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What changed in Yiren Digital Ltd.'s 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of Yiren Digital Ltd.'s 2023 and 2024 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 2024 report.

+717 added−628 removedSource: 20-F (2025-04-28) vs 20-F (2024-05-15)

Top changes in Yiren Digital Ltd.'s 2024 20-F

717 paragraphs added · 628 removed · 517 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

187 edited+64 added−25 removed729 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, 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.
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, 2024 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ The Company Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB (in millions) Net revenue — 5,065 1,956 — (1,215) 5,806 Net (loss)/income 1,582 1,606 (1) 21 (1,626) 1,582 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ The Company Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB (in millions) Net revenue — 3,610 2,878 — (1,592) 4,896 Net (loss)/income 2,080 904 1,335 (86) (2,153) 2,080 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Variable ​ Financing ​ ​ ​ Consolidated ​ The Company Subsidiaries Interest Entities Entities Eliminations Total ​ ​ RMB (in millions) Net revenue — 2,063 2,541 — (1,169) 3,435 Net (loss)/income 1,195 370 848 17 (1,235) 1,195 ​ 11 Table of Contents Selected Condensed Consolidated Balance Sheets of Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ The Company Subsidiaries Entities Entities Eliminations Total ​ ​ RMB (in millions) Cash and cash equivalents 159 2,524 1,158 — — 3,841 Restricted cash — 127 25 108 — 260 Trading securities ​ — ​ — ​ 77 ​ — ​ — ​ 77 Accounts receivable — 513 54 — — 567 Guarantee receivable ​ — ​ 474 ​ — ​ — ​ — ​ 474 Contract assets, net — 881 128 — — 1,009 Prepaid expenses and other assets — 2,323 29 10 — 2,362 Loans at fair value — 40 — 382 — 422 Financing receivables — 15 3 — — 18 Amounts due from related parties 1,096 5,062 3,737 — (6,507) 3,388 Held-to-maturity investments — — — 7 — 7 Other financial investments — 648 — — (295) 353 Property, equipment and software, net — 54 59 — (34) 79 Deferred tax assets — — 77 — — 77 Right-of-use assets — 36 4 — — 40 Investments in its subsidiaries, the consolidated VIEs and equity investees 8,363 88 — — (8,442) 9 Total assets 9,618 12,785 5,351 507 (15,278) 12,983 Accounts payable — 30 12 1 — 43 Amounts due to related parties 64 3,546 3,018 8 (6,506) 130 Guarantee liabilities-stand ready ​ — ​ 607 ​ — ​ — ​ — ​ 607 Guarantee liabilities-contingent ​ — ​ 579 ​ — ​ — ​ — ​ 579 Deferred revenue — 9 — — — 9 Payable to investors at fair value — — — 654 (286) 368 Accrued expenses and other liabilities 12 529 1,081 — — 1,622 Deferred tax liabilities — 32 9 — — 41 Lease liabilities — 37 4 — — 41 Total liabilities ​ 76 ​ 5,369 ​ 4,124 ​ 663 ​ (6,792) ​ 3,440 ​ 12 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ The Company 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 Guarantee receivable — 3 — — — 3 Contract assets, net — 824 154 — — 978 Prepaid expenses and other assets — 372 46 6 — 424 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 Other financial 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 Guarantee liabilities-stand ready ​ — ​ 9 ​ — ​ — ​ — ​ 9 Guarantee liabilities-contingent ​ — ​ 28 ​ — ​ — ​ — ​ 28 Deferred revenue — 54 — — — 54 Payable to investors at fair value — — — 731 (285) 446 Accrued expenses and other liabilities 7 211 1,243 2 — 1,463 Deferred tax liabilities — 102 20 — — 122 Lease liabilities — 14 10 — — 24 Total liabilities ​ 7 ​ 1,338 ​ 3,916 ​ 749 ​ (3,819) ​ 2,191 ​ 13 Table of Contents Selected Condensed Consolidated Cash Flows Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ Variable Backed ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ ​ The Company ​ Subsidiaries ​ Entities ​ Entities ​ Eliminations ​ Total ​ ​ RMB (in millions) Net cash provided by operating activities ​ 240 ​ 665 ​ 503 ​ 16 ​ — ​ 1,424 Net cash provided by/(used in) investing activities ​ 95 ​ (2,843) ​ (2,423) ​ (160) ​ 2,218 ​ (3,113) Net cash (used in)/provided by financing activities (198) 2,414 (260) (15) (2,218) (277) Effect of foreign exchange rate changes (1) 10 — — — 9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable ​ Backed ​ ​ ​ ​ ​ ​ ​ ​ Company ​ Interest ​ Financing ​ ​ ​ Consolidated ​ The Company Subsidiaries Entities Entities Eliminations Total ​ ​ RMB (in millions) Net cash (used in)/provided by operating activities ​ (25) ​ 791 ​ 1,379 ​ 26 ​ — ​ 2,171 Net cash provided by/ (used in) investing activities ​ 72 ​ 102 ​ 793 ​ (900) ​ 33 ​ 100 Net cash (used in)/provided by financing activities (48) 64 (1,604) 1,052 (33) (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 ​ The Company Subsidiaries Entities Entities Eliminations Total ​ ​ RMB (in millions) Net cash (used in)/provided by operating activities ​ (23) ​ 493 ​ 1,375 ​ 4 ​ — ​ 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) (10) (400) (6) (69) (489) Effect of foreign exchange rate changes 1 1 — — — 2 ​ A. [Reserved] B.
Yiren Digital Ltd. has no equity ownership in the consolidated variable interest entities. Therefore, investors investing in our ADSs are not holding equity interest in the consolidated variable interest entities but instead are holding equity interest in a holding company incorporated in the Cayman Islands.
Yiren Digital Ltd. has no equity ownership in the consolidated variable interest entities. Therefore, investors investing in our ADSs are not holding equity interest in the consolidated variable interest entities but instead are holding equity interest in a holding company incorporated in the Cayman Islands.
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.
The service fees paid are recognized as a tax deduction by the consolidated variable interest entities and as income by our PRC subsidiaries and are tax neutral. (3) Certain of our subsidiaries and the variable interest entities qualify for a 15% preferential income tax rate in China.
The service fees paid are recognized as a tax deduction by the consolidated variable interest entities and as income by our PRC subsidiaries and are tax neutral. (3) Certain of our subsidiaries qualify for a 15% preferential income tax rate in China.
In addition, we cannot assure you that the purchase of beneficial rights of the ABFEs through the Shenzhen Stock Exchange, or purchase of beneficial rights of ABFEs in private placement would not be deemed as investments in loans facilitated through the online marketplace we operate by using our own capital.
In addition, we cannot assure you that the purchase of beneficial rights of the ABFEs through the Shenzhen Stock Exchange, or the purchase of beneficial rights of ABFEs in private placement would not be deemed as investments in loans facilitated through the online marketplace we operate by using our own capital.
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.
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; 22 Table of Contents ● 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 ● the introduction or anticipated introduction of competing products by our competitors.
Failure to protect confidential information of our customers and network against security breaches could damage our reputation and brand and substantially harm our business and results of operations.
Failure to protect confidential information of our customers and network against security breaches could damage our reputation and brand and substantially harm our business and results of operations.
Since we and the subsidiaries and the consolidated variable interest entities of CreditEase that operated our online marketplace business are under common control of CreditEase, our consolidated financial statements include the assets, liabilities, revenues, expenses and cash flows that were directly attributable to our business for all periods presented.
Since we and the subsidiaries and the consolidated variable interest entities that operated our online marketplace business are under common control of CreditEase, our consolidated financial statements include the assets, liabilities, revenues, expenses and cash flows that were directly attributable to our business for all periods presented.
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.
Kechuang Xinlian, who owns ICP License, operates Yixianghua, but the relevant domain name and the relevant trademarks in connection with Yixianghua are not held by Kechuang Xinlian.
Kechuang Xinlian, who owns ICP License and operates Yixianghua, but the relevant domain name and the relevant trademarks in connection with Yixianghua are not held by Kechuang Xinlian.
Pursuant to the Overseas Listing Regulations, companies in China that directly or indirectly offer or list their securities in an overseas market must file with the CSRC within three business days after submitting their listing application documents to the regulator in the place of intended listing.
Pursuant to the Overseas Listing Regulations, companies in China that directly or indirectly offer or list their securities in an overseas market must file with the CSRC within three business days after submitting their listing application documents to the regulator in the place of intended listing.
The Overseas Listing Regulations also provides that a company in China must file with the CSRC within three business days after completion of its follow-on offering of securities after it is listed in an overseas market.
The Overseas Listing Regulations also provides that a company in China must file with the CSRC within three business days after completion of its follow-on offering of securities after it is listed in an overseas market.
Based on the foregoing, we are not required to complete filing with the CSRC for our historical offerings, but may be subject to the filing requirements for our future capital raising activities, if any, under the Overseas Listing Regulations.
Based on the foregoing, we are not required to complete filing with the CSRC for our historical offerings, but may be subject to the filing requirements for our future capital raising activities, if any, under the Overseas Listing Regulations.
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.
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; 35 Table of Contents ● 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.
As a result, the funds in our PRC subsidiaries or the consolidated variable interest entities in Chinese mainland may not be available to fund operations or for other use outside of Chinese mainland due to interventions in, or the imposition of restrictions and limitations on, the ability of our holding company, our subsidiaries, or the consolidated variable interest entities by the PRC government on such currency conversion.
As a result, the funds in our PRC subsidiaries or the consolidated variable interest entities in mainland China may not be available to fund operations or for other use outside of Chinese mainland due to interventions in, or the imposition of restrictions and limitations on, the ability of our holding company, our subsidiaries, or the consolidated variable interest entities by the PRC government on such currency conversion.
For example, Yiren Financial Information and CreditEase Puhui and their respective shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations, including maintaining our website and using the domain names and trademarks, in an acceptable manner or taking other actions that are detrimental to our interests. 44 Table of Contents If we had direct ownership of Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of such consolidated variable interest entities, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level.
For example, Yiren Financial Information and CreditEase Puhui and their respective shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations, including maintaining our website and using the domain names and trademarks, in an acceptable manner or taking other actions that are detrimental to our interests. 45 Table of Contents If we had direct ownership of Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of such consolidated variable interest entities, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level.
The following diagram illustrates our corporate structure, including our subsidiaries, the consolidated variable interest entities, and our consolidated assets backed financing entities, as of the date of this annual report: Notes: (1) The shareholders of CreditEase Puhui are Mr. Ning Tang and Ms. Mei Zhao, holding 99% and 1% of CreditEase Puhui’s equity interest, respectively. Mr.
The following diagram illustrates our corporate structure, including our subsidiaries, the consolidated variable interest entities, and our consolidated assets backed financing entities, as of the date of this annual report: Notes: (1) The shareholders of CreditEase Puhui are Mr. Ning Tang and Ms. Mei Zhao, each holding 99% and 1% of CreditEase Puhui’s equity interest, respectively. Mr.
We also undertook to repay the bank on behalf of defaulting borrowers if any repayment was 80 days overdue and upon such full repayment to the bank, we would obtain the creditor’s rights in respect of the relevant default amount. Since the promulgation of Circular 141, we have suspended the cooperation with the bank.
We also undertook to repay the bank on behalf of defaulting borrowers if any repayment was 80 days overdue and upon such full repayment to the bank, we would obtain the creditor’s rights in respect of the relevant default amount. Since the promulgation of Circular 141, we suspended the cooperation with the bank.
Operating internationally subjects us to new risks and may increase risks that we currently face, including risks associated with: ● varied, unfamiliar, unclear, and changing legal and regulatory restrictions, including different legal and regulatory standards applicable to real estate development and sales; ● compliance with laws and regulations of the jurisdictions in which we operate; ● difficulties in staffing and managing foreign operations; 37 Table of Contents ● longer collection cycles; ● differing intellectual property laws that may not provide sufficient protections for our intellectual property; ● proper compliance with local tax laws, which can be complex and may result in unintended adverse tax consequences; ● difficulties in enforcing agreements through foreign legal systems; ● fluctuations in currency exchange rates that may affect service demand and may adversely affect the profitability in RMB of services provided by us in foreign markets where payment for our services is made in the local currency; ● changes in general economic, health, and political conditions in countries where our properties are sold; ● potential labor strike, lockouts, work slowdowns, and work stoppages; and ● different consumer preferences and requirements in specific international markets.
Operating internationally subjects us to new risks and may increase risks that we currently face, including risks associated with: ● varied, unfamiliar, unclear, and changing legal and regulatory restrictions, including different legal and regulatory standards applicable to real estate development and sales; ● compliance with laws and regulations of the jurisdictions in which we operate; ● difficulties in staffing and managing foreign operations; ● longer collection cycles; ● differing intellectual property laws that may not provide sufficient protections for our intellectual property; ● proper compliance with local tax laws, which can be complex and may result in unintended adverse tax consequences; ● difficulties in enforcing agreements through foreign legal systems; ● fluctuations in currency exchange rates that may affect service demand and may adversely affect the profitability in RMB of services provided by us in foreign markets where payment for our services is made in the local currency; ● changes in general economic, health, and political conditions in countries where our properties are sold; ● potential labor strike, lockouts, work slowdowns, and work stoppages; and ● different consumer preferences and requirements in specific international markets.
Moreover, according to the Administrative Measures for Review and Registration of Medium- and Long-term Foreign Debts of Enterprises issued by the National Development and Reform Commission on January 5, 2023, which took effect on February 10, 2023, any loans we extend to the consolidated variable interest entities or other PRC operating companies that are domestic PRC entities for more than one year must be registered with the National Development and Reform Commission and must also be registered with SAFE or its local branches. 52 Table of Contents We may also decide to finance our PRC subsidiaries by means of capital contributions.
Moreover, according to the Administrative Measures for Review and Registration of Medium- and Long-term Foreign Debts of Enterprises issued by the National Development and Reform Commission on January 5, 2023, which took effect on February 10, 2023, any loans we extend to the consolidated variable interest entities or other PRC operating companies that are domestic PRC entities for more than one year must be registered with the National Development and Reform Commission and must also be registered with SAFE or its local branches. 54 Table of Contents We may also decide to finance our PRC subsidiaries by means of capital contributions.
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.
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 and later amended in 2014, 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.
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 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. 44 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.
If we are considered a non-resident enterprise under the PRC Enterprise Income Tax Law and if the PRC tax authorities make adjustments to the taxable income of the transactions under Circular 59, Circular 7 and SAT Circular 37, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations. 58 Table of Contents The approval of and filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
If we are considered a non-resident enterprise under the PRC Enterprise Income Tax Law and if the PRC tax authorities make adjustments to the taxable income of the transactions under Circular 59, Circular 7 and SAT Circular 37, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations. 60 Table of Contents The approval of and filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
As a day-to-day service to borrowers, we provide payment reminder services such as sending reminder text messages and phone calls on the day a repayment is due. Once a repayment is past due, we send additional reminder text messages and initiate the collection process once a loan is fifteen days delinquent.
As a day-to-day service to borrowers, we provide payment reminder services such as sending reminder text messages or phone calls on the day a repayment is due. Once a repayment is past due, we send additional reminder text messages and initiate the collection process once a loan is fifteen days delinquent.
See “—Risks Related to Our Corporate Structure—Contractual arrangements in relation to the consolidated variable interest entities may be subject to scrutiny by the PRC tax authorities and they may determine that we owe additional taxes, which could negatively affect our financial condition and the value of your investment” above. 51 Table of Contents Under PRC laws and regulations, our PRC subsidiaries may pay dividends only out of their respective accumulated after-tax profits as determined in accordance with PRC accounting standards and regulations.
See “—Risks Related to Our Corporate Structure—Contractual arrangements in relation to the consolidated variable interest entities may be subject to scrutiny by the PRC tax authorities and they may determine that we owe additional taxes, which could negatively affect our financial condition and the value of your investment” above. 53 Table of Contents Under PRC laws and regulations, our PRC subsidiaries may pay dividends only out of their respective accumulated after-tax profits as determined in accordance with PRC accounting standards and regulations.
Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects. 55 Table of Contents Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects. 57 Table of Contents Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Our existing and new loan products available through our platform could fail to attain sufficient market acceptance for many reasons, including: ● borrowers may not find terms of our loan products, such as borrowing costs and credit limit, competitive or appealing; ● institutional funding partners are not willing to deploy their funds in a timely or efficient manner; ● we may fail to predict market demand accurately and provide loan products that meet this demand in a timely fashion; 23 Table of Contents ● users may not like, find useful or agree with, any changes; ● there may be defects, errors or failures on our platform; ● there may be negative publicity about our loan products available through our platform or our platform’s performance or effectiveness; ● regulatory authorities may take the view that the existing and new loan products or changes to our platform do not comply with PRC laws, regulations or rules applicable to us; and ● there may be competing products and services introduced or anticipated to be introduced by our competitors.
Our existing and new loan products available through our platform could fail to attain sufficient market acceptance for many reasons, including: ● borrowers may not find terms of our loan products, such as borrowing costs and credit limit, competitive or appealing; ● institutional funding partners are not willing to deploy their funds in a timely or efficient manner; ● we may fail to predict market demand accurately and provide loan products that meet this demand in a timely fashion; ● users may not like, find useful or agree with, any changes; ● there may be defects, errors or failures on our platform; ● there may be negative publicity about our loan products available through our platform or our platform’s performance or effectiveness; ● regulatory authorities may take the view that the existing and new loan products or changes to our platform do not comply with PRC laws, regulations or rules applicable to us; and ● there may be competing products and services introduced or anticipated to be introduced by our competitors.
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.
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. 68 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.
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.
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; ● 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 we are subject to late penalties or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be materially and adversely affected. 54 Table of Contents The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
If we are subject to late penalties or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be materially and adversely affected. 56 Table of Contents The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
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.
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. 47 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.
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 there is insufficient funding from these institutional funding partners, borrowers may not be able to obtain capital through our marketplace and may need to turn to other sources for their borrowing needs.
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.
In July 2019, we consummated a business realignment transaction with CreditEase, the controlling shareholder of our company, pursuant to which we assumed from CreditEase and its affiliates certain business operations.
Historically, CreditEase has provided us with origination and servicing, financial, administrative, sales and marketing, risk management, human resources and legal services, and also with the services of a number of its executives and employees.
Historically, CreditEase provided us with origination and servicing, financial, administrative, sales and marketing, risk management, human resources and legal services, and also with the services of a number of its executives and employees.
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.
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. 67 Table of Contents It may be difficult for overseas regulators to conduct investigations or collect evidence within China.
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.
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. 48 Table of Contents In addition, the global macroeconomic environment is facing challenges.
For example, in a falling interest rate environment, potential borrowers may seek lower priced loans from other channels if we do not lower the interest and fee rates on our loan products. 28 Table of Contents A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition.
For example, in a falling interest rate environment, potential borrowers may seek lower priced loans from other channels if we do not lower the interest and fee rates on our loan products. 29 Table of Contents A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition.
Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 48 Table of Contents 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.
Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 49 Table of Contents 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.
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.
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. 64 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.
As of the date of this annual report, our PRC subsidiaries and the consolidated variable interest entities have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our company and the consolidated variable interest entities in China, including, among others, Internet Content Provider (“ICP”) License, Electronic Data Interchange License, Domestic Call Center License, Food Business Permit, Filing Recordation for Medical Devices Operating Enterprise, Financing Guarantee Business License, Approval to Conduct Financial Leasing Business, Approval to Conduct Micro-lending Business and Business Licenses to Professional Insurance Intermediaries.
As of the date of this annual report, our PRC subsidiaries and the consolidated variable interest entities have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our company and the consolidated variable interest entities in China, including, among others, Internet Content Provider (“ICP”) License, Electronic Data Interchange License, Food Business Permit, Filing Recordation for Medical Devices Operating Enterprise, Financing Guarantee Business License, Approval to Conduct Financial Leasing Business, Approval to Conduct Micro-lending Business and Business Licenses to Professional Insurance Intermediaries.
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.
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 2024 Negative List may be invalidated by the courts.
Currently, the business is in its early stages and poised for further expansion. We may continue expanding our operations in other jurisdictions in the future. However, the entry and operation of our business in these markets could cause us to be subject to unexpected, uncontrollable, and rapidly changing events and circumstances outside China.
Currently, the business is in its early stages and poised for further expansion. We will continue expanding our operations in other jurisdictions in the future. However, the entry and operation of our business in these markets could cause us to be subject to unexpected, uncontrollable, and rapidly changing events and circumstances outside China.
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.
These risks and uncertainties may make it difficult for us to meet or comply with requirements under the applicable laws and regulations.” 46 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.
Any of these actions by the PRC government may have a material adverse effect on our business and results of operations. 50 Table of Contents Any failure by us or our third-party service providers to comply with applicable anti-money laundering laws and regulations could damage our reputation.
Any of these actions by the PRC government may have a material adverse effect on our business and results of operations. 52 Table of Contents Any failure by us or our third-party service providers to comply with applicable anti-money laundering laws and regulations could damage our reputation.
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.
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., or YouRace Hengchuang, CreditEase Puhui, and the shareholders of CreditEase Puhui.
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.
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 and made adequate employee benefits payments as of the date of this annual report.
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.
Yiren Hengsheng, one of our PRC subsidiaries, was qualified as a “software enterprise” in March 2021 and the status was reevaluated in 2024, 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 2025.
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.
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, 2024.
If our company and the VIEs cannot successfully enter into and maintain effective strategic relationships with business partners, our business will be harmed. 27 Table of Contents Misconduct, errors and failure to function by our employees and third-party service providers could harm our business and reputation.
If our company and the VIEs cannot successfully enter into and maintain effective strategic relationships with business partners, our business will be harmed. 28 Table of Contents Misconduct, errors and failure to function by our employees and third-party service providers could harm our business and reputation.
We believe that we were a passive foreign investment company, or PFIC, for United States federal income tax purposes for the taxable year ended December 31, 2023, which could subject United States holders of our ADSs or ordinary shares to significant adverse United States federal income tax consequences.
We believe that we were a passive foreign investment company, or PFIC, for United States federal income tax purposes for the taxable year ended December 31, 2024, which could subject United States holders of our ADSs or ordinary shares to significant adverse United States federal income tax consequences.
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. We generated a majority of our revenue from financial service business in 2023.
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. We generated a majority of our revenue from financial service business in 2024.
For our consumption and lifestyle service business, we primarily serve our existing customers from all business lines. 16 Table of Contents There is no assurance that our company or the VIEs will be successful with our user acquisition efforts.
For our consumption and lifestyle service business, we primarily serve our existing customers from other business lines. 16 Table of Contents There is no assurance that our company or the VIEs will be successful with our user acquisition efforts.
As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 53 Table of Contents Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and affect the value of your investment.
As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 55 Table of Contents Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and affect the value of your investment.
American Depositary Shares” for more information. 63 Table of Contents Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings. We may from time to time distribute rights to our shareholders, including rights to acquire our securities.
American Depositary Shares” for more information. 65 Table of Contents Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings. We may from time to time distribute rights to our shareholders, including rights to acquire our securities.
YouRace Hengchuang, one of our PRC subsidiaries, was qualified as a “high and new technology enterprise” in November 2018 and the status was reaffirmed in 2021. Accordingly, it has been eligible for a preferential income tax rate of 15%.
YouRace Hengchuang, one of our PRC subsidiaries, was qualified as a “high and new technology enterprise” in November 2018 and the status was reaffirmed in 2024. Accordingly, it has been eligible for a preferential income tax rate of 15%.
Similarly, India has permanently banned a large number of apps since 2020 out of national security concerns, many of which are China-based apps, escalating regional political and trade tensions. Likewise, we are monitoring policies in the United States that are aimed at restricting U.S. persons from investing in or supplying certain Chinese companies.
Similarly, India has permanently banned a large number of apps since 2020 out of national security concerns, many of which are China-based apps, escalating regional political and trade tensions. 38 Table of Contents Likewise, we are monitoring policies in the United States that are aimed at restricting U.S. persons from investing in or supplying certain Chinese companies.
Pursuant to such Special Administrative Measures, if a domestic company engaging in the prohibited business stipulated in the 2021 Negative List seeks an overseas offering and listing, it shall obtain the approval from the competent governmental authorities.
Pursuant to such Special Administrative Measures, if a domestic company engaging in the prohibited business stipulated in the 2024 Negative List seeks an overseas offering and listing, it shall obtain the approval from the competent governmental authorities.
As of the date of this annual report, our subsidiaries and the VIEs had 441 registered trademarks with the Trademark Office of the National Intellectual Property Administration. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” and “Item 4. Information on the Company—B.
As of the date of this annual report, our subsidiaries and the VIEs had 460 registered trademarks with the Trademark Office of the National Intellectual Property Administration. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” and “Item 4. Information on the Company—B.
Our management has concluded that our internal control over financial reporting was effective as of December 31, 2023. See “Item 15. Controls and Procedures.” In the future, our management may conclude that our internal control over financial reporting is not effective.
Our management has concluded that our internal control over financial reporting was effective as of December 31, 2024. See “Item 15. Controls and Procedures.” In the future, our management may conclude that our internal control over financial reporting is not effective.
Unless we are able to control our labor costs or pass on these increased labor costs to our users by increasing the fees of our services, our financial condition and results of operations may be adversely affected. If we cannot maintain our corporate culture as we grow, we could lose the innovation, collaboration and focus that contribute to our business.
Unless we are able to control our labor costs or pass on these increased labor costs to our users by increasing the fees of our services, our financial condition and results of operations may be adversely affected. 37 Table of Contents If we cannot maintain our corporate culture as we grow, we could lose the innovation, collaboration and focus that contribute to our business.
Any such tax may reduce the returns on the investment in our ADSs. 56 Table of Contents Discontinuation of preferential tax treatment or imposition of any additional taxes could adversely affect our financial condition and results of operations.
Any such tax may reduce the returns on the investment in our ADSs. 58 Table of Contents Discontinuation of preferential tax treatment or imposition of any additional taxes could adversely affect our financial condition and results of operations.
As the 2021 Negative List is relatively new, there remain substantial uncertainties as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies like us will be subject to these new requirements.
As the 2024 Negative List is relatively new, there remain substantial uncertainties as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies like us will be subject to these new requirements.
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.
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. 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.
Taxation—Material United States Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” 67 Table of Contents We may incur increased costs as a result of being a public company, particularly after we ceased to qualify as an “emerging growth company.” As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company.
Taxation—Material United States Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” We may incur increased costs as a result of being a public company, particularly after we ceased to qualify as an “emerging growth company.” As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company.
Related Party Transactions—Carve-out Agreements with CreditEase—Second amended and restated non-competition agreement.” ● Employee recruiting and retention . Because both CreditEase and we are engaged in consumer finance related businesses in China, we may compete with CreditEase in the hiring of new employees, in particular with respect to risk management related matters.
Related Party Transactions—Carve-out Agreements with CreditEase—Second amended and restated non-competition agreement.” 42 Table of Contents ● Employee recruiting and retention . Because both CreditEase and we are engaged in consumer finance related businesses in China, we may compete with CreditEase in the hiring of new employees, in particular with respect to risk management related matters.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the enacted version of the revised Measures for Cybersecurity Review and the draft of Regulations on the Network Data Security, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the enacted version of the revised Measures for Cybersecurity Review and the Regulation on Network Data Security Management, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
In addition, we cannot assure you that any future investment in or acquisition of new businesses or technology will lead to the successful development of new or enhanced products and services or that any new or enhanced products and services, if developed, will achieve market acceptance or prove to be profitable. 34 Table of Contents Acquisitions could expose us to significant business risks.
In addition, we cannot assure you that any future investment in or acquisition of new businesses or technology will lead to the successful development of new or enhanced products and services or that any new or enhanced products and services, if developed, will achieve market acceptance or prove to be profitable. Acquisitions could expose us to significant business risks.
Any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition. 36 Table of Contents Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results.
Any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition. Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results.
Any failure in protecting or enforcing intellectual property rights owned by our subsidiaries or the VIEs could have a material adverse effect on our business, financial condition and results of operations. 31 Table of Contents We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business operations.
Any failure in protecting or enforcing intellectual property rights owned by our subsidiaries or the VIEs could have a material adverse effect on our business, financial condition and results of operations. We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business operations.
For secondary listing, dual primary listing or other new foreign listings, our company also needs to apply for a CAC cybersecurity review if it falls in the categories that require such a review under the Measures for Cybersecurity Review. 32 Table of Contents Furthermore, Measures for Cybersecurity Review, or the Measures, further restate and expand the applicable scope of the cybersecurity review.
For secondary listing, dual primary listing or other new foreign listings, our company also needs to apply for a CAC cybersecurity review if it falls in the categories that require such a review under the Measures for Cybersecurity Review. Furthermore, Measures for Cybersecurity Review, or the Measures, further restate and expand the applicable scope of the cybersecurity review.
Depending on the context, we refer to the consolidated variable interest entities by their legal names or “variable interest entities” or “VIEs”, including but not limited to the following entities: ● CreditEase Puhui Information Consultant (Beijing) Co., Ltd. or CreditEase Puhui, which was established in March 2011 and holds a Domestic Call Center Service Permit, operates a website and primarily engages in the credit business; ● Haijin Yichuang Financial Leasing Co., Ltd. or Yichuang Financial Leasing, which was established in March 2017 and primarily engages in the business of financial leasing; ● Hainan Haijin Yichuang Micro-lending Co., Ltd. or Yichuang Micro-lending, which was established in May 2017 and primarily engages in the micro-lending business; ● Tianjin Linyang Information and Technology Co., Ltd. or Tianjin Linyang, which was established in July 2019 and primarily engages in the borrower acquisition services; ● Hexiang Insurance Broker Co., Ltd. or Hexiang Insurance Brokers, which was established in September 2011 and holds Business Licenses to Professional Insurance Intermediaries, operates a website and primarily engages in the insurance brokerage business; ● Yiren Financial Information Service (Beijing) Co., Ltd. or Yiren Financial Information, which was established in October 2016 and primarily engages in customer membership services business; ● Beijing Yiding Technology Co., Ltd. or Yiding Technology, which was established in August 2019 and primarily engages in the insurance referral business; ● Beijing Kechuang Xinlian Technology Co., Ltd. or Kechuang Xinlian, which was established in November 2019 and holds an Internet Content Provider License and an Electronic Data Interchange License, operates a website, a mobile application and a mini-program and primarily engages in the e-commerce and micro-lending businesses; 3 Table of Contents ● Beijing Yiyouxuan Technology Information Service Co., Ltd. or Yiyouxuan, which was established in July 2022 and holds an Internet Content Provider License and an Electronic Data Interchange License, operates a mobile application and primarily engages in membership services; ● Dekai Yichuang Asset Management (Shenzhen) Co., Ltd. or Dekai Yichuang, which was established in March 2016 and had no business operation other than holding shares as of the date of this annual report; ● Hainan Haijin Yichuang Data Information Service Co., Ltd. or Yichuang Data, which was established in December 2016 and had no business operation other than holding shares as of the date of this annual report; and ● Heilongjiang Changtuo Technology Development Co., Ltd. or Changtuo Technology, which was established in January 2014 and had no business operation other than holding shares as of the date of this annual report.
Depending on the context, we refer to the consolidated variable interest entities by their legal names or “variable interest entities” or “VIEs,” including but not limited to the following entities: ● CreditEase Puhui Information Consultant (Beijing) Co., Ltd. or CreditEase Puhui, which was established in March 2011 and had no material business operations as of the date of this annual report; ● Haijin Yichuang Financial Leasing Co., Ltd. or Yichuang Financial Leasing, which was established in March 2017 and primarily engages in the business of financial leasing; ● Hainan Haijin Yichuang Micro-lending Co., Ltd. or Yichuang Micro-lending, which was established in May 2017 and primarily engages in the micro-lending business; ● Tianjin Linyang Information and Technology Co., Ltd. or Tianjin Linyang, which was established in July 2019 and primarily engages in the borrower acquisition services; ● Hexiang Insurance Broker Co., Ltd. or Hexiang Insurance Brokers, which was established in September 2011 and holds Business Licenses to Professional Insurance Intermediaries, operates a website and primarily engages in the insurance brokerage business; ● Yiren Financial Information Service (Beijing) Co., Ltd. or Yiren Financial Information, which was established in October 2016 and primarily engages in customer membership services business; ● Beijing Yiding Technology Co., Ltd. or Yiding Technology, which was established in August 2019 and primarily engages in the insurance referral business; ● Beijing Kechuang Xinlian Technology Co., Ltd. or Kechuang Xinlian, which was established in November 2019 and holds an Internet Content Provider License and an Electronic Data Interchange License, operates a website, a mobile application and a mini-program and primarily engages in the e-commerce and micro-lending businesses; 3 Table of Contents ● Beijing Yiyouxuan Technology Information Service Co., Ltd. or Yiyouxuan, which was established in July 2022 and holds an Internet Content Provider License and an Electronic Data Interchange License, operates a mobile application and primarily engages in membership services; ● Dekai Yichuang Asset Management (Shenzhen) Co., Ltd. or Dekai Yichuang, which was established in March 2016 and had no business operation other than holding shares as of the date of this annual report; ● Hainan Haijin Yichuang Data Information Service Co., Ltd. or Yichuang Data, which was established in December 2016 and had no business operation other than holding shares as of the date of this annual report; and ● Heilongjiang Changtuo Technology Development Co., Ltd. or Changtuo Technology, which was established in January 2014 and had no business operation other than holding shares as of the date of this annual report.
Additionally, there is a risk that, following our obtaining a borrower’s credit information, the borrower may have: ● become delinquent in the payment of an outstanding obligation; ● defaulted on a pre-existing debt obligation; ● taken on additional debt; or ● sustained other adverse financial events.
Additionally, there is a risk that, following our obtaining a borrower’s credit information, the borrower may have: ● become delinquent in the payment of an outstanding obligation; ● defaulted on a pre-existing debt obligation; 25 Table of Contents ● taken on additional debt; or ● sustained other adverse financial events.
The ultimate shareholders of Pucheng Credit Assessment and Management (Beijing) Co., Ltd. are Mr. Ning Tang and Ms. Yan Tian, ultimately holding 95% and 5% of its equity interest, respectively. Mr. Ning Tang is our executive chairman, and Ms. Yan Tian is a third-party individual designated by CreditEase.
The shareholders of Pucheng Credit Assessment and Management (Beijing) Co., Ltd. are Mr. Ning Tang and Ms. Yan Tian, ultimately owning 95% and 5% of its equity interest, respectively. Mr. Ning Tang is our executive chairman and Ms. Yan Tian is a third-party individual designated by CreditEase.
In addition, certain entities we acquired in March 2019 as part of our business realignment with CreditEase did not make adequate employee benefits payment in the past.
However, certain entities we acquired in March 2019 as part of our business realignment with CreditEase did not make adequate employee benefits payment in the past.
When any of our PRC subsidiaries incurs debt on its own behalf, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. Our subsidiaries’ ability to distribute dividends is based upon their distributable earnings.
When any of our PRC subsidiaries incurs debt on its own behalf, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. 10 Table of Contents Our subsidiaries’ ability to distribute dividends is based upon their distributable earnings.
For example, foreign investors are not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except for e-commerce, domestic multi-party communication, storage and forwarding classes and call centers) in accordance with the Special Administrative Measures for Access of Foreign Investment (Negative List) (2021 Edition), or the 2021 Negative List, effective from January 1, 2022, as amended, and other applicable laws and regulations.
For example, foreign investors are not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except for e-commerce, domestic multi-party communication, storage and forwarding classes and call centers) in accordance with the Special Administrative Measures for Access of Foreign Investment (Negative List) (2024 Edition), or the 2024 Negative List, effective from November 1, 2024, as amended, and other applicable laws and regulations.
We cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant tax authority or we will be able to complete the necessary filings with the relevant tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiaries to Yiren Digital Hong Kong Limited, our Hong Kong subsidiary. 57 Table of Contents Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.
Taxation—People’s Republic of China Taxation.” We cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant tax authority or we will be able to complete the necessary filings with the relevant tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiaries to Yiren Digital Hong Kong Limited, our Hong Kong subsidiary. 59 Table of Contents Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.
This would result in such transfer being non-deductible expenses for the consolidated variable interest entities but still taxable income for the PRC subsidiaries. 10 Table of Contents Under PRC laws and regulations, our company and the VIEs are subject to restrictions on foreign exchange and cross-border cash transfers, including to U.S. investors.
This would result in such transfer being non-deductible expenses for the consolidated variable interest entities but still taxable income for the PRC subsidiaries. Under PRC laws and regulations, our company and the VIEs are subject to restrictions on foreign exchange and cross-border cash transfers, including to U.S. investors.
If any of the foregoing were to occur, our reputation, business and results of operations would be materially and adversely affected. If we are unable to compete effectively, our business and results of operations could be harmed. The industries our company and the VIEs are operating in are competitive and evolving.
If any of the foregoing were to occur, our reputation, business and results of operations would be materially and adversely affected. 24 Table of Contents If we are unable to compete effectively, our business and results of operations could be harmed. The industries our company and the VIEs are operating in are competitive and evolving.
Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities, hold certain assets that are material to the operation of our business.
Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities and their subsidiaries, hold certain assets that are material to the operation of our business.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeOn 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.
Biggest changePursuant to the Regulatory Measures, the insurance institutions shall (i) complete the rectification of the issues on internal protocols, marketing activities, sales management and information disclosure within three months from the effective date of the Regulatory Measure; (ii) complete the rectification of other issues on business and operation within six months from the effective date of the Regulatory Measure; and (iii) complete the authentication of classified cybersecurity protection of its self-operated online platform within twelve months from the effective date of the Regulatory Measure. 92 Table of Contents 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.
All of the loans offered under our financial services business feature fixed monthly payments with fixed interest rates, which are paid to the funding parties, either the third-party institutional funding partners or our subsidiaries. In addition, guarantee companies that cooperate with us charge borrowers guarantee fees for the credit enhancement services they provide.
All of the loans offered under our financial services business feature fixed monthly payments with fixed interest rates, which are paid to the funding parties, either the third-party institutional funding partners or our subsidiaries. In addition, guarantee companies that cooperate with us or our subsidiaries that provide guarantee services charge borrowers guarantee fees for the credit enhancement services they provide.
For example, Yiren Digital was named as one of the Top 100 Annual Growth Public Companies of 2023 in December 2023 by Snowball Finance (Xueqiu), the renowned investor community in China, following its recent receipt of the 2023 Annual Digital Inclusive Finance Excellence Award from reputable institutions, including the China Digital Index Research Institute and the Shanghai Finance and Development Laboratory.
For example, Yiren Digital was named as one of the Top 100 Annual Growth Public Companies of 2023 in December 2023 by Snowball Finance (Xueqiu), the renowned investor community in China, following its receipt of the 2023 Annual Digital Inclusive Finance Excellence Award from reputable institutions, including the China Digital Index Research Institute and the Shanghai Finance and Development Laboratory.
Failure to comply with the registration procedures set forth in SAFE Circular 37 and the subsequent notice, or making misrepresentation on or failure to disclose controllers of the foreign-invested enterprise that is established through round-trip investment, may result in restrictions being imposed on the foreign exchange activities of the relevant foreign-invested enterprise, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations. 104 Table of Contents Regulations on Stock Incentive Plans SAFE promulgated the Stock Option Rules in February 2012, replacing the previous rules issued by SAFE in March 2007.
Failure to comply with the registration procedures set forth in SAFE Circular 37 and the subsequent notice, or making misrepresentation on or failure to disclose controllers of the foreign-invested enterprise that is established through round-trip investment, may result in restrictions being imposed on the foreign exchange activities of the relevant foreign-invested enterprise, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations. 106 Table of Contents Regulations on Stock Incentive Plans SAFE promulgated the Stock Option Rules in February 2012, replacing the previous rules issued by SAFE in March 2007.
As an AI-driven one-stop select financial and lifestyle services platform in China, our company and the VIEs are regulated by various government authorities, including, among others: ● the Ministry of Industry and Information Technology, or the MIIT, regulating the telecommunications and telecommunications-related activities, including, but not limited to, the internet information services and other value-added telecommunication services; ● the People’s Bank of China, or the PBOC, as the central bank of China, regulating the formation and implementation of monetary policy, issuing the currency, supervising the commercial banks and assisting the administration of the financing; and ● the National Administration of Financial Regulation, or the NAFR, is formed in May 2023 on the basis of and replacing the previous China Banking and Insurance Regulatory Commission as China’s new financial regulator.
As an AI-driven one-stop select financial and lifestyle services platform in China, our company and the VIEs are regulated by various government authorities, including, among others: ● the Ministry of Industry and Information Technology, or the MIIT, regulating the telecommunications and telecommunications-related activities, including, but not limited to, the internet information services and other value-added telecommunication services; ● the People’s Bank of China, or the PBOC, as the central bank of China, regulating the formation and implementation of monetary policy, issuing the currency, supervising the commercial banks and assisting the administration of the financing; and ● the National Administration of Financial Regulation, or the NFRA, is formed in May 2023 on the basis of and replacing the previous China Banking and Insurance Regulatory Commission as China’s new financial regulator.
Pursuant to the Insurance Brokerage Provisions and the Notice on Relevant Issues on the Administration of Practitioners of Insurance Intermediaries, which was promulgated by CIRC on August 3, 2015, before an insurance intermediary practitioner begins to practice, his/her employer shall complete the practicing registration in the insurance intermediary regulatory information system of the CIRC for him or her, and the qualification certificate shall not be served as a necessary condition for the administration of practicing registration. 87 Table of Contents Pursuant to the Insurance Brokerage Provisions, an insurance broker may not set payment of fees or purchase of insurance products as a condition of employment, may not promise unreasonably high return, or take the number of persons introduced directly or indirectly or sales performance as the main basis of payroll calculation.
Pursuant to the Insurance Brokerage Provisions and the Notice on Relevant Issues on the Administration of Practitioners of Insurance Intermediaries, which was promulgated by CIRC on August 3, 2015, before an insurance intermediary practitioner begins to practice, his/her employer shall complete the practicing registration in the insurance intermediary regulatory information system of the CIRC for him or her, and the qualification certificate shall not be served as a necessary condition for the administration of practicing registration. 89 Table of Contents Pursuant to the Insurance Brokerage Provisions, an insurance broker may not set payment of fees or purchase of insurance products as a condition of employment, may not promise unreasonably high return, or take the number of persons introduced directly or indirectly or sales performance as the main basis of payroll calculation.
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.
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. 105 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.
If the PRC government finds that the agreements that establish the structure for operating our online consumer finance marketplace business do not comply with PRC government restrictions on foreign investment in value-added telecommunications services businesses, such as internet content provision services, we could be subject to severe penalties, including being prohibited from continuing operations. 106 Table of Contents In addition, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements.
If the PRC government finds that the agreements that establish the structure for operating our online consumer finance marketplace business do not comply with PRC government restrictions on foreign investment in value-added telecommunications services businesses, such as internet content provision services, we could be subject to severe penalties, including being prohibited from continuing operations. 108 Table of Contents In addition, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements.
Pursuant to the Insurance Law of the PRC, an insurance broker is an entity that, in the interest of the insurance applicants, provides intermediary services between the insurance applicants and the insurance companies for the conclusion of insurance contracts, and collects commissions for such services in accordance with relevant laws. 86 Table of Contents On May 1, 2018, the CIRC promulgated the Provisions on the Supervision and Administration of Insurance Brokers, or the Insurance Brokerage Provisions, which specifies the provisions regarding market access and exit, operating rules, industry self-discipline, monitor and inspection and legal obligations for insurance brokers.
Pursuant to the Insurance Law of the PRC, an insurance broker is an entity that, in the interest of the insurance applicants, provides intermediary services between the insurance applicants and the insurance companies for the conclusion of insurance contracts, and collects commissions for such services in accordance with relevant laws. 88 Table of Contents On May 1, 2018, the CIRC promulgated the Provisions on the Supervision and Administration of Insurance Brokers, or the Insurance Brokerage Provisions, which specifies the provisions regarding market access and exit, operating rules, industry self-discipline, monitor and inspection and legal obligations for insurance brokers.
The Administrative Measures for the Licenses of Banking and Insurance Institutions that was promulgated by the CBIRC on April 28, 2021 and became effective on July 2021 stipulates that no entity or individual may forge, alter, transfer, lease or lend any license of a banking or insurance institution, including the insurance intermediary license. 88 Table of Contents On October 28, 2021, the CBIRC promulgated the Implementing Measures for Administrative Licensing and Record-filing for Insurance Intermediaries, or the Implementing Measures, which took effect on February 1, 2022, in order to clarify the conditions and procedures for administrative licensing and record-filing matters.
The Administrative Measures for the Licenses of Banking and Insurance Institutions that was promulgated by the CBIRC on April 28, 2021 and became effective on July 2021 stipulates that no entity or individual may forge, alter, transfer, lease or lend any license of a banking or insurance institution, including the insurance intermediary license. 90 Table of Contents On October 28, 2021, the CBIRC promulgated the Implementing Measures for Administrative Licensing and Record-filing for Insurance Intermediaries, or the Implementing Measures, which took effect on February 1, 2022, in order to clarify the conditions and procedures for administrative licensing and record-filing matters.
The term of the loans is ten years and can be extended upon mutual written consent of the parties. 111 Table of Contents In the opinion of Han Kun Law Offices, our PRC counsel: ● the ownership structures of our subsidiaries, YouRace Hengchuang and Hengyuda, and the consolidated variable interest entities, Yiren Financial Information and CreditEase Puhui, will not result in any violation of PRC laws or regulations currently in effect; and ● the contractual agreements relating to Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities, as described in “Item 4.
The term of the loans is ten years and can be extended upon mutual written consent of the parties. 113 Table of Contents In the opinion of Han Kun Law Offices, our PRC counsel: ● the ownership structures of our subsidiaries, YouRace Hengchuang and Hengyuda, and the consolidated variable interest entities, Yiren Financial Information and CreditEase Puhui, will not result in any violation of PRC laws or regulations currently in effect; and ● the contractual agreements relating to Yiren Financial Information and CreditEase Puhui, the consolidated variable interest entities, as described in “Item 4.
Algorithm-based recommendation service providers with public opinion attributes or social mobilization capabilities shall fill in certain information through the internet-based information service algorithm record-filing system, perform the record-filing procedures and conduct security assessment in accordance with relevant provisions. 97 Table of Contents On July 7, 2022, the CAC issued the Measures for Security Assessment of Cross-border Data Transfer, or the Measures, which took effect on September 1, 2022.
Algorithm-based recommendation service providers with public opinion attributes or social mobilization capabilities shall fill in certain information through the internet-based information service algorithm record-filing system, perform the record-filing procedures and conduct security assessment in accordance with relevant provisions. 100 Table of Contents On July 7, 2022, the CAC issued the Measures for Security Assessment of Cross-border Data Transfer, or the Measures, which took effect on September 1, 2022.
Our servers are primarily hosted at internet data centers owned by major domestic internet data center providers. The hosting services agreements typically have a three-year term. We believe that we will be able to obtain adequate facilities, principally through leasing, to accommodate our future expansion plans. Item 4A. Unresolved Staff Comments None. 112 Table of Contents
Our servers are primarily hosted at internet data centers owned by major domestic internet data center providers. The hosting services agreements typically have a three-year term. We believe that we will be able to obtain adequate facilities, principally through leasing, to accommodate our future expansion plans. Item 4A. Unresolved Staff Comments None. 114 Table of Contents
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.
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.” 107 Table of Contents C.
The 2021 Negative List and Circular of the Ministry of Industry and Information Technology on Liberalizing the Restrictions on Foreign Shareholding Percentages in Online Data Processing and Transaction Processing Business (For-profit E-commerce Business), or the Circular 196, promulgated by MIIT in June 2015 allow a foreign investor to own more than 50% of the total equity interest in an online data processing and transaction business (e-commerce business).
The 2024 Negative List and Circular of the Ministry of Industry and Information Technology on Liberalizing the Restrictions on Foreign Shareholding Percentages in Online Data Processing and Transaction Processing Business (For-profit E-commerce Business), or the Circular 196, promulgated by MIIT in June 2015 allow a foreign investor to own more than 50% of the total equity interest in an online data processing and transaction business (e-commerce business).
Contractual Arrangements with Yiren Financial Information The following is a summary of the currently effective contractual arrangements by and among our wholly-owned subsidiary, Hengyuda, the variable interest entity, Yiren Financial Information, and the shareholders of Yiren Financial Information. 108 Table of Contents Agreements that Allow Us to Conduct the Business Operations of Yiren Financial Information Amended and Restated Equity Interest Pledge Agreements .
Contractual Arrangements with Yiren Financial Information The following is a summary of the currently effective contractual arrangements by and among our wholly-owned subsidiary, Hengyuda, the variable interest entity, Yiren Financial Information, and the shareholders of Yiren Financial Information. 110 Table of Contents Agreements that Allow Us to Conduct the Business Operations of Yiren Financial Information Amended and Restated Equity Interest Pledge Agreements .
As of the date of this annual report, our subsidiaries and the VIEs had 441 registered trademarks with the Trademark Office of the National Intellectual Property Administration. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology.
As of the date of this annual report, our subsidiaries and the VIEs had 460 registered trademarks with the Trademark Office of the National Intellectual Property Administration. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology.
Unless terminated in accordance with the provision of the agreement or terminated by Hengyuda unilaterally in writing, this agreement will remain effective permanently. 109 Table of Contents Agreements that Provide Us with the Option to Purchase the Equity Interest in Yiren Financial Information Amended and Restated Exclusive Option Agreement .
Unless terminated in accordance with the provision of the agreement or terminated by Hengyuda unilaterally in writing, this agreement will remain effective permanently. 111 Table of Contents Agreements that Provide Us with the Option to Purchase the Equity Interest in Yiren Financial Information Amended and Restated Exclusive Option Agreement .
In December 2020, the Supreme People’s Court issued the Interpretation Concerning Laws Applicable to Trials of Disputes over Financial Leasing Contracts, which provides more specific rules regarding the determination, dissolution, liability for breach and other aspects of financial contracts. On January 21, 2022, the CBIRC issued the Off-site Regulation Procedures for Financing Leasing Companies , or the Off-site Regulation Procedures.
In December 2020, the Supreme People’s Court issued the Interpretation Concerning Laws Applicable to Trials of Disputes over Financial Leasing Contracts, which provides more specific rules regarding the determination, dissolution, liability for breach and other aspects of financial contracts. 94 Table of Contents On January 21, 2022, the CBIRC issued the Off-site Regulation Procedures for Financing Leasing Companies , or the Off-site Regulation Procedures.
By employing advanced Large Language Models (LLMs), we have automated and streamlined various business operations, including marketing, customer service, risk management, and loan collections. Our actions have involved developing and upgrading Interactive Voice Response (IVR) systems, improving automation in marketing and loan collections, and developing quality inspection robots for real-time/offline use, ensuring stringent compliance in our business practices.
By employing advanced LLMs, we have automated and streamlined various business operations, including marketing, customer service, risk management, and loan collections. Our actions have involved developing and upgrading Interactive Voice Response (IVR) systems, improving automation in marketing and loan collections, and developing quality inspection robots for real-time/offline use, ensuring stringent compliance in our business practices.
Also, on June 27, 2022, the CAC issued the Administrative Provisions for Internet User Account Information, which took effect on August 1, 2022, specifying rules of users accounts information for internet-based information service provider as well as its users. Regulations on Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including trademarks.
Also, on June 27, 2022, the CAC issued the Administrative Provisions for Internet User Account Information, which took effect on August 1, 2022, specifying rules of users accounts information for internet-based information service provider as well as its users. 103 Table of Contents Regulations on Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including trademarks.
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.
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.
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.
Micro-lending companies are also required to accept public scrutiny supervision and are prohibited from carrying out illegal fund-raising in any form. 86 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.
Given CreditEase’s more-than-a-decade experience and expertise in risk management and the considerable data pools it has accumulated, our relationship with CreditEase allows us to further improve our credit scoring models and enhance our capabilities of accurate risk control. 78 Table of Contents The following table presents the key criteria that materially impact a borrower’s credit score: Criteria Examples Effect on Credit Score Purpose of the loan ​ Personal consumption ​ ● No monotonic correlation Customer attributes ​ Education background ​ ● Positive correlation ● Higher education leads to higher score Usage and performance of the loans from other financial institutions ​ Maximum amount of loans that the borrower has borrowed from commercial banks ​ ● Positive correlation ● The larger the amount of bank loans, the higher the score Credit card usage and payment pattern ​ Frequency of credit card usage ​ ● Negative correlation ● Above a certain threshold, the higher the frequency of credit card usage, the lower the score Public record ​ Court enforcement record ​ ● No monotonic correlation ● A borrower’s score is lower if he/she has been subject to court enforcement Income and debt condition ​ Salaries ​ ● Positive correlation ● Below a certain threshold, the higher the salary, the higher the score Geographic location ​ Province or city where the borrower is located ​ ● No monotonic correlation ● A borrower’s score is lower if he/she is located in a province or city where we face intense market competition Job stability ​ Length of employment ​ ● Positive correlation ● The longer the employment, the higher the score Online merchant purchasing pattern ​ Recent average consumption level ​ ● Positive correlation ● The higher the recent average consumption level, the higher the score ​ The credit scores derived from our proprietary credit scoring model containing the criteria mentioned above are used to determine the final grade of a borrower’s “A-Score,” which reflects the level of his credit quality as a potential new borrower on our platform.
Given CreditEase’s nearly two-decade experience and expertise in risk management and the considerable data pools it has accumulated, our relationship with CreditEase allows us to further improve our credit scoring models and enhance our capabilities of accurate risk control. 79 Table of Contents The following table presents the key criteria that materially impact a borrower’s credit score: Criteria Examples Effect on Credit Score Purpose of the loan ​ Personal consumption ​ ● No monotonic correlation Customer attributes ​ Education background ​ ● Positive correlation ● Higher education leads to higher score Usage and performance of the loans from other financial institutions ​ Maximum amount of loans that the borrower has borrowed from commercial banks ​ ● Positive correlation ● The larger the amount of bank loans, the higher the score Credit card usage and payment pattern ​ Frequency of credit card usage ​ ● Negative correlation ● Above a certain threshold, the higher the frequency of credit card usage, the lower the score Public record ​ Court enforcement record ​ ● No monotonic correlation ● A borrower’s score is lower if he/she has been subject to court enforcement Income and debt condition ​ Salaries ​ ● Positive correlation ● Below a certain threshold, the higher the salary, the higher the score Geographic location ​ Province or city where the borrower is located ​ ● No monotonic correlation Job stability ​ Length of employment ​ ● Positive correlation ● The longer the employment, the higher the score Online merchant purchasing pattern ​ Recent average consumption level ​ ● Positive correlation ● The higher the recent average consumption level, the higher the score ​ The credit scores derived from our proprietary credit scoring model containing the criteria mentioned above are used to determine the final grade of a borrower’s “A-Score,” which reflects the level of his credit quality as a potential new borrower on our platform.
All the data that we collect are based on the borrowers’ full knowledge and consent. 75 Table of Contents Stage 3: Anti-Fraud, Credit Assessment and Decisioning In order to efficiently screen applicants, we have designed an initial qualification phase to review the basic information regarding a prospective borrower that has been submitted with the application and gathered by us from available sources.
All the data that we collect are based on the borrowers’ full knowledge and consent. Stage 3: Anti-Fraud, Credit Assessment and Decisioning In order to efficiently screen applicants, we have designed an initial qualification phase to review the basic information regarding a prospective borrower that has been submitted with the application and gathered by us from available sources.
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 .
The equity interest pledge agreements remain effective until CreditEase Puhui and its shareholders discharge all their obligations under the contractual arrangements. 112 Table of Contents Powers of Attorney .
Pursuant to the loan agreements between YouRace Hengchuang and the shareholders of CreditEase Puhui, YouRace Hengchuang agreed to provide loans in an aggregate amount of RMB10.0 million to the shareholders of CreditEase Puhui solely for the capitalization of CreditEase Puhui.
Pursuant to the loan agreements between YouRace Hengchuang and the shareholders of CreditEase Puhui, YouRace Hengchuang agreed to provide loans in an aggregate amount of RMB30.0 million to the shareholders of CreditEase Puhui solely for the capitalization of CreditEase Puhui.
Additionally, it offers insurance brokerage services to a wide range of clients, including both retail and institutional clients. In insurance brokerage business, revenue primarily comes from insurance commission fees paid by insurance companies when clients purchase insurance products through Hexiang Insurance Brokers. 70 Table of Contents ● Consumption and lifestyle and others .
Additionally, it offers insurance brokerage services to a wide range of clients, including both retail and institutional clients. In insurance brokerage business, revenue primarily comes from insurance commission fees paid by insurance companies when clients purchase insurance products through Hexiang Insurance Brokers. ● Consumption and lifestyle and others .
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.
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. 84 Table of Contents 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.
Currently we have already connected our data with third-party credit scoring agents as required by the regulations that prohibit internet platforms from directly providing personal information collected by them to financial institutions. Stage 4: Approval and Funding The funding source for the financial services business now includes investments from institutional funding partners only.
Currently we have already connected our data with third-party credit scoring agents as required by the regulations that prohibit internet platforms from directly providing personal information collected by them to financial institutions. 77 Table of Contents Stage 4: Approval and Funding The funding source for the financial services business now includes investments from institutional funding partners only.
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.
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.
Additionally, we developed the AI-Generated Content (AIGC) platform to quickly create images and videos for marketing purposes. These efforts have delivered efficient and secured services to our customers, highlighting our commitment as a leading AI-driven platform. ● Proprietary fraud detection .
Additionally, we developed the AI-Generated Content (AIGC) platform to quickly create images and videos for marketing purposes. These efforts have delivered efficient and secured services to our customers, highlighting our commitment as a leading AI-driven platform.
The NAFR is in charge of regulating the financial industry, with the exception of the securities sector. It will take over certain functions of the PBOC and the CSRC.
The NFRA is in charge of regulating the financial industry, with the exception of the securities sector. It will take over certain functions of the PBOC and the CSRC.
Moreover, even if we are able to license the infringed or similar technology, license fees could be substantial and may adversely affect our results of operations. See “Item 3. Key Information—D.
Moreover, even if we are able to license the infringed or similar technology, license fees could be substantial and may adversely affect our results of operations. 83 Table of Contents See “Item 3. Key Information—D.
The CBIRC issued the Administrative Measures for Information Disclosure of Life Insurance Products in November 2022, and issued the Information Disclosure Rules for One-Year-Above Life Insurance Products on December 30, 2022, both of which prescribe for disclosure requirements for life insurance and will come into effect on June 30, 2023.
The CBIRC issued the Administrative Measures for Information Disclosure of Life Insurance Products in November 2022, and issued the Information Disclosure Rules for One-Year-Above Life Insurance Products on December 30, 2022, both of which prescribe for disclosure requirements for life insurance and came into effect on June 30, 2023.
Baijunda and Wuhan Linyi jointly established a subsidiary, Hexiang Insurance Brokers, in September 2011. 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.
Baijunda and Wuhan Linyi jointly established a subsidiary, Hexiang Insurance Brokers, in September 2011. Upon the completion of this acquisition, Hexiang Insurance Brokers and its wholly owned subsidiary, Heanjun (which was deregistered in 2024), 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.
Ning Tang and Ms. Mei Zhao, holding 99% and 1% of CreditEase Puhui’s equity interest, respectively. Mr. Ning Tang is our executive chairman and Ms. Mei Zhao is one of our employees. (2) The shareholders of Yiren Financial Information are Pucheng Credit Assessment and Management (Beijing) Co., Ltd., Mr. Ning Tang and Ms.
Ning Tang and Ms. Mei Zhao, each holding 99% and 1% of CreditEase Puhui’s equity interest, respectively. Mr. Ning Tang is our executive chairman and Ms. Mei Zhao is one of our employees. 109 Table of Contents (2) The shareholders of Yiren Financial Information are Pucheng Credit Assessment and Management (Beijing) Co., Ltd., Mr. Ning Tang and Ms.
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.
Upon the completion of this acquisition, Hexiang Insurance Brokers and its wholly owned subsidiary, Heanjun (which was deregistered in 2024), 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.
(formerly known as Hejun Auto Rescue (Wuhan) Co., Ltd.) or Heanjun. Hexiang Insurance Brokers has been operating insurance brokerage business since then. 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.
(formerly known as Hejun Auto Rescue (Wuhan) Co., Ltd.) or Heanjun, which was deregistered in 2024. Hexiang Insurance Brokers has been operating insurance brokerage business since then. 71 Table of Contents 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.
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.
We allow prospective borrowers who initially fail to meet our borrower criteria to reapply for a loan after a certain period of time, typically ranging from 30 to 90 days, 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.
For the self-funded loans, we charge financing service fees that consist of interest income charged from borrowers. Borrowers Borrowers under the financial services business are primarily individuals, including credit card holders with stable credit performances and small business owners with business operations for more than six months and the ability to generate recurring revenues.
For the self-funded loans, we charge financing service fees that consist of interest income charged from borrowers. Borrowers Borrowers under the financial services business are primarily individuals, including credit card holders with stable credit performances and small business owners with the capabilities to generate recurring revenues.
These Measures categorizes insurance sales activities of insurance companies and insurance intermediaries, including insurance agency companies, into three phases namely pre-sales, in-sales, and post-sales activities, sets forth varied regulatory requirements on insurance sales activities in each phase: (1) for pre-sales phase, insurance intermediaries companies shall not engage in insurance sales activities beyond the approved business scope and regional scope; insurance intermediaries companies shall assume the primary management responsibility for the insurance sales promotion information released by its sales personnel; (2) for in-sales phase, insurance intermediaries companies shall not enter into insurance contracts with their clients using methods such as compulsory tie-in sale or default check on web pages; (3) for post-sales phase, insurance intermediaries companies shall establish archives management rules, properly maintain business archives, account books, business ledgers, personnel archives, client materials and audio-visual materials, electronic data, and other archive materials generated during traceability management. 91 Table of Contents We acquired, through Yiren Financial Information, all outstanding shares of Baijunda and Wuhan Linyi in May 2020.
These Measures categorizes insurance sales activities of insurance companies and insurance intermediaries, including insurance agency companies, into three phases namely pre-sales, in-sales, and post-sales activities, sets forth varied regulatory requirements on insurance sales activities in each phase: (1) for pre-sales phase, insurance intermediaries companies shall not engage in insurance sales activities beyond the approved business scope and regional scope; insurance intermediaries companies shall assume the primary management responsibility for the insurance sales promotion information released by its sales personnel; (2) for in-sales phase, insurance intermediaries companies shall not enter into insurance contracts with their clients using methods such as compulsory tie-in sale or default check on web pages; (3) for post-sales phase, insurance intermediaries companies shall establish archives management rules, properly maintain business archives, account books, business ledgers, personnel archives, client materials and audio-visual materials, electronic data, and other archive materials generated during traceability management.
Pursuant to the amended and restated loan agreements between Hengyuda and the shareholders of Yiren Financial Information, Hengyuda agreed to provide loans of RMB4.0 million, RMB1.0 million and RMB95.0 million to Mr. Ning Tang, Mr. Yan Tian and Pucheng Credit Assessment and Management (Beijing) Co., Ltd., respectively, solely for the capitalization of Yiren Financial Information.
Pursuant to the amended and restated loan agreements between Hengyuda and the shareholders of Yiren Financial Information, Hengyuda agreed to provide loans of RMB1.9 million, RMB0.6 million and RMB47.5 million to Mr. Ning Tang, Mr. Yan Tian and Pucheng Credit Assessment and Management (Beijing) Co., Ltd., respectively, solely for the capitalization of Yiren Financial Information.
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.
Loan Servicing and Collections Our technology platform is capable of monitoring and tracking payment activity. 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.
ICP operators are subject to legal liability, including warnings, fines, confiscation of illegal gains, revocation of licenses or filings, closing of the relevant websites, administrative punishment, criminal liabilities, or civil liabilities, if they violate relevant provisions on internet privacy.
The relevant telecommunications authorities are further authorized to order ICP operators to rectify unauthorized disclosure. ICP operators are subject to legal liability, including warnings, fines, confiscation of illegal gains, revocation of licenses or filings, closing of the relevant websites, administrative punishment, criminal liabilities, or civil liabilities, if they violate relevant provisions on internet privacy.
Yan Tian, holding 95%, 4% and 1% of Yiren Financial Information’s equity interest, respectively. The ultimate shareholders of Pucheng Credit Assessment and Management (Beijing) Co., Ltd. are Mr. Ning Tang and Ms. Yan Tian, ultimately holding 95% and 5% of its equity interest, respectively. Mr. Ning Tang is our executive chairman, and Ms.
Yan Tian, each owning 95%, 3.8% and 1.2% of Yiren Financial Information’s equity interest, respectively. The shareholders of Pucheng Credit Assessment and Management (Beijing) Co., Ltd. are Mr. Ning Tang and Ms. Yan Tian, ultimately owning 95% and 5% of its equity interest, respectively. Mr. Ning Tang is our executive chairman and Ms.
The self-funded loans mainly receive funding from our company’s subsidiaries and are primarily unsecured small revolving loans, and in 2021 and 2022, the self-funded loans also included auto-secured loans and property-secured loans funded from VIEs’ subsidiaries. These loans amounted to RMB1,688.9 million, RMB648 thousand and RMB44.0 million (US$6.2 million) in 2021, 2022 and 2023, respectively.
The self-funded loans mainly receive funding from our company’s subsidiaries and are primarily unsecured small revolving loans, and the self-funded loans also included historical auto-secured loans funded from VIEs’ subsidiaries in 2022. These loans amounted to RMB648 thousand, RMB44.0 million and RMB252.9 million (US$34.6 million) in 2022, 2023 and 2024, respectively.
This division engages in various risk management activities, including reporting on performance trends, monitoring of loan concentrations and stability, performing economic stress tests on loans, randomly auditing loan decisions by our credit assessment team members and conducting peer benchmarking and external risk assessments.
This division plays a key role in various risk management activities, including reporting on performance trends, monitoring loan concentrations and stability, conducting economic stress tests on loans, auditing loan decisions made by our credit assessment team, and performing peer benchmarking and external risk assessments.
Our company and the VIEs have developed different user-friendly mobile applications for borrowers and clients of our financial services business, insurance brokerage business, and consumption and lifestyle business, which enable them to access our platforms at any time or location that is convenient. ● AI-powered system and data-driven services.
Our company and the VIEs have developed different user-friendly mobile applications for borrowers and clients of our financial services business, insurance brokerage business, and consumption and lifestyle business, which enable them to access our platforms at any time or location that is convenient. 81 Table of Contents ● Scalable platform .
In 2023, small revolving loans accounted for 96.9% of the total loan facilitation volume under the financial services business. As part of our global expansion strategy, we began offering unsecured small revolving loans in the Philippines in early 2023.
In 2024, small revolving loans accounted for almost all of our total loan facilitation volume under the financial services business. 75 Table of Contents As part of our global expansion strategy, we began offering unsecured small revolving loans in the Philippines in early 2023.
For example, we have been providing overseas engineering liability insurance services since the second half of 2022 to meet the growing security demands of engineering construction projects in Belt and Road countries.
For example, since the second half of 2022, we have been offering overseas engineering liability insurance services to address the growing security needs of engineering projects in Belt and Road countries.
Foreign Investment in Value-Added Telecommunication Services The Provisions on Administration of Foreign Invested Telecommunications Enterprises promulgated by the State Council in December 2001 and subsequently amended respectively in September 2008, February 2016 and March 2022 prohibit a foreign investor from owning more than 50% of the total equity interest in any value-added telecommunications service business in China.
We provide the value-added telecommunication services that are in the “restricted” category through the consolidated variable interest entities. ​ 85 Table of Contents Foreign Investment in Value-Added Telecommunication Services The Provisions on Administration of Foreign Invested Telecommunications Enterprises promulgated by the State Council in December 2001 and subsequently amended respectively in September 2008, February 2016 and March 2022 prohibit a foreign investor from owning more than 50% of the total equity interest in any value-added telecommunications service business in China.
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.
YouRace HK then established Chongqing Hengyuda Technology Co., Ltd., or Hengyuda, our wholly owned subsidiary in China, in March 2016. YouRace Hengchuang further established Yiren Information Consulting (Beijing) Co., Ltd., our wholly owned subsidiary in China, in August 2017. 70 Table of Contents Hengcheng Technology Development (Beijing) Co., Ltd., or Hengcheng, was established in China in September 2014.
Our PRC subsidiaries have obtained all material approvals required for its business operations. However, industries such as value-added telecommunication services (except for e-commerce, domestic multi-party communication, storage and forwarding classes and call centers), including internet information services, are restricted from foreign investment. We provide the value-added telecommunication services that are in the “restricted” category through the consolidated variable interest entities.
Our PRC subsidiaries have obtained all material approvals required for its business operations. However, industries such as value-added telecommunication services (except for e-commerce, domestic multi-party communication, storage and forwarding classes and call centers), including internet information services, are restricted from foreign investment.
Our company and the VIEs started to scale back such offline business in the second half of 2021 and discontinued the business in February 2022 to optimize product mix, cost efficiency and revenue structure during and post the pandemic period. 71 Table of Contents The following table provides a breakdown of the number of borrowers under our financial services business by channel: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2021 2022 2023 Number of borrowers (1) : ​ ​ ​ ​ ​ ​ Borrowers from online channels 1,217,938 1,606,879 2,891,901 Borrowers from offline channels 79,108 14 — Total number of borrowers 1,297,046 1,606,893 2,891,901 (1) The number of borrowers for a specified period represents the number of borrowers whose loans were funded under our financial services business during such period.
Our company and the VIEs discontinued the offline business in February 2022 to optimize product mix, cost efficiency and revenue structure during and post the pandemic period. 73 Table of Contents The following table provides a breakdown of the number of borrowers under our financial services business by channel: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2023 2024 Number of borrowers (1) : ​ ​ ​ ​ ​ ​ Borrowers from online channels 1,606,879 2,891,901 4,187,502 Borrowers from offline channels 14 — — Total number of borrowers 1,606,893 2,891,901 4,187,502 (1) The number of borrowers for a specified period represents the number of borrowers whose loans were funded under our financial services business during such period.
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.
Our online borrower acquisition efforts are supported by our big data capabilities and are primarily focused on search engine marketing (SEM), search engine optimization (SEO), mobile application downloads through major app stores, online channels via application programming interfaces (APIs), e-commerce and consumption platforms, social media platforms, and various marketing campaigns and membership services.
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.
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 2024 Negative List, jointly issued by the National Development and Reform Commission, or the NDRC and MOFCOM on September 6, 2024 and effective from November 1, 2024, 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 2024 Negative List and shall not engage in the prohibited activities listed in the 2024 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.
The infrastructure can be expanded easily to meet increasing data storage needs and user traffic. Our company and the VIEs have designed a unified platform, which administrates all systems and servers and can reconfigure or redeploy systems or servers automatically whenever needed.
Our platform is built on a distributed, load-balanced computing infrastructure, which is both highly scalable and reliable. The infrastructure can be expanded easily to meet increasing data storage needs and user traffic. Our company and the VIEs have designed a unified platform, which administrates all systems and servers and can reconfigure or redeploy systems or servers automatically whenever needed.
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.
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.
Our company and the VIEs have leased additional office spaces of 3,946.9 and 3,275.9 square meters in Beijing and other cities in China, respectively. We lease our premises from unrelated third parties under operating lease agreements. The lease for our principal executive offices will expire in December 2024.
Our company and the VIEs have leased additional office spaces of 4,396.4 and 4,466.6 square meters in Beijing and other cities in China, respectively. We lease our premises from unrelated third parties under operating lease agreements. The lease for our principal executive offices will expire in April 2028.
We currently focus on financial services, insurance brokerage business, and consumption and lifestyle business. ● Financial services . Our subsidiaries and the VIEs offer a diversified portfolio of loan products to high-quality and selected underserved borrowers in China. The loans are financed either by third-party funding partners or the VIEs’ subsidiaries.
Our subsidiaries and the VIEs offer a diversified portfolio of loan products to high-quality and selected underserved borrowers in China. The loans are financed either by third-party funding partners or the VIEs’ subsidiaries.
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. Hexiang Insurance Brokers has obtained the License for Professional Insurance Intermediaries.
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.
Regulations on Internet Insurance Business On December 14, 2020, the CBIRC promulgated the Regulatory Measures for Online Insurance Business, or the Regulatory Measures, which became effective on February 1, 2021 and supersedes the Interim Regulatory Measures for Internet Insurance Business promulgated by the CIRC on July 22, 2015.
Hexiang Insurance Brokers has obtained the License for Professional Insurance Intermediaries. ​ 91 Table of Contents Regulations on Internet Insurance Business On December 14, 2020, the CBIRC promulgated the Regulatory Measures for Online Insurance Business, or the Regulatory Measures, which became effective on February 1, 2021 and supersedes the Interim Regulatory Measures for Internet Insurance Business promulgated by the CIRC on July 22, 2015.
As of December 31, 2023, we had served approximately 9.3 million borrowers through our subsidiaries and the VIEs. In 2021, 2022 and 2023, the aggregate loans we facilitated under our loan facilitation services and self-funded financing services amounted to RMB23,195.2 million, RMB22,623.1 million and RMB36,036.3 million (US$5,075.6 million), respectively.
As of December 31, 2024, we had served approximately 12.4 million borrowers through our subsidiaries and the VIEs. In 2022, 2023 and 2024, the aggregate loans we facilitated under our loan facilitation services and self-funded financing services amounted to RMB22,623.1 million, RMB36,036.3 million and RMB53,591.6 million (US$7,342.0 million), respectively.
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.
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.
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.
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. Meanwhile, we also refer some of the selected qualified borrowers to our own subsidiaries for loan funding services directly.
Ltd. in October 2022, and acquired Creditable Lending Corporation in February 2023 and Capital para Mexicanos Emprendedores S.A. de C.V., SOFOM, ENR in October 2023. Our principal executive offices are located at 28/F, China Merchants Bureau Building, 118 Jianguo Road, Chaoyang District, Beijing, People’s Republic of China. Our telephone number at this address is +86 10 5964-4552.
To expand our business internationally, we established Yiren Vision Pte. Ltd. in October 2022, and acquired Creditable Lending Corporation in February 2023 and Capital para Mexicanos Emprendedores S.A. de C.V., SOFOM, ENR in October 2023. Our principal executive offices are located at 28/F, China Merchants Bureau Building, 118 Jianguo Road, Chaoyang District, Beijing, People’s Republic of China.
Our Technology We believe our technology platform is a competitive advantage and an important reason that borrowers and clients utilize our marketplace. Key features of our technology platform include: ● Highly automated process.
Our Technology We believe our technology platform is a competitive advantage and an important reason that borrowers and clients utilize our marketplace. Key features of our technology platform include: ● AI-powered system and data-driven services .
As of the date of this annual report, we had 441 registered trademarks with the Trademark Office of the National Intellectual Property Administration. 101 Table of Contents Regulations Relating to Dividend Withholding Tax Pursuant to the Enterprise Income Tax Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
Regulations Relating to Dividend Withholding Tax Pursuant to the Enterprise Income Tax Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
In 2023, we had generated RMB1,960.3 million GMV in consumption and lifestyle business and others segment. 77 Table of Contents Meanwhile, as the revenue from e-commerce has increased and that from wealth solutions decreased due to our strategic shift towards offering non-financial products and services, the revenue generated from wealth solutions has been re-categorized as “others” within our net revenue under our consolidated financial statements included elsewhere in this annual report.
Meanwhile, as the revenue from consumption and lifestyle services has increased and that from wealth solutions decreased due to our strategic shift towards offering non-financial products and services, the revenue generated from wealth solutions has been re-categorized as “others” within our net revenue under our consolidated financial statements included elsewhere in this annual report.
CreditEase incorporated Yirendai Ltd. in the Cayman Islands to be our holding company in September 2014. We then established a wholly owned subsidiary in Hong Kong, YouRace Digital Holdings HK Limited (formerly known as Yiren Digital Hong Kong Limited or Yirendai Hong Kong Limited), or YouRace HK, in October 2014.
CreditEase incorporated Yirendai Ltd. in the Cayman Islands to be our holding company in September 2014. We then established a wholly owned subsidiary in Hong Kong, YouRace Digital Holdings HK Limited, or YouRace HK, in October 2014. YouRace HK further established YouRace Hengchuang Technology Development (Beijing) Co., Ltd., or YouRace Hengchuang, our wholly owned subsidiary in China, in January 2015.
Any entity which is not a qualified insurance institution (including the insurance company and insurance intermediary service providers, such as the insurance brokerage company and insurance agency company) is not allowed to conduct online insurance business, including without limitation consultation of insurance products, comparison of insurance products, trial calculation of insurance premiums, quotation and comparison of quotations, drafting insurance plans for policyholders, processing insurance application formalities and premium collection. 89 Table of Contents According to the Regulatory Measures, “self-operated online platform” refers to the online platform which is established and operated independently by an insurance institution for the purpose of engaging in the internet insurance business.
Any entity which is not a qualified insurance institution (including the insurance company and insurance intermediary service providers, such as the insurance brokerage company and insurance agency company) is not allowed to conduct online insurance business, including without limitation consultation of insurance products, comparison of insurance products, trial calculation of insurance premiums, quotation and comparison of quotations, drafting insurance plans for policyholders, processing insurance application formalities and premium collection.
We provide a diverse array of non-financial products and services tailored to meet various consumer needs and address additional service demands through Yixianghua and Yiren Select, all with the goal of enhancing the customer experience. Our offerings span multiple sectors, including membership upgraded services, 3C products (computers, consumer electronics, and communication devices), and healthcare products and services.
We provide a diverse array of non-financial products and services tailored to meet various consumer needs and address additional service demands through Yixianghua and Yiren Select, all with the goal of enhancing the customer experience.
Funding Sources Under the financial services business, the loans are primarily funded by third parties. Since September 2020, we have ceased accepting new funding from individual investors and instead have solely accepted funding from institutional funding partners, such as commercial banks, internet banks, trusts, microloan companies, and consumer finance companies.
Since September 2020, we have ceased accepting new funding from individual investors and instead have solely accepted funding from institutional funding partners, such as commercial banks, internet banks, trusts, microloan companies, and consumer finance companies.
Therefore, the funding from third-party financial leasing companies showed a significant decreasing trend from RMB4,060.4 million in 2021 to nil in 2022, and the funding provided by the consolidated financial leasing companies decreased from RMB1,687.2 million in 2021 to RMB648.0 thousand in 2022. 73 Table of Contents Our Loan Products Yiren Credit platform primarily facilitates unsecured loan products to borrowers.
Therefore, the funding from third-party financial leasing companies showed a significant decreasing trend from RMB4,060.4 million in 2021 to nil in 2022, and the funding provided by the consolidated financial leasing companies decreased from RMB1,687.2 million in 2021 to RMB648.0 thousand in 2022 and further to nil in 2024.
In 2021, 2022 and 2023, we facilitated RMB21,506.3 million, RMB22,622.5 million and RMB35,992.3 million (US$5,069.4 million) loans funded by third parties, respectively.
In 2022, 2023 and 2024, we facilitated loans of RMB22,622.5 million, RMB35,992.3 million and RMB53,338.7 million (US$7,307.4 million) respectively, funded by third parties.
Hainan Haijin Yichuang Micro-lending Co., Ltd., which is a subsidiary of the consolidated variable interest entities, is approved by the local governmental authority to conduct micro-lending business. 85 Table of Contents Regulations on Financing Guarantee In March 2010, seven governmental authorities including the CBRC, the MOFCOM and Ministry of Finance, or MOF promulgated the Interim Administrative Measures for Financing Guarantee Companies which requires an entity or individual to obtain a prior approval from the relevant governmental authority before engaging in the financing guarantee business.
Regulations on Financing Guarantee In March 2010, seven governmental authorities including the CBRC, the MOFCOM and Ministry of Finance, or MOF promulgated the Interim Administrative Measures for Financing Guarantee Companies which requires an entity or individual to obtain a prior approval from the relevant governmental authority before engaging in the financing guarantee business.
As of December 31, 2023, Hexiang Insurance Brokers had established 32 offline branches nationwide and offered over 1000 insurance products from over 100 insurers, and served 1,173,873 individual clients and 109,229 institutional clients.
As of December 31, 2024, Hexiang Insurance Brokers had established 32 offline branches nationwide and offered over 1,000 insurance products from over 100 insurers, and served 1,397,597 individual clients and 134,522 institutional clients.
Pursuant to this draft, financial institutions shall not engage other entities or individuals to carry out internet marketing of financial products unless otherwise provided or authorized by laws and regulations.
Pursuant to this draft, financial institutions shall not engage other entities or individuals to carry out internet marketing of financial products unless otherwise provided or authorized by laws and regulations. Regulations on Internet Information Security Internet information in China is also regulated and restricted from a national security standpoint.
In December 2019, we entered into a series of contractual arrangements with Tianjin Linyang and its then shareholders and started to consolidate its financial results. In August 2019, Tianjin Linyang established Beijing Yiding Technology Co., Ltd., or Yiding Technology, to conduct our insurance referral business. Yiding Technology became a subsidiary of Yiren Financial Information in August 2022.
In August 2019, Tianjin Linyang established Beijing Yiding Technology Co., Ltd., or Yiding Technology, to conduct our insurance referral business. Yiding Technology became a subsidiary of Yiren Financial Information in August 2022. 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.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenue (including revenue from related parties of RMB573,158, RMB411,010 and RMB141,595 for the years ended December 31, 2021, 2022 and 2023, respectively) (1) ​ 4,477,929 100.0 3,434,620 100.0 4,895,633 689,535 100.0 Operating costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing (including expenses from related parties of RMB1,548, RMB38 and RMB24 for the years ended December 31, 2021, 2022 and 2023, respectively) ​ (1,553,344) (34.7) (573,974) (16.7) (656,603) (92,481) (13.4) Origination, servicing and other operating costs (including costs from related parties of RMB354,985, RMB350,311 and RMB324,854 for the years ended December 31, 2021, 2022 and 2023, respectively) ​ (760,858) (17.0) (776,841) (22.6) (976,172) (137,491) (19.9) Research and development (including expenses from related parties of RMB85,893, RMB65,268 and RMB52,468 for the years ended December 31, 2021, 2022 and 2023, respectively) ​ (207,996) (4.7) (151,924) (4.4) (148,754) (20,952) (3.0) General and administrative (including expenses from related parties of RMB 49,225, RMB35,368 and RMB19,567 for the years ended December 31, 2021, 2022 and 2023, respectively) ​ (298,244) ​ (6.6) ​ (271,794) ​ (7.9) ​ (231,135) ​ (32,555) ​ (4.7) Allowance for contract assets, receivables and others (370,154) (8.3) (188,223) (5.5) (288,187) (40,589) (6.0) Total operating costs and expenses (3,190,596) (71.3) (1,962,756) (57.1) (2,300,851) (324,068) (47.0) Interest (expense)/income, net (73,383) (1.6) (26,302) (0.8) 80,749 11,373 1.6 Fair value adjustments related to the Consolidated ABFE (2) (37,442) (0.8) 18,900 0.6 (50,171) (7,066) (1.0) Other income, net 26,665 0.6 30,921 0.9 20,000 2,817 0.4 Total other (loss)/income, net (84,160) (1.8) 23,519 0.7 50,578 7,124 1.0 Income before provision for income taxes 1,203,173 26.9 1,495,383 43.6 2,645,360 372,591 54.0 Income tax expenses (170,189) (3.8) (300,512) (8.8) (565,163) (79,601) (11.5) Net income 1,032,984 23.1 1,194,871 34.8 2,080,197 292,990 42.5 Notes: (1) Net revenue is broken down as follows: 123 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Insurance brokerage services 755,691 16.9 731,797 21.3 963,822 135,751 19.7 Financing services 524,840 11.7 278,783 8.1 55,974 7,884 1.1 Electronic commerce services ​ 33,114 ​ 0.7 ​ 302,896 ​ 8.8 ​ 1,267,104 ​ 178,468 ​ 25.9 Others ​ 884,253 ​ 19.8 ​ 554,123 ​ 16.2 ​ 350,678 ​ 49,392 ​ 7.1 Total net revenue 4,477,929 100.0 3,434,620 100.0 4,895,633 689,535 100.0 (2) We consolidated certain trusts or Asset Backed Special Plan (“ABS plan”) as a whole, which we refer to in this annual report collectively as “Consolidated Assets Backed Financing Entities” or the “Consolidated ABFE.” For more information about the Consolidated ABFE, please see “Note 2—Summary of Significant Accounting Policies—Basis of consolidation” appearing in Item 18 of this annual report.
Biggest changeThis information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenue (including revenue from related parties of RMB411,010, RMB141,595 and RMB32,192 for the years ended December 31, 2022, 2023 and 2024, respectively) (1) ​ 3,434,620 100.0 4,895,633 100.0 5,805,901 795,405 100.0 Operating costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing (including expenses from related parties of RMB38, RMB24 and nil for the years ended December 31, 2022, 2023 and 2024, respectively) ​ (573,974) (16.7) (656,603) (13.4) (1,196,429) (163,910) (20.6) Origination, servicing and other operating costs (including costs from related parties of RMB350,311, RMB324,854 and RMB283,907 for the years ended December 31, 2022, 2023 and 2024, respectively) ​ (776,841) (22.6) (976,172) (19.9) (882,957) (120,965) (15.2) Research and development (including expenses from related parties of RMB65,268, RMB52,468 and RMB252,802 for the years ended December 31, 2022, 2023 and 2024, respectively) ​ (151,924) (4.4) (148,754) (3.0) (411,876) (56,427) (7.1) General and administrative (including expenses from related parties of RMB35,368, RMB19,567 and RMB27,339 for the years ended December 31, 2022, 2023 and 2024, respectively) ​ (271,794) ​ (7.9) ​ (231,135) ​ (4.7) ​ (274,673) ​ (37,629) ​ (4.7) Provision for contingent liabilities (21,501) (0.6) (27,035) (0.6) (869,280) (119,091) (15.0) Allowance for contract assets, receivables and others (166,722) (4.9) (261,152) (5.4) (523,622) (71,736) (9.0) Total operating costs and expenses (1,962,756) (57.1) (2,300,851) (47.0) (4,158,837) (569,758) (71.6) Interest (expense)/income, net (26,302) (0.8) 80,749 1.6 105,477 14,450 1.8 Fair value adjustments related to the Consolidated ABFE (2) 18,900 0.6 (50,171) (1.0) 107,532 14,732 1.9 Other income, net (including expenses from related parties of nil, nil and RMB1,003 for the years ended December 31, 2022, 2023 and 2024, respectively) 30,921 0.9 20,000 0.4 1,848 253 — Total other income, net 23,519 0.7 50,578 1.0 214,857 29,435 3.7 Income before provision for income taxes 1,495,383 43.6 2,645,360 54.0 1,861,921 255,082 32.1 Income tax expenses (300,512) (8.8) (565,163) (11.5) (279,182) (38,248) (4.8) Share of results of equity investees — — — — (440) (60) — Net income 1,194,871 34.8 2,080,197 42.5 1,582,299 216,774 27.3 Notes: (1) Net revenue is broken down as follows: 125 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan facilitation services 1,362,685 39.7 2,240,852 45.8 2,721,389 372,829 46.9 Post-origination services 204,336 5.9 17,203 0.4 5,957 816 0.1 Insurance brokerage services 731,797 21.3 963,822 19.7 408,369 55,946 7.0 Financing services 278,783 8.1 55,974 1.1 93,239 12,774 1.6 Electronic commerce services ​ 302,896 ​ 8.8 ​ 1,267,104 ​ 25.9 ​ 1,865,621 ​ 255,589 ​ 32.1 Guarantee services ​ 10,999 ​ 0.3 ​ 50,865 ​ 1.0 ​ 429,299 ​ 58,814 ​ 7.4 Others ​ 543,124 ​ 15.9 ​ 299,813 ​ 6.1 ​ 282,027 ​ 38,637 ​ 4.9 Total net revenue 3,434,620 100.0 4,895,633 100.0 5,805,901 795,405 100.0 (2) We consolidated certain trusts or asset backed special plan (“ABS plan”) as a whole, which we refer to in this annual report collectively as “consolidated assets backed financing entities” or the “Consolidated ABFE.” For more information about the Consolidated ABFE, please see “Note 2—Summary of Significant Accounting Policies—Basis of consolidation” appearing in Item 18 of this annual report.
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.
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.
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.
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 services and service fees receivable from industry partners.
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.
Allowance for contract assets, receivables and others . Allowance for contract assets, receivables and others is 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.
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.
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, 2024 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.
We intend to continue to dedicate significant resources to our sales and marketing efforts and constantly seek to improve the effectiveness of these efforts, in particular with regard to borrower acquisition. 113 Table of Contents For our financial services business, our company and the VIEs attract borrowers through online channels, such as social media platforms, search engine marketing, search engine optimization, mobile application downloads through major application stores, as well as various marketing campaigns and membership services.
We intend to continue to dedicate significant resources to our sales and marketing efforts and constantly seek to improve the effectiveness of these efforts, in particular with regard to borrower acquisition. 115 Table of Contents For our financial services business, our company and the VIEs attract borrowers through online channels, such as social media platforms, search engine marketing, search engine optimization, mobile application downloads through major application stores, as well as various marketing campaigns and membership services.
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.
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, 2024.
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.
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.” 135 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.
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.
Allowance for guarantee receivable and 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.
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.
Yiren Hengsheng, one of our PRC subsidiaries, was qualified as a “software enterprise” in March 2021 and the status was reevaluated in 2024, 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 2025.
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.
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.” ​ 124 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 an absolute amount and as a percentage of our net revenue.
For our insurance brokerage business, we acquire clients through a variety of sources, such as online direct marketing, CreditEase ecosystem, member referral, channel partnership and social media platforms. For our consumption and lifestyle service business, we primarily serve our existing customers from all business lines.
For our insurance brokerage business, we acquire clients through a variety of sources, such as online direct marketing, CreditEase ecosystem, member referral, channel partnership and social media platforms. For our consumption and lifestyle service business, we primarily serve our existing customers from other business lines.
The increase was offset by a decrease in revenue from others of 66.0% from RMB440.2 million in 2022 to RMB149.6 million (US$21.1 million) in 2023, primarily due to the strategic shift towards focusing on offering consumption and lifestyle products and services, which resulted in an increased revenue contribution from the e-commerce business and decreased revenue contribution from the Yiren Select wealth business since the second half of 2023.
The increase was offset by a decrease in revenue from others of 66.0% from RMB440.2 million in 2022 to RMB149.6 million in 2023, primarily due to the strategic shift towards focusing on offering consumption and lifestyle products and services, which resulted in an increased revenue contribution from the e-commerce business and decreased revenue contribution from the Yiren Select wealth business since the second half of 2023.
The increase was primarily attributable to an increase in the revenue from referral services of 85.3% from RMB64.9 million in 2022 to RMB120.2 million (US$16.9 million) in 2023, which was primarily due to the growing number of borrowers referred.
The increase was primarily attributable to an increase in the revenue from referral services of 85.3% from RMB64.9 million in 2022 to RMB120.2 million in 2023, which was primarily due to the growing number of borrowers referred.
In 2023, the majority of our revenues were generated from our financial services business, which included (i) loan facilitation service fees paid by institutional partners for our technology-enabled borrower acquisition services; (ii) post origination service fees paid by institutional partners for our post-origination loan management and collection services; (iii) financing service fees paid by borrowers for loans funded by our subsidiaries, and (iv) revenue from other financial services, such as referral services related to borrower referral for other loan platforms and guarantee services.
In 2024, the majority of our revenues were generated from our financial services business, which included (i) loan facilitation service fees paid by institutional partners for our technology-enabled borrower acquisition services; (ii) post origination service fees paid by institutional partners for our post-origination loan management and collection services; (iii) financing service fees paid by borrowers for loans funded by our subsidiaries; (iv) guarantee service fees paid by borrowers for loans guaranteed by our subsidiaries; and (v) revenue from other financial services, such as referral services related to borrower referral for other loan platforms.
Business Overview—Financial Services Business—Our Loan Products.” For these loans, we receive from the third-party funding partners, and guarantee companies if any, (i) the loan facilitation service fees for our technology-enabled borrower acquisition services, and (ii) the post-origination service fees for our post-origination loan management and collection services, including payment reminder services, payment collection services, overdue payment monitoring services, and lawsuit filing services under certain circumstances, among others.
Business Overview—Financial Services Business—Our Loan Products.” For these loans, we receive from the third-party funding partners, guarantee companies, and borrowers if any, (i) the loan facilitation service fees for our technology-enabled borrower acquisition services, (ii) the post-origination service fees for our post-origination loan management and collection services, including payment reminder services, payment collection services, overdue payment monitoring services, and lawsuit filing services under certain circumstances, among others, and (iii) the guarantee service fees for guarantee services provided to borrowers, if any.
Our fair value adjustments decreased from a fair value gain of RMB18.9 million in 2022 to a fair value loss of RMB50.2 million (US$7.1 million) in 2023, primarily due to the expected losses on loans issued by new trusts. Other income, net.
Our fair value adjustments decreased from a fair value gain of RMB18.9 million in 2022 to a fair value loss of RMB50.2 million in 2023, primarily due to the expected losses on loans issued by new trusts. Other income, net.
The revenue from electronic commerce services increased by 318.3% from RMB302.9 million in 2022 to RMB1,267.1 million (US$178.5 million) in 2023, primarily due to the continuous growth of paying customers on our e-commerce platform.
The revenue from electronic commerce services increased by 318.3% from RMB302.9 million in 2022 to RMB1,267.1 million in 2023, primarily due to the continuous growth of paying customers on our e-commerce platform.
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.
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.
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.
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 RMB166.7 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 RMB123.2 million, partially offset by an increase in deferred tax assets or liabilities of RMB109.6 million.
Under PRC law, each of our subsidiaries and the consolidated variable interest entities in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital and may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion.
Under PRC law, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital and may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion.
Our net other income decreased by 35.3% from RMB30.9 million in 2022 to RMB20.0 million (US$2.8 million) in 2023, primarily due to reduced preferential tax treatments and governmental incentives. Income tax expenses .
Our net other income decreased by 35.3% from RMB30.9 million in 2022 to RMB20.0 million in 2023, primarily due to reduced preferential tax treatments and governmental incentives. Income tax expenses .
Our sales and marketing expenses as a percentage of our total revenues decreased from 16.7% to 13.4% during the same period. 127 Table of Contents Origination, servicing and other operating costs .
Our sales and marketing expenses as a percentage of our total revenues decreased from 16.7% to 13.4% during the same period. Origination, servicing and other operating costs .
Allowance for contract assets Contract assets are stated at the historical carrying amount net of write offs and allowance for uncollectible accounts.
Allowance for guarantee receivable and contract assets Guarantee receivable and contract assets are stated at the historical carrying amount net of write offs and allowance for uncollectible accounts.
The increase was partially offset by a decrease of 26.0% in our sales and marketing expenses for the insurance brokerage business from RMB17.4 million in 2022 to RMB12.9 million (US$1.8 million) in 2023, and further offset by a decrease of 15.6% in our sales and marketing expenses in the consumption and lifestyle business and others from RMB172.6 million in 2022 to RMB145.7 million (US$20.5 million) in 2023, mainly due to the decrease in general branding costs.
The increase was partially offset by a decrease of 26.0% in our sales and marketing expenses for the insurance brokerage business from RMB17.4 million in 2022 to RMB12.9 million in 2023, and further offset by a decrease of 15.6% in our sales and marketing expenses in the consumption and lifestyle business and others from RMB172.6 million in 2022 to RMB145.7 million in 2023, mainly due to the decrease in general branding costs.
Business Overview—Risk Management.” 117 Table of Contents Selected Statements of Operations Items Net revenue Our net revenue consists of revenue from loan facilitation services and post-origination services in connection with loans funded by third-party institutions, insurance brokerage services, financing services in connection with loans funded by our subsidiaries (and consolidated entities in 2021 and 2022), electronic commerce services, and others.
Business Overview—Risk Management.” Selected Statements of Operations Items Net revenue Our net revenue consists of revenue from loan facilitation services, post-origination services and guarantee services in connection with loans funded by third-party institutions, financing services in connection with loans funded by our subsidiaries (and consolidated entities in 2022), insurance brokerage services, electronic commerce services, and others.
Our sales and marketing expenses increased by 14.4% from RMB574.0 million in 2022 to RMB656.6 million (US$92.5 million) in 2023, mainly due to an increase of 29.7% in sales and marketing expenses for the financial services business from RMB384.0 million in 2022 to RMB498.1 million (US$70.2 million) in 2023, mainly as a result of the growth of our financial services business volume.
Our sales and marketing expenses increased by 14.4% from RMB574.0 million in 2022 to RMB656.6 million in 2023, mainly due to an increase of 29.7% in sales and marketing expenses for the financial services business from RMB384.0 million in 2022 to RMB498.1 million in 2023, mainly as a result of the growth of our financial services business volume.
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.
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, guarantee deposits in a restricted bank account, and frozen funds due to lawsuits.
Loans at Fair Value Loans at fair value represented the fair value of loans invested by the Consolidated ABFE increased by 1,154.1% from RMB54.0 million as of December 31, 2022 to RMB677.8 million (US$95.5 million) as of December 31, 2023, primarily due to the increase in the balance of loans invested by the Consolidated ABFE.
Loans at fair value increased by 1,154.1% from RMB54.0 million as of December 31, 2022 to RMB677.8 million as of December 31, 2023, primarily due to an increase in the balance of loans invested by the Consolidated ABFE.
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.
Financing Receivables Financing receivables mainly represent loans issued by our overseas subsidiary and Yichuang Micro-lending and lease receivables arising from direct financing leases issued by Yichuang Financial Leasing.
The revenue from our insurance brokerage business increased by 31.7% from RMB731.8 million in 2022 to RMB963.8 million (US$135.8 million) in 2023, mainly due to our improved customer acquisition and serving capabilities for our insurance brokerage business.
The revenue from our insurance brokerage business increased by 31.7% from RMB731.8 million in 2022 to RMB963.8 million in 2023, primarily due to our improved customer acquisition and serving capabilities.
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.
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.
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 post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are provided. Revenue from guarantee services is recognized on a straight-line basis over the term of the guarantee liability.
Our total operating costs and expenses increased by 17.2% from RMB1,962.8 million in 2022 to RMB2300.9 million (US$324.1 million) in 2023, primarily attributable to increases in origination, servicing and other operating costs and sales and marketing expenses. Sales and marketing expenses .
Our total operating costs and expenses increased by 17.2% from RMB1,962.8 million in 2022 to RMB2,300.9 million in 2023, primarily attributable to increases in origination, servicing and other operating costs and sales and marketing expenses. Sales and marketing expenses .
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 lease our principal office premises under an operating lease with an expiration date in April 2028. Rental expenses under operating leases for 2022, 2023 and 2024 were RMB27.9 million, RMB19.4 million and RMB19.3 million (US$2.6 million), respectively. Payables to investors related to the Consolidated ABFE have been excluded from the table above.
The terms of health and life insurance products vary and are typically five to ten years. We earn brokerage commissions on health and life insurance products from both the first-year initial premium and the renewal premiums for each subsequent year throughout the policy term, as calculated based on pre-agreed percentages of the premiums paid by the policy holder.
We earn brokerage commissions on health and life insurance products from both the first-year initial premium and the renewal premiums for each subsequent year throughout the policy term, as calculated based on pre-agreed percentages of the premiums paid by the policy holder.
The revenue from our consumption and lifestyle business and others increased by 90.6% from RMB743.1 million in 2022 to RMB1,416.7 million (US$199.5 million) in 2023, mainly due to the continuous growth of paying customers on our e-commerce platform. Operating costs and expenses .
The revenue from our consumption and lifestyle business and others increased by 90.6% from RMB743.1 million in 2022 to RMB1,416.7 million in 2023, mainly due to the continuous growth of paying customers on our comprehensive life service platform. Operating costs and expenses .
We recorded a net interest income of RMB80.7 million (US$11.4 million) in 2023, as compared to a net interest expense of RMB26.3 million in 2022, primarily due to the repayment of secured borrowings and improved diversification of our investments. Fair value adjustments related to the Consolidated ABFE.
We recorded a net interest income of RMB80.7 million in 2023, as compared to a net interest expense of RMB26.3 million in 2022, primarily due to the repayment of secured borrowings and improved diversification of our investments. Fair value adjustments gain/(loss).
The loans funded by these third parties are primarily unsecured small revolving loans and small business loans, and in 2020 and 2021, loans funded by third parties also included auto-secured loans. For more details of these loan products, please see “Item 4. Information on the Company—B.
The loans funded by these third parties are primarily unsecured small revolving loans and small business loans. For more details of these loan products, please see “Item 4. Information on the Company—B.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2021 and 2022 were increases of 1.5% and 1.8%, respectively, and a decrease of 0.3% for December 2023.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index were an increase of 1.8% for December 2022, a decrease of 0.3% for December 2023, and an increase of 0.1% for December 2024.
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.
Revenue from loan facilitation, post-origination and guarantee services We provide loan facilitation services, post-origination services and guarantee services under loan facilitation model. 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.
Investing Activities Net cash provided by investing activities was RMB100.0 million (US$14.1 million) in 2023, which was primarily attributable to collection of principals of loans at fair value and financing receivables, partially offset by investment in loans at fair value.
Net cash provided by investing activities was RMB100.0 million in 2023, which was primarily attributable to collection of principals of loans at fair value of RMB772.4 million and repayments of financing receivables of RMB359.0 million, partially offset by investment in loans at fair value of RMB1,494.1 million.
For example, we have been providing overseas engineering liability insurance services since the second half of 2022 to meet the growing security demands of engineering construction projects in Belt and Road countries.
For example, since the second half of 2022, we have been offering overseas engineering liability insurance services to address the growing security needs of engineering projects in Belt and Road countries.
Penalty fees are calculated as a certain percentage of past due amounts in the case of late payment, or a certain percentage of the contract amounts in case of prepayment, and we recognize the relevant revenue when the fees are received.
Revenue from referral services is recognized when successful referrals are completed. Penalty fees are calculated as a certain percentage of past due amounts in the case of late payment, or a certain percentage of the contract amounts in case of prepayment, and we recognize the relevant revenue when the fees are received.
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.
If the estimate of the prepayment rates suffers 0.5 percentage point increase/decrease, it would result in a decrease of RMB16.9 million (US$2.3 million) and an increase of RMB16.9 million (US$2.3 million) for revenue recognized for the year ended December 31, 2024.
Payable to Investors at Fair Value Payable to investors at fair value represents the amount payable by the Consolidated ABFE to its investors, which increased from nil to RMB445.8 million (US$62.8 million) as of December 31, 2023, primarily due to the increase in the external contribution to the Consolidated ABFE.
Payable to investors at fair value increased from nil as of December 31, 2022 to RMB445.8 million as of December 31, 2023, primarily due to an increase in the external contribution to the Consolidated ABFE.
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.
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 other financial investments.
Allowance for contract assets, receivables and others. Our allowance for contract assets, receivables and others increased by 53.1% from RMB188.2 million in 2021 to RMB288.2 million (US$40.6 million) in 2023, which was primarily attributed to the growing volume of loans facilitated on our platform. Interest income/(expense), net .
Our allowance for contract assets, receivables and others increased by 56.6% from RMB166.7 million in 2022 to RMB261.2 million in 2023, which was primarily attributed to the growing volume of loans facilitated on our platform. Interest income/(expense), net .
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.
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.
If our existing PRC subsidiaries or any newly formed ones incur debts on their own behalf in the future, the instruments governing their debts may restrict their ability to pay dividends to us.
We conduct our operations primarily through our subsidiaries and the consolidated variable interest entities in China. If our existing PRC subsidiaries or any newly formed ones incur debts on their own behalf in the future, the instruments governing their debts may restrict their ability to pay dividends to us.
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 RMB288.2 million (US$40.6 million), and certain working capital items, including a decrease in amounts due from related parties of RMB431.6 million (US$60.8 million) and an increase in accrued expenses and other liabilities of RMB155.2 million (US$21.9 million), partially offset by an increase in accounts receivable of RMB308.0 million (US$43.4 million), an increase in contract assets of RMB545.4 million (US$76.8 million) and an increase in prepaid expenses and other assets of RMB169.4 million (US$23.9 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 RMB261.2 million, and certain working capital items, including a decrease in amounts due from related parties of RMB431.6 million and an increase in accrued expenses and other liabilities of RMB200.0 million, partially offset by an increase in accounts receivable of RMB306.5 million, an increase in contract assets of RMB547.7 million and an increase in prepaid expenses and other assets of RMB168.7 million.
We recorded income tax expenses of RMB565.2 million (US$79.6 million) in 2023 as compared to income tax expenses of RMB300.5 million in 2022, which was mainly due to the increase in taxable income driven by the growing of our business volume. Net income .
We recorded income tax expenses of RMB565.2 million in 2023 as compared to income tax expenses of RMB300.5 million in 2022, which was mainly due to the increase in taxable income driven by the growing of our business volume. Net income . As a result of the foregoing, our net income increased from RMB1,194.9 million in 2022 to RMB2,080.2 million.
For our financial services business, we compete with other consumer finance marketplaces and loan facilitation platforms in China. The industry was intensely competitive before the year 2018.
Ability to Compete Effectively Our business and results of operations depend on our ability to compete effectively in the markets in which we operate. For our financial services business, we compete with other consumer finance marketplaces and loan facilitation platforms in China. The industry was intensely competitive before the year 2018.
YouRace Hengchuang, one of our PRC subsidiaries, was qualified as a “high and new technology enterprise” in November 2018 and the status was reaffirmed in 2021. Accordingly, it has been eligible for a preferential income tax rate of 15%.
The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. YouRace Hengchuang, one of our PRC subsidiaries, was qualified as a “high and new technology enterprise” in November 2018 and the status was reaffirmed in 2024. Accordingly, it has been eligible for a preferential income tax rate of 15%.
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.
If the estimate of the net cumulative expected loss rates suffers 0.5 percentage point increase/decrease, it would result in an increase of RMB19.2 million (US$2.6 million) and a decrease of RMB19.2 million (US$2.6 million) for allowance for guarantee receivable and contract assets.
Our origination, servicing and other operating costs as a percentage of our total revenue decreased from 22.6% to 19.9% during the same period. Research and development expenses . Our research and development expenses decreased slightly from RMB151.9 million in 2022 to RMB148.8 million (US$21.0 million) in 2023, mainly due to the optimization of personnel.
Research and development expenses . Our research and development expenses decreased slightly from RMB151.9 million in 2022 to RMB148.8 million in 2023, mainly due to the optimization of personnel. Our research and development expenses as a percentage of our total revenue decreased from 4.4% to 3.0% during the same period. General and administrative expenses .
Besides, Chongqing Hengfengyi Technology Co., Ltd. as a new setup PRC subsidiary and Chongqing Jintong Financing Guarantee Co., Ltd. as a newly acquired company in 2023, are also eligible for a reduced enterprise income tax rate of 15% pursuant to the same set of policies and regulations applicable to Hengyuda.
Besides, Chongqing Hengfengyi Technology Co., Ltd., Beihai Youce Yike Technology Co., Ltd., Beihai Hengze Innovation Technology Co., Ltd., and Beihai Youjia Innovation Technology Co., Ltd., as newly setup PRC subsidiaries are also eligible for a reduced enterprise income tax rate of 15% pursuant to the same set of policies and regulations applicable to Hengyuda.
Our general and administrative expenses decreased by 15% from RMB271.8 million in 2022 to RMB231.1 million (US$32.6 million) in 2023, due to the optimization of our offline business and the overall improvement of our cost efficiency. Our general and administrative expenses as a percentage of our total revenue decreased from 7.9% to 4.7% during the same period.
Our general and administrative expenses decreased by 15% from RMB271.8 million in 2022 to RMB231.1 million in 2023, due to the optimization of our offline business and the overall improvement of our cost efficiency.
Our origination, servicing and other operating costs increased 25.7% from RMB776.8 million in 2022 to RMB976.2 million (US$137.5 million) in 2023, mainly due to the rapid growth of our overall business scale compared to the year of 2022.
Our origination, servicing and other operating costs increased 25.7% from RMB776.8 million in 2022 to RMB976.2 million in 2023, mainly due to the rapid growth of our overall business scale compared to the year of 2022. Our origination, servicing and other operating costs as a percentage of our total revenue decreased from 22.6% to 19.9% during the same period.
Risk Factors—Risks Relating to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and affect the value of your investment.” 134 Table of Contents The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB RMB RMB US$ ​ ​ (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$305.8 million) in 2023.
Risk Factors—Risks Relating to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and affect the value of your investment.” 136 Table of Contents The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ 1,849,430 ​ 2,171,013 1,424,082 195,098 Net cash provided by/(used in) investing activities 52,559 100,045 (3,113,115) (426,495) Net cash used in financing activities ​ (489,123) ​ (569,278) ​ (277,226) ​ (37,980) Effect of foreign exchange rate changes 2,486 (3,871) 9,212 1,263 Net increase/(decrease) in cash, cash equivalents and restricted cash 1,415,352 1,697,909 (1,957,047) (268,114) Cash, cash equivalents and restricted cash, beginning of year 2,945,343 4,360,695 6,058,604 830,025 Cash, cash equivalents and restricted cash, end of year 4,360,695 6,058,604 4,101,557 561,911 ​ Operating Activities Net cash provided by operating activities was RMB1,424.1 million (US$195.1 million) in 2024.
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.
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 of RMB399.7 million. Capital Expenditures We made capital expenditures of RMB0.9 million, RMB4.4 million and RMB9.2 million (US$1.3 million) in 2022, 2023 and 2024, respectively.
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.
Contractual Obligations The following table sets forth our contractual obligations as of December 31, 2024: ​ ​ ​ ​ ​ As of December 31, 2024 ​ RMB (in thousands) 2025 15,557 2026 13,389 2027 and thereafter 13,965 Total lease liabilities 42,911 ​ Our operating lease obligations relate to our leases of office premises.
The increases were partially offset by a decrease in revenue from post-origination services of 91.6% from RMB204.3 million in 2022 to RMB17.2 million (US$2.4 million) in 2023, primarily due to the reduced demand from institutional funding partners for such services in 2023, as well as a decrease in the revenue from financing services of 79.9% from RMB278.8 million in 2022 to RMB56.0 million (US$7.9 million) in 2023, primarily as the secured loan facilitation was discontinued in 2022. 125 Table of Contents The revenue from our financial services business decreased by 38.5% from RMB3,184.3 million in 2021 to RMB1,959.7 million in 2022, 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 increases were partially offset by a decrease in revenue from post-origination services of 91.6% from RMB204.3 million in 2022 to RMB17.2 million in 2023, primarily due to the reduced demand from institutional funding partners for such services in 2023, as well as a decrease in the revenue from financing services of 79.9% from RMB278.8 million in 2022 to RMB56.0 million in 2023, primarily as the secured loan facilitation was discontinued in 2022.
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.
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.
We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Our net revenue increased from RMB3,434.6 million in 2022 to RMB4,895.6 million (US$689.5 million) in 2023, primarily due to an increase of 28.3% in the revenue from our financial services business from RMB1,959.7 million in 2022 to RMB2,515.1 million (US$354.2 million) in 2023. The increase was driven by the growing demand for our small revolving loan products.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net revenue . Our net revenue increased from RMB3,434.6 million in 2022 to RMB4,895.6 million in 2023, primarily due to an increase of 28.3% in the revenue from our financial services business from RMB1,959.7 million in 2022 to RMB2,515.1 million in 2023.
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.
The 30+ days delinquency rate by vintage refers to the outstanding principal balance of loans facilitated over a specified period that are more than 30 days past due, as a percentage of the total loans facilitated during that same period. ​ The following chart displays the 30+ Days Delinquency Rates by vintage as of December 31, 2024, for loans facilitated under our loan facilitation model, except loans originating outside mainland China, for each of the months shown: ​ 30+ Days Delinquency Rates ​ 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 principal of recovered past due payments 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. 118 Table of Contents The following chart displays the historical lifetime cumulative M3+ Net Charge-off Rates by vintage as of December 31, 2024, for loans facilitated under our loan facilitation model, except loans originating outside mainland China, for each of the months shown: Cumulative M3+ Net Charge Off Rates 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 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.
Discussion of Certain Balance Sheet Items The following selected consolidated balance sheet as of December 31, 2023 and 2024 has been derived from our audited consolidated financial statements included in this annual report beginning on page F-1.
Available-for-sale investments decreased by 55.0% from RMB972.7 million as of December 31, 2022 to RMB438.1 million (US$61.7 million) as of December 31, 2023, primarily due to improved diversification of our investments.
Other financial investments decreased by 19.4% from RMB438.1 million as of December 31, 2023 to RMB353.2 million (US$48.4 million) as of December 31, 2024, primarily due to the improved diversification of our investments. 133 Table of Contents Other financial investments decreased by 55.0% from RMB972.7 million as of December 31, 2022 to RMB438.1 million as of December 31, 2023, primarily due to improved diversification of our investments.
Our research and development expenses as a percentage of our total revenue decreased from 4.4% to 3.0% during the same period. General and administrative expenses .
Our general and administrative expenses as a percentage of our total revenue decreased from 7.9% to 4.7% during the same period. 130 Table of Contents Provision for contingent liabilities.
The following table presents the sales and marketing expenses allocated to each business segment, both in absolute amount and as a percentage of total sales and marketing expenses, during the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Sales and marketing expenses: ​ Financial services business ​ 1,353,244 87.2 383,950 66.9 498,055 70,150 75.8 Insurance brokerage business ​ 18,007 1.2 17,417 3.0 12,887 1,815 2.0 Consumption & lifestyle business and others ​ 182,093 ​ 11.6 ​ 172,607 ​ 30.1 ​ 145,661 ​ 20,516 ​ 22.2 Total operating costs and expenses ​ 1,553,344 100.0 573,974 100.0 656,603 92,481 100.0 ​ The sales and marketing expenses for each business segment decreased from 2021 to 2022 primarily due to the optimization of our offline business and the improvement of our cost efficiency, and increased in financial services business from 2022 to 2023 primarily due to the growth of financial services business volume.
The following table presents the sales and marketing expenses allocated to each business segment, both in an absolute amount and as a percentage of total sales and marketing expenses, during the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Sales and marketing expenses: ​ Financial services business ​ 383,950 66.9 498,055 75.8 1,102,737 151,074 92.2 Insurance brokerage business ​ 17,417 3.0 12,887 2.0 13,706 1,878 1.1 Consumption & lifestyle business and others ​ 172,607 ​ 30.1 ​ 145,661 ​ 22.2 ​ 79,986 ​ 10,958 ​ 6.7 Total sales and marketing expenses ​ 573,974 100.0 656,603 100.0 1,196,429 163,910 100.0 ​ ​ 122 Table of Contents Origination, servicing and other operating costs .
As of December 31, 2023, we had cash and cash equivalents of approximately RMB5,791.3 million (US$815.7 million), as compared to cash and cash equivalents of approximately RMB4,271.9 million as of December 31, 2022. As of December 31, 2023, we had restricted cash of approximately RMB267.3 million (US$37.6 million), as compared to RMB88.8 million as of December 31, 2022.
As of December 31, 2024, we had cash and cash equivalents of RMB3,841.3 million (US$526.3 million) as compared to cash and cash equivalents of approximately RMB5,791.3 million as of December 31, 2023. As of December 31, 2024, we had restricted cash of RMB260.3 million (US$35.7 million) as compared to restricted cash of approximately RMB267.3 million as of December 31, 2023.
Our accounts receivable increased from 2022 to 2023 was primarily due to the increase in service fees receivable from industry partners driven by the growth in our financial services business volume.
As of December 31, 2022, 2023 and 2024, we had accounts receivable of RMB221.0 million, RMB499.0 million and RMB566.5 million (US$77.6 million), respectively. Our accounts receivable increased from 2022 to 2024 was primarily due to the increase in service fees receivable from industry partners driven by the growth in our financial services business volume.
Our origination, servicing and other operating costs as a percentage of our total revenue increased from 17.0% to 22.6% during the same period. Research and development expenses . Our research and development expenses decreased from RMB208.0 million in 2021 to RMB151.9 million in 2022, mainly due to the optimization of personnel.
Our origination, servicing and other operating costs as a percentage of our total revenue decreased from 19.9% to 15.2% during the same period. Research and development expenses .
We are subject to VAT at a rate of 6% on the services we provide to borrowers and clients, less any deductible VAT we have already paid or borne.
However, the relevant rules and policy initiative may change, and the favorable tax treatment under these rules is available only to companies meeting certain qualifications. We are subject to VAT at a rate of 6% on the services we provide to borrowers and clients, less any deductible VAT we have already paid or borne.
Depreciation and amortization expenses of financial services business in 2021, 2022 and 2023 were RMB29.2 million, RMB19.0 million and RMB1.0 million (US$0.1 million), respectively. Depreciation and amortization expenses of insurance brokerage business in 2021, 2022 and 2023 were RMB0.1 million, RMB0.1 million and RMB0.1 million (US$14.0 thousand), respectively.
Depreciation and amortization expenses of insurance brokerage business in 2022, 2023 and 2024 were RMB0.1 million, RMB0.1 million and RMB0.4 million (US$49.2 thousand), respectively. Depreciation and amortization expenses of consumption and lifestyle business and other segment in 2022, 2023 and 2024 were RMB1.8 million, RMB1.5 million and RMB1.0 million (US$0.1million), respectively.
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.
Loans at fair value decreased by 37.8% from RMB677.8 million as of December 31, 2023 to RMB421.9 million (US$57.8 million) as of December 31, 2024, primarily due to a decrease in the balance of loans invested by the Consolidated ABFE.
Net cash provided by operating activities was RMB158.2 million in 2021.
Net cash provided by operating activities was RMB2,171.0 million in 2023.
Business Overview.” 124 Table of Contents The table below provides a summary of our operating segment results for the years ended December 31, 2021, 2022 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (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$354.2 million) in 2023, primarily due to the growing demand for our small revolving loan products.
Business Overview.” 126 Table of Contents The table below provides a summary of our operating segment results for the years ended December 31, 2022, 2023 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB RMB RMB US$ ​ ​ (in thousands) Financial services business 1,959,732 2,515,119 3,473,109 475,814 Insurance brokerage business 731,797 963,822 408,369 55,946 Consumption & lifestyle business and others 743,091 1,416,692 1,924,423 263,645 Total net revenue 3,434,620 4,895,633 5,805,901 795,405 Operating costs and expenses: ​ ​ ​ ​ Financial services business (878,375) (1,108,663) (3,384,367) (463,657) Insurance brokerage business (566,538) (724,652) (436,636) (59,819) Consumption & lifestyle business and others (370,268) (283,948) (154,489) (21,163) Income from operations: ​ ​ ​ ​ Financial services business 1,081,357 1,406,456 88,742 12,157 Insurance brokerage business 165,259 239,170 (28,267) (3,873) Consumption & lifestyle business and others 372,823 1,132,744 1,769,934 242,482 Total segment income from operations ​ 1,619,439 ​ 2,778,370 ​ 1,830,409 ​ 250,766 Unallocated expenses ​ (147,575) ​ (183,588) ​ (183,345) ​ (25,119) Other (expenses)/income ​ 23,519 ​ 50,578 ​ 214,857 ​ 29,435 Income before provision for income taxes 1,495,383 2,645,360 1,861,921 255,082 ​ Set forth below is a breakdown of net revenue for each segment, both in an absolute amount and as a percentage of total net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Financial services business: ​ Loan facilitation services ​ 1,362,685 39.7 2,240,852 45.8 2,721,389 372,829 47.0 Post-origination services ​ 204,336 5.9 17,203 0.4 5,957 816 0.1 Financing services ​ 278,783 8.1 55,974 1.1 93,239 12,774 1.6 Guarantee services ​ 10,999 ​ 0.3 ​ 50,865 ​ 1.0 ​ 429,299 ​ 58,814 ​ 7.4 Others ​ 102,929 3.1 150,225 3.1 223,225 30,581 3.8 Subtotal ​ 1,959,732 57.1 2,515,119 51.4 3,473,109 475,814 59.9 Insurance brokerage business: ​ ​ ​ ​ ​ ​ ​ ​ Insurance brokerage services ​ 731,797 21.3 963,822 19.7 408,369 55,946 7.0 Subtotal ​ 731,797 ​ 21.3 ​ 963,822 ​ 19.7 ​ 408,369 ​ 55,946 ​ 7.0 Consumption & lifestyle business and others: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Electronic commerce services ​ 302,896 ​ 8.8 ​ 1,267,104 ​ 25.9 ​ 1,865,621 ​ 255,589 ​ 32.1 Others ​ 440,195 ​ 12.8 ​ 149,588 ​ 3.0 ​ 58,802 ​ 8,056 ​ 1.0 Subtotal ​ 743,091 ​ 21.6 ​ 1,416,692 ​ 28.9 ​ 1,924,423 ​ 263,645 ​ 33.1 Total net revenue ​ 3,434,620 100.0 4,895,633 100.0 5,805,901 795,405 100.0 ​ Financial Services Business (formerly known as consumer credit segment) The revenue from our financial services business increased by 38.1% from RMB2,515.1 million in 2023 to RMB3,473.1 million (US$475.8 million) in 2024, primarily due to the growing demand for our small revolving loan products.
The following table sets forth the breakdown of our net revenue, both in absolute amount and as a percentage of our total net revenue, for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Insurance brokerage services 755,691 16.9 731,797 21.3 963,822 135,751 19.7 Financing services ​ 524,840 ​ 11.7 ​ 278,783 ​ 8.1 ​ 55,974 ​ 7,884 ​ 1.1 Electronic commerce services ​ 33,114 ​ 0.7 ​ 302,896 ​ 8.8 ​ 1,267,104 ​ 178,468 ​ 25.9 Others 884,253 19.8 554,123 16.2 350,678 49,392 7.1 Total net revenue 4,477,929 100.0 3,434,620 100.0 4,895,633 689,535 100.0 ​ Loan facilitation and post-origination service fees We provide loan facilitation services to third-party institutional funding partners and borrowers.
The following table sets forth the breakdown of our net revenue, both in an absolute amount and as a percentage of our total net revenue, for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan facilitation services 1,362,685 39.7 2,240,852 45.8 2,721,389 372,829 46.9 Post-origination services 204,336 5.9 17,203 0.4 5,957 816 0.1 Guarantee services ​ 10,999 ​ 0.3 ​ 50,865 ​ 1.0 ​ 429,299 ​ 58,814 ​ 7.4 Financing services 278,783 8.1 55,974 1.1 93,239 12,774 1.6 Insurance brokerage services 731,797 21.3 963,822 19.7 408,369 55,946 7.0 Electronic commerce services ​ 302,896 ​ 8.8 ​ 1,267,104 ​ 25.9 ​ 1,865,621 ​ 255,589 ​ 32.1 Others 543,124 15.9 299,813 6.1 282,027 38,637 4.9 Total net revenue 3,434,620 100.0 4,895,633 100.0 5,805,901 795,405 100.0 ​ 119 Table of Contents Loan facilitation, post-origination and guarantee service fees We provide loan facilitation services to third-party institutional funding partners and borrowers.

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Biggest changeThe 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.
Biggest changeWe 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. We plan to hire additional employees as we expand our business.
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.
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.
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.
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.
Tina Ju, 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.
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.
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, 2025.
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.
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; 146 Table of Contents ● internal access controls and audits relating to cyber and information security; ● disclosures in SEC filings related to its information technology and network systems; and ● cyber insurance policies and coverage.
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 .
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; 145 Table of Contents ● 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.
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 .
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 .
Hiu Fung Vincent Pang, Sam Hanhui Sun and Hao Li satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
Hiu Fung Vincent Pang, Sam Hanhui Sun, Hao Li and Shuo Zheng satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
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.
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, Hao Li and Shuo Zheng. Sam Hanhui Sun is the chairman of our audit committee.
If a change-of-control corporate transaction occurs, the plan administrator may, in its sole discretion, provide for (i) all awards outstanding to terminate at a specific time in the future and give each participant the right to exercise the vested portion of such awards during a specific period of time, or (ii) the purchase of any award for an amount of cash equal to the amount that could have been attained upon the exercise of such award, or (iii) the replacement of such award with other rights or property selected by the plan administrator in its sole discretion, or (iv) payment of award in cash based on the value of ordinary shares on the date of the change-of-control corporate transaction plus reasonable interest.
If a change-of-control corporate transaction occurs, the plan administrator may, in its sole discretion, provide for (i) all awards outstanding to terminate at a specific time in the future and give each participant the right to exercise the vested portion of such awards during a specific period of time, or (ii) the purchase of any award for an amount of cash equal to the amount that could have been attained upon the exercise of such award, or (iii) the replacement of such award with other rights or property selected by the plan administrator in its sole discretion, or (iv) payment of award in cash based on the value of ordinary shares on the date of the change-of-control corporate transaction plus reasonable interest. 144 Table of Contents Term of the Options .
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.
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.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Hiu Fung Vincent Pang, Sam Hanhui Sun and Hao Li. Hiu Fung Vincent Pang is the chairman of our nominating and corporate governance committee.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Hiu Fung Vincent Pang, Sam Hanhui Sun, Hao Li and Shuo Zheng. Hiu Fung Vincent Pang is the chairman of our nominating and corporate governance committee.
We have entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. 143 Table of Contents We have entered into director agreements with each of our independent directors.
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.
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 2024, we paid an aggregate of approximately RMB10.1 million (US$1.4 million) in cash to our directors and officers.
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.
Our officers are elected by and serve at the discretion of the board of directors. D. Employees As of December 31, 2022, 2023 and 2024, our company and the VIEs had a total of 1,064, 754, and 949 employees, respectively.
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.
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. 141 Table of Contents Mr. Jingsheng Huang has served as our director since December 17, 2015. Mr.
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.
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.
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.
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.
We have entered into director agreements with each of our independent directors. These agreements set forth the services to be provided and compensation to be received by our independent directors, as well as the independent directors’ obligations in terms of confidentiality, non-competition and non-solicitation.
These agreements set forth the services to be provided and compensation to be received by our independent directors, as well as the independent directors’ obligations in terms of confidentiality, non-competition and non-solicitation.
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.
As of March 31, 2025, there was no restricted share unit outstanding under the 2015 Plan and 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, 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.
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, 2025 ​ ​ Number %† Directors and Executive Officers**: ​ ​ ​ ​ Ning Tang (1) 62,244,893 36.0 Tina Ju (2) — — Jingsheng Huang * * Sam Hanhui Sun — — Hao Li * * Hiu Fung Vincent Pang ​ — ​ — Shuo Zheng ​ — ​ — Yuning Feng ​ * * Bin Yang * * All Directors and Executive Officers as a Group 62,502,487 36.2 Principal Shareholder: ​ ​ CreditEase Holdings (Cayman) Limited (3) 143,421,412 83.0 * Less than 1% of our total outstanding shares. ** Except for Ms.
Pang held various positions at Deloitte Beijing, Beijing Zhonggongxin Certified Public Accountants Co., Ltd., PricewaterhouseCoopers Beijing, KPMG Vancouver and Dyke & Howard Vancouver. Mr. Pang received a degree of Bachelor of Commerce from McGill University in Canada in 1991. Mr. Pang is also a Canadian Chartered Accountant. Ms. Na Mei has served as our chief financial officer since September 2020.
Pang held various positions at Deloitte Beijing, Beijing Zhonggongxin Certified Public Accountants Co., Ltd., PricewaterhouseCoopers Beijing, KPMG Vancouver and Dyke & Howard Vancouver. Mr. Pang received a degree of Bachelor of Commerce from McGill University in Canada in 1991. Mr. Pang is also a Canadian Chartered Accountant. Ms. Shuo Zheng has served as our director since June 17, 2024. Ms.
As 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.
The following table summarizes, as of March 31, 2025, 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 * July 1, 2022 and 2023 Hao Li * July 1, 2022 and 2023 Bin Yang * ​ July 1, 2022 Other Individuals as a Group ​ 1,225,924 ​ July 1, 2022, 2023 and 2024 and January 1, 2023, 2024 and 2025 * Less than 1% of our total outstanding ordinary shares.
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.
As of March 31, 2025, 27,143,412 of our outstanding ordinary shares were held by one record holder in the United States, which is the depositary of our ADS program, representing 15.7% of our total issued and outstanding ordinary shares as of such date. None of our existing shareholders has different voting rights from other shareholders.
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.
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.
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.
The total number of ordinary shares outstanding as of March 31, 2025 is 172,812,968. (1) Mr. Ning Tang does not hold any ordinary share in our company directly. Mr.
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.
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, 2025 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. 148 Table of Contents The calculations in the table below are based on 172,812,968 ordinary shares outstanding as of March 31, 2025.
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.
Hao Li is Building G2, No. 56 Jianguo Road, Chaoyang District, Beijing 100022, the People’s Republic of China. The business address of 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.
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 ​ 51 ​ Executive Chairman and Chief Executive Officer Tina Ju 60 Director Jingsheng Huang 67 Director Sam Hanhui Sun 52 Independent Director Hao Li 46 Independent Director Hiu Fung Vincent Pang 55 Independent Director Shuo Zheng ​ 55 ​ Independent Director Yuning Feng ​ 39 ​ Chief Financial Officer Bin Yang 47 Chief Human Resources Officer ​ Mr.
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.
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. 147 Table of Contents Terms of Directors and Executive Officers Our directors may be elected by a resolution of our board of directors, or by an ordinary resolution of our shareholders.
We have determined that Sam Hanhui Sun, Hiu Fung Vincent Pang and Hao Li satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE and Rule 10A-3 under the Securities Exchange Act of 1934. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
We have determined that Sam Hanhui Sun, Hiu Fung Vincent Pang, Hao Li and Shuo Zheng satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE and Rule 10A-3 under the Securities Exchange Act of 1934.
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.
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. From January 2010 to September 2015, Mr.
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.
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. Pursuant to the 2017 Plan, the maximum aggregate number of shares which may be issued is 6,060,900.
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.
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.
Our compensation committee consists of Sam Hanhui Sun, Hiu Fung Vincent Pang and Hao Li. Sam Hanhui Sun is the chairman of our compensation committee. We have determined that Sam Hanhui Sun, Hiu Fung Vincent Pang and Hao Li satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE.
We have determined that Sam Hanhui Sun, Hiu Fung Vincent Pang, Hao Li and Shuo Zheng satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
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.
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. Mr.
Tina Ju is Level 19, Cheung Kong Center, 2 Queens Road, Central, Hong Kong. The business address of Mr. Qing Li is 23 Coniston Ct, Princeton, NJ 08540, USA. The business address of Mr. Jingsheng Huang is 505 Winchester St, Newton, MA 02461, USA. The business address of Mr.
Tina Ju is Level 19, Cheung Kong Center, 2 Queens Road, Central, Hong Kong. The business address of Mr. Jingsheng Huang is 505 Winchester St, Newton, MA 02461, USA. 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.
The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
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.
Certain entities we acquired in March 2019 as part of our business realignment with CreditEase did not make adequate employee benefits payment in the past, which may subject us to penalties including potential late fees or fines. See “Item 3. Key Information—D.
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.
Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Removed
Li is the founder and chief executive officer of Sciencast Management L.P., a limited partnership formed in Delaware. Prior to founding Sciencast, Mr.
Added
Shuo Zheng has over 28 years of experience in financial control and regulatory compliance within both corporate and personal banking sectors. From June 2016 to July 2023, she had served as the Head of Regulatory Compliance and Branch Compliance at JPMorgan Chase Bank China.
Removed
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.
Added
Prior to this, from August 2011 to June 2016, she was the Head of North Region Compliance and Approved Compliance Officer for Citibank Beijing branch. Ms. Zheng also held positions at China offices of Deutsche Bank, Standard Chartered Bank and HSBC from 1995 to 2011. Ms.
Removed
Ms. Mei joined CreditEase Consumer Credit Division, now part of Yiren Digital, in 2015. She has served as the financial controller for this business unit and the head of business finance department. Prior to joining CreditEase, Ms. Mei had worked 12 years at PricewaterhouseCoopers.
Added
Zheng holds a bachelor’s degree in finance from the Financial and Banking Institution of China, now part of the University of International Business and Economics, which she obtained in 1992. She also holds ACCA Certificates (Chinese version) and the Insurance Agent Sales Certificate. 142 Table of Contents Mr.
Removed
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.
Added
Yuning Feng has served as our chief financial officer since August 20, 2024. He possesses over a decade of experience in venture capital investment, investment banking and financial control. Before joining our company, he was a partner at CE Innovation Capital, from 2015 to 2018 and from 2021 to 2024.
Removed
Terms of Directors and Executive Officers Our directors may be elected by a resolution of our board of directors, or by an ordinary resolution of our shareholders.
Added
In this role, he led investments in fintech, enterprise solutions, and AI sectors, managed investment portfolios, and contributed to fundraising and fund management. From 2018 to 2021, Mr. Feng served as an investment banker at China Renaissance, specializing in corporate finance for fintech and enterprise solutions companies, where he established strong connections with a variety of companies and investors.
Added
Earlier in his career, Mr. Feng was a financial controller at Goldman Sachs and UBS from 2008 to 2012. He received a bachelor’s degree from Beijing Foreign Studies University in 2008 and an MBA from the University of Warwick in 2014. Ms. Bin Yang has served as our chief human resources officer since 2023. Ms.
Added
We have entered into indemnification agreements with each of our directors and executive officers.
Added
As of March 31, 2025, 1,424,264 restricted share units were outstanding under the 2020 Plan.
Added
The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Added
Compensation Committee . Our compensation committee consists of Sam Hanhui Sun, Hiu Fung Vincent Pang, Hao Li and Shuo Zheng. Sam Hanhui Sun is the chairman of our compensation committee.
Added
Environmental , Social, and Governance (ESG) Committee . We established our ESG committee in June 2024. Our ESG committee consists of Ning Tang, Hao Li and Shuo Zheng. Ning Tang is the chairman of the committee. Hao Li and Shuo Zheng satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE.
Added
The ESG committee assists the board of directors in fulfilling its oversight responsibility with respect to our company’s non-financial regulatory risks that may have a material impact on our company and especially its ability to sustain trust with customers, employees, and the public.
Added
The ESG committee is responsible for, among other things: ● identifying and evaluating ESG risks and opportunities that are relevant and material to our operations and that affect shareholders and other key stakeholders; ● oversight and internal management of ESG policies, strategies, goals, and implementations; ● identifying and engaging stakeholders to understand and respond to their expectations; ● monitoring, evaluating, and advising the board of directors on ESG-related legal, regulatory, and compliance developments and public policy trends; and ● reviewing our annual ESG report and other material public disclosure related to ESG matters.
Added
The following table sets forth the breakdown of our employees as of December 31, 2024 by function: ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Employees ​ % of Total Function ​ ​ ​ ​ Sales and Marketing 404 42.6 Operations 117 12.3 Technology 234 24.7 Risk Management 38 4.0 General and Administrative 130 13.7 Product Development 26 2.7 Total 949 100.0 ​ As of December 31, 2024, the majority of our employees are based in China.

Item 7. Management's Discussion & Analysis

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

14 edited+4 added−3 removed33 unchanged
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.
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.
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.
Expenses of services provided by CreditEase’s affiliates were recorded as service expenses charged by related parties in 2022, 2023 and 2024 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.
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.
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.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Agreements with CreditEase We are a majority-owned subsidiary of CreditEase.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” 149 Table of Contents B. Related Party Transactions Agreements with CreditEase We are a majority-owned subsidiary of CreditEase.
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.
Nil, nil and nil were repaid to us for the years ended December 31, 2022, 2023 and 2024, respectively. For the years ended December 31, 2022, 2023 and 2024, CreditEase, its subsidiaries and affiliates provided loans to us with an amount of nil, nil and nil, respectively.
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.
RMB182.0 million, RMB195.8 million and nil were repaid by us for the years ended December 31, 2022, 2023 and 2024, 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.
We refer to this earlier date as the control ending date. We also agree to use our reasonable best efforts to complete our audit and provide CreditEase with all financial and other information on a timely basis so that CreditEase may meet its deadlines for its filing of annual and quarterly financial statements, if applicable.
We also agree to use our reasonable best efforts to complete our audit and provide CreditEase with all financial and other information on a timely basis so that CreditEase may meet its deadlines for its filing of annual and quarterly financial statements, if applicable. 150 Table of Contents The master transaction agreement will automatically terminate five years after the control ending date.
The termination of this agreement will not affect the validity and effectiveness of the amended and restated transitional services agreement, the amended and restated non-competition agreement, the amended and restated cooperation framework agreement and the amended and restated intellectual property license agreement.
This agreement can be terminated early or extended by mutual written consent of the parties. The termination of this agreement will not affect the validity and effectiveness of the amended and restated transitional services agreement, the amended and restated non-competition agreement, the amended and restated cooperation framework agreement and the amended and restated intellectual property license agreement.
Second Amended and Restated Non-competition Agreement Our second amended and restated non-competition agreement with CreditEase provides for a non-competition period beginning upon December 31, 2020 and ending on the earliest of (i) the first anniversary of the control ending date; (ii) the date on which the ADSs representing ordinary shares of Yiren Digital cease to be listed on Nasdaq or the New York Stock Exchange (except for temporary suspension of trading of the ADSs); and (iii) December 31, 2035, the fifteenth anniversary of December 31, 2020.
In consideration of Yiren Digital obtaining requisite corporate approvals and causing the applicable subsidiaries or the consolidated variable interest entities to execute the relevant agreement, CreditEase had caused its subsidiaries or the consolidated variable interest entities paid an aggregate amount equal to RMB67.0 million to our company’s designated subsidiaries or the consolidated variable interest entities at the closing. 152 Table of Contents Second Amended and Restated Non-competition Agreement Our second amended and restated non-competition agreement with CreditEase provides for a non-competition period beginning upon December 31, 2020 and ending on the earliest of (i) the first anniversary of the control ending date; (ii) the date on which the ADSs representing ordinary shares of Yiren Digital cease to be listed on Nasdaq or the New York Stock Exchange (except for temporary suspension of trading of the ADSs); and (iii) December 31, 2035, the fifteenth anniversary of December 31, 2020.
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.
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 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 information about costs and expenses incurred for services provided by CreditEase, its subsidiaries and affiliates for the years ended December 31, 2022, 2023 and 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2023 2024 ​ ​ RMB ​ RMB ​ RMB US$ Customers acquisition and referral services 216,958 ​ 175,471 ​ 9,935 ​ 1,362 System support services 100,635 ​ 72,035 ​ 280,141 ​ 38,379 Credit assessment services 110,566 ​ 118,395 ​ 163,589 ​ 22,412 Collection services 22,735 29,188 110,383 ​ 15,122 Other services ​ 91 ​ 1,824 ​ 1,003 ​ 137 Total costs and expenses 450,985 396,913 565,051 ​ 77,412 ​ 153 Table of Contents Revenue derived from services provided by us to CreditEase, its subsidiaries and affiliates for the years ended December 31, 2022, 2023 and 2024 is recorded as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2023 2024 ​ ​ RMB ​ RMB ​ RMB US$ Customers acquisition and referral services 409,688 ​ 140,782 ​ 32,192 ​ 4,410 Other services ​ 1,322 ​ 813 ​ — ​ — Total revenue 411,010 ​ 141,595 ​ 32,192 ​ 4,410 ​ For the years ended December 31, 2022, 2023 and 2024, we provided loans to CreditEase, its subsidiaries and affiliates with an amount of RMB200.0 million, nil and RMB1,100.0 million (US$150.7 million), respectively.
Amended and Restated Cooperation Framework Agreement Under the amended and restated cooperation framework agreement, CreditEase agrees to provide us long-term services and support in terms of user acquisition, collection, technology support, business consulting services, credit assessment and management consulting services, internationalization consulting services, and wealth management consulting services.
Upon the control ending date, CreditEase may terminate this agreement with respect to either all or part of the services by giving us a 90-day prior written notice. 151 Table of Contents Amended and Restated Cooperation Framework Agreement Under the amended and restated cooperation framework agreement, CreditEase agrees to provide us long-term services and support in terms of user acquisition, collection, technology support, business consulting services, credit assessment and management consulting services, internationalization consulting services, and wealth management consulting services.
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.
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.
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.
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
The master transaction agreement will automatically terminate five years after the control ending date. This agreement can be terminated early or extended by mutual written consent of the parties.
Added
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.
Removed
Upon the control ending date, CreditEase may terminate this agreement with respect to either all or part of the services by giving us a 90-day prior written notice.
Added
We refer to this earlier date as the control ending date.
Removed
In consideration of Yiren Digital obtaining requisite corporate approvals and causing the applicable subsidiaries or the consolidated variable interest entities to execute the relevant agreement, CreditEase had caused its subsidiaries or the consolidated variable interest entities paid an aggregate amount equal to RMB67.0 million to our company’s designated subsidiaries or the consolidated variable interest entities at the closing.
Added
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.
Added
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.

Other YRD 10-K year-over-year comparisons