect customer’s choice during the sales process of insurance products.
In particular, the Regulatory Measures require online insurance transactions being conducted through online interfaces operated by insurance institutions only, and prohibit insurance institutions to set default option for customer and impose any restriction on the cancellation of automatic payment to affect a customer’s choice during the sales process of insurance products.
Our existing or new loan products and changes to our platform could fail to attain sufficient market acceptance for many reasons, including, but not limited to: ● our failure to predict market demand accurately and supply loan products that meet this demand in a timely fashion; ● borrowers and institutional funding partners using our platform may not like, find useful or agree with any changes; ● our failure to properly price new loan products; ● defects, errors or failures on our platform; ● negative publicity about our loan products or our platform’s performance or effectiveness; ● views taken by regulatory authorities that the new products or platform changes do not comply with PRC laws, rules or regulations applicable to us; and 23 Table of Contents ● the introduction or anticipated introduction of competing products by our competitors.
Our existing or new loan products and changes to our platform could fail to attain sufficient market acceptance for many reasons, including, but not limited to: ● our failure to predict market demand accurately and supply loan products that meet this demand in a timely fashion; ● borrowers and institutional funding partners using our platform may not like, find useful or agree with any changes; ● our failure to properly price new loan products; ● defects, errors or failures on our platform; ● negative publicity about our loan products or our platform’s performance or effectiveness; ● views taken by regulatory authorities that the new products or platform changes do not comply with PRC laws, rules or regulations applicable to us; and 22 Table of Contents ● the introduction or anticipated introduction of competing products by our competitors.
Errors or other design defects within the software on which we rely may result in a negative experience for borrowers and wealth clients using our platform, delay introductions of new features or enhancements, result in errors or compromise our ability to protect borrower or wealth client data or our intellectual property.
Errors or other design defects within the software on which we rely may result in a negative experience for borrowers and clients using our platform, delay introductions of new features or enhancements, result in errors or compromise our ability to protect borrower or client data or our intellectual property.
To comply with PRC laws and regulations, we conduct our operations in China through (i) a series of contractual arrangements entered into among Chongqing Hengyuda Technology Co., Ltd., or Hengyuda, Yiren Financial Information Service (Beijing) Co., Ltd., or Yiren Wealth, and the shareholders of Yiren Wealth, and (ii) a series of contractual arrangements entered into among YouRace Hengchuang Technology Development (Beijing) Co., Ltd.
To comply with PRC laws and regulations, we conduct our operations in China through (i) a series of contractual arrangements entered into among Chongqing Hengyuda Technology Co., Ltd., or Hengyuda, Yiren Financial Information Service (Beijing) Co., Ltd., or Yiren Financial Information, and the shareholders of Yiren Financial Information, and (ii) a series of contractual arrangements entered into among YouRace Hengchuang Technology Development (Beijing) Co., Ltd.
Yiren Hengsheng, one of our PRC subsidiaries, was qualified as a “software enterprise” in March 2021 and the status was reevaluated in 2022, and accordingly has been eligible for an exemption of enterprise income tax for 2020 and 2021 and a reduced enterprise income tax at the rate of 12.5% from 2022 through 2024.
Yiren Hengsheng, one of our PRC subsidiaries, was qualified as a “software enterprise” in March 2021 and the status was reevaluated in 2023, and accordingly has been eligible for an exemption of enterprise income tax for 2020 and 2021 and a reduced enterprise income tax at the rate of 12.5% from 2022 through 2024.
SAT Circular 37 provides certain changes to the current withholding regime. For example, SAT Circular 37 requires that the transferor shall declare to the competent tax authority for payment of tax within seven (7) days after the tax payment obligation comes into being if the withholding agent fails to withhold the tax due or withhold the tax due in full.
SAT Circular 37 provides certain changes to the current withholding regime. For example, SAT Circular 37 requires that the transferor shall declare to the competent tax authority for payment of tax within seven days after the tax payment obligation comes into being if the withholding agent fails to withhold the tax due or withhold the tax due in full.
These factors could prevent us from processing or posting payments on loans, damage our brand and reputation, divert our employees’ attention, subject us to liability and cause borrowers and wealth clients to abandon our marketplace, any of which could adversely affect our business, financial condition and results of operations.
These factors could prevent us from processing or posting payments on loans, damage our brand and reputation, divert our employees’ attention, subject us to liability and cause borrowers and clients to abandon our marketplace, any of which could adversely affect our business, financial condition and results of operations.
Our competitors may also have longer operating histories, more extensive borrower or wealth client bases, greater brand recognition and brand loyalty and broader partner relationships than us. Additionally, a current or potential competitor may acquire one or more of our existing competitors or form a strategic alliance with one or more of our competitors.
Our competitors may also have longer operating histories, more extensive borrower or client bases, greater brand recognition and brand loyalty and broader partner relationships than us. Additionally, a current or potential competitor may acquire one or more of our existing competitors or form a strategic alliance with one or more of our competitors.
The cost of services which CreditEase provides to us may from time to time increase based on commercial negotiations between CreditEase and us. Furthermore, borrowers, wealth clients and business partners may react negatively to our carve-out from or business restructuring with CreditEase. As such, our carve-out from or business restructuring with CreditEase may materially and adversely affect our business.
The cost of services which CreditEase provides to us may from time to time increase based on commercial negotiations between CreditEase and us. Furthermore, borrowers, clients and business partners may react negatively to our carve-out from or business restructuring with CreditEase. As such, our carve-out from or business restructuring with CreditEase may materially and adversely affect our business.
For a detailed description of the risks associated with our corporate structure, please refer to risks disclosed under “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.” We face various risks and uncertainties related to doing business in China.
For a detailed description of the risks associated with our corporate structure, please refer to risks disclosed under “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.” Doing Business in China We and the VIEs face various risks and uncertainties related to doing business in China.
Our holding company in the Cayman Islands, the consolidated variable interest entities, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the consolidated variable interest entities and, consequently, significantly affect the financial performance of the consolidated variable interest entities and our company as a group. 47 Table of Contents Our PRC counsel, Han Kun Law Offices, has also advised us that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations and there can be no assurance that the PRC government will ultimately take a view that is consistent with the opinion of our PRC counsel.
Our holding company in the Cayman Islands, the consolidated variable interest entities, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the consolidated variable interest entities and, consequently, significantly affect the financial performance of the consolidated variable interest entities and our company as a group. 43 Table of Contents Our PRC counsel, Han Kun Law Offices, has also advised us that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations and there can be no assurance that the PRC government will ultimately take a view that is consistent with the opinion of our PRC counsel.
Our platform collects, stores and processes certain personal and other sensitive data from our borrowers and wealth clients, which makes it an attractive target and potentially vulnerable to cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions.
Our platform collects, stores and processes certain personal and other sensitive data from our borrowers and clients, which makes it an attractive target and potentially vulnerable to cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions.
The control ending date refers to the earlier of (i) the first date when CreditEase no longer owns at least 20% of the voting power of our then outstanding securities, or (ii) the first date when CreditEase ceases to be the largest beneficial owner of our then outstanding voting securities (without considering holdings by certain institutional investors). 44 Table of Contents Such contractual limitations may significantly affect our ability to diversify our revenue sources and may materially and adversely impact our business and prospects should the growth of the online consumer finance marketplace industry in China slow down.
The control ending date refers to the earlier of (i) the first date when CreditEase no longer owns at least 20% of the voting power of our then outstanding securities, or (ii) the first date when CreditEase ceases to be the largest beneficial owner of our then outstanding voting securities (without considering holdings by certain institutional investors). 40 Table of Contents Such contractual limitations may significantly affect our ability to diversify our revenue sources and may materially and adversely impact our business and prospects should the growth of the online consumer finance marketplace industry in China slow down.
Furthermore, we have adopted share incentive plans in September 2015, July 2017 and June 2020, and we may grant equity-based awards to eligible participants from time to time under the plan, which will result in share-based compensation expenses to us.
Furthermore, we adopted share incentive plans in September 2015, July 2017 and June 2020, and we may grant equity-based awards to eligible participants from time to time under the plan, which will result in share-based compensation expenses to us.
Any significant disruption in service on our platform or in our computer systems, including events beyond our control, could prevent us from processing or posting loans on our marketplace, reduce the attractiveness of our marketplace and result in a loss of borrowers or wealth clients.
Any significant disruption in service on our platform or in our computer systems, including events beyond our control, could prevent us from processing or posting loans on our marketplace, reduce the attractiveness of our marketplace and result in a loss of borrowers or clients.
As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. 46 Table of Contents Risks Related to Our Corporate Structure If the PRC government deems that the contractual arrangements in relation to 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.
As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. 42 Table of Contents Risks Related to Our Corporate Structure If the PRC government deems that the contractual arrangements in relation to 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.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 70 Table of Contents As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NYSE corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the NYSE corporate governance listing standards.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 66 Table of Contents As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NYSE corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the NYSE corporate governance listing standards.
If we are unable to maintain or increase the volume of loans facilitated through our marketplace or if we are unable to retain existing borrowers or wealth clients or attract new borrowers or wealth clients, our business and results of operations will be adversely affected.
If we are unable to maintain or increase the volume of loans facilitated through our marketplace or if we are unable to retain existing borrowers or clients or attract new borrowers or clients, our business and results of operations will be adversely affected.
Factors that may cause fluctuations in our quarterly financial results include: ● our ability to attract new borrowers and wealth clients and maintain relationships with existing borrowers and wealth clients; ● channels through which borrowers and wealth clients are sourced, including the relative mix of online and offline channels; ● changes in our product mix and introduction of new loan products; ● the amount and timing of operating expenses related to acquiring borrowers and wealth clients, and the maintenance and expansion of our business, operations and infrastructure; ● promulgation of new rules and regulations applicable to, or heightened regulatory scrutiny of, the online consumer finance industry; ● our decision to manage loan volume growth during the period; ● network outages or security breaches; ● general economic, industry and market conditions; 28 Table of Contents ● our emphasis on borrower and wealth client experience instead of near-term growth; and ● the timing of expenses related to the development or acquisition of technologies or businesses.
Factors that may cause fluctuations in our quarterly financial results include: ● our ability to attract new borrowers and clients and maintain relationships with existing borrowers and clients; ● channels through which borrowers and clients are sourced, including the relative mix of online and offline channels; ● changes in our product mix and introduction of new loan products; ● the amount and timing of operating expenses related to acquiring borrowers and clients, and the maintenance and expansion of our business, operations and infrastructure; ● promulgation of new rules and regulations applicable to, or heightened regulatory scrutiny of, the online consumer finance industry; ● our decision to manage loan volume growth during the period; ● network outages or security breaches; ● general economic, industry and market conditions; 26 Table of Contents ● our emphasis on borrower and client experience instead of near-term growth; and ● the timing of expenses related to the development or acquisition of technologies or businesses.
If these insurance and guarantee companies fail to perform any of their contractual obligations, our institutional funding partners may cease collaboration with us, which could materially harm our reputation and growth of our marketplace.
If these guarantee companies fail to perform any of their contractual obligations, our institutional funding partners may cease collaboration with us, which could materially harm our reputation and growth of our marketplace.
There remains substantial uncertainties with respect to how the CSRC filing procedures under the Overseas Listing Regulations would be applied to, and implicate, the procedures, timetables and outcomes of our future offering or other capital raising activities. 62 Table of Contents On February 24, 2023, the CSRC, jointly with other relevant governmental authorities, published the Provisions on Strengthening Confidentiality and Archives Management of Overseas Securities Issuance and Listing by Domestic Enterprises, or the Confidentiality and Archives Management Provisions, which became effective on March 31, 2023.
There remains substantial uncertainties with respect to how the CSRC filing procedures under the Overseas Listing Regulations would be applied to, and implicate, the procedures, timetables and outcomes of our future offering or other capital raising activities. 59 Table of Contents On February 24, 2023, the CSRC, jointly with other relevant governmental authorities, published the Provisions on Strengthening Confidentiality and Archives Management of Overseas Securities Issuance and Listing by Domestic Enterprises, or the Confidentiality and Archives Management Provisions, which became effective on March 31, 2023.
Our financial position could be materially and adversely affected if the consolidated variable interest entities’ tax liabilities increase or if they are required to pay late payment fees and other penalties. 50 Table of Contents We may lose the ability to use and benefit from assets held by the consolidated variable interest entities that are material to the operation of our business if any of these entities goes bankrupt or becomes subject to a dissolution or liquidation proceeding.
Our financial position could be materially and adversely affected if the consolidated variable interest entities’ tax liabilities increase or if they are required to pay late payment fees and other penalties. 46 Table of Contents We may lose the ability to use and benefit from assets held by the consolidated variable interest entities that are material to the operation of our business if any of these entities goes bankrupt or becomes subject to a dissolution or liquidation proceeding.
Although we collaborate with insurance and guarantee companies to provide credit enhancement for loans facilitated through our marketplace, if widespread defaults were to occur, institutional funding partners may incur losses and cease collaboration with us, the insurance and guarantee companies that cooperate with us may raise their insurance premium and guarantee service fees, which may cause us to lower fee rates to stay competitive in acquiring borrowers, and our business and results of operations may be materially and adversely affected.
Although we collaborate with guarantee companies to provide credit enhancement for loans facilitated through our marketplace, if widespread defaults were to occur, institutional funding partners may incur losses and cease collaboration with us, the guarantee companies that cooperate with us may raise their guarantee service fees, which may cause us to lower fee rates to stay competitive in acquiring borrowers, and our business and results of operations may be materially and adversely affected.
Risk Factors.” Risks Related to Our Business Risks and uncertainties related to our business include, but are not limited to, the following: ● We operate in emerging and evolving industries, and our operations, services and products have been and may need to be modified in answering to the latest market trends, which makes it difficult to evaluate our future prospects. ● If we are unable to obtain adequate funding from institutional funding partners to meet user demand for loans on our platform, our business and results of operations will be adversely affected. ● If we are unable to maintain or increase the volume of loans facilitated through our marketplace or if we are unable to retain existing borrowers or wealth clients or attract new borrowers or wealth clients, our business and results of operations will be adversely affected. ● If our practice is deemed to violate any PRC laws, rules or regulations, our business, financial condition and results of operations would be materially and adversely affected. ● We may not be able to achieve profitability in the future. ● If we fail to maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud. ● Our business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity.
Risk Factors.” Risks Related to Our Business Risks and uncertainties related to our business include, but are not limited to, the following: ● We operate in emerging and evolving industries, and our operations, services and products have been and may need to be modified in answering to the latest market trends, which makes it difficult to evaluate our future prospects. ● If the funding from institutional funding partners is insufficient to meet user demand for loans on our platform, our business and results of operations will be adversely affected. ● If we are unable to maintain or increase the volume of loans facilitated through our marketplace or if we are unable to retain existing borrowers or clients or attract new borrowers or clients, our business and results of operations will be adversely affected. ● If our practice is deemed to violate any PRC laws, rules or regulations, our business, financial condition and results of operations would be materially and adversely affected. ● We may not be able to achieve profitability in the future. ● If we fail to maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud. ● Our business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity.
In addition, as the laws, rules and regulations applicable to asset-backed securities are still developing, it remains uncertain as to the application and interpretation of such laws, rules and regulations, particularly as they relate to the online lending information intermediary service industry. 22 Table of Contents If we are unable to maintain low default rates for loans facilitated by our platform, our business and results of operations may be materially and adversely affected.
In addition, as the laws, rules and regulations applicable to asset-backed securities are still developing, it remains uncertain as to the application and interpretation of such laws, rules and regulations, particularly as they relate to the online lending information intermediary service industry. 21 Table of Contents If we are unable to maintain low default rates for loans facilitated by our platform, our business and results of operations may be materially and adversely affected.
If there is insufficient funding from our institutional funding partners, borrowers may not be able to obtain capital through our marketplace and may turn to other sources for their borrowing needs.
If there is insufficient funding from these institutional funding partners, borrowers may not be able to obtain capital through our marketplace and may turn to other sources for their borrowing needs.
If we are unable to compete with such companies and meet the need for innovation in our industry, the demand for our marketplace could stagnate or substantially decline, we could experience reduced revenues or our marketplace could fail to achieve or maintain more widespread market acceptance, any of which could harm our business and results of operations. 26 Table of Contents If we fail to promote and maintain our brand in an effective and cost-efficient way, our business and results of operations may be harmed.
If we are unable to compete with such companies and meet the need for innovation in our industry, the demand for our marketplace could stagnate or substantially decline, we could experience reduced revenues or our marketplace could fail to achieve or maintain more widespread market acceptance, any of which could harm our business and results of operations. 24 Table of Contents If we fail to promote and maintain our brand in an effective and cost-efficient way, our business and results of operations may be harmed.
We are required under PRC laws and regulations to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
Our company and the VIEs are required under PRC laws and regulations to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume of our ADSs to decline. 65 Table of Contents Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ADSs for return on your investment.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume of our ADSs to decline. 61 Table of Contents Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ADSs for return on your investment.
Any accidental or willful security breaches or other unauthorized access to our platform could cause confidential information of our borrowers and wealth clients to be stolen and used for criminal purposes.
Any accidental or willful security breaches or other unauthorized access to our platform could cause confidential information of our borrowers and clients to be stolen and used for criminal purposes.
The satisfactory performance, reliability and availability of our platform and our underlying network infrastructure are critical to our operations, customer service, reputation and our ability to retain existing and attract new borrowers and wealth clients.
The satisfactory performance, reliability and availability of our platform and our underlying network infrastructure are critical to our operations, customer service, reputation and our ability to retain existing and attract new borrowers and clients.
While we have not been subject to any regulatory penalties as of the date of this annual report in connection with such financing guarantee and insurance brokerage business practices, we may be subject to regulatory warnings, correction orders, condemnation and fines and may be required to further modify our business if any of our financing guarantee or insurance brokerage companies is deemed to have violated national, provincial or local laws and regulations or regulatory orders and guidance.
While our company and the VIEs have not been subject to any regulatory penalties as of the date of this annual report in connection with such financing guarantee and insurance brokerage business practices, we may be subject to regulatory warnings, correction orders, condemnation and fines and may be required to further modify our business if any of our financing guarantee or insurance brokerage companies is deemed to have violated national, provincial or local laws and regulations or regulatory orders and guidance.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. 69 Table of Contents It may be difficult for overseas regulators to conduct investigations or collect evidence within China.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. 65 Table of Contents It may be difficult for overseas regulators to conduct investigations or collect evidence within China.
Investors in our ordinary shares or the ADSs thus are not purchasing equity interest in the consolidated variable interest entities in China but instead are purchasing equity interest in a Cayman Islands holding company.
Investors in our ordinary shares or the ADSs thus are not holding equity interest in the consolidated variable interest entities in China but instead are holding equity interest in a Cayman Islands holding company.
Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. 51 Table of Contents In addition, the global macroeconomic environment is facing challenges.
Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. 47 Table of Contents In addition, the global macroeconomic environment is facing challenges.
If we are unable to attract qualified borrowers and sufficient funding from our institutional funding partners or if borrowers do not continue to participate in our marketplace at the current rates due to business or regulatory reasons, we might not be able to increase our loan transaction volume and revenues as we expect, and our business and results of operations may be adversely affected.
If our company or the VIEs are unable to attract qualified borrowers and sufficient funding from our institutional funding partners, or if borrowers do not continue to participate in our marketplace at the current rates due to business or regulatory reasons, our company or the VIEs might not be able to increase our loan transaction volume and revenues as we expect, and our business and results of operations may be adversely affected.
If, in the future, the accumulated earnings of the consolidated variable interest entities exceed the service fees paid to our PRC subsidiaries (or if the current and contemplated fee structure between the intercompany entities is determined to be non-substantive and disallowed by Chinese tax authorities), the consolidated variable interest entities could make a non-deductible transfer to our PRC subsidiaries for the amounts of the stranded cash in the consolidated variable interest entities.
If, in the future, the accumulated earnings of the consolidated variable interest entities exceed the service fees paid to our PRC subsidiaries (or if the current and contemplated fee structure between the intercompany entities is determined to be non-substantive and disallowed by Chinese tax authorities), the consolidated variable interest entities could make a non-deductible transfer to our PRC subsidiaries for the amount of the stranded cash in the consolidated variable interest entities.
In addition, as a result of our carve-out from or business restructuring with CreditEase, our historical financial performance may not be indicative of our future performances as a stand-alone public company. 43 Table of Contents Our financial information included in this annual report may not be representative of our financial condition and results of operations if we had been operating as a stand-alone company.
In addition, as a result of our carve-out from or business restructuring with CreditEase, our historical financial performance may not be indicative of our future performances as a stand-alone public company. 39 Table of Contents Our financial information included in this annual report may not be representative of our financial condition and results of operations if we had been operating as a stand-alone company.
We may face material and adverse tax consequences if the PRC tax authorities determine that (i) the contractual arrangements between Hengyuda, our wholly owned subsidiary in China, Yiren Wealth, the variable interest entity in China, and the shareholders of Yiren Wealth, and (ii) the contractual arrangements between YouRace Hengchuang, our wholly owned subsidiary in China, CreditEase Puhui, the variable interest entity in China, and the shareholders of CreditEase Puhui were not entered into on an arm’s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of Yiren Wealth and CreditEase Puhui, the consolidated variable interest entities, in the form of a transfer pricing adjustment.
We may face material and adverse tax consequences if the PRC tax authorities determine that (i) the contractual arrangements between Hengyuda, our wholly owned subsidiary in China, Yiren Financial Information, the variable interest entity in China, and the shareholders of Yiren Financial Information, and (ii) the contractual arrangements between YouRace Hengchuang, our wholly owned subsidiary in China, CreditEase Puhui, the variable interest entity in China, and the shareholders of CreditEase Puhui were not entered into on an arm’s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities, in the form of a transfer pricing adjustment.
These risks and uncertainties may make it difficult for us to meet or comply with requirements under the applicable laws and regulations” and “—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.” 4 Table of Contents Permissions Required from the PRC Authorities for Our Operations We conduct our business primarily through our subsidiaries and the consolidated variable interest entities in China.
These risks and uncertainties may make it difficult for us to meet or comply with requirements under the applicable laws and regulations” and “—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.” Permissions Required from the PRC Authorities for Our Operations We conduct our business primarily through our subsidiaries and the consolidated variable interest entities in China.
We believe that developing and maintaining awareness of our brand effectively is critical to attracting new borrowers and wealth clients and retaining existing borrowers and wealth clients on our marketplace.
We believe that developing and maintaining awareness of our brand effectively is critical to attracting new borrowers and clients and retaining existing borrowers and clients on our marketplace.
However, if requested, we can utilize an automated process for collecting scheduled loan payments from our borrowers. Upon loan origination, we establish a payment schedule with payment occurring on a set business day each month. Borrowers then make scheduled loan repayments via a third-party payment platform or a payment platform delegated by the institutional funding partners.
If requested, we utilize an automated process for collecting scheduled loan payments from our borrowers. Upon loan origination, we establish a payment schedule with payment occurring on a set business day each month. Borrowers then make scheduled loan repayments via a third-party payment platform or a payment platform delegated by the institutional funding partners.
If any of these insurance and guarantee companies is unable or unwilling to continue operating in the line of business that is the subject of their cooperation with us for regulatory, business or other reasons, we may not be able to obtain similar relationships on terms acceptable to us in a timely manner, or at all.
If any of these guarantee companies is unable or unwilling to continue operating in the line of business that is the subject of their cooperation with us for regulatory, business or other reasons, we may not be able to obtain similar relationships on terms acceptable to us in a timely manner, or at all.
In addition, any ordinary shares that we issue under our share incentive plans would dilute the percentage ownership held by the investors who purchased ADSs. 66 Table of Contents You, as holders of ADSs, may have fewer rights than holders of our ordinary shares and must act through the depositary to exercise those rights.
In addition, any ordinary shares that we issue under our share incentive plans would dilute the percentage ownership held by the investors who purchased ADSs. 62 Table of Contents You, as holders of ADSs, may have fewer rights than holders of our ordinary shares and must act through the depositary to exercise those rights.
The Internet Life Insurance Circular requires that each installment of premium of certain insurance products less than one year term shall be equal.
The Internet Life Insurance Circular requires that each installment of premium of certain insurance products less than a one-year term shall be equal.
For example, in July 2019, we consummated a business realignment transaction with CreditEase, the controlling shareholder of our company, pursuant to which we have assumed from CreditEase and its affiliates the Acquired Business. After the business realignment, we will continue to receive certain business consulting and other support services from CreditEase. See “Item 4. Information on the Company—A.
For example, in July 2019, we consummated a business realignment transaction with CreditEase, the controlling shareholder of our company, pursuant to which we have assumed from CreditEase and its affiliates certain business operations. After the business realignment, we will continue to receive certain business consulting and other support services from CreditEase. See “Item 4. Information on the Company—A.
In addition, the Supreme People’s Court issued Certain Opinions Concerning the Application of the Foreign Investment Law on December 16, 2019, or the Foreign Investment Law Judicial Interpretations, which provides that investment contract in relation to the investment by foreign investor in a field which is prohibited from foreign investment under the 2021 Negative List may be invalidated by the courts.
In addition, the Supreme People’s Court issued Certain Opinions Concerning the Application of the Foreign Investment Law on December 26, 2019, or the Foreign Investment Law Judicial Interpretations, which provides that investment contract in relation to the investment by foreign investor in a field which is prohibited from foreign investment under the 2021 Negative List may be invalidated by the courts.
Pursuant to the Confidentiality and Archives Management Provisions, China-based companies that offer and list securities in overseas markets shall establish confidentiality and archives system.
Pursuant to the Confidentiality and Archives Management Provisions, China-based companies that offer and list securities in overseas markets shall establish a confidentiality and archives system.
These risks and uncertainties may make it difficult for us to meet or comply with requirements under the applicable laws and regulations.” 49 Table of Contents The shareholders of the consolidated variable interest entities may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.
These risks and uncertainties may make it difficult for us to meet or comply with requirements under the applicable laws and regulations.” 45 Table of Contents The shareholders of the consolidated variable interest entities may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.
If our existing and new loan products and wealth solutions available through our platform do not achieve adequate acceptance in the market, our competitive position, results of operations and financial condition could be harmed. We cooperate with business partners to provide services to wealth clients and borrowers on our platforms.
If our existing and new loan products available through our platform do not achieve adequate acceptance in the market, our competitive position, results of operations and financial condition could be harmed. We cooperate with business partners to provide services to borrowers and clients on our platforms.
Borrowers may also have less propensity or ability to repay their loans as a result of the economic problems caused by COVID-19, which may then impact credit quality. The operations of some of our business partners and service providers have also been constrained and impacted, which may have a negative impact on our business.
Borrowers may also have less propensity or ability to repay their loans as a result of the economic problems caused by COVID-19, which may then impact credit quality. The operations of some of our business partners and service providers may be constrained and impacted, which may have a negative impact on our business.
Currently, we do not have any business liability or disruption insurance to cover our operations. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance.
Currently, our company and the VIEs do not have any business liability or disruption insurance to cover our operations. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance.
Such a sale could be contrary to the interests of our employees or our other shareholders. 45 Table of Contents ● Allocation of business opportunities . Under our second amended and restated non-competition agreement with CreditEase, we agree not to compete with CreditEase in the businesses conducted by CreditEase.
Such a sale could be contrary to the interests of our employees or our other shareholders. 41 Table of Contents ● Allocation of business opportunities . Under our second amended and restated non-competition agreement with CreditEase, we agree not to compete with CreditEase in the businesses conducted by CreditEase.
Based upon our analysis of the nature and composition of our income and assets, the value of our assets (in particular the retention of a substantial amount of cash), activities and market capitalization, we believe that we were a PFIC for United States federal income tax purposes for our taxable year ended December 31, 2022.
Based upon our analysis of the nature and composition of our income and assets, the value of our assets (in particular the retention of a substantial amount of cash), activities and market capitalization, we believe that we were a PFIC for United States federal income tax purposes for our taxable year ended December 31, 2023.
As a result of our election to follow home country practice with respect to the foregoing matters, our shareholders will not have the same protection that they otherwise would enjoy under the NYSE corporate governance listing standards applicable to U.S. domestic issuers.
As a result of our election to follow home country practices with respect to the foregoing matters, our shareholders will not have the same protection that they otherwise would enjoy under the NYSE corporate governance listing standards applicable to U.S. domestic issuers.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

208 edited+104 added−94 removed279 unchanged
Biggest changeAccording to the Implementing Measures, to apply to operate insurance brokerage business, an applicant shall meet the following conditions: (i) it has obtained a business license, on which the name shall include the words “insurance brokerage”, and its trade name shall not be the same as that of any existing professional insurance intermediary, except for the professional insurance broker whose actual controller is the same as that of any other professional insurance intermediary; (ii) its shareholders meet certain requirements, including (1) in good financial conditions, able to make foreign investments with self-owned funds, and make capital contributions with self-owned, authentic and legitimate funds; (2) for legal person shareholder, a good corporate governance structure or an effective organizational management model, good social reputation, credit records, tax payment records, and good operation and management; its net assets at the end of the previous year of the date of contribution are not negative, and the net assets and monetary funds at the end of the previous month of the date of contribution are greater than the capital contribution; (iii) its registered capital is paid-in monetary capital and is held in custody in accordance with the relevant provisions of the CBIRC; the minimum registered capital of national insurance brokers shall be RMB 50 million, and that of regional insurance brokers RMB 20 million; (iv) the business scope set forth in its business license complies with the relevant provisions of the CBIRC; (v) it has articles of association that comply with the Company Law of the PRC and the Insurance Law of the PRC; (vi) its senior executives meet the required qualifications; (vii) it has a governance structure and an internal control system required by the CBIRC, along with a scientific, reasonable and feasible business model; (viii) it has a fixed domicile commensurate with its business size; (ix) it has business, financial and other computer software and hardware facilities required by the CBIRC; (x) its risk testing meets the requirements; and (xi) it meets other conditions stipulated by laws, administrative regulations and the CBIRC. 93 Table of Contents The Implementing Measures prohibits applications to operate insurance brokerage business if an entity’s shareholder (i) has been subjected to a criminal penalty or major administrative punishment in the last five years, (ii) is under investigation by the relevant authority due to being suspected of committing any major illegal or criminal offense, (iii) is determined as a target of joint disciplinary action against dishonesty by the relevant authority of the State due to serious dishonesty and shall be subjected to corresponding disciplinary action in the field of insurance, or has any other bad record of serious dishonesty in the last five years; (iv) is not allowed to invest in any enterprise in accordance with laws or administrative regulations; or (v) the CBIRC deems unsuitable for being a shareholder of an insurance broker.
Biggest changeAccording to the Implementing Measures, to apply to operate an insurance brokerage business, an applicant shall meet the following conditions: (i) it has obtained a business license, on which the name shall include the words “insurance brokerage,” and its trade name shall not be the same as that of any existing professional insurance intermediary, except for the professional insurance broker whose actual controller is the same as that of any other professional insurance intermediary; (ii) its shareholders meet certain requirements, including (1) in good financial condition, able to make foreign investments with self-owned funds, and make capital contributions with self-owned, authentic and legitimate funds; (2) for legal person shareholder, a good corporate governance structure or an effective organizational management model, good social reputation, credit records, tax payment records, and good operation and management; its net assets at the end of the previous year of the date of contribution are not negative, and the net assets and monetary funds at the end of the previous month of the date of contribution are greater than the capital contribution; (iii) its registered capital is paid-in monetary capital and is held in custody in accordance with the relevant provisions of the CBIRC; the minimum registered capital of national insurance brokers shall be RMB 50 million, and that of regional insurance brokers RMB 20 million; (iv) the business scope set forth in its business license complies with the relevant provisions of the CBIRC; (v) it has articles of association that comply with the Company Law of the PRC and the Insurance Law of the PRC; (vi) its senior executives meet the required qualifications; (vii) it has a governance structure and an internal control system required by the CBIRC, along with a scientific, reasonable and feasible business model; (viii) it has a fixed domicile commensurate with its business size; (ix) it has business, financial and other computer software and hardware facilities required by the CBIRC; (x) its risk testing meets the requirements; and (xi) it meets other conditions stipulated by laws, administrative regulations and the CBIRC.
Yichuang Data and Yichuang Financial Leasing collectively established Hainan Haijin Yichuang Micro-lending Co., Ltd., or Yichuang Micro-lending, holding 50% and 50% equity interests in Yichuang Micro-lending, respectively, to conduct micro-lending business, in May 2017. CreditEase Puhui Information Consultant (Beijing) Co., Ltd., or CreditEase Puhui, acquired all the equity interests of Dekai Yichuang in September 2020 from Hengcheng.
Yichuang Data and Yichuang Financial Leasing collectively established Hainan Haijin Yichuang Micro-lending Co., Ltd., or Yichuang Micro-lending in May 2017, holding 50% and 50% equity interests in Yichuang Micro-lending, respectively, to conduct micro-lending business. CreditEase Puhui Information Consultant (Beijing) Co., Ltd., or CreditEase Puhui, acquired all the equity interests of Dekai Yichuang in September 2020 from Hengcheng.
Yiren Hengsheng Technology Development (Beijing) Co., Ltd., or Yiren Hengsheng, is currently a wholly owned subsidiary of YouRace Hengchuang, which provides technology and system support to our inter-group companies. We established a wholly owned subsidiary, Yiren Blue Boyage Limited, or Blue Boyage, in the Cayman Islands in May 2019.
Yiren Hengsheng Technology Development (Beijing) Co., Ltd., or Yiren Hengsheng, is currently a wholly owned subsidiary of YouRace Hengchuang, which provides technology and system support to our inter-group companies. In May 2019, we established a wholly owned subsidiary, Yiren Blue Boyage Limited, or Blue Boyage, in the Cayman Islands.
Our institutional funding partners will then review the credit application and our preliminary credit assessment of the borrower introduced by us in accordance with their own credit assessment standards and decide if to approve or decline the loan application.
The institutional funding partners will then review the credit application and our preliminary credit assessment of the borrower introduced by us in accordance with their own credit assessment standards and decide if to approve or decline the loan application.
Our system combines quantitative modeling, big data technologies, such as knowledge graph, offline verification and the use of third-party services. The quantitative modeling aspect of our fraud detection system involves the use of a big data platform to locate potential inconsistencies in a particular borrower application. The internet technology aspect includes IP verification and monitoring.
Our system combines quantitative modeling, big data technologies, such as the knowledge graph, offline verification and the use of third-party services. The quantitative modeling aspect of our fraud detection system involves the use of a big data platform to locate potential inconsistencies in a particular borrower application. The internet technology aspect includes IP verification and monitoring.
According to the Foreign Investment Law, foreign investments are entitled to pre-entry national treatment and are subject to negative list management system. The pre-entry national treatment means that the treatment given to foreign investors and their investments at the stage of investment access shall not be less favorable than that of domestic investors and their investments.
According to the Foreign Investment Law, foreign investments are entitled to pre-entry national treatment and are subject to the negative list management system. The pre-entry national treatment means that the treatment given to foreign investors and their investments at the stage of investment access shall not be less favorable than that of domestic investors and their investments.
In addition, the Regulatory Measures imposes technical IT requirements for insurance institutions engaged in online insurance business.
In addition, the Regulatory Measures imposes technical IT requirements for insurance institutions engaged in the online insurance business.
On November 28, 2019, the CAC, the MIIT, the Ministry of Public Security and the State Administration for Market Regulation, or SAMR jointly issued the Methods of Identifying Illegal Acts of Apps to Collect and Use Personal Information.
On November 28, 2019, the CAC, the MIIT, the Ministry of Public Security and the State Administration for Market Regulation, or the SAMR, jointly issued the Methods of Identifying Illegal Acts of Apps to Collect and Use Personal Information.
Among others, any of the following acts of an app operator will constitute “collection and use of personal information without consent of users”: (i) collecting an user’s personal information or activating the permission for collecting any user’s personal information without obtaining such user’s consent; (ii) collecting personal information or activating the permission for collecting the personal information of any user who explicitly refuses such collection, or repeatedly seeking for user’s consent such that the user’s normal use of such app is disturbed; (iii) any user’s personal information which has been actually collected by the app operator or the permission for collecting any user’s personal information activated by the app operator is beyond the scope of personal information which such user authorizes such app operator to collect; (iv) seeking for any user’s consent in a non-explicit manner; (v) modifying any user’s settings for activating the permission for collecting any personal information without such user’s consent; (vi) using users’ personal information and any algorithms to directionally push any information, without providing the option of non-directed pushing such information; (vii) misleading users to permit collecting their personal information or activating the permission for collecting such users’ personal information by improper methods such as fraud and deception; (viii) failing to provide users with the means and methods to withdraw their permission of collecting personal information; and (ix) collecting and using personal information in violation of the rules for collecting and using personal information promulgated by such app operator. 104 Table of Contents On August 22, 2019, the CAC promulgated the Children Information Protection Provisions, which took effect on October 1, 2019, requiring that before collecting, using, transferring or disclosing the personal information of a child, the Internet service operator should inform the child’s guardians in a noticeable and clear manner and obtain their consents.
Among others, any of the following acts of an app operator will constitute “collection and use of personal information without consent of users”: (i) collecting a user’s personal information or activating the permission for collecting any user’s personal information without obtaining such user’s consent; (ii) collecting personal information or activating the permission for collecting the personal information of any user who explicitly refuses such collection, or repeatedly seeking for user’s consent such that the user’s normal use of such app is disturbed; (iii) any user’s personal information which has been actually collected by the app operator or the permission for collecting any user’s personal information activated by the app operator is beyond the scope of personal information which such user authorizes such app operator to collect; (iv) seeking for any user’s consent in a non-explicit manner; (v) modifying any user’s settings for activating the permission for collecting any personal information without such user’s consent; (vi) using users’ personal information and any algorithms to directionally push any information, without providing the option of non-directed pushing such information; (vii) misleading users to permit collecting their personal information or activating the permission for collecting such users’ personal information by improper methods such as fraud and deception; (viii) failing to provide users with the means and methods to withdraw their permission of collecting personal information; and (ix) collecting and using personal information in violation of the rules for collecting and using personal information promulgated by such app operator. 100 Table of Contents On August 22, 2019, the CAC promulgated the Children Information Protection Provisions, which took effect on October 1, 2019, requiring that before collecting, using, transferring or disclosing the personal information of a child, the Internet service operator should inform the child’s guardians in a noticeable and clear manner and obtain their consents.
On April 14, 2016, the CIRC together with 14 authorities issued the Implementation Plan for the Special Campaign on Internet Insurance Risks, which sets out the overall framework for the rectification initiative dedicated to mitigation of online insurance risks, specifying that the special rectification initiative shall focus on regulating business operation model optimizing market environment and improving regulatory rules, to achieve the objective of parallel promotion of innovation and risk mitigation, and the healthy and sustainable development of online insurance. 95 Table of Contents On April 2, 2019, the CBIRC promulgated the Circular of the General Office of the CBIRC on Issuing the 2019 Plan for the Rectification of Chaos in the Insurance Intermediary Market, or the Rectification Plan, aiming to further curb the chaos of violations of laws and regulations in the insurance intermediary market.
On April 14, 2016, the CIRC together with 14 authorities issued the Implementation Plan for the Special Campaign on Internet Insurance Risks, which sets out the overall framework for the rectification initiative dedicated to mitigation of online insurance risks, specifying that the special rectification initiative shall focus on regulating business operation model optimizing market environment and improving regulatory rules, to achieve the objective of parallel promotion of innovation and risk mitigation, and the healthy and sustainable development of online insurance. 90 Table of Contents On April 2, 2019, the CBIRC promulgated the Circular of the General Office of the CBIRC on Issuing the 2019 Plan for the Rectification of Chaos in the Insurance Intermediary Market, or the Rectification Plan, aiming to further curb the chaos of violations of laws and regulations in the insurance intermediary market.
Foreign-invested enterprises established before the implementation of this Law may retain the original business organization and so on within five years after the implementation of this Law. The Foreign Investment Law is formulated to further expand opening-up, vigorously promote foreign investment and protect the legitimate rights and interests of foreign investors.
Foreign-invested enterprises established before the implementation of the Foreign Investment Law may retain the original business organization and so on within five years after the implementation of the Foreign Investment Law. The Foreign Investment Law is formulated to further expand opening-up, vigorously promote foreign investment and protect the legitimate rights and interests of foreign investors.
Our collections process is divided into distinct stages based on the severity of delinquency, which dictates the level of collection steps taken. Loans progress through the collection cycle based upon the number of days past due but can be accelerated based on specific circumstances.
Our collection process is divided into distinct stages based on the severity of delinquency, which dictates the level of collection steps taken. Loans progress through the collection cycle based upon the number of days past due, but can be accelerated based on specific circumstances.
As a result of these contractual arrangements, we were the primary beneficiary of Hengcheng and treated Hengcheng as the variable interest entity under U.S. GAAP before December 31, 2020. We had consolidated the financial results of Hengcheng in our consolidated financial statements in accordance with U.S. GAAP before December 31, 2020.
As a result of these contractual arrangements, we were the primary beneficiary of Hengcheng and treated Hengcheng as the variable interest entity under U.S. GAAP before December 31, 2020. We consolidated the financial results of Hengcheng in our consolidated financial statements in accordance with U.S. GAAP before December 31, 2020.
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. 107 Table of Contents In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, most recently amended in December 2019, which substantially amends and simplifies the current foreign exchange procedure.
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. 103 Table of Contents In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, most recently amended in December 2019, which substantially amends and simplifies the current foreign exchange procedure.
The Foreign Investment Law does not mention the relevant concept and regulatory regime of VIE structures, please refer to “Risk Factors-Uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.” Foreign investors’ investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance with the law, and all national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises.
The Foreign Investment Law does not mention the relevant concept and regulatory regime of VIE structures; please refer to “Risk Factors-Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.” Foreign investors’ investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance with the law, and all national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises.
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 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.
For example, it is unclear whether the requirement of cybersecurity review applies to follow-on offerings by an “online platform operator” that is in possession of personal data of more than one million users where the offshore holding company of such operator is already listed overseas. 101 Table of Contents On November 14, 2021, the CAC released the Regulations on the Network Data Security (Draft for Comments), or the Draft Regulations, and accepted public comments before December 13, 2021.
For example, it is unclear whether the requirement of cybersecurity review applies to follow-on offerings by an “online platform operator” that is in possession of personal data of more than one million users where the offshore holding company of such operator is already listed overseas. 96 Table of Contents On November 14, 2021, the CAC released the Regulations on the Network Data Security (Draft for Comments), or the Draft Regulations, and accepted public comments before December 13, 2021.
(formerly known as Yiren Hengye Technology Development (Beijing) Co., Ltd.), or YouRace Hengchuang, our wholly owned subsidiary in China, in January 2015. YouRace HK further established Chongqing Hengyuda Technology Co., Ltd., or Hengyuda, our wholly owned subsidiary in China, in March 2016.
YouRace HK further established YouRace Hengchuang Technology Development (Beijing) Co., Ltd. (formerly known as Yiren Hengye Technology Development (Beijing) Co., Ltd.), or YouRace Hengchuang, our wholly owned subsidiary in China, in January 2015. YouRace HK then established Chongqing Hengyuda Technology Co., Ltd., or Hengyuda, our wholly owned subsidiary in China, in March 2016.
Besides, the foreign investors of the company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors. 106 Table of Contents On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Regulations, and five supporting guidelines, which became effective on March 31, 2023.
Besides, the foreign investors of the company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors. 102 Table of Contents On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Regulations, and five supporting guidelines, which became effective on March 31, 2023.
Before our business restructuring with CreditEase in December 2020, we also conducted those activities through Hengcheng, which we conducted the business operations until December 31, 2020 through a series of contractual arrangements.
GAAP. Before our business restructuring with CreditEase in December 2020, we also conducted those activities through Hengcheng, which we conducted the business operations until December 31, 2020 through a series of contractual arrangements.
If any user knows that a network operator illegally collects and uses his or her personal information in violation of laws, regulations or any agreement with the user, or the collected and stored personal information is inaccurate or wrong, the user has the right to request the network operator to delete or correct the relevant collected personal information. 103 Table of Contents The relevant telecommunications authorities are further authorized to order ICP operators to rectify unauthorized disclosure.
If any user knows that a network operator illegally collects and uses his or her personal information in violation of laws, regulations or any agreement with the user, or the collected and stored personal information is inaccurate or wrong, the user has the right to request the network operator to delete or correct the relevant collected personal information. 99 Table of Contents The relevant telecommunications authorities are further authorized to order ICP operators to rectify unauthorized disclosure.
In December 2022, Tianjin Linyang became a wholly owned subsidiary of CreditEase Puhui, and our contractual arrangements with Tianjin Linyang and its shareholders were simultaneously terminated.
In December 2022, Tianjin Linyang became a wholly owned subsidiary of CreditEase Puhui, and our direct contractual arrangements with Tianjin Linyang and its shareholders were simultaneously terminated.
However, if requested, we can utilize an automated process for collecting scheduled loan payments from our borrowers. Upon loan origination, we establish a payment schedule with payment occurring on a set business day each month. Borrowers then make scheduled loan repayments via a third-party payment platform or a payment platform delegated by the institutional funding partners.
If requested, we utilize an automated process for collecting scheduled loan payments from our borrowers. Upon loan origination, we establish a payment schedule with payment occurring on a set business day each month. Borrowers then make scheduled loan repayments via a third-party payment platform or a payment platform delegated by the institutional funding partners.
YouRace Hengchuang is entitled to designate any person to act as such shareholder’s exclusive attorney-in-fact without notifying or the approval of such shareholder, and if required by PRC law, YouRace Hengchuang shall designate a PRC citizen to exercise such right. Each power of attorney will remain in force for so long as the shareholder remains a shareholder of CreditEase Puhui.
YouRace Hengchuang is entitled to designate any person to act as such shareholder’s exclusive attorney-in-fact without notifying or the approval of such shareholder, and if required by PRC law, YouRace Hengchuang shall designate a PRC citizen to exercise such right. Each power of attorney will remain in force as long as the shareholder remains a shareholder of CreditEase Puhui.
Our small revolving loans are unsecured loans with average ticket size ranging from RMB4,000 to RMB6,000 and terms ranging from 3 months to 12 months. Small revolving loan product was launched in 2020 and has been enjoying a high popularity among our borrowers, leading a continuously growing proportion of our overall loan portfolio.
These small revolving loans are unsecured loans with average ticket size ranging from RMB4,000 to RMB6,000 and terms ranging from 3 months to 12 months. The small revolving loan product was launched in 2020 and has been enjoying a high popularity among our borrowers, leading a continuously growing proportion of our overall loan portfolio.
Our credit scoring model aggregates and analyzes the data submitted by the borrower as well as the data we collect from a number of internal and external sources after obtaining the borrower’s full consent, and then generates a score for the prospective borrower. In addition, we use our credit scoring systems to more accurately characterize a borrower’s credit profile.
Our credit scoring model aggregates and analyzes the data submitted by the borrower as well as the data we collect from a number of internal and external sources after obtaining the borrower’s full consent, and then generates a score for the prospective borrower. In addition, we use the AI-powered systems to more accurately characterize a borrower’s credit profile.
Without Hengyuda’s prior written consent, Yiren Wealth shall not amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of, or create or allow any encumbrance on its assets or beneficial interest with a value of more than RMB500,000, provide any loans to any third parties, enter into any material contract with a value of more than RMB500,000 (except those contracts entered into in the ordinary course of business), merge with or acquire any other persons or make any investments, or distribute dividends to the shareholders.
Without Hengyuda’s prior written consent, Yiren Financial Information shall not amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of, or create or allow any encumbrance on its assets or beneficial interest with a value of more than RMB500,000, provide any loans to any third parties, enter into any material contract with a value of more than RMB500,000 (except those contracts entered into in the ordinary course of business), merge with or acquire any other persons or make any investments, or distribute dividends to the shareholders.
We also provide social security insurance, including pension insurance, unemployment insurance, work-related injury insurance and medical insurance, for our employees. We do not maintain business interruption insurance or general third-party liability insurance, nor do we maintain product liability insurance or key-man insurance. We consider our insurance coverage to be sufficient for our business operations in China.
We also provide social security insurance, including pension insurance, unemployment insurance, work-related injury insurance and medical insurance, for our employees. We do not maintain business interruption insurance or general third-party liability insurance, nor do we maintain product liability insurance. We consider our insurance coverage to be sufficient for our business operations in China.
With built-in payment tracking functionality and automated missed payment notifications, the platform allows us to monitor the performance of outstanding loans on a real-time basis. CreditEase has developed a strategy to optimize the collections process for our delinquent loans.
With built-in payment tracking functionality and automated missed payment notifications, the platform allows us to monitor the performance of outstanding loans on a real-time basis. CreditEase has developed a strategy to optimize the collection process for our delinquent loans.
As a result of these contractual arrangements, we have become the primary beneficiary of Yiren Wealth and CreditEase Puhui, and we treat Yiren Wealth and CreditEase Puhui as the consolidated variable interest entities under U.S. GAAP. We have consolidated the financial results of Yiren Wealth and CreditEase Puhui in our consolidated financial statements in accordance with U.S. GAAP.
As a result of these contractual arrangements, we have become the primary beneficiary of Yiren Financial Information and CreditEase Puhui, and we treat Yiren Financial Information and CreditEase Puhui as the consolidated variable interest entities under U.S. GAAP. We have consolidated the financial results of Yiren Financial Information and CreditEase Puhui in our consolidated financial statements in accordance with U.S.
The purchase price shall be the higher of the amount equal to the registered capital contributed by the respective shareholders of Yiren Wealth (or such other price then accepted by Hengyuda) or the minimum price required by PRC law, which purchase price could be paid by way of offset of the outstanding debts owed by the shareholders of Yiren Wealth to Hengyuda (including without limitation the outstanding amount of the loan owed by the shareholders of Yiren Wealth to Hengyuda and any interest thereon under the respective loan agreement).
The purchase price shall be the higher of the amount equal to the registered capital contributed by the respective shareholders of Yiren Financial Information (or such other price then accepted by Hengyuda) or the minimum price required by PRC law, which purchase price could be paid by way of offset of the outstanding debts owed by the shareholders of Yiren Financial Information to Hengyuda (including without limitation the outstanding amount of the loan owed by the shareholders of Yiren Financial Information to Hengyuda and any interest thereon under the respective loan agreement).
YouRace Hengchuang further established Yiren Information Consulting (Beijing) Co., Ltd., our wholly owned subsidiary in China, in August 2017. 72 Table of Contents Hengcheng Technology Development (Beijing) Co., Ltd., or Hengcheng, was established in China in September 2014.
YouRace Hengchuang further established Yiren Information Consulting (Beijing) Co., Ltd., our wholly owned subsidiary in China, in August 2017. 68 Table of Contents Hengcheng Technology Development (Beijing) Co., Ltd., or Hengcheng, was established in China in September 2014.
For the companies without the relevant financing guarantee license but actually engaging in financing guarantee business, the regulatory authorities shall cease such companies’ operation and properly make settlement for existing business contracts. 90 Table of Contents On July 14, 2020, the CBIRC issued the Guidelines for Off-Site Supervision of Financing Guarantee Companies, which took effect on September 1, 2020.
For the companies without the relevant financing guarantee license but actually engaging in financing guarantee business, the regulatory authorities shall cease such companies’ operation and properly make settlement for existing business contracts. On July 14, 2020, the CBIRC issued the Guidelines for Off-Site Supervision of Financing Guarantee Companies, which took effect on September 1, 2020.
Pursuant to the powers of attorney, each shareholder of Yiren Wealth has irrevocably appointed Hengyuda to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of Yiren Wealth requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Yiren Wealth, and appointing directors and executive officers.
Pursuant to the powers of attorney, each shareholder of Yiren Financial Information has irrevocably appointed Hengyuda to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of Yiren Financial Information requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Yiren Financial Information, and appointing directors and executive officers.
Due to our limited operating history, the seasonal trends that we have experienced in the past may not apply to, or be indicative of, our future operating results. Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.
Due to our limited operating history, the seasonal trends that we have experienced in the past may not apply to, or be indicative of, our future operating results. 82 Table of Contents Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.
If Yiren Wealth or any of its shareholders breaches their contractual obligations under these agreements, Hengyuda, as pledgee, will be entitled to certain rights regarding the pledged equity interests, including receiving proceeds from the auction or sale of all or part of the pledged equity interests of Yiren Wealth in accordance with the law.
If Yiren Financial Information or any of its shareholders breaches their contractual obligations under these agreements, Hengyuda, as pledgee, will be entitled to certain rights regarding the pledged equity interests, including receiving proceeds from the auction or sale of all or part of the pledged equity interests of Yiren Financial Information in accordance with the law.
Micro-lending companies are also required to accept public scrutiny supervision and are prohibited from carrying out illegal fund-raising in any form. 89 Table of Contents Based on the Micro-lending Guidance, many provincial governments, including that of Hainan Province, promulgated local implementing rules on the administration of micro-lending companies.
Micro-lending companies are also required to accept public scrutiny supervision and are prohibited from carrying out illegal fund-raising in any form. Based on the Micro-lending Guidance, many provincial governments, including that of Hainan Province, promulgated local implementing rules on the administration of micro-lending companies.
Yiren Wealth agrees to pay service fees on a monthly basis and at an amount determined by Hengyuda after taking into account multiple factors, such as the complexity and difficulty of the services provided, the time consumed, the content and commercial value of services provided and the market price of comparable services.
Yiren Financial Information agrees to pay service fees on a monthly basis and at an amount determined by Hengyuda after taking into account multiple factors, such as the complexity and difficulty of the services provided, the time consumed, the content and commercial value of services provided and the market price of comparable services.
Our online borrower acquisition efforts are supported by our big data capabilities and are primarily directed toward search engine marketing, search engine optimization, mobile application downloads through major application stores, online channels through application programming interfaces, SaaS platforms, e-commerce and consumption platforms, as well as various marketing campaigns and membership services.
Our online borrower acquisition efforts are supported by our big data capabilities and are primarily directed toward search engine marketing, search engine optimization, mobile application downloads through major application stores, online channels through application programming interfaces, e-commerce and consumption platforms, social media platforms, as well as various marketing campaigns and membership services.
Pursuant to the amended and restated exclusive option agreements, each shareholder of Yiren Wealth has irrevocably granted Hengyuda an exclusive option to purchase, or have its designated person or persons to purchase, at its discretion, to the extent permitted under PRC law, all or part of the shareholder’s equity interests in Yiren Wealth.
Pursuant to the amended and restated exclusive option agreements, each shareholder of Yiren Financial Information has irrevocably granted Hengyuda an exclusive option to purchase, or have its designated person or persons to purchase, at its discretion, to the extent permitted under PRC law, all or part of the shareholder’s equity interests in Yiren Financial Information.
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.” Insurance We maintain property insurance policies covering certain equipment and other property that are essential to our business operation to safeguard against risks and unexpected events.
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.” Insurance Our company and the VIEs maintain property insurance policies covering certain equipment and other property that are essential to our business operation to safeguard against risks and unexpected events.
These contractual arrangements allow us to: · conduct the business operations of Yiren Wealth and CreditEase Puhui; · receive substantially all of the economic benefits of Yiren Wealth and CreditEase Puhui; and · have an exclusive option to purchase all or part of the equity interests in Yiren Wealth and CreditEase Puhui when and to the extent permitted by PRC law.
These contractual arrangements allow us to: · conduct the business operations of Yiren Financial Information and CreditEase Puhui; · receive substantially all of the economic benefits of Yiren Financial Information and CreditEase Puhui; and · have an exclusive option to purchase all or part of the equity interests in Yiren Financial Information and CreditEase Puhui when and to the extent permitted by PRC law.
Under the exclusive business cooperation agreement between Hengyuda and Yiren Wealth, Hengyuda has the exclusive right to provide Yiren Wealth with technical support, consulting services and other services. Without Hengyuda’s prior written consent, Yiren Wealth agrees not to accept the same or any similar services provided by any third party.
Under the exclusive business cooperation agreement between Hengyuda and Yiren Financial Information, Hengyuda has the exclusive right to provide Yiren Financial Information with technical support, consulting services and other services. Without Hengyuda’s prior written consent, Yiren Financial Information agrees not to accept the same or any similar services provided by any third party.
Hengyuda owns the intellectual property rights arising out of the performance of this agreement. In addition, Yiren Wealth has granted Hengyuda an irrevocable and exclusive option to purchase any or all of the assets and businesses of Yiren Wealth at the lowest price permitted under PRC law.
Hengyuda owns the intellectual property rights arising out of the performance of this agreement. In addition, Yiren Financial Information has granted Hengyuda an irrevocable and exclusive option to purchase any or all of the assets and businesses of Yiren Financial Information at the lowest price permitted under PRC law.
The probability that we may be subject to late penalties or fines in relation to the underpaid employee benefits is remote. 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 as required by PRC regulations may subject us to penalties.” C.
The probability that we may be subject to late penalties or fines in relation to the underpaid employee benefits is remote. 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 as required by PRC regulations may subject us to penalties.” 105 Table of Contents C.
An insurance broker shall open an independent account for commissions it collects. 91 Table of Contents Pursuant to the Insurance Brokerage Provisions, an insurance broker and its practitioners shall not engage in the following acts or behaviors: (i) deceive or mislead the insurer, the applicant, the insured or the beneficiary; (ii) conceal any important circumstances relating to the insurance contract; (iii) obstruct the applicant from fulfilling his or her obligation to tell the truth, or induce the applicant not to fulfill the same; (iv) grant or commit to grant to the applicant, the insured or the beneficiary any interest other than that provided in the insurance contract; (v) compel or induce the applicant to enter or restrict the applicant from entry into an insurance contract by using their administrative power, position or the advantage of their profession and other improper means; (vi) forge or alter the insurance contract without authorization or providing false evidence for parties to the insurance contract; (vii) misappropriate, retain or embezzle the premiums or insurance benefits; (viii) make use of the advantages of the business to obtain improper benefits for other institutions or individuals; (ix) defraud insurance benefits in collusion with the applicant, the insured or the beneficiary; or (x) disclose trade secrets of the insurer, the applicant or the insured known during the business activities.
Pursuant to the Insurance Brokerage Provisions, an insurance broker and its practitioners shall not engage in the following acts or behaviors: (i) deceive or mislead the insurer, the applicant, the insured or the beneficiary; (ii) conceal any important circumstances relating to the insurance contract; (iii) obstruct the applicant from fulfilling his or her obligation to tell the truth, or induce the applicant not to fulfill the same; (iv) grant or commit to grant to the applicant, the insured or the beneficiary any interest other than that provided in the insurance contract; (v) compel or induce the applicant to enter or restrict the applicant from entry into an insurance contract by using their administrative power, position or the advantage of their profession and other improper means; (vi) forge or alter the insurance contract without authorization or providing false evidence for parties to the insurance contract; (vii) misappropriate, retain or embezzle the premiums or insurance benefits; (viii) make use of the advantages of the business to obtain improper benefits for other institutions or individuals; (ix) defraud insurance benefits in collusion with the applicant, the insured or the beneficiary; or (x) disclose trade secrets of the insurer, the applicant or the insured known during the business activities.
Pursuant to the loan agreement, the shareholders can only repay the loans by the sale of all their equity interest in Yiren Wealth to Hengyuda or its designated person(s) pursuant to their respective exclusive option agreements. The shareholders must pay all of the proceeds from sale of such equity interests to Hengyuda.
Pursuant to the loan agreement, the shareholders can only repay the loans by the sale of all their equity interest in Yiren Financial Information to Hengyuda or its designated person(s) pursuant to their respective exclusive option agreements. The shareholders must pay all of the proceeds from sale of such equity interests to Hengyuda.
The equity pledge under each equity pledge agreement has been registered with the competent office of the State Administration for Market Regulation in accordance with the PRC laws. 114 Table of Contents However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules.
The equity pledge under each equity pledge agreement has been registered with the competent office of the State Administration for Market Regulation in accordance with the PRC laws. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules.
We acquired, through Blue Boyage, all outstanding shares of China Glory Securities Company Limited (formerly known as Varengold Capital Securities Limited), or China Glory. We established Yiren Green Management Limited, a limited liability company incorporated in Hong Kong, in December 2019, to support the business operation of China Glory.
We acquired, through Blue Boyage, China Glory Securities Company Limited (formerly known as Varengold Capital Securities Limited), or China Glory. In December 2019, we established Yiren Green Management Limited, or Yiren Green, a limited liability company incorporated in Hong Kong, to support the business operation of China Glory.
Any violation of the Anti-Terrorism Law may result in severe penalties, including substantial fines. In November 2016, the Standing Committee of the National People’s Congress promulgated the Cyber Security Law of the PRC, or the PRC Cyber Security Law, which took effect on June 1, 2017.
Any violation of the Anti-Terrorism Law may result in severe penalties, including substantial fines. 95 Table of Contents In November 2016, the Standing Committee of the National People’s Congress promulgated the Cyber Security Law of the PRC, or the PRC Cyber Security Law, which took effect on June 1, 2017.
Moreover, without Hengyuda’s prior written consent, no dividend will be distributed to Yiren Wealth’s shareholders, and if any of the shareholders receives any profit, interest, dividend or proceeds of share transfer or liquidation, the shareholder must give such profit, interest, dividend and proceeds to Hengyuda.
Moreover, without Hengyuda’s prior written consent, no dividend will be distributed to Yiren Financial Information’s shareholders, and if any of the shareholders receives any profit, interest, dividend or proceeds of share transfer or liquidation, the shareholder must give such profit, interest, dividend and proceeds to Hengyuda.
Each of the shareholders of Yiren Wealth agrees that, during the term of the equity interest pledge agreements, he or she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of Hengyuda.
Each of the shareholders of Yiren Financial Information agrees that, during the term of the equity interest pledge agreements, he or she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of Hengyuda.
Upon the completion of this acquisition, Hexiang Insurance Brokers and its wholly owned subsidiary, Heanjun, have become the wholly owned subsidiaries of Yiren Wealth in May 2020, and Hexiang Insurance Brokers has been operating our insurance brokerage business since then.
Upon the completion of this acquisition, Hexiang Insurance Brokers and its wholly owned subsidiary, Heanjun, have become the wholly owned subsidiaries of Yiren Financial Information in May 2020, and Hexiang Insurance Brokers has been operating our insurance brokerage business since then.
Each shareholder has waived all the rights which have been authorized to Hengyuda and will not exercise such rights. Agreement that Allows us to Receive Economic Benefits from Yiren Wealth Exclusive Business Cooperation Agreement .
Each shareholder has waived all the rights which have been authorized to Hengyuda and will not exercise such rights. Agreement that Allows us to Receive Economic Benefits from Yiren Financial Information Exclusive Business Cooperation Agreement .
These agreements will remain effective until all equity interests of Yiren Wealth held by its shareholders have been transferred or assigned to Hengyuda or its designated person(s). Amended and Restated Loan Agreements .
These agreements will remain effective until all equity interests of Yiren Financial Information held by its shareholders have been transferred or assigned to Hengyuda or its designated person(s). Amended and Restated Loan Agreements .
Failure to make adequate contributions to various employee benefit plans may be subject to fines and other administrative sanctions. We failed to make contribution to the social insurance plans and housing provident fund for some of our employees based on their actual wages.
Failure to make adequate contributions to various employee benefit plans may be subject to fines and other administrative sanctions. Our PRC subsidiaries and the VIEs failed to make contribution to the social insurance plans and housing provident fund for some of our employees based on their actual wages.
The shareholders of Yiren Wealth have agreed that, without Hengyuda’s prior written consent, they will not dispose of their equity interests in Yiren Wealth or create or allow any encumbrance on their equity interests.
The shareholders of Yiren Financial Information have agreed that, without Hengyuda’s prior written consent, they will not dispose of their equity interests in Yiren Financial Information or create or allow any encumbrance on their equity interests.
We believe our industry leading risk management capabilities provide us with a competitive advantage in attracting capital to our marketplace by obtaining the confidence from our institutional funding partners. 83 Table of Contents Proprietary Fraud Detection System We use a proprietary fraud detection system, which is part of our larger risk management system, to identify and reject potential borrower applications.
We believe our industry leading risk management capabilities provide us with a competitive advantage in attracting capital to our marketplace by obtaining the confidence from our institutional funding partners. Proprietary Fraud Detection System Our company and the VIEs use a proprietary fraud detection system, which is part of our larger risk management system, to identify and reject potential borrower applications.
Regulations Relating to Foreign Investment PRC Foreign Investment Law The Foreign Investment Law was formally adopted by the Second session of the 13th National People’s Congress on March 15, 2019, which has become effective on January 1, 2020 and, together with their implementation rules and ancillary regulations, has 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.
Regulations Relating to Foreign Investment PRC Foreign Investment Law The Foreign Investment Law was formally adopted by the Second session of the 13th National People’s Congress on March 15, 2019, which became effective on January 1, 2020, and, together with their implementation rules and ancillary regulations, have replaced the trio of prior 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.
Hengyuda is entitled to designate any person to act as such shareholder’s exclusive attorney-in-fact without notifying or the approval of such shareholder, and if required by PRC law, Hengyuda shall designate a PRC citizen to exercise such right. Each power of attorney will remain in force for so long as the shareholder remains a shareholder of Yiren Wealth.
Hengyuda is entitled to designate any person to act as such shareholder’s exclusive attorney-in-fact without notifying or the approval of such shareholder, and if required by PRC law, Hengyuda shall designate a PRC citizen to exercise such right. Each power of attorney will remain in force as long as the shareholder remains a shareholder of Yiren Financial Information.
Although most stages of the collections process are outsourced to CreditEase, we handle all decisions to restructure or defer delinquent loans that are above a certain threshold, while CreditEase collection teams have the discretion to make decisions for the loans that are below such threshold.
Although most stages of the collection process are outsourced to our affiliate, we handle all decisions to restructure or defer delinquent loans that are above a certain threshold, while the collection teams of our affiliate have the discretion to make decisions for the loans that are below such threshold.
We acquired, through Yiren Wealth, all outstanding shares of Baijunda and Wuhan Linyi in May 2020. Baijunda and Wuhan Linyi jointly established a subsidiary, Hexiang Insurance Brokers, in September 2011.
We acquired, through Yiren Financial Information, all outstanding shares of Baijunda and Wuhan Linyi in May 2020. Baijunda and Wuhan Linyi jointly established a subsidiary, Hexiang Insurance Brokers, in September 2011.
We use a combination of current and historical data obtained during the application process, third-party data and sophisticated analytical tools to help determine an application’s fraud risk. High risk applications are subject to further investigation.
Our company and the VIEs use a combination of current and historical data obtained during the application process, third-party data and sophisticated analytical tools to help determine an application’s fraud risk. High risk applications are subject to further investigation.
Unless otherwise agreed by the parties or terminated by YouRace Hengchuang unilaterally, this agreement will remain effective permanently. 113 Table of Contents Agreements that Provide Us with the Option to Purchase the Equity Interest in CreditEase Puhui Exclusive Option Agreement .
Unless otherwise agreed by the parties or terminated by YouRace Hengchuang unilaterally, this agreement will remain effective permanently. Agreements that Provide Us with the Option to Purchase the Equity Interest in CreditEase Puhui Exclusive Option Agreement .
Product Development We constantly evaluate the popularity of our existing product offerings and develop new products and services that can cater to the ever-evolving needs of our clients.
Product Development Our company and the VIEs constantly evaluate the popularity of our existing product offerings and develop new products and services that can cater to the ever-evolving needs of our clients.
The equity interest pledge agreements remain effective until CreditEase Puhui and its shareholders discharge all their obligations under the contractual arrangements. Powers of Attorney .
The equity interest pledge agreements remain effective until CreditEase Puhui and its shareholders discharge all their obligations under the contractual arrangements. 110 Table of Contents Powers of Attorney .
If Hengyuda exercises the option to purchase part of the equity interest held by a shareholder of Yiren Wealth, the purchase price shall be calculated proportionally. Yiren Wealth and each of its shareholders have agreed to appoint any persons designated by Hengyuda to act as Yiren Wealth’s directors.
If Hengyuda exercises the option to purchase part of the equity interest held by a shareholder of Yiren Financial Information, the purchase price shall be calculated proportionally. Yiren Financial Information and each of its shareholders have agreed to appoint any persons designated by Hengyuda to act as Yiren Financial Information’s directors.
On December 31, 2020, as a result of a business restructuring, our contractual arrangements with Hengcheng and its shareholders had been terminated and CreditEase had, through its subsidiaries and affiliates, started conducting the business operations of Hengcheng.
On December 31, 2020, as a result of a business restructuring, we terminated contractual arrangements with Hengcheng and its shareholders, and CreditEase, through its subsidiaries and affiliates, started conducting the business operations of Hengcheng.
Seasonality We experience seasonality in our business, reflecting seasonal fluctuations in internet usage and traditional personal consumption patterns, as our individual borrowers typically use their borrowing proceeds to finance their personal consumption needs.
Seasonality Our company and the VIEs experience seasonality in our business, reflecting seasonal fluctuations in internet usage and traditional personal consumption patterns, as our individual borrowers typically use their borrowing proceeds to finance their personal consumption needs.
For property and casualty insurance, we provide insurance products such as household property insurance, corporate property insurance, liability insurance, auto insurance, cargo insurance and accident insurance products, which satisfy different demands of individuals, families and corporate clients in property protection, employee welfare and benefit protection, operation risk transfer, etc.
For property and casualty insurance, Hexiang Insurance Brokers provides insurance products such as household property insurance, corporate property insurance, liability insurance, auto insurance, cargo insurance, and accident insurance products, which satisfy different demands of individuals, families and corporate clients in property protection, employee welfare and benefit protection, operation risk transfer, etc.
We are constantly monitoring the operations and performances of our models at a regular basis (weekly/monthly/quarterly) to ensure the stability and effectiveness of the models in responding to the evolving market environment and borrower behaviors from different segments.
Our company and the VIEs are constantly monitoring the operations and performances of our models on a regular basis (weekly/monthly/quarterly) to ensure the stability and effectiveness of the models in responding to the evolving market environment and borrower behaviors from different segments.
The following funds shall only be deposited in the designated account for client funds: (i) insurance premiums paid by policyholders to an insurance company; and (ii) surrender value and pay-outs collected on behalf of policyholders, insured parties and beneficiaries.
The following funds shall only be deposited in the designated account for client funds: (i) insurance premiums paid by policyholders to an insurance company; and (ii) surrender value and pay-outs collected on behalf of policyholders, insured parties and beneficiaries. An insurance broker shall open an independent account for commissions it collects.
The loan must be repaid immediately under certain circumstances, including, among others, if a foreign investor is permitted to hold majority or 100% equity interest in CreditEase Puhui and YouRace Hengchuang elects to exercise its exclusive equity purchase option. The term of the loans is ten years and can be extended upon mutual written consent of the parties.
The loan must be repaid immediately under certain circumstances, including, among others, if a foreign investor is permitted to hold majority or 100% equity interest in Yiren Financial Information and Hengyuda elects to exercise its exclusive equity purchase option. The term of the loans is ten years and can be extended upon mutual written consent of the parties.
For life and health insurance, we focus on critical illness insurance products, annuity, whole life, term life, endowment life, long-term and short-term health insurance products, which meet the overall needs of our clients in security heath planning, retirement planning, child education fund planning, asset inheritance, etc.
For life and health insurance, Hexiang Insurance Brokers focuses on critical illness insurance products, annuity, whole life, term life, endowment life, and long-term and short-term health insurance products, which meet the overall needs of the clients in security heath planning, retirement planning, child education fund planning, asset inheritance, etc.
On March 30, 2015, SAFE promulgated Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises nationwide. On June 9, 2016, SAFE promulgated Circular 16 to further expand and strengthen such reform.
On March 30, 2015, SAFE promulgated Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises nationwide. On June 9, 2016, SAFE promulgated Circular 16 to further expand and strengthen such reform. Circular 16 was partly amended on December 4, 2023.
We allow prospective borrowers who initially fail to meet our borrower criteria to reapply for a loan after a certain period of time, typically six months, if they are able to demonstrate a verifiable improvement in the criteria that impact their scores.
We allow prospective borrowers who initially fail to meet our borrower criteria to reapply for a loan after a certain period of time, typically six months, if they are able to demonstrate a verifiable improvement in the criteria that impact their scores. For prospective borrowers that we determine present a fraud risk, reapplications are never permitted.
Pursuant to amended and restated the equity interest pledge agreements, each shareholder of Yiren Wealth has pledged all of his or her equity interest in Yiren Wealth to guarantee the shareholder’s and Yiren Wealth’s performance of their obligations under the exclusive business cooperation agreement, exclusive option agreement, loan agreement and power of attorney.
Pursuant to amended and restated the equity interest pledge agreements, each shareholder of Yiren Financial Information has pledged all of his or her equity interest in Yiren Financial Information to guarantee the shareholder’s and Yiren Financial Information’s performance of their obligations under the exclusive business cooperation agreement, exclusive option agreement, loan agreement (as applicable) and power of attorney.
In case where fraud is confirmed, the application is cancelled, and we identify and flag characteristics of the loan to help refine our fraud detection efforts. ● Scalable platform . Our platform is built on a distributed, load-balanced computing infrastructure, which is both highly scalable and reliable.
In cases that fraud is confirmed, the application is cancelled, and we identify and flag characteristics of the loan to help refine our fraud detection efforts. 80 Table of Contents ● Scalable platform . Our platform is built on a distributed, load-balanced computing infrastructure, which is both highly scalable and reliable.
The loan must be repaid immediately under certain circumstances, including, among others, if a foreign investor is permitted to hold majority or 100% equity interest in Yiren Wealth and Hengyuda elects to exercise its exclusive equity purchase option.
The loan must be repaid immediately under certain circumstances, including, among others, if a foreign investor is permitted to hold majority or 100% equity interest in CreditEase Puhui and YouRace Hengchuang elects to exercise its exclusive equity purchase option.
Industry Catalog and Negative List Relating to Foreign Investment Investment activities in the PRC by foreign investors are principally governed by three principal legal documents: (i) the Provisions for Guiding the Foreign Investments Direction promulgated by the State Council on February 11, 2002, pursuant to which foreign investment projects are categorized as encouraged, permitted, restricted and prohibited; (ii) the 2021 Negative List, jointly issued by the National Development and Reform Commission, or the NDRC and MOFCOM on December 27, 2021 and effective from January 1, 2022, which sets forth management measures for the market entry of foreign investors, such as equity requirements and senior manager requirements and provides that foreign investors shall comply with such restrictive requirements when engaging in the restricted activities listed in the 2021 Negative List and shall not engage in the prohibited activities listed in the 2021 Negative List; and (iii) the Catalog of Industries for Encouraged Foreign Investment (2022 Edition), or the Encouraged Catalog, also jointly issued by the NDRC and MOFCOM on October 26, 2022 and effective from January 1, 2023, which sets forth the encouraged foreign investment industries.
In carrying out business activities, foreign-invested enterprises shall comply with relevant provisions on labor protection, social insurance, tax, accounting, foreign exchange and other matters stipulated in laws and regulations. 83 Table of Contents Industry Catalog and Negative List Relating to Foreign Investment Investment activities in the PRC by foreign investors are principally governed by three principal legal documents: (i) the Provisions for Guiding the Foreign Investments Direction promulgated by the State Council on February 11, 2002, pursuant to which foreign investment projects are categorized as encouraged, permitted, restricted and prohibited; (ii) the 2021 Negative List, jointly issued by the National Development and Reform Commission, or the NDRC and MOFCOM on December 27, 2021 and effective from January 1, 2022, which sets forth management measures for the market entry of foreign investors, such as equity requirements and senior manager requirements and provides that foreign investors shall comply with such restrictive requirements when engaging in the restricted activities listed in the 2021 Negative List and shall not engage in the prohibited activities listed in the 2021 Negative List; and (iii) the Catalog of Industries for Encouraged Foreign Investment (2022 Edition), or the Encouraged Catalog, also jointly issued by the NDRC and MOFCOM on October 26, 2022 and effective from January 1, 2023, which sets forth the encouraged foreign investment industries.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe table below provides a summary of our operating segment results for the years ended December 31, 2020, 2021 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB RMB RMB US$ ​ ​ (in thousands) Net revenue: ​ ​ ​ ​ ​ ​ ​ ​ Holistic wealth 1,432,364 1,260,513 1,171,992 169,923 Consumer credit 2,529,598 3,184,302 1,959,732 284,134 Others — 33,114 302,896 43,916 Total net revenue 3,961,962 4,477,929 3,434,620 497,973 Operating costs and expenses: ​ ​ ​ ​ Holistic wealth (760,180) (952,224) (851,974) (123,525) Consumer credit (3,703,031) (2,130,221) (878,375) (127,352) Others — (10,340) (84,832) (12,300) (Loss)/income from operations: ​ ​ ​ ​ Holistic wealth 672,184 308,289 320,018 46,398 Consumer credit (1,173,433) 1,054,081 1,081,357 156,782 Others — 22,774 218,064 31,616 Total segment (loss)/income from operations ​ (501,249) ​ 1,385,144 ​ 1,619,439 ​ 234,796 Unallocated expenses ​ (204,589) ​ (97,811) ​ (147,575) ​ (21,396) Other (expenses)/income ​ (67,521) ​ (84,160) ​ 23,519 ​ 3,410 (Loss)/income before provision for income taxes (773,359) 1,203,173 1,495,383 216,810 ​ 127 Table of Contents Set forth below is a breakdown of net revenue for each segment, both in absolute amount and as a percentage of total net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Consumer credit segment: ​ Loan facilitation services ​ 1,329,720 33.6 2,105,776 47.0 1,362,685 197,571 39.7 Post-origination services ​ 670,440 16.9 174,255 3.9 204,336 29,626 5.9 Financing services ​ 59,658 1.5 524,840 11.7 278,783 40,420 8.1 Others ​ 469,780 11.9 379,431 8.5 113,928 16,517 3.4 Subtotal ​ 2,529,598 63.8 3,184,302 71.1 1,959,732 284,134 57.1 Holistic wealth segment: ​ ​ ​ ​ ​ ​ ​ ​ Account management services ​ 921,779 23.3 — — — — — Insurance brokerage services ​ 430,830 10.9 755,691 16.9 731,797 106,101 21.3 Others ​ 79,755 2.0 504,822 11.3 440,195 63,822 12.8 Subtotal ​ 1,432,364 ​ 36.2 ​ 1,260,513 ​ 28.2 ​ 1,171,992 ​ 169,923 ​ 34.1 Other segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Electronic commerce services ​ — ​ — ​ 33,114 ​ 0.7 ​ 302,896 ​ 43,916 ​ 8.8 Subtotal ​ — ​ — ​ 33,114 ​ 0.7 ​ 302,896 ​ 43,916 ​ 8.8 Total net revenue ​ 3,961,962 100.0 4,477,929 100.0 3,434,620 497,973 100.0 ​ Consumer Credit Segment Revenue from our consumer credit segment decreased by 38.5% to RMB1,959.7 million (US$284.1 million) in 2022 from RMB3,184.3 million in 2021, primarily due to the decrease in the weighted average transaction fee rate of small revolving loan products as a result of our business transition.
Biggest changeBusiness Overview.” 124 Table of Contents The table below provides a summary of our operating segment results for the years ended December 31, 2021, 2022 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Financial services business 3,184,302 1,959,732 2,515,119 354,247 Insurance brokerage business 755,691 731,797 963,822 135,751 Consumption & lifestyle business and others 537,936 743,091 1,416,692 199,537 Total net revenue 4,477,929 3,434,620 4,895,633 689,535 Operating costs and expenses: ​ ​ ​ ​ Financial services business (2,130,221) (878,375) (1,108,663) (156,152) Insurance brokerage business (556,111) (566,538) (724,652) (102,065) Consumption & lifestyle business and others (406,453) (370,268) (283,948) (39,993) Income from operations: ​ ​ ​ ​ Financial services business 1,054,081 1,081,357 1,406,456 198,095 Insurance brokerage business 199,580 165,259 239,170 33,686 Consumption & lifestyle business and others 131,483 372,823 1,132,744 159,544 Total segment income from operations ​ 1,385,144 ​ 1,619,439 ​ 2,778,370 ​ 391,325 Unallocated expenses ​ (97,811) ​ (147,575) ​ (183,588) ​ (25,858) Other (expenses)/income ​ (84,160) ​ 23,519 ​ 50,578 ​ 7,124 Income before provision for income taxes 1,203,173 1,495,383 2,645,360 372,591 ​ Set forth below is a breakdown of net revenue for each segment, both in absolute amount and as a percentage of total net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Financial services business: ​ Loan facilitation services ​ 2,105,776 47.0 1,362,685 39.7 2,240,852 315,617 45.8 Post-origination services ​ 174,255 3.9 204,336 5.9 17,203 2,423 0.4 Financing services ​ 524,840 11.7 278,783 8.1 55,975 7,884 1.1 Others ​ 379,431 8.5 113,928 3.4 201,089 28,323 4.1 Subtotal ​ 3,184,302 71.1 1,959,732 57.1 2,515,119 354,247 51.4 Insurance brokerage business: ​ ​ ​ ​ ​ ​ ​ ​ Insurance brokerage services ​ 755,691 16.9 731,797 21.3 963,822 135,751 19.7 Subtotal ​ 755,691 ​ 16.9 ​ 731,797 ​ 21.3 ​ 963,822 ​ 135,751 ​ 19.7 Consumption & lifestyle business and others: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Electronic commerce services ​ 33,114 ​ 0.7 ​ 302,896 ​ 8.8 ​ 1,267,104 ​ 178,468 ​ 25.9 Others ​ 504,822 ​ 11.3 ​ 440,195 ​ 12.8 ​ 149,588 ​ 21,069 ​ 3.0 Subtotal ​ 537,936 ​ 12.0 ​ 743,091 ​ 21.6 ​ 1,416,692 ​ 199,537 ​ 28.9 Total net revenue ​ 4,477,929 100.0 3,434,620 100.0 4,895,633 689,535 100.0 ​ Financial Services Business (formerly known as consumer credit segment) The revenue from our financial services business increased by 28.3% from RMB1,959.7 million in 2022 to RMB2,515.1 million (US$354.2 million) in 2023, primarily due to the growing demand for our small revolving loan products.
Origination, servicing and other operating costs consist primarily of variable expenses and vendor costs, including costs related to credit assessment, customer and system support, payment processing services and collection associated with facilitating and servicing loans.
Origination, servicing and other operating costs . Origination, servicing and other operating costs consist primarily of variable expenses and vendor costs, including costs related to credit assessment, customer and system support, payment processing services and collection associated with facilitating and servicing loans.
In connection with the business restructuring, we are no longer engaged in online lending information intermediary business. CreditEase takes over the investor protection program and is responsible to ensure the winding-down of the outstanding loan collection activities relating to the Disposed Business in an orderly manner in accordance with the related rules and regulations.
In connection with the business restructuring, we are no longer engaged in the online lending information intermediary business. CreditEase takes over the investor protection program and is responsible to ensure the winding-down of the outstanding loan collection activities relating to the Disposed Business in an orderly manner in accordance with the related rules and regulations.
Yiren Hengsheng, one of our PRC subsidiaries, was qualified as a “software enterprise” in March 2021 and the status was reevaluated in 2022, and accordingly has been eligible for an exemption of enterprise income tax for 2020 and 2021 and a reduced enterprise income tax at the rate of 12.5% from 2022 through 2024.
Yiren Hengsheng, one of our PRC subsidiaries, was qualified as a “software enterprise” in March 2021 and the status was reevaluated in 2023, and accordingly has been eligible for an exemption of enterprise income tax for 2020 and 2021 and a reduced enterprise income tax at the rate of 12.5% from 2022 through 2024.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2022 that are reasonably likely to have a material and adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition.
Trend Information Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2023 that are reasonably likely to have a material and adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition.
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.” 125 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amount and as a percentage of our net revenue.
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.” 122 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amount and as a percentage of our net revenue.
Our prepaid expenses and other assets primarily include funds receivable from external payment networks, funds receivable for disposal of financing receivables and deposits, and our accrued expenses and other liabilities include primarily accrued payroll and welfare, tax payable and payable to investors.
Our prepaid expenses and other assets primarily include funds receivable from external payment networks, funds receivable for disposal of financing receivables and deposits, and our accrued expenses and other liabilities include primarily accrued payroll and welfare, tax payable, payable to investors and accrued advertisement expenses.
We estimate the standalone selling prices of loan facilitation services and post-facilitation services based on historical cost data adjusted by current service patterns such as tenure, which could change with the evolvement of our product mix. There has been no material change to the allocation ratio between the two performance obligations during the year ended December 31, 2022.
We estimate the standalone selling prices of loan facilitation services and post-facilitation services based on historical cost data adjusted by current service patterns such as tenure, which could change with the evolvement of our product mix. There has been no material change to the allocation ratio between the two performance obligations during the year ended December 31, 2023.
Allowance for contract assets are based on net cumulative expected loss rates, taking the historical default rate of loans originated in the same vintage, as well as national or local economic conditions that correlate with defaults on loans into consideration. We regularly review the methodology and assumptions used for estimating the net cumulative expected loss rates.
Allowance for contract assets is based on net cumulative expected loss rates, taking the historical default rate of loans originated in the same vintage, as well as national or local economic conditions that correlate with defaults on loans into consideration. We regularly review the methodology and assumptions used for estimating the net cumulative expected loss rates.
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 any offering outside China 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.” 135 Table of Contents Substantially all of our future revenues are likely to continue to be in the form of RMB.
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 any offering outside China 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.” Substantially all of our future revenues are likely to continue to be in the form of RMB.
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 their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations.
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 their accumulated after-tax profits, if any, determined in accordance with Chinese accounting standards and regulations.
Borrowers may also have less propensity or ability to repay their loans as a result of the economic problems caused by COVID-19, which may then impact credit quality. The operations of some of our business partners and service providers have also been constrained and impacted, which may have a negative impact on our business.
Borrowers may also have less propensity or ability to repay their loans as a result of the economic problems caused by COVID-19, which may then impact credit quality. The operations of some of our business partners and service providers may be constrained and impacted, which may have a negative impact on our business.
Although we consolidated the results of operations of Yiren Wealth and CreditEase Puhui, the consolidated variable interest entities, we only have access to the cash balances and the future earnings of Yiren Wealth and CreditEase Puhui through our contractual arrangements with them. See “Item 4. Information on the Company—A.
Although we consolidated the results of operations of Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities, we only have access to the cash balances and the future earnings of Yiren Financial Information and CreditEase Puhui through our contractual arrangements with them. See “Item 4. Information on the Company—A.
For example: ● capital contributions to our PRC subsidiaries, whether existing or newly established ones, must be filed for record with MOFCOM or its local counterparts; and ● loans by us to our PRC subsidiaries, which are foreign-invested enterprises, to finance their activities cannot exceed statutory limits, must be registered with SAFE or its local branches and must be registered with the NDRC if the term of such loan is more than one year.
For example: ● capital contributions to our PRC subsidiaries, whether existing or newly established ones, must be reported to MOFCOM or its local counterparts; and ● loans by us to our PRC subsidiaries, which are foreign-invested enterprises, to finance their activities cannot exceed statutory limits, must be registered with SAFE or its local branches and must be registered with the NDRC if the term of such loan is more than one year.
Allowance for contract assets, receivables and others was the credit loss of contact assets, which represented our right to consideration in exchange for services that we had transferred to the customer before payment was due. Taxation Cayman Islands We are incorporated in the Cayman Islands.
Allowance for contract assets, receivables and others was the credit loss of contact assets, which represents our right to consideration in exchange for services that we had transferred to the customer before payment was due. Taxation Cayman Islands We are incorporated in the Cayman Islands.
Product Mix and Pricing Our ability to maintain profitability largely depends on our ability to continually optimize our product mix and to accurately price the loans facilitated through our platform. The expected net charge-off rate and actual observed results for each of these customer groups divide potential borrowers into distinctively different credit segments. See “Item 4.
Product Mix and Pricing Our ability to maintain profitability largely depends on our ability to continually optimize our product mix and to accurately price the loans facilitated through our platform. The expected net charge-off rate and actual observed results for each of these customer groups divide potential borrowers into distinctively different credit segments. See “Item 4. Information on the Company—B.
Information on the Company—Business Overview—Risk Management—Proprietary Credit Scoring Model and Loan Qualification System.” In response to market competition or further developments, we may spend more effort promoting certain loan products, managing the growth in volume of other loan products, introducing new products with new risk grades or adjusting the pricing of our existing products.
Business Overview—Risk Management—Proprietary Credit Scoring Model and Loan Qualification System.” In response to market competition or further developments, we may spend more effort promoting certain loan products, managing the growth in volume of other loan products, introducing new products with new risk grades or adjusting the pricing of our existing products.
We will continue to diversify funding sources, expand our loan product mix and enhance our risk management to support our business growth. 118 Table of Contents Impact of COVID-19 on Our Operations Substantially all of our net revenue is generated in China. Our results of operations and financial condition have been affected by the spread of COVID-19.
We will continue to diversify funding sources, expand our loan product mix and enhance our risk management to support our business growth. Impact of COVID-19 on Our Operations Substantially all of our net revenue is generated in China. Our results of operations and financial condition have been affected by the spread of COVID-19.
Restricted Cash Restricted cash represented cash held by the Consolidated ABFE through segregated bank accounts which is not available to fund our general liquidity needs and guarantee deposits in a restricted bank account.
Restricted Cash Our restricted cash represents cash held by the Consolidated ABFE through segregated bank accounts which is not available to fund our general liquidity needs and guarantee deposits in a restricted bank account.
We had taken a series of measures in response to the outbreak, including, among others, a remote working arrangement for some of our employees, suspension of our offline customer acquisition activities and cancellation of non-essential business travels to ensure the safety and health of our employees. These measures reduced the capacity and efficiency of our operations.
We took a series of measures in response to the outbreak, including, among others, a remote working arrangement for some of our employees, suspension of our offline customer acquisition activities and cancellation of non-essential business travels to ensure the safety and health of our employees. These measures reduced the capacity and efficiency of our operations.
Our fair value adjustments increased from a fair value loss of RMB37.4 million in 2021 to a fair value gain of RMB18.9 million (US$2.7 million) in 2022, primarily due to actual profits being more than estimated when some trusts of Consolidated ABFE ceased. ​ Other income, net.
Our fair value adjustments increased from a fair value loss of RMB37.4 million in 2021 to a fair value gain of RMB18.9 million in 2022, primarily due to actual profits being more than estimated when some trusts of Consolidated ABFE ceased. Other income, net.
Net cash generated provided by operating activities was RMB158.2 million in 2021.
Net cash provided by operating activities was RMB158.2 million in 2021.
We have identified our promise to sell insurance policies on behalf of an insurance company as the performance obligation in our contracts with the insurance companies. Our performance obligation to the insurance company is satisfied and commission revenue is recognized at the point in time when an insurance policy becomes effective.
We have identified our promise to sell insurance policies on behalf of the insurance companies as the performance obligation in our contracts with the insurance companies. Our performance obligation to the insurance companies is satisfied and commission revenue, including renewal commission revenue, is recognized at the point in time when an insurance policy becomes effective.
COVID-19 also resulted in the temporary closure of many corporate offices, retail stores, manufacturing facilities and factories across China. We had seen delinquency volatilities and a significant decrease in loan volumes and revenues in the first half of 2020.
COVID-19 also resulted in the temporary closure of many corporate offices, retail stores, manufacturing facilities and factories across China. We saw delinquency volatilities and a significant decrease in loan volumes and revenues in the first half of 2020.
While new laws and regulations or changes to existing laws and regulations could make wealth solutions more difficult to be accepted by clients on terms favorable to us, or at all, these events could also provide new product and market opportunities.
While new laws and regulations or changes to existing laws and regulations could make products more difficult to be accepted by clients on terms favorable to us, or at all, these events could also provide new product and market opportunities.
The decrease in the revenue from our consumer credit services was primarily due to the decrease in the weighted average transaction fee rate of small revolving loan products as a result of our business transition.
The decrease in the revenue from our financial services business was primarily due to the decrease in the weighted average transaction fee rate of small revolving loan products as a result of our business transition.
We will make such payments to the investors related to the Consolidated ABFE if and when we receive the related loan payments from borrowers. We do not have any contractual obligations to make such payments out of our own liquidity resources. 137 Table of Contents We also have obligations relate to secured borrowings.
We will make such payments to the investors related to the Consolidated ABFE if and when we receive the related loan payments from borrowers. We do not have any contractual obligations to make such payments out of our own liquidity resources. We also have obligations related to secured borrowings.
Contract assets decreased by 43.3% from RMB1,105.9 million, net of allowance of RMB350.7 million as of December 31, 2021 to RMB626.8 million (US$90.9 million), net of allowance of RMB153.4 million (US$22.2 million) as of December 31, 2022, primarily due to the decrease in the weighted average transaction fee rate of small revolving loan facilitated in 2022.
Our contract assets decreased by 43.3% from RMB1,105.9 million, net of allowance of RMB350.7 million as of December 31, 2021 to RMB626.8 million, net of allowance of RMB153.4 million as of December 31, 2022, primarily due to the decrease in the weighted average transaction fee rate of small revolving loan facilitated in 2022.
We lease our principal office premises under a non-cancelable operating lease with an expiration date in December 2024. Rental expenses under operating leases for 2020, 2021 and 2022 were RMB245.7 million, RMB103.3 million and RMB27.9 million (US$4.0 million), respectively. Payables to investors related to the Consolidated ABFE have been excluded from the table above.
We lease our principal office premises under a non-cancelable operating lease with an expiration date in December 2024. Rental expenses under operating leases for 2021, 2022 and 2023 were RMB103.3 million, RMB27.9 million and RMB19.4 million (US$2.7 million), respectively. Payables to investors related to the Consolidated ABFE have been excluded from the table above.
We recorded income tax expenses of RMB300.5 million (US$43.6 million) in 2022 compared to income tax expenses of RMB170.2 million in 2021, which was mainly due to the increase in taxable income as a result of business recovery post restructuring. ​ Net income/(loss) .
We recorded income tax expenses of RMB300.5 million in 2022 compared to income tax expenses of RMB170.2 million in 2021, which was mainly due to the increase in taxable income as a result of business recovery post restructuring. Net income .
Prepaid expenses and other assets decreased by 8.7% from RMB352.0 million as of December 31, 2021 to RMB321.4 million (US$46.6 million) as of December 31, 2022, primarily due to the decrease in deposits for business cooperation.
Our prepaid expenses and other assets decreased by 8.7% from RMB352.0 million as of December 31, 2021 to RMB321.4 million as of December 31, 2022, primarily due to the decrease in deposits for business cooperation.
The difference between our net income and our net cash provided by operating activities was primarily attributable to certain non-cash items, including allowance for contract assets, receivables and others of RMB188.2 million (US$27.3 million), and certain working capital items, including a decrease in contract assets of RMB369.1 million (US$53.5 million) and an increase in accrued expenses and other liabilities of RMB109.8 million (US$15.9 million), partially offset by an increase in deferred tax assets or liabilities of RMB109.6 million (US$15.9 million).
The difference between our net income and our net cash provided by operating activities was primarily attributable to certain non-cash items, including allowance for contract assets, receivables and others of RMB188.2 million, and certain working capital items, including a decrease in contract assets of RMB369.1 million and an increase in accrued expenses and other liabilities of RMB109.8 million, partially offset by an increase in deferred tax assets or liabilities of RMB109.6 million.
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.
Our PRC subsidiaries, when distributing its after-tax profits to shareholders, 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. Such reserve is not distributable as cash dividends.
Financing receivables Financing receivables represented loans issued by Yichuang Micro-lending and lease receivables arising from direct financing leases issued by Yichuang Financial Leasing.
Financing Receivables Financing receivables mainly represent loans issued by Yichuang Micro-lending and lease receivables arising from direct financing leases issued by Yichuang Financial Leasing.
Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant 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 relevant tax authority.
We are also subject to surcharges on VAT payments in accordance with PRC law. 121 Table of Contents Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant 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 relevant tax authority.
Our total operating costs and expenses decreased from RMB3,190.6 million in 2021 to RMB1,962.8 million (US$284.6 million) in 2022, primarily attributable to the decrease in sales and marketing expenses. ​ Sales and marketing expenses .
Our total operating costs and expenses decreased by 38.5% from RMB3,190.6 million in 2021 to RMB1,962.8 million in 2022, primarily attributable to the decrease in sales and marketing expenses. Sales and marketing expenses .
According to the arrangements, Yichuang Financial Leasing transferred its creditor’s right of certain financial receivables totaling RMB909.1 million and RMB550.0 million, respectively, with remaining lease terms ranging from one to three years originating from its finance leasing services business to external creditors.
According to the arrangements, Yichuang Financial Leasing transferred its creditor’s right or beneficial interests of certain financing receivables totaling RMB550.0 million, nil and nil, respectively, with remaining lease terms ranging from one to three years originating from its finance leasing services business to external creditors.
Risk Factors—Risks Related to Our Business—We may need additional capital, and financing may not be available on terms acceptable to us, or at all.” Our ability to manage our working capital, including accounts receivable, prepaid expenses and other assets and accrued expenses and other liabilities, may materially affect our financial position and results of operations. See “Item 3. Key Information—D.
Risk Factors—Risks Related to Our Business—We may need additional capital, and financing may not be available on terms acceptable to us, or at all.” 133 Table of Contents Our ability to manage our working capital, including accounts receivable, prepaid expenses and other assets and accrued expenses and other liabilities, may materially affect our financial position and results of operations.
Business Overview—Risk Management—Proprietary Credit Scoring Model and Loan Qualification System.” The following table provides the amount of loans facilitated under our loan facilitation model during each of the periods presented and the corresponding accumulated M3+ Net Charge-off and M3+ Net Charge-off Rate data as of December 31, 2022 for the loans facilitated during each of the periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated M3+ Net Charge-off ​ ​ Amount of loans ​ Net Charge-off as ​ Rate as of ​ ​ facilitated during the ​ of December 31, ​ December 31, Period ​ period ​ 2022 ​ 2022 ​ ​ (in RMB thousands) ​ (in RMB thousands) ​ % 2018 4,211,573 393,238 9.3 2019 3,431,443 398,602 11.6 2020 9,614,819 780,798 8.1 2021 ​ 23,195,224 ​ 1,513,766 ​ 6.5 2022 Q1~Q3 15,839,577 316,444 2.0 (1) We define M3+ Net Charge-off, with respect to loans facilitated during a specified time period, which we refer to as a vintage, as the difference between (i) the total balance of outstanding principal of loans that become over three months delinquent during a specified period and (ii) the total amount of recovered past due payments of principal and accrued interest in the same period with respect to all loans in the same vintage that have ever become over three months delinquent.
Business Overview—Risk Management—Proprietary Credit Scoring Model and Loan Qualification System.” The following table provides the amount of loans facilitated under our loan facilitation model during each of the periods presented and the corresponding accumulated M3+ Net Charge-off and M3+ Net Charge-off Rate data as of December 31, 2023, for the loans facilitated during each of the periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated M3+ Net Charge-off ​ ​ Amount of loans ​ Net Charge-off as ​ Rate as of ​ ​ facilitated during the ​ of December 31, ​ December 31, Period ​ period ​ 2023 ​ 2023 ​ ​ (in RMB thousands) ​ (in RMB thousands) ​ % 2019 3,431,443 398,602 11.6 2020 9,614,819 780,798 8.1 2021 ​ 23,195,224 ​ 1,513,766 ​ 6.5 2022 22,623,101 1,070,819 4.7 2023 Q1-Q3 24,390,773 694,391 2.8 (1) We define M3+ Net Charge-off, with respect to loans facilitated during a specified time period, which we refer to as a vintage, as the difference between (i) the total balance of outstanding principal of loans that become over three months delinquent during a specified period and (ii) the total amount of recovered past due payments of principal and accrued interest in the same period with respect to all loans in the same vintage that have ever become over three months delinquent.
As COVID-19 has negatively affected the broader Chinese economy and the global economy, China may continue to experience great economic uncertainty, which may impact our business in a materially negative way as our users may be less inclined to borrow or invest in wealth solutions.
As COVID-19 has negatively affected the broader Chinese economy and the global economy, China may continue to experience great economic uncertainty, which may impact our business in a materially negative way as our users may be less inclined to borrow loans on our platform.
Our sales and marketing expenses as a percentage of our total revenues decreased from 34.7% to 16.7% during the same period. ​ Origination, servicing and other operating costs . Our origination, servicing and other operating costs remained stable, which slightly increased from RMB760.9 million in 2021 to RMB776.8 million (US$112.6 million) in 2022.
Our sales and marketing expenses as a percentage of our total revenue decreased from 34.7% to 16.7% during the same period. 128 Table of Contents Origination, servicing and other operating costs . Our origination, servicing and other operating costs remained stable, which slightly increased from RMB760.9 million in 2021 to RMB776.8 million in 2022.
Our interest expense, net decreased from expense of RMB73.4 million in 2021 to expense of RMB26.3 million (US$3.8 million) in 2022, primarily due to our repayment of secured borrowings. ​ Fair value adjustments related to the Consolidated ABFE.
Interest income/(expense), net . Our net interest expense decreased by 64.2% from RMB73.4 million in 2021 to RMB26.3 million in 2022, primarily due to our repayment of secured borrowings. Fair value adjustments related to the Consolidated ABFE.
As a result of the foregoing, our net income increased from net income of RMB1,033.0 million in 2021 to net income of RMB1,194.9 million (US$173.2 million) in 2022. ​ Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 Net revenue .
As a result of the foregoing, our net income increased from RMB1,194.9 million in 2022 to RMB2,080.2 million (US$293.0 million). Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Net revenue .
We started to provide guarantee services in connection with some of the loans facilitated through our marketplace by institutional funding partners, through one of our wholly owned subsidiaries, Fujian Jiaying, since October 2020. The outstanding balance of the loans guaranteed by Fujian Jiaying was immaterial as of December 31, 2022.
We have provided guarantee services in connection with some of the loans facilitated on our marketplace by institutional funding partners, through one of our wholly owned subsidiaries, Fujian Jiaying, since October 2020. The outstanding balance of the loans guaranteed by Fujian Jiaying was immaterial as of December 31, 2023.
If the estimate of the prepayment rates suffers 0.5 percentage point increase/decrease, it would result in a decrease of RMB12.4 million (US$1.8 million) and an increase of RMB12.4 million (US$1.8 million) for revenue recognized for the year ended December 31, 2022.
If the estimate of the prepayment rates suffers 0.5 percentage point increase/decrease, it would result in a decrease of RMB11.5 million (US$1.6 million) and an increase of RMB11.5 million (US$1.6 million) for revenue recognized for the year ended December 31, 2023.
As a result of the foregoing, our net income increased from net loss of RMB692.7 million in 2020 to net income of RMB1,033.0 million in 2021. ​ Discussion of Certain Balance Sheet Items ​ The following selected consolidated balance sheet as of December 31, 2021 and 2022 has been derived from our audited consolidated financial statements included in this annual report beginning on page F-1.
As a result of the foregoing, our net income increased by 15.7% from net income of RMB1,033.0 million in 2021 to net income of RMB1,194.9 million in 2022. 129 Table of Contents Discussion of Certain Balance Sheet Items The following selected consolidated balance sheet as of December 31, 2022 and 2023 has been derived from our audited consolidated financial statements included in this annual report beginning on page F-1.
On December 31, 2020, we consummated another business restructuring with CreditEase to streamline our service lines and reposition us as a comprehensive digital personal financial management platform in China. In connection with the business restructuring, we disposed of the online consumer lending platform targeting individual investors as the funding source. Insurance brokerage commissions .
Basis of Management’s Discussion of Operating Results On December 31, 2020, we consummated another business restructuring with CreditEase to streamline our service lines and reposition us as a comprehensive digital personal financial management platform in China. In connection with the business restructuring, we disposed of the online consumer lending platform targeting individual investors as the funding source (the “Disposed Business”).
Risk Factors—Risks Related to Our Business—Failure to manage our liquidity and cash flows may materially and adversely affect our financial position and results of operations.” 134 Table of Contents Our accounts receivable primarily include the commission receivable from insurance brokerage service and service fees receivable from industry partners.
See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Failure to manage our liquidity and cash flows may materially and adversely affect our financial position and results of operations.” Our accounts receivable primarily include the commission receivable from insurance brokerage service and service fees receivable from industry partners.
Investing Activities Net cash provided by investing activities was RMB52.6 million (US$7.6 million) in 2022, which was primarily attributable to repayments of financing receivables, partially offset by net outflow for available-for-sale investments.
Net cash provided by investing activities was RMB52.6 million in 2022, which was primarily attributable to repayments of financing receivables, partially offset by net outflow for available-for-sale investments. Net cash used in investing activities was RMB346.5 million in 2021, which was primarily attributable to origination of financing receivables, partially offset by repayments of financing receivables.
In addition, Hengyuda, one of our PRC subsidiaries, is eligible for a reduced enterprise income tax rate of 15% since 2017 pursuant to the Catalogue of Encouraged Industries in Western Regions, the Catalogue of Industries for Guiding Foreign Investment, Circular on Issues Concerning Tax Policies for In-depth Implementation of Western Development Strategies, and the related rules granting favorable tax treatment to companies in specified industries in western China under the PRC government’s policy initiative to promote the development of the western region of China.
In addition, Hengyuda, one of our PRC subsidiaries, has been eligible for a reduced enterprise income tax rate of 15% since 2017 pursuant to the Catalogue of Encouraged Industries in Western Regions, the Catalogue of Industries for Guiding Foreign Investment, Announcement on Renewing the Enterprise Income Tax Policy for Great Western Development, and the related rules granting favorable tax treatment to companies in specified industries in western China under the PRC government’s policy initiative to promote the development of the western region of China.
In 2020 and 2021, Yichuang Financial Leasing entered into several financing arrangements, with a principal amount of RMB862.0 million and RMB541.6 million, respectively.
In 2021, 2022, and 2023, Yichuang Financial Leasing entered into several financing arrangements, with a principal amount of RMB541.6 million, nil and nil, respectively.
See also “Risk Factors—Risks Related to Our Business and Industry—We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.” 119 Table of Contents Loan Performance Data Delinquency Rates As of December 31, 2022, the delinquency rates for loans under our loan facilitation model that are past due for 15-29 days, 30-59 days and 60-89 days are set forth below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Delinquent for ​ 15-29 days 30-59 days 60-89 days All Loans ​ ​ ​ ​ ​ ​ ​ December 31, 2020 0.5 % 0.7 % 0.6 % December 31, 2021 0.9 % 1.5 % 1.2 % December 31, 2022 0.7 % 1.3 % 1.1 % ​ ​ ​ ​ ​ ​ ​ ​ Online Channels ​ December 31, 2020 0.6 % 1.0 % 1.1 % December 31, 2021 0.8 % 1.3 % 1.1 % December 31, 2022 0.7 % 1.1 % 0.9 % ​ ​ ​ ​ ​ ​ ​ ​ Offline Channels ​ December 31, 2020 0.4 % 0.6 % 0.4 % December 31, 2021 1.0 % 1.8 % 1.4 % December 31, 2022 1.2 % 2.2 % 2.3 % ​ M3+ Net Charge-off Rates We currently define M3+ Net Charge-off Rate, with respect to loans facilitated during a specified time period, which we refer to as a vintage, as the difference between (i) the total balance of outstanding principal of loans that become over three months delinquent during a specified period and (ii) the total amount of recovered past due payments of principal and accrued interest in the same period with respect to all loans in the same vintage that have ever become over three months delinquent, divided by (iii) the total initial principal of the loans facilitated in such vintage.
See also “Risk Factors—Risks Related to Our Business and Industry—We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.” Loan Performance Data Delinquency Rates As of December 31, 2023, the delinquency rates for loans under our loan facilitation model that are past due for 15-29 days, 30-59 days and 60-89 days are set forth below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Delinquent for ​ 15-29 days 30-59 days 60-89 days All Loans ​ ​ ​ ​ ​ ​ ​ December 31, 2021 0.9 % 1.5 % 1.2 % December 31, 2022 0.7 % 1.3 % 1.1 % December 31, 2023 0.9 % 1.4 % 1.2 % ​ M3+ Net Charge-off Rates We currently define M3+ Net Charge-off Rate, with respect to loans facilitated during a specified time period, which we refer to as a vintage, as the difference between (i) the total balance of outstanding principal of loans that become over three months delinquent during a specified period and (ii) the total amount of recovered past due payments of principal and accrued interest in the same period with respect to all loans in the same vintage that have ever become over three months delinquent, divided by (iii) the total initial principal of the loans facilitated in such vintage. 116 Table of Contents The following chart displays the historical lifetime cumulative M3+ Net Charge-off Rates through December 31, 2023, by vintage, for all loan products facilitated under our loan facilitation model for each of the months shown: The expected M3+ Net Charge-off Rates and actual observed results for each of these customer groups divide potential borrowers into distinctively different credit segments.
As of December 31, 2022, allowance for contract assets is RMB153.4 million (US$22.2 million). If the estimate of the net cumulative expected loss rates suffers 0.5 percentage point increase/decrease, it would result in an increase of RMB11.3 million (US$1.6 million) and a decrease of RMB11.2 million (US$1.6 million) for allowance for contract assets. 139 Table of Contents
As of December 31, 2023, allowance for contract assets is RMB164.1 million (US$23.1 million). If the estimate of the net cumulative expected loss rates suffers 0.5 percentage point increase/decrease, it would result in an increase of RMB11.1 million (US$1.6 million) and a decrease of RMB11.1 million (US$1.6 million) for allowance for contract assets.
Loans at Fair Value Loans at fair value represented the fair value of loans invested by the Consolidated ABFE, which decreased by 61.6% from RMB192.2 million as of December 31, 2020 to RMB73.7 million as of December 31, 2021, and decreased by 26.7% to RMB54.0 million (US$7.8 million) as of December 31, 2022, primarily due to the decrease in the balance of loans invested by the Consolidated ABFE.
Loans at fair value decreased by 26.7% from RMB73.7 million as of December 31, 2021 to RMB54.0 million as of December 31, 2022, primarily due to the decrease in the balance of loans invested by the Consolidated ABFE.
As a result, Yiren Digital Ltd.’s ability to pay dividends depends upon dividends paid by YouRace Hengchuang and Hengyuda, our PRC subsidiaries, and Yiren Wealth and CreditEase Puhui, the consolidated variable interest entities.
We conduct our operations primarily through our subsidiaries and the consolidated variable interest entities in China. As a result, Yiren Digital Ltd.’s ability to pay dividends depends upon dividends paid by YouRace Hengchuang and Hengyuda, our PRC subsidiaries, and Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities.
While our significant accounting policies are described in more detail in “Note 2—Summary of Significant Accounting Policies” to our consolidated financial statements appearing in Item 18 of this Annual Report, we believe the following critical accounting estimates used in the preparation of our consolidated financial statements require the most difficult, subjective and complex judgments and estimates and have had, or are reasonably likely to have a material impact on our financial condition or results of operations. 138 Table of Contents Revenue We provide loan facilitation services, post-origination services and guarantee services (the amounts of the loans guaranteed by us was immaterial).
While our significant accounting policies are described in more detail in “Note 2—Summary of Significant Accounting Policies” to our consolidated financial statements appearing in Item 18 of this annual report, we believe the following critical accounting estimates used in the preparation of our consolidated financial statements require the most difficult, subjective and complex judgments and estimates and have had, or are reasonably likely to have a material impact on our financial condition or results of operations.
As of December 31, 2022, we recorded secured borrowings of RMB767.9 million (US$111.3 million) and amount due to related parties of RMB195.8 million (US$28.4 million) on our consolidated balance sheets as of December 31, 2022. Other than those shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2022. C.
As of December 31, 2023, we recorded secured borrowings of nil and amount due to related parties of nil on our consolidated balance sheets as of December 31, 2023. Other than those shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2023. C.
It also consists of costs in connection with the distribution of insurance products, including payroll and related expenses for insurance agents and transaction fee charged by third-party payment platforms. General and administrative expenses . General and administrative expenses consist primarily of salaries and benefits related to technology, accounting and finance, business development, legal, human resources and other personnel.
It also consists of costs in connection with the distribution of insurance products, including payroll and related expenses for insurance agents and transaction fees charged by third-party payment platforms. Research and development expenses . Research and development expenses consist primarily of salaries and benefits related to technology and technological innovations. General and administrative expenses .
We believe that our cash on hand and anticipated cash flows from operating activities will be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for the next 12 months.
Unlike financial institutions, we are not subject to any capital adequacy requirement that is applicable to financial institutions in China. We believe that our cash on hand and anticipated cash flows from operating activities will be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for the next 12 months.
Available-for-sale investments slightly increased from RMB175.5 million as of December 31, 2020 to RMB177.4 million as of December 31, 2021, and further increased to RMB972.7 million (US$141.0 million) as of December 31, 2022, primarily due to the increase of cash in 2022.
Available-for-sale investments increased by 448.5% from RMB177.4 million as of December 31, 2021 to RMB972.7 million as of December 31, 2022, primarily due to the increase of cash in 2022.
As a result, the estimation of standalone selling price involves significant judgments. We use expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services as the basis of revenue allocation.
There is no direct observable standalone selling price for similar services in the market that is reasonably available. As a result, the estimation of standalone selling price involves significant judgments. We use expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services as the basis of revenue allocation.
As the transfer of creditor’s right of financial receivables did not constitute a real asset transformation under the PRC law, the proceeds from the external creditors were considered as secured borrowings. Our secured borrowings have maturities ranging from one to three years.
As the transfer of creditor’s right or beneficial interests of financing receivables did not constitute a true sale for transfer of assets under the PRC law, the proceeds received from the external creditors were considered as secured borrowings. Our secured borrowings have maturities ranging from one to three years.
Product Development.” Failure to continue to successfully develop and offer innovative products and for such products to gain broad customer acceptance could adversely affect our operating results and we may not recoup the costs of launching and marketing new products.
See “—Product Development.” Failure to continue to successfully develop and offer innovative products and for such products to gain broad customer acceptance could adversely affect our operating results and we may not recoup the costs of launching and marketing new products. 114 Table of Contents Ability to Compete Effectively Our business and results of operations depend on our ability to compete effectively in the markets in which we operate.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Net revenue . Our net revenue decreased from RMB4,477.9 million in 2021 to RMB3,434.6 million (US$498.0 million) in 2022, primarily due to a 38.5% decrease in the revenue from our consumer credit services from RMB3,184.3 million in 2021 to RMB1,959.7 million (US$284.1 million) in 2022.
Our net revenue decreased from RMB4,477.9 million in 2021 to RMB3,434.6 million in 2022, primarily due to a 38.5% decrease in the revenue from our financial services business from RMB3,184.3 million in 2021 to RMB1,959.7 million in 2022.
Our other income, net increased from RMB26.7 million in 2021 to RMB30.9 million (US$4.5 million) in 2022, primarily due to tax preference and governmental incentives. ​ 129 Table of Contents Income tax (expenses)/benefits .
Our net other income increased from RMB26.7 million in 2021 to RMB30.9 million in 2022, primarily due to preferential tax treatments and governmental incentives. Income tax expenses .
Revenues from loan facilitation are recognized at the time a loan is originated. Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are provided. Revenues from guarantee services, if any, are recognized amortized during the guarantee term.
Revenue We provide loan facilitation services, post-origination services and guarantee services (the amounts of the loans guaranteed by us was immaterial). Revenues from loan facilitation are recognized at the time a loan is originated. Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are provided.
In connection with the business restructuring, we disposed of the online consumer lending platform targeting individual investors as the funding source. The Disposed Business was operated by Hengcheng, and CreditEase, through its subsidiaries and affiliates, paid the designated subsidiaries of our company an aggregate amount of RMB67.0 million in cash.
The Disposed Business was operated by Hengcheng, and CreditEase, through its subsidiaries and affiliates, paid the designated subsidiaries of our company an aggregate amount of RMB67.0 million in cash.
Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are provided. Revenues from guarantee services, if any, are recognized through performance of the guarantees (by making payments for defaults).
Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are provided.
The decrease in the weighted average transaction fee rate from 2021 to 2022 was primarily due to the robust growth in small revolving loan products as a result of our business transition.
In 2021, 2022 and 2023, our weighted average service fee rate for our loan facilitation services and post-origination services was 14.4%, 7.0% and 7.5%, respectively. The decrease in the weighted average fee rate from 2021 to 2022 was primarily due to the robust growth in small revolving loan products as a result of our business transition.
Financing Activities Net cash used in financing activities was RMB489.1 million (US$70.9 million) in 2022, which was mainly attributable to principal payments of loans from related parties and third parties. Net cash provided by financing activities was RMB427.4 million in 2021, which was mainly attributable to RMB575.9 million of loan from third parties.
Financing Activities Net cash used in financing activities was RMB569.3 million (US$80.2 million) in 2023, which was mainly attributable to principal payments of loans from third parties. Net cash used in financing activities was RMB489.1 million in 2022, which was mainly attributable to principal payments of loans from related parties and third parties.
Our sales and marketing expenses decreased from RMB1,553.3 million in 2021 to RMB574.0 million (US$83.2 million) in 2022, primarily due to a 71.6% decrease in sales and marketing expenses for consumer credit services from RMB1,353.2 million in 2021 to RMB384.0 million (US$55.7 million) in 2022.
Our sales and marketing expenses decreased from RMB1,553.3 million in 2021 to RMB574.0 million in 2022, primarily due to a 71.6% decrease in sales and marketing expenses for financial services business from RMB1,353.2 million in 2021 to RMB384.0 million in 2022. The decrease was primarily due to the optimization of our offline business and the improvement of our cost efficiency.
Our general and administrative expenses decreased from RMB508.9 million in 2021 to RMB423.7 million (US$61.4 million) in 2022, primarily due to the optimization of our offline business and the overall improvement of cost efficiency. Our general and administrative expenses as a percentage of our total revenues increased from 11.4% to 12.3% during the same period. ​ Provision for contingent liability.
Our research and development expenses as a percentage of our total revenue decreased from 4.7% to 4.4% during the same period. General and administrative expenses . Our general and administrative expenses decreased from RMB300.9 million in 2021 to RMB271.8 million in 2022, primarily due to the optimization of our offline business and the overall improvement of cost efficiency.
Risk Factors—Risks Relating to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and affect the value of your investment.” The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ 282,028 158,192 1,849,430 268,142 Net cash (used in)/provided investing activities (1,796,663) (346,507) 52,559 7,620 Net cash provided by/(used in) financing activities 955,448 427,446 (489,123) (70,916) Effect of foreign exchange rate changes (2,807) (936) 2,486 360 Net (decrease)/increase in cash, cash equivalents and restricted cash (561,994) 238,195 1,415,352 205,206 Cash, cash equivalents and restricted cash, beginning of year 3,269,142 2,707,148 2,945,343 427,035 Cash, cash equivalents and restricted cash, end of year 2,707,148 2,945,343 4,360,695 632,241 ​ Operating Activities Net cash generated provided by operating activities was RMB1,849.4 million (US$268.1 million) in 2022.
Risk Factors—Risks Relating to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and affect the value of your investment.” 134 Table of Contents The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ 158,192 1,849,430 2,171,013 305,780 Net cash (used in)/provided investing activities (346,507) 52,559 100,045 14,091 Net cash provided by/(used in) financing activities 427,446 (489,123) (569,278) (80,181) Effect of foreign exchange rate changes (936) 2,486 (3,871) (545) Net (decrease)/increase in cash, cash equivalents and restricted cash 238,195 1,415,352 1,697,909 239,145 Cash, cash equivalents and restricted cash, beginning of year 2,707,148 2,945,343 4,360,695 614,191 Cash, cash equivalents and restricted cash, end of year 2,945,343 4,360,695 6,058,604 853,336 ​ Operating Activities Net cash provided by operating activities was RMB2,171.0 million (US$305.8 million) in 2023.
See “Item 4. Information on the Company- B.
For details on each business segment, see “Item 4. Information on the Company—B.
Contractual Obligations The following table sets forth our contractual obligations as of December 31, 2022: ​ ​ ​ ​ ​ As of December 31, 2022 ​ RMB in thousands 2023 17,945 2024 16,304 2025 2,253 2026 and thereafter — Total accrued expenses and other liabilities 36,502 ​ Our operating lease obligations relate to our leases of office premises.
Contractual Obligations The following table sets forth our contractual obligations as of December 31, 2023: ​ ​ ​ ​ ​ As of December 31, 2023 ​ RMB in thousands 2024 18,976 2025 4,445 2026 and thereafter 821 Total lease liabilities 24,242 ​ Our operating lease obligations relate to our leases of office premises.
Major Factors Affecting Our Results of Operations Major factors affecting our results of operations include the following: Economic Conditions in China The demand for online consumer finance and wealth solutions from borrowers and wealth clients is dependent upon overall economic conditions in China.
Major Factors Affecting Our Results of Operations Major factors affecting our results of operations include the following: Economic Conditions in China The demand for online consumer finance from borrowers is dependent upon overall economic conditions in China. General economic factors, including the interest rate environment and unemployment rates, may affect borrowers’ willingness to seek loans.
As of December 31, 2020, 2021 and 2022, we had accounts receivable of RMB122.7 million, RMB305.0 million and RMB221.0 million (US$32.0 million), respectively. The increase in our accounts receivable from 2020 to 2021 was primarily due to the increase in service fees receivable from industry partners and commission receivable from insurance brokerage service.
As of December 31, 2021, 2022 and 2023, we had accounts receivable of RMB305.0 million, RMB221.0 million and RMB499.0 million (US$70.3 million), respectively. The decrease in our accounts receivable from 2021 to 2022 was primarily due to collections of commission receivables.
Sales and marketing expenses consist primarily of variable marketing expenses, including those related to borrower and wealth client acquisition and retention and general brand and awareness building. Our user acquisition expenses represent the primary costs that are associated with our loan facilitation services.
Sales and marketing expenses consist primarily of variable marketing expenses, including those related to borrower and client acquisition and retention and general brand and awareness building.
Secured borrowings Secured borrowings were primarily generated from several financing arrangements of Yichuang Financial Leasing, with a principal amount of RMB541.6 million and nil during the years of 2021 and 2022, respectively. It increased from RMB500.5 million as of December 31, 2020 to RMB1,028.6 million as of December 31, 2021, which was primarily due to the growth of external borrowings.
Secured Borrowings Secured borrowings were primarily generated from several financing arrangements of Yichuang Financial Leasing, with a principal amount of RMB862.0 million and RMB541.6 million during the years of 2020 and 2021, respectively.
The outbreak of COVID-19 also resulted in the suspension of our offline customer acquisition activities in February 2020, which impacted our operations and resulted in an increase in delinquency volatilities and a significant decrease in revenues and loan volumes in the first quarter of 2020.
The outbreak of COVID-19 also resulted in the suspension of our offline customer acquisition activities in February 2020, which impacted our operations and resulted in an increase in delinquency volatilities and a significant decrease in revenues and loan volumes in the first quarter of 2020. 115 Table of Contents After the initial outbreak of COVID-19, some instances of COVID-19 infections emerged in various regions of China from time to time, including the infections caused by the Omicron variants since early 2022.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

43 edited+8 added−12 removed55 unchanged
Biggest changeThe following table summarizes, as of March 31, 2023, the outstanding restricted share units that we granted to our current directors and executive officers and to other individuals as a group under our 2015 Plan, 2017 Plan and 2020 Plan: ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ Underlying Restricted ​ ​ Name Share Units Grant Date Jingsheng Huang ​ * ​ July 1, 2019 Sam Hanhui Sun * July 1, 2019 and 2022 and June 30, 2020 and 2021 Hao Li * June 30, 2020 and 2021 and July 1, 2022 Na Mei * ​ June 30, 2020 and 2021 and July 1, 2022 George Liu * ​ December 31, 2020 Other Individuals as a Group ​ * ​ July 1, 2018, 2019 and 2022 and June 30, 2020 and 2021 and December 31, 2020 and January 1, 2022 and 2023 * Less than 1% of our total outstanding ordinary shares.
Biggest changeAs of March 31, 2024, 2,241,114 restricted share units were outstanding under the 2020 Plan. 141 Table of Contents The following table summarizes, as of March 31, 2024, the outstanding restricted share units that we granted to our current directors and executive officers and to other individuals as a group under our 2020 Plan: ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ Underlying Restricted ​ ​ Name ​ Share Units ​ Grant Date Sam Hanhui Sun * June 30, 2021 and July 1, 2022 and 2023 Hao Li * June 30, 2021 and July 1, 2022 and 2023 Na Mei * ​ June 30, 2021 and July 1, 2022 Bin Yang * ​ June 30, 2021 and July 1, 2022 Other Individuals as a Group ​ 1,796,502 ​ June 30, 2021 and January 1, 2022, 2023 and 2024 and July 1, 2022 and 2023 * Less than 1% of our total outstanding ordinary shares.
Sun assumed a couple of positions at Qunar Cayman Islands Limited, a mobile and online travel platform then listed on Nasdaq, including serving as Qunar’s president from May 2015 to September 2015 and its chief financial officer from January 2010 to April 2015. Prior to joining Qunar, Mr.
From January 2010 to September 2015, Mr. Sun assumed a couple of positions at Qunar Cayman Islands Limited, a mobile and online travel platform then listed on Nasdaq, including serving as Qunar’s president from May 2015 to September 2015 and its chief financial officer from January 2010 to April 2015. Prior to joining Qunar, Mr.
Mr. Huang has served as a non-executive director of Gushengtang, a company listed on the Hong Kong Stock Exchange, since July 2021. Prior to that, he was a partner of TPG Growth and RMB Funds based in Shanghai, China. Before joining TPG, he was a managing director at Bain Capital LLC, where he set up and ran its Shanghai operations.
Huang has served as a non-executive director of Gushengtang, a company listed on the Hong Kong Stock Exchange, since July 2021. Prior to that, he was a partner of TPG Growth and RMB Funds based in Shanghai, China. Before joining TPG, he was a managing director at Bain Capital LLC, where he set up and ran its Shanghai operations.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions, including any transactions between us and CreditEase; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 144 Table of Contents Compensation Committee .
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions, including any transactions between us and CreditEase; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 143 Table of Contents Compensation Committee .
Sun was the chief financial officer of KongZhong Corporation, an online game developer and operator then listed on Nasdaq-listed company, from 2007 to 2009. Mr. Sun was also an independent director and audit committee member of KongZhong Corporation from July 2005 through January 2007. From 2004 to 2007, Mr.
Sun was the chief financial officer of KongZhong Corporation, an online game developer and operator then listed on a Nasdaq-listed company, from 2007 to 2009. Mr. Sun was also an independent director and audit committee member of KongZhong Corporation from July 2005 through January 2007. From 2004 to 2007, Mr.
Tang won the nomination of “Leader of the Year” in the “Global Microfinance Achievement Awards 2011,” initiated by the London-based C5 Group to recognize the efforts, innovations and services that ensure maximum business and social returns in the microfinance sector. Mr.
In July 2011, Mr. Tang won the nomination of “Leader of the Year” in the “Global Microfinance Achievement Awards 2011,” initiated by the London-based C5 Group to recognize the efforts, innovations and services that ensure maximum business and social returns in the microfinance sector. Mr.
Tina Ju, Mr. Qing Li, Mr. Jingsheng Huang, Mr. Sam Hanhui Sun, Mr. Hao Li, Mr. Hiu Fung Vincent Pang and Mr. George Liu, the business address of our directors and executive officers is 28/F, China Merchants Bureau Building, 118 Jianguo Road, Chaoyang District, Beijing 100022, People’s Republic of China. The business address of Ms.
Tina Ju, Mr. Qing Li, Mr. Jingsheng Huang, Mr. Sam Hanhui Sun, Mr. Hao Li, and Mr. Hiu Fung Vincent Pang, the business address of our directors and executive officers is 28/F, China Merchants Bureau Building, 118 Jianguo Road, Chaoyang District, Beijing 100022, People’s Republic of China. The business address of Ms.
These three plans are referred to as the 2015 Plan, 2017 Plan and 2020 Plan, respectively. Pursuant to the 2015 Plan, the maximum number of shares that may be issued pursuant to all awards under the 2015 Plan is 3,939,100 ordinary shares. As of March 31, 2023, there was no restricted share unit outstanding under the 2015 Plan.
These three plans are referred to as the 2015 Plan, 2017 Plan and 2020 Plan, respectively. Pursuant to the 2015 Plan, the maximum number of shares that may be issued pursuant to all awards under the 2015 Plan is 3,939,100 ordinary shares. As of March 31, 2024, there was no restricted share unit outstanding under the 2015 Plan.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2023 by: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5% of our total outstanding ordinary shares.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2024 by: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5% of our total outstanding ordinary shares.
The non-competition restricted period typically expires one year after the termination of employment, and we agree to compensate the employee with a certain percentage of his or her pre-departure salary during the restricted period. We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes. 146 Table of Contents E.
The non-competition restricted period typically expires one year after the termination of employment, and we agree to compensate the employee with a certain percentage of his or her pre-departure salary during the restricted period. We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes. E.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings; ● declaring dividends and distributions; 145 Table of Contents ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
For information regarding the share-based incentive awards that we have granted to our officers and directors, please refer to “—Share Incentive Plans.” Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
For information regarding the share-based incentive awards that we have granted to our officers and directors, please refer to “—Share Incentive Plans.” 140 Table of Contents Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
Prior to founding Sciencast, Mr. Li was a portfolio manager at SAC Capital Advisors from April 2009 to February 2014, a quantitative researcher at Tykhe Capital LLC from October 2005 to April 2009, a vice president at Fortress Investment Group from September 2004 to October 2005 and an associate from August 2002 to September 2004 at Lehman Brothers. Mr.
Li was a portfolio manager at SAC Capital Advisors from April 2009 to February 2014, a quantitative researcher at Tykhe Capital LLC from October 2005 to April 2009, a vice president at Fortress Investment Group from September 2004 to October 2005 and an associate from August 2002 to September 2004 at Lehman Brothers. Mr.
Sam Hanhui Sun is 64 Dong-gong Street, Dongcheng District, Beijing 100009, People’s Republic of China. The business address of Mr. Hao Li is Building G2, No. 56 Jianguo Road, Chaoyang District, Beijing 100022, the People’s Republic of China. The business address of Mr.
Sam Hanhui Sun is 64 Donggong Street, Dongcheng District, Beijing 100009, People’s Republic of China. The business address of Mr. Hao Li is Building G2, No. 56 Jianguo Road, Chaoyang District, Beijing 100022, the People’s Republic of China. The business address of Mr.
Term of the Options . The term of each option grant shall be stated in the award agreement, provided that the term shall not exceed ten years from the date of the grant. 143 Table of Contents Transfer Restrictions .
Term of the Options . The term of each option grant shall be stated in the award agreement, provided that the term shall not exceed ten years from the date of the grant. Transfer Restrictions .
We have not made adequate contributions to our employee benefits plans as required by the applicable PRC laws and regulations, including potential late fees or fines. See “Item 3. Key Information—D.
We have not made adequate contributions to our employee benefits plans as required by the applicable PRC laws and regulations, which may subject us to penalties including potential late fees or fines. See “Item 3. Key Information—D.
As required by PRC regulations, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution 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.
We plan to hire additional employees as we expand our business. As required by PRC regulations, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution 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.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Committees of the Board of Directors We have established four committees under the board of directors: an audit committee, a compensation committee, a nominating and corporate governance committee, and a cybersecurity risk management committee.
He is also the founder of our parent company, CreditEase, and has served as the chairman of the board of directors and chief executive officer of CreditEase since its inception in 2006. In December 2014, Mr.
Ning Tang is our founder, and has served as our executive chairman of the board of directors since our inception and our chief executive officer since July 2019. He is also the founder of our parent company, CreditEase, and has served as the chairman of the board of directors and chief executive officer of CreditEase since its inception in 2006.
Our officers are elected by and serve at the discretion of the board of directors. D. Employees As of December 31, 2020, 2021 and 2022, we had a total of 13,728, 3,797 and 1,064 employees, respectively.
Our officers are elected by and serve at the discretion of the board of directors. D. Employees As of December 31, 2021, 2022 and 2023, our company and the VIEs had a total of 3,797, 1,064 and 754 employees, respectively.
As of March 31, 2023, 31,805,539 of our outstanding ordinary shares were held by one record holder in the United States, which is the depositary of our ADS program, representing 17.9% of our total issued and outstanding ordinary shares as of such date. None of our existing shareholders has different voting rights from other shareholders.
As of March 31, 2024, 28,315,890 of our outstanding ordinary shares were held by one record holder in the United States, which is the depositary of our ADS program, representing 16.3% of our total issued and outstanding ordinary shares as of such date. None of our existing shareholders has different voting rights from other shareholders.
Prior to that, he was the managing executive director at Harvard Center Shanghai. Mr. Huang has also served as an independent non-executive director and from September 2022 as Non-executive Chairman of the Board of SOHO China, a company listed on the Hong Kong Stock Exchange, since September 2022, and previously, an independent non-executive director of SOHO China since August 2018.
Mr. Huang has also served as an independent non-executive director and from September 2022 as Non-executive Chairman of the Board of SOHO China, a company listed on the Hong Kong Stock Exchange, since September 2022, and previously, an independent non-executive director of SOHO China since August 2018. Mr.
Pursuant to the 2017 Plan, the maximum aggregate number of shares which may be issued is 6,060,900. As of March 31, 2023, 17,182 restricted share units were outstanding under the 2017 Plan. Pursuant to the 2020 Plan, the maximum number of shares that may be issued pursuant to all awards under the 2020 Plan is 18,560,000 ordinary shares.
Pursuant to the 2017 Plan, the maximum aggregate number of shares which may be issued is 6,060,900. As of March 31, 2024, there was no restricted share unit outstanding under the 2017 Plan. Pursuant to the 2020 Plan, the maximum number of shares that may be issued pursuant to all awards under the 2020 Plan is 18,560,000 ordinary shares.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially ​ ​ Owned as of March 31, 2023 ​ ​ Number ​ %† Directors and Executive Officers**: ​ ​ ​ ​ Ning Tang (1) 62,244,893 35.1 Tina Ju (2) — — Qing Li * * Jingsheng Huang * * Sam Hanhui Sun * * Hao Li * * Hiu Fung Vincent Pang ​ — ​ — Na Mei * * George Liu — — All Directors and Executive Officers as a Group 62,506,721 35.3 Principal Shareholders: ​ ​ CreditEase Holdings (Cayman) Limited (3) 143,421,412 80.9 * Less than 1% of our total outstanding shares. ** Except for Ms.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially ​ ​ Owned as of March 31, 2024 ​ ​ Number ​ %† Directors and Executive Officers**: ​ ​ ​ ​ Ning Tang (1) 62,244,893 35.8 Tina Ju (2) — — Qing Li * * Jingsheng Huang * * Sam Hanhui Sun * * Hao Li * * Hiu Fung Vincent Pang ​ — ​ — Na Mei * * Bin Yang * * All Directors and Executive Officers as a Group 62,645,921 36.0 Principal Shareholder: ​ ​ CreditEase Holdings (Cayman) Limited (3) 143,421,412 82.5 * Less than 1% of our total outstanding shares. 146 Table of Contents ** Except for Ms.
Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Sam Hanhui Sun, Hiu Fung Vincent Pang and Hao Li. Sam Hanhui Sun is the chairman of our audit committee.
We have adopted a charter for each of the four committees. Each committee’s members and functions are described below: Audit Committee . Our audit committee consists of Sam Hanhui Sun, Hiu Fung Vincent Pang and Hao Li. Sam Hanhui Sun is the chairman of our audit committee.
The calculations in the table below are based on 177,225,898 ordinary shares outstanding as of March 31, 2023. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 173,869,086 ordinary shares outstanding as of March 31, 2024. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Huang served as an independent director of Besunyen Holdings Company Limited, a company listed on the Hong Kong Stock Exchange, until June 2019. Mr. Huang received an M.B.A degree from Harvard Business School, an M.A. from Stanford University and a B.A. from Beijing Foreign Studies University. Mr. Sam Hanhui Sun has served as our director since December 17, 2015. Mr.
Huang served as an independent director of Besunyen Holdings Company Limited, a company listed on the Hong Kong Stock Exchange, until June 2019. Mr. Huang received an M.B.A degree from Harvard Business School, an M.A. from Stanford University and a B.A. from Beijing Foreign Studies University. 139 Table of Contents Mr.
The total number of ordinary shares outstanding as of March 31, 2023 is 177,225,898. (1) Mr. Ning Tang does not hold any ordinary share in our company directly. Mr.
The total number of ordinary shares outstanding as of March 31, 2024 is 173,869,086. (1) Mr. Ning Tang does not hold any ordinary share in our company directly. Mr.
Tang, through a trust controlled by him, holds all equity interest of a British Virgin Islands company, which in turn owns 43.4% of the total outstanding shares of CreditEase, our parent company, on an as-converted basis. (2) Ms.
Tang, through a trust controlled by him, holds all equity interest of a British Virgin Islands company, which in turn owns 43.4% of the total outstanding shares of CreditEase, our parent company, on an as-converted basis. (2) Ms. Tina Ju is a founding and managing partner of KPCB China, which holds certain equity interest in CreditEase through its affiliated funds.
Li received a Ph.D. in finance from Columbia University and a B.S. in mathematics from Peking University. 140 Table of Contents Mr. Jingsheng Huang has served as our director since December 17, 2015. Mr. Huang is a Senior Advisor to CreditEase on impact and private equity investment since January 1, 2020.
Li received a Ph.D. in finance from Columbia University and a B.S. in mathematics from Peking University. Mr. Jingsheng Huang has served as our director since December 17, 2015. Mr. Huang is a Senior Advisor to CreditEase on impact and private equity investment since January 1, 2020. Prior to that, he was the managing executive director at Harvard Center Shanghai.
She brought in seasoned experience in finance management, taxation, internal control and consulting, along with years of first-hand exposure dealing with publicly listed companies in China and abroad. Ms. Mei obtained her bachelor’s degree from Capital Economic University and is a certified public accountant. 141 Table of Contents Mr.
She brought in seasoned experience in finance management, taxation, internal control and consulting, along with years of first-hand exposure dealing with publicly listed companies in China and abroad. Ms. Mei obtained her bachelor’s degree from Capital Economic University and is a certified public accountant. Ms. Bin Yang has served as our chief human resources officer since 2023. Ms.
Mr. Hao Li has served as our director since January 1, 2020. Mr. Li is the founder and chairman of the board of CTG Group, a human resource services provider in China. As a well-regarded business pioneer, Mr.
Sun received a B.E. in business administration from Beijing Institute of Technology in 1993. He is a Certified Public Accountant in China. Mr. Hao Li has served as our director since January 1, 2020. Mr. Li is the founder and chairman of the board of CTG Group, a human resource services provider in China. As a well-regarded business pioneer, Mr.
He is also a member of the Phi Beta Kappa Society. Ms. Tina Ju has served as our director since January 2015. Ms. Ju is a founding and managing partner of KPCB China and TDF Capital, and currently a managing member of the general partner of both funds.
He is also a member of the Phi Beta Kappa Society. Ms. Tina Ju has served as our director since January 2015. Ms. Ju is a founding and managing partner of KPCB China and TDF Capital. She has more than 35 years of experience in venture capital, investment banking and operations. Ms.
Ning Tang, our executive chairman, and a few investors, including IDG, KPCB China and Morgan Stanley Private Equity Asia, through their respective investment vehicles.
(3) CreditEase Holdings (Cayman) Limited is incorporated in the Cayman Islands. CreditEase is owned by Mr. Ning Tang, our executive chairman, and a few investors, including IDG, KPCB China and Morgan Stanley Private Equity Asia, through their respective investment vehicles.
Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of this annual report: ​ ​ ​ ​ ​ ​ Directors and Executive Officers* Age Position/Title Ning Tang ​ 49 ​ Executive Chairman and Chief Executive Officer Tina Ju 58 Director Qing Li 46 Director Jingsheng Huang 65 Director Sam Hanhui Sun 50 Independent Director Hao Li 44 Independent Director Hiu Fung Vincent Pang 53 Independent Director Na Mei 42 Chief Financial Officer George Liu 60 Chief Risk Officer * We also have a non-voting observer on our board of directors, Mr.
Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of this annual report: ​ ​ ​ ​ ​ ​ Directors and Executive Officers* Age Position/Title Ning Tang ​ 50 ​ Executive Chairman and Chief Executive Officer Tina Ju 59 Director Qing Li 47 Director Jingsheng Huang 66 Director Sam Hanhui Sun 51 Independent Director Hao Li 45 Independent Director Hiu Fung Vincent Pang 54 Independent Director Na Mei 43 Chief Financial Officer Bin Yang 46 Chief Human Resources Officer ​ 138 Table of Contents Mr.
Compensation In 2022, we paid an aggregate of approximately RMB6.0 million (US$0.9 million) in cash to our directors and officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
George Liu is 1912 Liesfeld Pky, Glen Allen, VA 23060, USA. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 31, 2023.
Hiu Fung Vincent Pang is 502, Building 3, Park 1872, Balizhuangbeili, Chaoyang District, Beijing 100025, the People’s Republic of China. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 31, 2024.
Each party to a director agreement may terminate the agreement through a 30-day prior written notice or such shorter period as the parties may agree upon. 142 Table of Contents Share Incentive Plans We have adopted three share incentive plans, namely, the 2015 Share Incentive Plan, 2017 Share Incentive Plan, and 2020 Share Incentive Plan, which allow us to offer a variety of share-based incentive awards to employees, officers, directors and individual consultants who render services to us.
Share Incentive Plans We have adopted three share incentive plans, namely, the 2015 Share Incentive Plan, 2017 Share Incentive Plan, and 2020 Share Incentive Plan, which allow us to offer a variety of share-based incentive awards to employees, officers, directors and individual consultants who render services to us.
Ju received a bachelor’s degree in industrial engineering and operations research from the University of California, Berkeley and an MBA degree from Harvard Business School. Mr. Qing Li has served as our director since December 17, 2015. Mr. Li is the founder and chief executive officer of Sciencast Management L.P., a limited partnership formed in Delaware.
Ju currently serves as a director on the board of various private companies. Ms. Ju received a bachelor’s degree in industrial engineering and operations research from UC Berkeley and an MBA from Harvard Business School. Mr. Qing Li has served as our director since December 17, 2015. Mr.
Our board of directors has the authority to amend or terminate the plan subject to shareholder approval to the extent necessary to comply with applicable law. However, no such action may impair the rights of any award recipient unless agreed by the recipient. C. Board Practices Board of Directors Our board of directors consists of seven directors.
Our board of directors has the authority to amend or terminate the plan subject to shareholder approval to the extent necessary to comply with applicable law.
Sun currently serves as an independent director and audit committee chair of iQIYI Inc., a Nasdaq-listed company, and an independent director and audit committee chair of Zhihu Inc., a NYSE-listed company. From January 2010 to September 2015, Mr.
Sam Hanhui Sun has served as our director since December 17, 2015. Mr. Sun currently serves as an independent director and audit committee chair of iQIYI Inc., a Nasdaq-listed company, an independent director and audit committee chair of Zhihu Inc., a NYSE-listed company, and an independent director of YSB Inc., a company listed on the Hong Kong Stock Exchange.
Ju spent 11 years in investment banking at Deutsche Bank with her last position as the head of TMT and Transport Asia, Merrill Lynch with her last position as head of Asia Technology and Corporate Finance Team, and Goldman Sachs. Ms. Ju currently serves as a director on the board of various private companies. Ms.
Ju began her venture capital career in 1999 and co-founded VTDF China in 2000 and KPCB China in 2007. Earlier in her career, Ms. Ju spent 10 years in investment banking at Deutsche Bank as the head of TMT and Transport Asia, Merrill Lynch as head of Asia Technology and Corporate Finance Team, and Goldman Sachs. Ms.
The following table sets forth the breakdown of our employees as of December 31, 2022 by function: ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Employees ​ % of Total Function ​ ​ ​ ​ Sales and Marketing 900 84.7 Operations 11 1.0 Technology 17 1.6 Risk Management 92 8.6 General and Administrative 25 2.3 Product Development 19 1.8 Total 1,064 100.0 ​ As of December 31, 2022, all of our employees are based in China.
The following table sets forth the breakdown of our employees as of December 31, 2023 by function: ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Employees ​ % of Total Function ​ ​ ​ ​ Sales and Marketing 444 58.9 Operations 34 4.5 Technology 85 11.3 Risk Management 9 1.2 General and Administrative 74 9.8 Product Development 108 14.3 Total 754 100.0 ​ As of December 31, 2023, all of our employees are based in China. 145 Table of Contents We believe our company and the VIEs offer our employees competitive compensation packages and a work environment that encourages initiative and is based on merit, and as a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team.
Removed
Kwok King Kingsley Chan, a managing director at Morgan Stanley Private Equity Asia. Mr. Ning Tang is our founder, and has served as our executive chairman of the board of directors since our inception and our chief executive officer since July 2019.
Added
Li is the founder and chief executive officer of Sciencast Management L.P., a limited partnership formed in Delaware. Prior to founding Sciencast, Mr.
Removed
Tang was elected to be the chairman of the Beijing P2P Association, founded by CreditEase together with approximately 30 member enterprises and the first association in the industry in China that is officially registered and overseen by regulators. In July 2011, Mr.
Added
Yang initially joined the company in 2015 as the head of the human resources department and possesses over 10 years of experience in human resource management. Prior to joining the company, she previously worked at JUPITER, C2MICRO, and 360. B. Compensation In 2023, we paid an aggregate of approximately RMB6.1 million (US$0.9 million) in cash to our directors and officers.
Removed
She has more than 25 years of experience in venture capital, investment banking and operations. Ms. Ju began her venture capital career in 1999. She co-founded VTDF China in 2000 and KPCB China in 2007. Earlier in her career, Ms.
Added
Each party to a director agreement may terminate the agreement through a 30-day prior written notice or such shorter period as the parties may agree upon.
Removed
Sun currently serves as an independent director and audit committee chair of CAR Inc., a company listed on the Hong Kong Stock Exchange and an independent director and audit committee chair of iQIYI Inc., a Nasdaq-listed company. Mr. Sun received a B.E. in business administration from Beijing Institute of Technology in 1993. He is a Certified Public Accountant in China.
Added
However, no such action may impair the rights of any award recipient unless agreed by the recipient. 142 Table of Contents Clawback Policy On November 16, 2023, our board of directors adopted an Incentive Compensation Recoupment Policy (the “Clawback Policy”) providing for the recoupment of certain incentive compensation from current and former executive officers of our company in the event the company is required to restate any of its financial statements filed with the SEC under the Exchange Act in order to correct an error that is material to the previously-issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.
Removed
George Liu has served as our chief risk officer since December 2020. Dr. Liu has decades of experience in data and risk management, both in China and the United States.
Added
The adoption of the Clawback Policy was mandated by the New York Stock Exchange Listed Company Manual introduced pursuant to Exchange Act Rule 10D-1. A copy of the Clawback Policy has been filed herewith as Exhibit 97.1. C. Board Practices Board of Directors Our board of directors consists of seven directors.
Removed
Before joining the Company, he took a series of executive roles and built rich experience in entrepreneurship, including serving as the Chief Data Executive and VP for Mashang Consumer Finance, a leading consumer finance company in China. Dr.
Added
Cybersecurity Risk Management Committee . We established our cybersecurity risk management committee in March 2024. Our cybersecurity risk management committee consists of Ning Tang, Sam Hanhui Sun and Hao Li. Ning Tang is the chairman of the committee. Sam Hanhui Sun and Hao Li satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE.
Removed
Liu worked at Capital One for over a decade where he served as the Senior Director of Decision Science and led the efforts of risk control for the company’s credit card business before returning to China. Dr.
Added
The cybersecurity risk management committee assists the board of directors in fulfilling the board’s oversight responsibility with respect to the risks related to our company’s information technology use and data protection, including but not limited to cybersecurity and privacy.
Removed
Liu. received his Ph.D. in statistical science from the Pennsylvania State University and received his two master’s degrees, one in mathematics and one in statistical science, from the University of Pittsburgh and the University of Science and Technology of China respectively. B.
Added
The cybersecurity risk management committee is responsible for, among other things: ● quality and effectiveness of the policies and procedures governing information technology and network systems, including relating to data governance, incident response procedures and disaster recovery capabilities, and product security; ● technology senior management teams’ priorities for its information technology and engineering security functions; ● management of compliance risks and audits related to its information technology and network systems; ● internal access controls and audits relating to cyber and information security; ● disclosures in SEC filings related to its information technology and network systems; and 144 Table of Contents ● cyber insurance policies and coverage.
Removed
As of March 31, 2023, 3,332,246 restricted share units were outstanding under the 2020 Plan.
Removed
We believe we offer our employees competitive compensation packages and a work environment that encourages initiative and is based on merit, and as a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team. We plan to hire additional employees as we expand our business.
Removed
Hiu Fung Vincent Pang is 502, Building 3, Park 1872, Balizhuangbeili, Chaoyang District, Beijing 100025, the People’s Republic of China. The business address of Mr.
Removed
Tina Ju is a founding and managing partner of KPCB China, which holds certain equity interest in CreditEase through its affiliated funds. 147 Table of Contents (3) CreditEase Holdings (Cayman) Limited is incorporated in the Cayman Islands, and its business address is 3/F, Winterless Center Building A, Chaoyang District, Beijing, People’s Republic of China. CreditEase is owned by Mr.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCreditEase agrees not to compete with us during the non-competition period in any of the following business or any business that is of the same nature as the following business, in each case unless as may otherwise be approved in writing by the audit committee of the board of directors of Yiren Digital: (i) the online holistic wealth business targeting the mass affluent (which refers to individuals with RMB1,000,000 to RMB10,000,000 investable financial assets), unsecured and secured consumer lending, financial leasing, small and medium enterprise (SME) lending and other related services and businesses, conducted by Yiren Digital and its subsidiaries and the consolidated variable interest entities anywhere in the world, and (ii) other businesses that we and CreditEase may mutually agree from time to time to be part of the business that CreditEase cannot compete with us .
Biggest changeCreditEase agrees not to compete with us during the non-competition period in any of the following business or any business that is of the same nature as the following business, in each case unless as may otherwise be approved in writing by the audit committee of the board of directors of Yiren Digital: (i) the online holistic wealth business targeting the mass affluent (which refers to individuals with RMB1,000,000 to RMB10,000,000 investable financial assets), unsecured and secured consumer lending, financial leasing, small and medium enterprise (SME) lending and other related services and businesses, conducted by Yiren Digital and its subsidiaries and the consolidated variable interest entities anywhere in the world, and (ii) other businesses that we and CreditEase may mutually agree from time to time to be part of the business that CreditEase cannot compete with us. 150 Table of Contents The second amended and restated non-competition agreement also provides for a mutual non-solicitation obligation that neither CreditEase nor we may, during the non-competition period, hire or solicit for hire, any active employees of or individuals providing consulting services to the other party, or any former employees of or individuals providing consulting services to the other party within six months of the termination of their employment or consulting services, without the other party’s consent, except for solicitation activities through generalized non-targeted advertisement not directed to such employees or individuals that do not result in a hiring within the non-competition period.
Expenses of services provided by CreditEase’s affiliates were recorded as service expenses charged by related parties in 2020, 2021 and 2022 based on various agreements that we entered into with relevant affiliates of CreditEase. As part of a business realignment with CreditEase in 2019, we acquired CreditEase Puhui, an entity managing CreditEase’s national service network.
Expenses of services provided by CreditEase’s affiliates were recorded as service expenses charged by related parties in 2021, 2022 and 2023 based on various agreements that we entered into with relevant affiliates of CreditEase. As part of a business realignment with CreditEase in 2019, we acquired CreditEase Puhui, an entity managing CreditEase’s national service network.
For a description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the Consolidated Variable Interest Entities.” 152 Table of Contents Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation—Employment Agreements and Indemnification Agreements.” C. Interests of Experts and Counsel Not applicable.
For a description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the Consolidated Variable Interest Entities.” Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation—Employment Agreements and Indemnification Agreements.” C. Interests of Experts and Counsel Not applicable.
We also operated relevant business through contractual arrangements among YouRace Hengchuang, Hengcheng and the shareholders of Hengcheng, which had been terminated on December 31, 2020. We used to have contractual arrangements among YouRace Hengchuang, Tianjin Linyang and the shareholders of Tianjin Linyang, and such contractual arrangements were terminated on December 5, 2022.
We also operated relevant business through contractual arrangements among YouRace Hengchuang, Hengcheng and the shareholders of Hengcheng, which was terminated on December 31, 2020. We used to have contractual arrangements among YouRace Hengchuang, Tianjin Linyang and the shareholders of Tianjin Linyang, and such contractual arrangements were terminated on December 5, 2022.
As a result, we operate our relevant business through contractual arrangements among YouRace Hengchuang and Hengyuda, our PRC subsidiaries, Yiren Wealth and CreditEase Puhui, the consolidated variable interest entities, and the shareholders of Yiren Wealth and CreditEase Puhui.
As a result, we operate our relevant business through contractual arrangements among YouRace Hengchuang and Hengyuda, our PRC subsidiaries, Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities, and the shareholders of Yiren Financial Information and CreditEase Puhui.
Nil, nil and nil were repaid to us for the years ended December 31, 2020, 2021 and 2022, respectively. For the years ended December 31, 2020, 2021 and 2022, CreditEase, its subsidiaries and affiliates provided loans to us with an amount of RMB361.5 million, RMB2.6 million and nil, respectively.
Nil, nil and nil were repaid to us for the years ended December 31, 2021, 2022 and 2023, respectively. For the years ended December 31, 2021, 2022 and 2023, CreditEase, its subsidiaries and affiliates provided loans to us with an amount of RMB2.6 million, nil and nil, respectively.
This agreement became effective on March 25, 2019, the date of the amended and restated intellectual property license agreement, and, unless terminated pursuant to the express provisions of the agreement or as agreed by CreditEase and us in writing, will expire on the earlier of (i) March 25, 2049, the thirtieth anniversary of the date of the agreement or (ii) one year after the control ending date. 150 Table of Contents Share Subscription Agreement On March 25, 2019, we entered into a share subscription agreement with CreditEase.
This agreement became effective on March 25, 2019, the date of the amended and restated intellectual property license agreement, and, unless terminated pursuant to the express provisions of the agreement or as agreed by CreditEase and us in writing, will expire on the earlier of (i) March 25, 2049, the thirtieth anniversary of the date of the agreement or (ii) one year after the control ending date.
Amended and Restated Transitional Services Agreement Under the amended and restated transitional services agreement, CreditEase agrees that, during the service period, as described below, CreditEase will provide us with various corporate support services, including but not limited to: ● operational management support; ● administrative support; ● legal support; ● human resources support; ● corporate communications; ● marketing; ● global security & continuity; and ● accounting, internal control and internal audit support. 149 Table of Contents CreditEase also may provide us with additional services that we and CreditEase may identify from time to time in the future.
Amended and Restated Transitional Services Agreement Under the amended and restated transitional services agreement, CreditEase agrees that, during the service period, as described below, CreditEase will provide us with various corporate support services, including but not limited to: ● operational management support; ● administrative support; 148 Table of Contents ● legal support; ● human resources support; ● corporate communications; ● marketing; ● global security & continuity; and ● accounting, internal control and internal audit support.
Pursuant to the share subscription agreement, CreditEase transferred to our company certain of its businesses, including online holistic wealth targeting the mass affluent, unsecured and secured consumer lending, SME lending, and other related services or businesses.
Share Subscription Agreement On March 25, 2019, we entered into a share subscription agreement with CreditEase. Pursuant to the share subscription agreement, CreditEase transferred to our company certain of its businesses, including online holistic wealth targeting the mass affluent, unsecured and secured consumer lending, SME lending, and other related services or businesses.
Nil, RMB29.3 million and RMB182.0 million (US$26.4 million) were repaid by us for the years ended December 31, 2020, 2021 and 2022, respectively. Contractual Arrangements with the Consolidated Variable Interest Entities and Their Respective Shareholders PRC laws and regulations currently restrict foreign ownership and investment in value-added telecommunications services in China.
RMB29.3 million, RMB182.0 million and RMB195.8 million (US$27.6 million) were repaid by us for the years ended December 31, 2021, 2022 and 2023, respectively. 151 Table of Contents Contractual Arrangements with the Consolidated Variable Interest Entities and Their Respective Shareholders PRC laws and regulations currently restrict foreign ownership and investment in value-added telecommunications services in China.
The master transaction agreement also contains indemnification provisions under which we and CreditEase agree to indemnify each other with respect to breaches of the master transaction agreement or any related inter-company agreement. 148 Table of Contents In addition, we agree to indemnify CreditEase against liabilities arising from misstatements or omissions in the prospectus for our initial public offering or the registration statement of which it is a part, except for misstatements or omissions relating to information that CreditEase provided to us specifically for inclusion in the prospectus for our initial public offering or the registration statement of which it forms a part.
In addition, we agree to indemnify CreditEase against liabilities arising from misstatements or omissions in the prospectus for our initial public offering or the registration statement of which it is a part, except for misstatements or omissions relating to information that CreditEase provided to us specifically for inclusion in the prospectus for our initial public offering or the registration statement of which it forms a part.
The information about costs and expenses incurred for services provided by CreditEase, its subsidiaries and affiliates for the years ended December 31, 2020, 2021 and 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB ​ RMB ​ RMB ​ US$ Customers acquisition and referral services 387,843 ​ 281,633 ​ 216,958 ​ 31,456 System support services 164,671 ​ 135,118 ​ 100,635 ​ 14,591 Credit assessment services 8,022 ​ 56,957 ​ 110,566 ​ 16,031 Collection services 421,726 17,943 22,735 ​ 3,296 Other services ​ 40,956 ​ — ​ 91 ​ 13 Total costs and expenses 1,023,218 491,651 450,985 ​ 65,387 ​ Revenue derived from services provided by us to CreditEase, its subsidiaries and affiliates for the years ended December 31, 2020, 2021 and 2022 is recorded as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB ​ RMB ​ RMB ​ US$ Customers acquisition and referral services 138,438 ​ 442,570 ​ 409,688 ​ 59,399 Technical services — ​ 85,832 ​ — ​ — Post-loan management services — ​ 44,586 ​ — ​ — Other services ​ 7,004 ​ 170 ​ 1,322 ​ 192 Total revenue 145,442 ​ 573,158 ​ 411,010 ​ 59,591 ​ For the years ended December 31, 2020, 2021 and 2022, we provided loans to CreditEase, its subsidiaries and affiliates with an amount of nil, nil and RMB200.0 million (US$29.0 million), respectively.
The information about costs and expenses incurred for services provided by CreditEase, its subsidiaries and affiliates for the years ended December 31, 2021, 2022 and 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB ​ RMB ​ RMB ​ US$ Customers acquisition and referral services 281,633 ​ 216,958 ​ 175,471 ​ 24,714 System support services 135,118 ​ 100,635 ​ 72,035 ​ 10,146 Credit assessment services 56,957 ​ 110,566 ​ 118,395 ​ 16,676 Collection services 17,943 22,735 29,188 ​ 4,111 Other services ​ — ​ 91 ​ 1,824 ​ 257 Total costs and expenses 491,651 450,985 396,913 ​ 55,904 ​ Revenue derived from services provided by us to CreditEase, its subsidiaries and affiliates for the years ended December 31, 2021, 2022 and 2023 is recorded as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB ​ RMB ​ RMB ​ US$ Customers acquisition and referral services 442,570 ​ 409,688 ​ 140,782 ​ 19,829 Technical services 85,832 ​ — ​ — ​ — Post-loan management services 44,586 ​ — ​ — ​ — Other services ​ 170 ​ 1,322 ​ 813 ​ 115 Total revenue 573,158 ​ 411,010 ​ 141,595 ​ 19,943 ​ For the years ended December 31, 2021, 2022 and 2023, we provided loans to CreditEase, its subsidiaries and affiliates with an amount of nil, RMB200.0 million and nil, respectively.
The price to be paid for the services provided under the amended and restated transitional service agreement will be the actual direct and indirect costs of providing such services.
CreditEase also may provide us with additional services that we and CreditEase may identify from time to time in the future. The price to be paid for the services provided under the amended and restated transitional service agreement will be the actual direct and indirect costs of providing such services.
On December 31, 2020, we entered into a set of definitive agreements with CreditEase regarding a business restructuring between CreditEase and us. These agreements include, among other things, a restructuring agreement and a second amended and restated non-competition agreement (which amended and restated the amended and restated non-competition agreement in its entirety). The following are summaries of the above-mentioned agreements.
These agreements include, among other things, a share subscription agreement, an amended and restated transitional service agreement, an amended and restated non-competition agreement, an amended and restated cooperation framework agreement, and an amended and restated intellectual property license agreement. 147 Table of Contents On December 31, 2020, we entered into a set of definitive agreements with CreditEase regarding a business restructuring between CreditEase and us.
This agreement became effective on March 25, 2019, the date of the amended and restated cooperation framework agreement, and, unless terminated pursuant to the express provisions of the agreement or as agreed by CreditEase and us in writing, will expire on the earlier of (i) March 25, 2034, the fifteenth anniversary of the date of the agreement, or (ii) one year after the control ending date.
This agreement became effective on March 25, 2019, the date of the amended and restated cooperation framework agreement, and, unless terminated pursuant to the express provisions of the agreement or as agreed by CreditEase and us in writing, will expire on the earlier of (i) March 25, 2034, the fifteenth anniversary of the date of the agreement, or (ii) one year after the control ending date. 149 Table of Contents Amended and Restated Intellectual Property License Agreement CreditEase and we agree, to the extent permitted under applicable laws and regulations, to cooperate in sharing information and data collected from each party’s business operation, including without limitation borrower and investor information and credit and loan data, as reasonably requested by the requesting party.
The second amended and restated non-competition agreement also provides for a mutual non-solicitation obligation that neither CreditEase nor we may, during the non-competition period, hire or solicit for hire, any active employees of or individuals providing consulting services to the other party, or any former employees of or individuals providing consulting services to the other party within six months of the termination of their employment or consulting services, without the other party’s consent, except for solicitation activities through generalized non-targeted advertisement not directed to such employees or individuals that do not result in a hiring within the non-competition period. 151 Table of Contents Transactions with CreditEase Affiliated Entities Prior to our establishment, our online consumer finance marketplace business was carried out by various subsidiaries and the consolidated variable interest entities of CreditEase, which provided us with origination and servicing, sales and marketing and general and administrative services.
Transactions with CreditEase Affiliated Entities Prior to our establishment, our online consumer finance marketplace business was carried out by various subsidiaries and the consolidated variable interest entities of CreditEase, which provided us with origination and servicing, sales and marketing and general and administrative services.
Master Transaction Agreement The master transaction agreement contains provisions relating to our carve-out from CreditEase.
These agreements include, among other things, a restructuring agreement and a second amended and restated non-competition agreement (which amended and restated the amended and restated non-competition agreement in its entirety). The following are summaries of the above-mentioned agreements: Master Transaction Agreement The master transaction agreement contains provisions relating to our carve-out from CreditEase.
Removed
These agreements include, among other things, a share subscription agreement, an amended and restated transitional service agreement, an amended and restated non-competition agreement, an amended and restated cooperation framework agreement, and an amended and restated intellectual property license agreement.
Added
The master transaction agreement also contains indemnification provisions under which we and CreditEase agree to indemnify each other with respect to breaches of the master transaction agreement or any related inter-company agreement.
Removed
Amended and Restated Intellectual Property License Agreement Under the amended and restated intellectual property license agreement, CreditEase and we grant to each other and each party’s respective subsidiaries and the consolidated variable interest entities a worldwide, royalty-free, fully paid-up, non-sublicensable, non-transferable, limited, non-exclusive license of intellectual property owned by the licensing party to use, reproduce, modify, prepare derivative works of, perform, display, or otherwise exploit, except for certain trademarks with regard to which CreditEase agrees to grant us a worldwide, royalty-free, fully paid-up, sublicensable, transferable, unlimited and exclusive license to use, reproduce, modify, prepare derivative works of, perform, display, sublicense, transfer or otherwise exploit, until and unless such trademarks are transferred to our company or any of our subsidiaries or the consolidated variable interest entities.
Added
This information sharing is free of charge unless otherwise mutually agreed in writing.
Removed
CreditEase and we also agree, to the extent permitted under applicable laws and regulations, to cooperate in sharing information and data collected from each party’s business operation, including without limitation borrower and investor information and credit and loan data, as reasonably requested by the requesting party. This information sharing is free of charge unless otherwise mutually agreed in writing.

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