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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIES EXCHANGE ACT OF 1934ORANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal yea

2、r ended December 31,2024.ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934ORSHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company reportFor the transition period from toCommission f

3、ile number:001-38752Qifu Technology,Inc.(Exact Name of Registrant as Specified in Its Charter)N/A(Translation of Registrants Name Into English)Cayman Islands(Jurisdiction of Incorporation or Organization)7/F Lujiazui Finance PlazaNo.1217 Dongfang RoadPudong New Area,Shanghai 200122Peoples Republic o

4、f China(Address of Principal Executive Offices)Alex Xu,Chief Financial Officer7/F Lujiazui Finance PlazaNo.1217 Dongfang RoadPudong New Area,Shanghai 200122Peoples Republic of ChinaPhone:+86 21 5835-7668Email:(Name,Telephone,Email and/or Facsimile number and Address of Company Contact Person)Securit

5、ies registered or to be registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbol(s)Name of each exchange on which registeredAmerican depositary shares,each representing two Class A ordinary shares,par valueUS$0.00001 per shareQFINThe Nasdaq Global Select MarketClass A ordina

6、ry shares,par value US$0.00001 per share3660The Stock Exchange of Hong Kong LimitedSecurities registered or to be registered pursuant to Section 12(g)of the Act:None(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:None(Title of Class)Table of C

7、ontentsIndicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report:As of December 31,2024,there were 283,981,320 class A ordinary shares issued and outstanding,par value US$0.00001 per share.Indicate b

8、y check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No If this report is an annual or transition report,indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the SecuritiesExchange Act of

9、 1934.Yes No Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 from theirobligations under those Sections.Indicate by check mark whether the registrant:(1)has filed all reports required to be fil

10、ed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during thepreceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90days.Yes No Indicate by check mark whether the registrant

11、has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the

12、registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated

13、 filerEmerging growth companyIf an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registrant has elected not to use theextended transition period for complying with any new or revised financial accounting standards provided pu

14、rsuant to Section 13(a)of the Exchange Act.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board to its Accounting StandardsCodification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and

15、attestation to its managements assessment of the effectiveness of its internal control over financialreporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Sect

16、ion 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflect thecorrection of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery ana

17、lysis of incentive-based compensation received by any of theregistrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP Intern

18、ational Financial Reporting Standards as issued by the International Accounting Standards Board Other If“Other”has been checked in response to the previous question,indicate by check mark which financial statement item the registrant has elected to follow.Item 17 Item 18If this is an annual report,i

19、ndicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to

20、be filed by Sections 12,13 or 15(d)of the Securities Exchange Act of 1934subsequent to the distribution of securities under a plan confirmed by a court.Yes No Table of ContentsTABLE OF CONTENTSINTRODUCTION1FORWARD-LOOKING STATEMENTS3PART I.4ITEM 1 IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS

21、4ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE4ITEM 3 KEY INFORMATION4ITEM 4 INFORMATION ON THE COMPANY75ITEM 4A UNRESOLVED STAFF COMMENTS122ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS122ITEM 6 DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES143ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTI

22、ONS154ITEM 8 FINANCIAL INFORMATION157ITEM 9 THE OFFER AND LISTING158ITEM 10 ADDITIONAL INFORMATION159ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK174ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES175PART II.181ITEM 13 DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES

23、181ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OFPROCEEDS181ITEM 15 CONTROLS AND PROCEDURES181ITEM 16 RESERVED182ITEM 16A AUDIT COMMITTEE FINANCIAL EXPERT182ITEM 16B CODE OF ETHICS182ITEM 16C PRINCIPAL ACCOUNTANT FEES AND SERVICES182ITEM 16D EXEMPTIONS FROM THE LISTING S

24、TANDARDS FOR AUDIT COMMITTEES182ITEM 16E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS183ITEM 16F CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT184ITEM 16G CORPORATE GOVERNANCE185ITEM 16H MINE SAFETY DISCLOSURE185ITEM 16I DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

25、INSPECTIONS185ITEM 16J INSIDER TRADING POLICIES185ITEM 16K CYBERSECURITY185PART III.188ITEM 17 FINANCIAL STATEMENTS188ITEM 18 FINANCIAL STATEMENTS188ITEM 19 EXHIBITS188SIGNATURES191Table of Contents1INTRODUCTIONUnless otherwise indicated and except where the context otherwise requires,references in

26、this annual report to:“Qifu Technology,”“we,”“us,”“our”and“our company”are to Qifu Technology,Inc.and its subsidiaries,and,in thecontext of describing our operations and consolidated financial information,the VIEs in China and their respectivesubsidiaries;“360 Group”are to 360 Security Technology In

27、c.and its controlled affiliates and predecessors;“ADSs”are to American depositary shares,each of which represents two of our class A ordinary shares;“CCASS”refers to the Central Clearing and Settlement System established and operated by Hong Kong SecuritiesClearing Company Limited,a wholly-owned sub

28、sidiary of Hong Kong Exchange and Clearing Limited;“China”or“the PRC”are to the Peoples Republic of China.Unless otherwise indicated,the policies,laws,regulations andinterpretations adopted by the government of mainland China,which are specifically referenced in this annual report,arenot applicable

29、to Hong Kong,Macau or Taiwan.To the extent that mainland China laws and regulations are applied inHong Kong,the legal and operational risks associated with operating in mainland China may also apply to our operationsin Hong Kong;“class A ordinary shares”are to our class A ordinary shares,par value U

30、S$0.00001 per share;“Fuzhou Financing Guarantee”are to Fuzhou Qifu Financing Guarantee Co.,Ltd.;“Fuzhou Microcredit”are to Fuzhou Qifu Online Microcredit Co.,Ltd.;“HK$”or“Hong Kong dollars”are to the legal currency of Hong Kong;“shares,”or“ordinary shares”are to our class A ordinary shares,and in th

31、e context of describing our share capital beforeMarch 31,2023,also include our class B ordinary shares,par value US$0.00001 per share,as the context requires and asapplicable;“RMB”or“Renminbi”are to Renminbi,the legal currency of the PRC;“Shanghai Financing Guarantee”are to Shanghai Qiyaoxin Technol

32、ogy Co.,Ltd.(formerly known as Shanghai 360Financing Guarantee Co.,Ltd.);“Shanghai Qibutianxia”are to Shanghai Qibutianxia Information Technology Co.,Ltd.(formerly known as BeijingQibutianxia Technology Co.,Ltd.);“Shanghai Qiyu”are to Shanghai Qiyu Information Technology Co.,Ltd.;“US$”or“U.S.dollars

33、”are to United States dollars,the lawful currency of the United States;“U.S.GAAP”are to accounting principles generally accepted in the United States;“variable interest entities,”“VIE”or“VIEs”are to Shanghai Qiyu,Fuzhou Financing Guarantee and Shanghai FinancingGuarantee;and“WFOE”or“Shanghai Qiyue”a

34、re to Shanghai Qiyue Information Technology Co.,Ltd.Unless otherwise stated,all translations from RMB to U.S.dollars and from U.S.dollars to RMB in this annual report weremade at a rate of RMB7.2993 to US$1.00,the exchange rate on December 31,2024 set forth in the H.10 statistical release of the U.S

35、.Federal Reserve Board.Table of Contents2In addition,unless the context indicates otherwise,for the discussion of our business references to:“180 day+vintage delinquency rate”are to a percentage that is equal to(i)the total amount of principal for all loans wefacilitated in a fiscal quarter that bec

36、ome delinquent for more than 180 days,less the total amount of recovered past dueprincipal for all loans we facilitated that were delinquent for more than 180 days in the same fiscal quarter,divided by(ii)the total initial principal amount of loans we facilitated in such fiscal quarter;loans under I

37、ntelligent Credit Engine andother technology solutions are not included in the delinquency rate calculation;“30 day collection rate”are to a percentage that is equal to(i)the amount of principal that is repaid in one month amongthe total amount of principal that is overdue as of a specified date,div

38、ided by(ii)the total amount of principal that isoverdue as of such specified date;“90 day+delinquency rate”are to a percentage that is equal to(i)the outstanding loan balance of on-and off-balance sheetloans we facilitated that are 91 to 180 calendar days past due,divided by(ii)the total outstanding

39、 loan balance of on-andoff-balance sheet loans we facilitated across our platform as of a specific date;loans that are charged-off and loans underIntelligent Credit Engine and other technology solutions are not included in the delinquency rate calculation;“capital-light model”are to a comprehensive

40、suite of technology-enabled loan facilitation services spanning the loanlifecycle,from borrower acquisition,technology empowerment in credit assessment to post-facilitation services,underwhich we do not take any credit risk;“capital-heavy loans”are to loans under which we bear credit risks;“Credit-T

41、ech”are to credit technology services,which refer to services using technology solutions to empower andenhance credit services;“loan facilitation volume”are to the total principal amount of loans facilitated or originated by,as the context mandates,aCredit-Tech platform,a traditional financial insti

42、tution or other market players in the credit industry;in the context of thevolume of loans we facilitated or originated,the total principal amount of loans we facilitated or originated during thegiven period,including loan volume facilitated through Intelligence Credit Engine(ICE)and other technolog

43、y solutionsand retrospectively excluding the impact of discontinued service under other technology solutions in 2024,which did nothave and is not expected to have a material impact on our overall business,financial condition,and results of operations;“outstanding loan balance”are to the total amount

44、 of principal outstanding for loans facilitated or originated by a Credit-Tech platform,as the context mandates,a traditional financial institution or other market players in the credit industry atthe end of each period;in the context of the outstanding balance of loans we facilitated or originated,

45、the total amount ofprincipal outstanding for loans we facilitated or originated at the end of each period,including loan balance for ICE andother technology solutions excluding loans delinquent for more than 180 days and retrospectively excluding the impact ofdiscontinued service under other technol

46、ogy solutions in 2024,which did not have and is not expected to have a materialimpact on our overall business,financial condition,and results of operations;“repeat borrower contribution”or“loan origination contributed by repeat borrowers”are to a percentage,the numerator ofwhich is the principal amo

47、unt of loans borrowed during that period by borrowers who had historically made at least onesuccessful drawdown,and the denominator of which is the total loan facilitation volume through our platform during thatperiod;“SME”are to small-and micro-enterprises and owners of small-and micro-enterprises;

48、and“users with approved credit lines”are to users who have submitted their credit applications and are approved with a creditline at the end of each period.Table of Contents3FORWARD-LOOKING STATEMENTSThis annual report contains forward-looking statements that relate to our current expectations and v

49、iews of future events.Thesestatements involve known and unknown risks,uncertainties and other factors that may cause our actual results,performance orachievements to be materially different from those expressed or implied by the forward-looking statements.These statements are madeunder the“safe harb

50、or”provisions of the U.S.Private Securities Litigations Reform Act of 1995.You can identify some of these forward-looking statements by words or phrases such as“may,”“will,”“expect,”“anticipate,”“aim,”“estimate,”“intend,”“plan,”“believe,”“is/are likely to,”“potential,”“continue”or other similar expr

51、essions.We have basedthese forward-looking statements largely on our current expectations and projections about future events that we believe may affect ourfinancial condition,results of operations,business strategy and financial needs.These forward-looking statements include statementsrelating to:o

52、ur goals and strategies;our future business development,financial conditions and results of operations;the expected growth of the Credit-Tech industry in China;our expectations regarding demand for and market acceptance of our Credit-Tech products;our expectations regarding keeping and strengthening

53、 our relationships with borrowers,financial institution partners,datapartners and other parties we collaborate with;competition in our industry;andgovernment policies and regulations relating to our industry.You should read this annual report and the documents that we refer to in this annual report

54、and have filed as exhibits to thisannual report completely and with the understanding that our actual future results may be materially different from what we expect.Other sections of this annual report discuss factors which could adversely impact our business and financial performance.Moreover,weope

55、rate in an evolving environment.New risk factors emerge from time to time and it is not possible for our management to predict allrisk factors,nor can we assess the impact of all factors on our business or the extent to which any factor,or combination of factors,maycause actual results to differ mat

56、erially from those contained in any forward-looking statements.We qualify all of our forward-lookingstatements by these cautionary statements.You should not rely upon forward-looking statements as predictions of future events.The forward-looking statements made inthis annual report relate only to ev

57、ents or information as of the date on which the statements are made in this annual report.Except asrequired by law,we undertake no obligation to update or revise publicly any forward-looking statements,whether as a result of newinformation,future events or otherwise,after the date on which the state

58、ments are made or to reflect the occurrence of unanticipatedevents.Table of Contents4PART I.ITEM 1 IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERSNot applicable.ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.ITEM 3 KEY INFORMATIONOur Holding Company Structure and Contractual Arran

59、gements with the VIEs and VIEs subsidiariesQifu Technology,Inc.is not a Chinese operating company but rather a Cayman Islands holding company that does not conductbusiness directly and has no equity ownership in the VIEs and VIEs subsidiaries.We conduct our operations in China through(i)ourPRC subsi

60、diaries and(ii)the VIEs with which we have maintained contractual arrangements.PRC laws and regulations restrict andimpose conditions on foreign investment in internet-based businesses,such as the distribution of online information.For example,foreign investors are generally not allowed to own more

61、than 50%of the equity interests in a value-added telecommunications serviceprovider in accordance with the Special Management Measures for the Access of Foreign Investment(Negative List)and otherapplicable laws and regulations.We are a Cayman Islands exempt company and our PRC subsidiaries are consi

62、dered foreign-investedenterprises.Accordingly,we operate certain of our businesses in China through the VIEs,and rely on contractual arrangements amongour PRC subsidiaries,the VIEs and the nominee shareholders of the VIEs to control the business operations of the VIEs.Revenuescontributed by the VIEs

63、 accounted for 92%,94%and 95%of our total net revenue for the years of 2022,2023 and 2024,respectively.Asused in this annual report,“we,”“us,”“our company,”“our”or“Qifu Technology,”refers to Qifu Technology,Inc.,its subsidiaries,and,in the context of describing our operations and consolidated financ

64、ial information,the VIEs and their subsidiaries in China,including,but not limited to Shanghai Qiyu,Fuzhou Financing Guarantee,Shanghai Financing Guarantee and Fuzhou Microcredit.Investors in ourADSs are not purchasing equity interest in the VIEs in China but instead are purchasing equity interest i

65、n a holding companyincorporated in the Cayman Islands.A series of contractual agreements,including(i)voting proxy agreements,equity interest pledge agreements and loanagreements,which provide us with effective control over the VIEs in China,(ii)exclusive business cooperation agreements,which allowus

66、 to receive economic benefits from the VIEs in China,and(iii)exclusive option agreements,which provide us with the option topurchase the equity interests in,and assets of,the VIEs(collectively,“contractual arrangements”).Terms contained in each set ofcontractual arrangements with the VIEs and their

67、respective shareholders are substantially similar.For more details of these contractualarrangements,see“Item 4.Information on the CompanyC.Organizational StructureContractual Arrangements with the VIEs andTheir Shareholders.”However,the contractual arrangements may not be as effective as direct owne

68、rship in providing us with control over the VIEsand we may incur substantial costs to enforce the terms of the arrangements.All of these contractual arrangements are governed by andinterpreted in accordance with PRC law,and disputes arising from these contractual arrangements between us and the VIEs

69、 will beresolved through arbitration in China.Accordingly,these contracts would be interpreted in accordance with PRC law and any disputesarising from these contracts would be resolved in accordance with PRC legal procedures.These arrangements have not been tested inarbitral tribunals or courts.The

70、legal system in the PRC is different from the legal system of some other jurisdictions,and theuncertainties involved in it could limit our ability to enforce these contractual arrangements.Further,there are very few precedents andlittle formal guidance as to how contractual arrangements in the conte

71、xt of a VIE should be interpreted or enforced under PRC law.Thereremain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureWe rely on contractual arrangement

72、s with the VIEs andthe shareholders of the VIEs for all of our business operations,which may not be as effective as direct ownership in providingoperational control”and“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureAny failure by theVIEs or the shareholders of the VIEs

73、to perform their obligations under our contractual arrangements with them would have a materialadverse effect on our business.”Table of Contents5There are also substantial uncertainties regarding the interpretation and application of current and future PRC laws,regulationsand rules regarding the sta

74、tus of the rights of our Cayman Islands holding company with respect to its contractual arrangements with theVIEs and its nominee shareholders.It is uncertain whether any new PRC laws or regulations relating to variable interest entity structureswill be adopted or if adopted,what they would provide.

75、If we or any of the VIEs is found to be in violation of any existing or future PRClaws or regulations,or fail to obtain or maintain any of the required permits or approvals,the PRC regulatory authorities would havebroad discretion to take action in dealing with such violations or failures.If the PRC

76、 government deems that our contractualarrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries,or if theseregulations or the interpretation of existing regulations change or are interpreted differently in the future,we could be subjec

77、t to severepenalties or be forced to relinquish our interests in those operations.Our holding company,our PRC subsidiaries and VIEs,and investorsof our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of thecontractual arrangements wi

78、th the VIEs and,consequently,significantly affect the financial performance of the VIEs and VIEssubsidiaries and our company as a whole.For a detailed description of the risks associated with our corporate structure,please refer torisks disclosed under“Item 3.Key InformationD.Risk FactorsRisks Relat

79、ed to Our Corporate Structure.”We face various risks and uncertainties related to doing business in China.Our business operations are primarily conducted inChina,and we are subject to complex and evolving PRC laws and regulations.For example,we face risks associated with regulatoryapprovals on offsh

80、ore offerings,anti-monopoly regulatory actions,and oversight on cybersecurity and data privacy,which may impactour ability to conduct certain businesses,accept foreign investments,or list on a United States or other foreign exchange.These riskscould result in a material adverse change in our operati

81、ons and the value of our ADSs,significantly limit or completely hinder our abilityto continue to offer securities to investors,or cause the value of such securities to significantly decline.Pursuant to the Holding ForeignCompanies Accountable Act,or the HFCAA,if the U.S.Securities and Exchange Commi

82、ssion,or the SEC determines that we have filedaudit reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company AccountingOversight Board,or the PCAOB,for two consecutive years,the SEC will prohibit our shares or the ADSs from being traded on

83、anational securities exchange or in the over-the-counter trading market in the United States.On December 16,2021,the PCAOB issued areport to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered publicaccounting firms headquartered in mainland

84、China and Hong Kong,including our auditor.In May 2022,the SEC conclusively listed usas a Commission-Identified Issuer under the HFCAA following the filing of the annual report on Form 20-F for the fiscal year endedDecember 31,2021.On December 15,2022,the PCAOB issued a report that vacated its Decemb

85、er 16,2021 determination and removedmainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered publicaccounting firms.As of the date of this annual report,the PCAOB has not issued any new determination regarding its ability to inspe

86、ct orinvestigate registered public accounting firms headquartered in mainland China and Hong Kong.For this reason,we do not expect to beidentified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F.Each year,the PCAOB willdetermine whether it can inspect

87、and investigate completely audit firms in mainland China and Hong Kong,among other jurisdictions.Ifthe PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in certainjurisdictions and we use an accounting firm headquartered in one of

88、 those jurisdictions to issue an audit report on our financialstatements to be filed with the SEC,we would be identified as a Commission-Identified Issuer following the filing of the annual reporton Form 20-F for the relevant fiscal year.There can be no assurance that we would not be identified as a

89、 Commission-Identified Issuerfor any future fiscal year,and if we were so identified for two consecutive years,we would become subject to the prohibition on tradingunder the HFCAA.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe PCAOB hadhistorically been unable to

90、 inspect our auditor in relation to their audit work performed for our financial statements and the inability ofthe PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections”and“Item3.Key InformationD.Risk FactorsRisks Related to Doing B

91、usiness in ChinaOur ADSs may be prohibited from trading in theUnited States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.Thedelisting of the ADSs,or the threat of their being delisted,may materially and adversely affect the value

92、 of your investment.”PRC governments significant authority in regulating our operations and its oversight and control over offerings conductedoffshore by,and foreign investment in,China-based issuers could significantly limit or completely hinder our ability to offer or continueto offer securities t

93、o investors.Implementation of industry-wide regulations in this nature may cause the value of such securities tosignificantly decline or become worthless.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to DoingBusiness in ChinaThe PRC governments significant oversight and disc

94、retion over our business operation and any failure to complywith PRC laws and regulations could result in a material adverse change in our operations and the value of the ADSs.”Risks and uncertainties arising from the legal system in China,including risks and uncertainties regarding the enforcement

95、oflaws and quickly evolving rules and regulations in China,could result in a material adverse change in our operations and the value of ourADSs.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaUncertainties inthe interpretation and enforcement of PRC l

96、aws and regulations could limit the legal protections available to us.”Table of Contents6Permissions Required from the PRC Government Authorities for Our OperationsWe conduct our business primarily through our subsidiaries,the VIEs and their subsidiaries in China.Our operations in Chinaare governed

97、by PRC laws and regulations.As of the date of this annual report,our PRC subsidiaries,the VIEs or their subsidiaries haveobtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of ourholding company,our PRC subsidiaries and the VI

98、Es in China,including,among others,financing guarantee business license owned byFuzhou Financing Guarantee,value-added telecommunications license owned by Shanghai Qiyu and Fuzhou Microcredit,and theincorporation approval of Fuzhou Microcredit.Given the uncertainties of interpretation and implementa

99、tion of the laws and regulationsand the enforcement practice by government authorities,we may be required to obtain additional licenses,permits,filings or approvalsfor the functions and services of our platform in the future.For more detailed information,see“Item 3.Key InformationD.RiskFactorsRisks

100、Related to Doing Business in ChinaWe may be adversely affected by the complexity,uncertainties and changes in PRCregulation of internet-related businesses and companies,and any lack of requisite approvals,licenses or permits applicable to ourbusiness may have a material adverse effect on our busines

101、s and results of operations.”Furthermore,we and the VIEs will be required to obtain permissions from or complete the filing procedures with the ChinaSecurities Regulatory Commission,or the CSRC,and may be required to go through cybersecurity review by the CyberspaceAdministration of China,or the CAC

102、,in case of any future issuance of securities to foreign investors.Any failure to obtain or delay inobtaining such approval or completing such procedures would subject us to sanctions by the CSRC,CAC or other PRC regulatoryauthorities.These regulatory authorities may impose fines and penalties on ou

103、r operations in China,limit our ability to pay dividendsoutside of China,limit our operating privileges in China,delay or restrict the repatriation of the proceeds from our offshore offerings intoChina or take other actions that could materially and adversely affect our business,financial condition,

104、results of operations,andprospects,as well as the trading price of our ADSs.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business inChinaThe PRC governments significant oversight and discretion over our business operation and any failure to comply with PRClaws and regulations could

105、 result in a material adverse change in our operations and the value of the ADSs”and“Item 3.KeyInformationD.Risk FactorsRisks Related to Doing Business in ChinaThe approval of and filing with the CSRC or other PRCgovernment authorities will be required if we conduct offshore offerings in the future,

106、and we cannot predict whether or for how long wewill be able to obtain such approval or complete such filing.”Cash and Asset Flows through Our OrganizationQifu Technology,Inc.is a holding company with no material operations of its own.We conduct our operations in Chinaprimarily through our subsidiar

107、ies and VIEs in China.As a result,although other means are available for us to obtain financing at theholding company level,Qifu Technology,Inc.s ability to pay dividends to the shareholders and to service any debt it may incur maydepend upon dividends paid by our PRC subsidiaries and service fees p

108、aid by the VIEs.If any of our subsidiaries incurs debt on its own behalf in the future,the instruments governing such debt may restrict its abilityto pay dividends to Qifu Technology,Inc.In addition,our PRC subsidiaries are permitted to pay dividends to Qifu Technology,Inc.onlyout of their retained

109、earnings,if any,as determined in accordance with PRC accounting standards and regulations.Further,our PRCsubsidiaries and the VIEs are required to make appropriations to certain statutory reserve funds or may make appropriations to certaindiscretionary funds,which are not distributable as cash divid

110、ends except in the event of a solvent liquidation of the companies.For moredetails,see“Item 5.Operating and Financial Review and ProspectsB.Liquidity and Capital ResourcesHolding Company Structure.”For risks relating to the fund flows of our operations in China,see“Item 3.Key InformationD.Risk Facto

111、rsRisks Related to DoingBusiness in ChinaWe may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash andfinancing requirements we may have,and any limitation on the ability of our PRC subsidiaries to make payments to us could have amaterial adverse effect

112、 on our ability to conduct our business.”Under PRC laws and regulations,our PRC subsidiaries and the VIEs are subject to certain restrictions with respect to payingdividends or otherwise transferring any of their net assets to us.Remittance of dividends by a wholly foreign-owned enterprise out ofChi

113、na is also subject to examination by the banks designated by the State Administration of Foreign Exchange,or SAFE,and payment ofwithholding tax.As a result of these PRC laws and regulations,amounts restricted include paid-in capital,capital reserve and statutoryreserves of our PRC subsidiaries and t

114、he VIEs totaled RMB14,436.1 million,RMB16,233.7 million and RMB17,073.2 million(US$2,339.0 million)as of December 31,2022,2023 and 2024,respectively.Table of Contents7Our PRC subsidiaries,the VIEs and their subsidiaries generate their revenue primarily in Renminbi,which is not freelyconvertible into

115、 other currencies.As a result,any restriction on currency exchange may limit the ability of our PRC subsidiaries to paydividends to us.In addition,under the Enterprise Income Tax Law of the PRC and its implementation rules,profits of a foreigninvestment enterprise generated in or after 2008 that are

116、 distributed to its immediate holding company outside mainland China aresubject to withholding tax at a rate of 10%,unless the foreign holding companys jurisdiction of incorporation has a tax treaty with Chinathat provides for a reduced rate of withholding tax.For example,a holding company in Hong K

117、ong,subject to approval of the PRC localtax authority,will be eligible to a 5%withholding tax rate under the Arrangement Between the PRC and the Hong Kong SpecialAdministrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income andCapital if s

118、uch holding company is considered to be a non-PRC resident enterprise and holds at least 25%of the equity interests in thePRC foreign investment enterprise distributing the dividends.Since the equity holders of the major PRC subsidiaries of our company areHong Kong incorporated companies and meet th

119、e relevant requirements pursuant to the tax treaty between PRC and Hong Kong,wehave used 5%to provide for deferred tax liabilities on retained earnings which are anticipated to be distributed.See also“Item 3.KeyInformationD.Risk FactorsRisks Related to Doing Business in ChinaGovernmental control of

120、currency conversion may limit ourability to utilize our net revenue effectively and affect the value of your investment”and“Item 5.Operating and Financial Review andProspectsB.Liquidity and Capital ResourcesHolding Company Structure.”In 2024,our WFOE made dividend payments ofRMB8,476.0 million(US$1,

121、161.2 million)to our Hong Kong subsidiaries and paid related withholding income tax(net of tax refund)ofRMB405.6 million(US$55.6 million)accordingly.As of December 31,2024,we recorded a deferred tax liability of RMB173.3 million(US$23.7 million)associated with all of our earnings expected to be dist

122、ributed from mainland China subsidiaries to overseas fordividend distribution and share repurchase.The remaining undistributed profits of mainland China subsidiaries as of December 31,2024would be indefinitely reinvested with unrecognized deferred tax liabilities of approximately RMB768.8 million(US

123、$105.3 million).In2024,our Hong Kong subsidiaries made dividend payments of RMB7,954.3 million(US$1,089.7 million)to our holding company,QifuTechnology,Inc.For purposes of illustration,the following discussion reflects the hypothetical taxes that might be required to be paid withinmainland China,ass

124、uming that we determine to pay a dividend from mainland China subsidiaries to overseas entities in the future:Taxation Scenario(1)(Statutory Tax and Standard Rates)Hypothetical pre-tax earnings(2)100%Tax on earnings at statutory rate of 25%(3)(25)%Net earnings available for distribution 75%Withholdi

125、ng tax at rate of 5%(3.75)%Net distribution to Parent/Shareholders 71.25%Notes:(1)For purposes of this example,the tax calculation has been simplified.The hypothetical book pre-tax earnings amount,notconsidering book to tax adjustment,is assumed to equal taxable income in China.(2)Assume all the pro

126、fits of VIEs could be distributed to the mainland China subsidiaries in a tax free manner.(3)Certain of our subsidiaries and VIEs and their subsidiaries qualifies for a 15%preferential income tax rate in China.However,suchrate is subject to qualification,is temporary in nature,and may not be availab

127、le in a future period when distributions are paid.Forpurposes of this hypothetical example,the table above reflects a maximum tax scenario under which the full statutory rate would beeffective.Under PRC law,Qifu Technology,Inc.may provide funding to our mainland China subsidiaries only through capit

128、alcontributions or loans,and to the VIEs only through loans,subject to satisfaction of applicable government registration and approvalrequirements.The VIEs may transfer cash to our relevant WFOE by paying service fees according to the exclusive business cooperationagreements.The VIEs agree to pay ou

129、r WFOE service fees,the amount of which are subject to adjustment at our WFOEs sole discretiontaking into consideration of the complexity of the services,the actual cost that may be incurred for providing such services,as well as thevalue and comparable price on the market of the service provided,am

130、ong others.Our WFOE would have the exclusive ownership of allthe intellectual property rights created as a result of the performance of the exclusive business cooperation agreement,to the extentpermitted by applicable PRC laws.Table of Contents8The following table sets forth the amount of the transf

131、ers for the years presented.Years Ended December 31,2022 2023 2024(RMB in thousands)Funds from Qifu Technology,Inc.to our subsidiaries,net/(repayment by our subsidiariesto Qifu Technology,Inc.,net)7,698 (31,815)3,038,563Funds from Qifu Technology,Inc.to the VIEs,net/(repayment by the VIEs to QifuTec

132、hnology,Inc.,net)(1,588,312)(274,627)Funds from WFOE to the other subsidiaries,(1)net 28,277Funds from our subsidiaries to the VIEs,net/(repayment by the VIEs to our subsidiaries,net)859,935 628,014(6,765,934)Dividend from WFOE to our subsidiaries (940,000)(8,476,000)Dividend from our subsidiaries t

133、o Qifu Technology,Inc.(790,000)(7,954,310)Dividend from the other subsidiaries(1)to WFOE (4,503,000)Service fees paid by our subsidiaries to the VIEs 103,094 209,033 133,379Service fees paid by the VIEs to WFOE 420,290 1,306,173 3,052,595Service fees paid by the VIEs to the other subsidiaries(1)3,26

134、3 5,696 6,013Investment paid by our subsidiaries to WFOE 7,267Investment paid by WFOE to the other subsidiaries(1)20,000Investment paid by our subsidiaries to the VIEs 2,201,000Note:(1)Refers to our subsidiaries other than the WFOE.In 2022,2023 and 2024,no assets other than cash flows discussed abov

135、e were transferred through our organization.For the years ended December 31,2022,2023 and 2024,dividends of US$146.4 million,US$131.9 million and US$178.8million were paid to shareholders of record as of designated record dates.On May 18,2023,our board of directors approved the adoptionof a semi-ann

136、ual cash dividend policy.Under the policy,we intend to declare and distribute a recurring cash dividend on a semi-annualbasis,starting from the first half of 2023,at an amount equivalent to approximately 20%to 30%of our companys net income after taxfor the previous six-month period based upon our op

137、erations and financial conditions,and other factors,subject to adjustment anddetermination by the board of directors of Qifu Technology,Inc.See“Item 8.Financial InformationA.Consolidated Statements andOther Financial InformationDividend Policy.”For PRC and United States federal income tax considerat

138、ions of an investment in ourADSs,see“Item 10.Additional InformationE.Taxation.”Selected Financial DataOur Selected Consolidated Financial DataThe following selected consolidated statements of operations data for the years ended December 31,2022,2023 and 2024,selected consolidated balance sheet data

139、as of December 31,2023 and 2024 and selected consolidated cash flow data for the years endedDecember 31,2022,2023 and 2024 have been derived from our audited consolidated financial statements included elsewhere in thisannual report.Our selected consolidated balance sheets data as of December 31,2020

140、,2021 and 2022 and the selected consolidatedstatements of operations data and cash flow data for the years ended December 31,2020 and 2021 have been derived from our auditedcombined and consolidated financial statements not included in this annual report.Our consolidated financial statements are pre

141、paredand presented in accordance with U.S.GAAP.Table of Contents9You should read the summary consolidated financial information in conjunction with our consolidated financial statements andrelated notes and“Item 5.Operating and Financial Review and Prospects”included elsewhere in this annual report.

142、Our historical resultsare not necessarily indicative of our results expected for future periods.Years Ended December 31,20202021202220232024 RMB RMB RMB RMB RMB US$(in thousands,except for per share data)Selected Consolidated Statements of Operations Data:Net revenue Credit driven services(1)11,403,

143、675 10,189,167 11,586,251 11,738,560 11,719,027 1,605,500Loan facilitation and servicing fees-capital heavy 4,596,555 2,326,027 2,086,414 1,667,119 1,016,514 139,262Financing income 2,184,180 2,184,128 3,487,951 5,109,921 6,636,511 909,198Revenue from releasing of guarantee liabilities 4,506,935 5,5

144、83,135 5,899,153 4,745,898 3,695,017 506,215Other services fees 116,005 95,877 112,733 215,622 370,985 50,825Platform services(1)2,160,279 6,446,478 4,967,679 4,551,467 5,446,629 746,185Loan facilitation and servicing fees-capital light 1,826,654 5,677,941 4,124,726 3,213,955 2,116,797 290,000Referr

145、al services fees 265,300 620,317 561,372 950,016 2,842,637 389,440Other services fees 68,325 148,220 281,581 387,496 487,195 66,745Total net revenue 13,563,954 16,635,645 16,553,930 16,290,027 17,165,656 2,351,685Operating costs and expenses:(2)Facilitation,origination and servicing 1,600,564 2,252,

146、157 2,373,458 2,659,912 2,900,704 397,395Funding costs 595,623 337,426 504,448 645,445 590,935 80,958Sales and marketing 1,079,494 2,090,374 2,206,948 1,939,885 1,725,877 236,444General and administrative 455,952 557,295 412,794 421,076 449,505 61,582Provision for loans receivable 698,701 965,419 1,

147、580,306 2,151,046 2,773,323 379,944Provision for financial assets receivable 312,058 243,946 397,951 386,090 296,857 40,669Provision for accounts receivable and contract assets 237,277 324,605 238,065 175,799 421,481 57,743Provision for contingent liabilities 4,794,127 3,078,224 4,367,776 3,053,810

148、478,404 65,541Total operating costs and expenses 9,773,796 9,849,446 12,081,746 11,433,063 9,637,086 1,320,276Income from operations 3,790,158 6,786,199 4,472,184 4,856,964 7,528,570 1,031,409Interest(expense)income,net 77,169 126,256 182,301 217,307 237,015 32,471Foreign exchange(loss)gain 101,534

149、35,549 (160,225)2,356 1,512 207Investment income(loss)10,115(19,888)(30,112)Other income,net 112,884 64,590 268,000 230,936 125,325 17,169Income before income tax benefit 4,081,745 7,022,709 4,742,372 5,277,451 7,892,422 1,081,256Income tax expense(586,036)(1,258,196)(736,804)(1,008,874)(1,644,306)(

150、225,269)Net income 3,495,709 5,764,513 4,005,568 4,268,577 6,248,116 855,987Net loss attributable to non-controlling interests 897 17,212 18,605 16,759 16,198 2,219Net income attributable to ordinary shareholders ofthe Company 3,496,606 5,781,725 4,024,173 4,285,336 6,264,314 858,206Net income per o

151、rdinary share attributable to ordinaryshareholders of Qifu Technology,Inc.Basic 11.72 18.82 12.87 13.36 21.02 2.88Diluted 11.40 17.99 12.50 13.04 20.64 2.83Net income per ADSs attributable to ordinary shareholdersof Qifu Technology,Inc.Basic 23.4437.64 25.74 26.72 42.04 5.76Diluted 22.8035.98 25.00

152、26.08 41.28 5.66Weighted average shares used in calculating net incomeper ordinary share Basic 298,222,207 307,265,600 312,589,273 320,749,805 298,012,150 298,012,150Diluted 306,665,099 321,397,753 322,018,510 328,508,945 303,449,864 303,449,864Notes:(1)We report revenue streams in two categoriescre

153、dit driven services and platform services,to provide more relevant information.We also revised the comparative period presentation to conform to current period classification.Table of Contents10(2)Share-based compensation expenses were allocated as follows:Years Ended December 31,2020202120222023202

154、4 RMB RMB RMB RMB RMB US$(in thousands)Facilitation origination and servicing 72,192 75,20973,94575,15264,658 8,858Sales and marketing 8,164 12,340 4,328 (375)(118)(16)General and administrative 220,805 166,373 121,464 110,827103,073 14,121Total 301,161 253,922 199,737 185,604167,613 22,963The follo

155、wing table presents our selected consolidated balance sheet data as of the dates indicated.As of December 31,20202021202220232024 RMB RMB RMB RMB RMB US$(in thousands)Selected Consolidated Balance Sheets Data:Current assets:Cash and cash equivalents 4,418,416 6,116,360 7,165,584 4,177,890 4,452,416

156、609,978Restricted cash 2,355,850 2,643,587 3,346,779 3,381,107 2,353,384 322,412Security deposit prepaid to third-partyguarantee companies 915,144 874,886 396,699 207,071 162,617 22,278Short term investments 57,000 15,000 3,394,073 464,987Accounts receivable and contract assets,net 2,394,528 3,097,2

157、54 2,868,625 2,909,245 2,214,530 303,389Financial assets receivable,net 3,565,482 3,806,243 2,982,076 2,522,543 1,553,912 212,885Loans receivable,net 7,500,629 9,844,481 15,347,662 24,604,487 26,714,428 3,659,862Total current assets 21,876,042 27,757,223 34,097,466 39,796,028 42,780,568 5,860,913Lan

158、d use rights,net 1,018,908 998,185 977,461 956,738 131,073Total non-current assets 2,511,263 5,747,772 6,245,704 6,022,544 5,352,050 733,229Total assets 24,387,305 33,504,995 40,343,170 45,818,572 48,132,618 6,594,142Current liabilities:Payable to investors of the consolidated trusts-current 3,117,6

159、34 2,304,518 6,099,520 8,942,291 8,188,454 1,121,814Guarantee liabilities-stand ready 4,173,497 4,818,144 4,120,346 3,949,601 2,383,202 326,497Guarantee liabilities-contingent 3,543,454 3,285,081 3,418,391 3,207,264 1,820,350 249,387Income tax payable 1,227,314 624,112 661,015 742,210 1,040,687 142,

160、574Total current liabilities 13,384,508 14,143,186 16,749,918 19,899,619 17,472,209 2,393,684Payable to investors of the consolidated trusts-noncurrent 1,468,890 4,010,597 4,521,600 3,581,800 5,719,600 783,582Total non-current liabilities 1,521,707 4,145,200 4,661,955 3,909,096 6,414,190 878,740Tota

161、l shareholders equity 9,481,090 15,216,609 18,931,297 22,009,857 24,246,219 3,321,718Total liabilities and equity 24,387,305 33,504,995 40,343,170 45,818,572 48,132,618 6,594,142Table of Contents11The following table presents our selected combined and consolidated cash flow data for the years ended

162、December 31,2020,2021,2022,2023 and 2024.Years Ended December 31,20202021202220232024 RMB RMB RMB RMB RMB US$(in thousands)Summary Combined and ConsolidatedCash Flow Data:Net cash provided by operating activities 5,325,810 5,789,700 5,922,515 7,118,350 9,343,311 1,280,027Net cash provided by/(used i

163、n)investingactivities 892,770 (6,064,328)(7,355,975)(11,147,789)(7,994,081)(1,095,184)Net cash(used in)/provided by financingactivities(3,282,400)2,263,720 3,204,068 1,066,458 (2,114,463)(289,680)Net increase/(decrease)in cash and cashequivalents 2,938,416 1,985,681 1,752,416 (2,953,366)(753,197)(10

164、3,188)Cash,cash equivalents,and restricted cash atthe beginning of year 3,835,850 6,774,266 8,759,947 10,512,363 7,558,997 1,035,578Cash,cash equivalents,and restricted cash atthe end of year 6,774,266 8,759,947 10,512,363 7,558,997 6,805,800 932,390We present our financial results in RMB.We make no

165、 representation that any RMB or U.S.dollar amounts could have been,orcould be,converted into U.S.dollars or RMB,as the case may be,at any particular rate,or at all.The RPC government imposes controlover its foreign currency reserves in part through direct regulation of the conversion of RMB into for

166、eign exchange and throughrestrictions on foreign trade.Unless otherwise noted,all translations from Renminbi to U.S.dollars and from U.S.dollars to Renminbi inthis annual report were made at a rate of RMB7.2993 to US$1.00,the noon buying rate as of December 31,2024.Financial Information Related to O

167、ur Consolidated Variable Interest EntitiesThe following table presents the condensed consolidated schedule of financial position,results of operations and cash flow datafor our company,our consolidated VIEs,our primary beneficiaries of VIEs excluding our company and other subsidiaries as of the date

168、sor for the years presented,as the case may be.For the Year Ended December 31,2024PrimaryBeneficiariesof VIEsexcluding theOtherVIEs The Company Company(1)Subsidiaries Eliminations Consolidated Total(RMB in thousands)Total net revenues 16,415,359 5,020,162962,412(5,232,277)17,165,656Total operating c

169、osts and expenses 14,121,455 19,770 378,419349,719(5,232,277)9,637,086Income(loss)from operations 2,293,904(19,770)4,641,743612,693 7,528,570Income before income tax expense 2,465,141 20,861 4,712,203694,217 7,892,422Investments in subsidiaries and VIEs 6,248,235 2,794,4276,067,994(15,110,656)Net in

170、come 2,185,995 6,264,314 6,660,2286,248,235(15,110,656)6,248,116Net(loss)income attributable to ordinaryshareholders of the Company 2,202,193 6,264,314 6,660,2286,248,235(15,110,656)6,264,314Table of Contents12For the Year Ended December 31,2023PrimaryBeneficiariesof VIEsexcluding theOtherVIEs The C

171、ompany Company(1)Subsidiaries Eliminations Consolidated Total (RMB in thousands)Total net revenues 15,472,430 1,485,7111,051,284(1,719,398)16,290,027Total operating costs and expenses 12,346,061 25,517 338,912441,971(1,719,398)11,433,063Income(loss)from operations 3,126,369(25,517)1,146,799609,313 4

172、,856,964Income before income tax expense 3,364,788 20,536 1,258,871633,256 5,277,451Investments in subsidiaries and VIEs 4,264,800 3,395,8943,903,935(11,564,629)Net income(loss)2,798,640 4,285,336 4,484,4304,264,800(11,564,629)4,268,577Net income(loss)attributable to ordinaryshareholders of the Comp

173、any 2,815,399 4,285,336 4,484,4304,264,800(11,564,629)4,285,336For the Year Ended December 31,2022PrimaryBeneficiariesof VIEsexcluding theOther VIEs The Company Company(1)Subsidiaries Eliminations Consolidated Total(RMB in thousands)Total net revenues 15,362,636 893,968 1,296,242(998,916)16,553,930T

174、otal operating costs and expenses 11,681,635 17,468 421,181 960,378 (998,916)12,081,746Income(loss)from operations 3,681,001 (17,468)472,787 335,864 4,472,184Income(loss)before income tax expense 3,856,803 (34,045)569,614 350,000 4,742,372Investments in subsidiaries and VIEs 4,058,218 3,526,061 3,79

175、3,486(11,377,765)Net income(loss)3,230,659 4,024,173 4,070,283 4,058,218 (11,377,765)4,005,568Net income(loss)attributable to ordinaryshareholders of the Company 3,249,264 4,024,173 4,070,283 4,058,218 (11,377,765)4,024,173Table of Contents13Selected Condensed Consolidated Balance Sheets Information

176、 As of December 31,2024PrimaryBeneficiariesof VIEsexcluding theOther VIEs The Company Company(1)Subsidiaries Eliminations Consolidated Total(RMB in thousands)Cash and cash equivalents4,005,463274,514882171,557 4,452,416Restricted cash2,353,384 2,353,384Security deposit prepaid to third-partyguarante

177、e companies162,617 162,617Short term investments222493,9477,2992,892,604 Accounts receivable and contract assets,net1,003,079 1,238,583 2,241,662Financial assets receivable,net1,724,691 1,724,691Loans receivable,net29,252,177 29,252,177Land use right,net956,738 956,738Intercompany receivables9,121,1

178、753,016,7772,483,7392,490,196(17,111,887)Investments in subsidiaries and VIEs 20,393,96621,388,847 21,117,637(62,900,450)Total assets51,940,32224,191,28423,949,12228,064,227(80,012,337)48,132,618Payable to investors of the consolidatedtrusts-current10,389,454 (2,201,000)8,188,454Guarantee liabilitie

179、s-stand ready2,383,202 2,383,202Guarantee liabilities-contingent1,820,350 1,820,350Income tax payable618,932 401,32020,435 1,040,687Payable to investors of the consolidatedtrusts-noncurrent5,719,600 5,719,600Intercompany payables4,897,887 4,826,5277,387,474(17,111,888)Total liabilities29,806,8361,24

180、15,720,9497,670,261(19,312,888)23,886,399Total equity22,133,48624,190,04318,228,17320,393,966(60,699,449)24,246,219Table of Contents14 As of December 31,2023PrimaryBeneficiariesof VIEsexcluding theOther VIEs The Company Company(1)Subsidiaries Eliminations Consolidated Total(RMB in thousands)Cash and

181、 cash equivalents4,037,2562,636114,89723,1014,177,890Restricted cash3,381,1073,381,107Security deposit prepaid to third-partyguarantee companies207,071207,071Accounts receivable and contract assets,net2,417,490638,7503,056,240Financial assets receivable,net3,118,8733,118,873Loans receivable,net27,50

182、2,49227,502,492Land use right,net977,461977,461Intercompany receivables2,559,1641,571,1022,728,150(6,858,416)Investments in subsidiaries and VIEs21,933,95122,921,72718,841,758(63,697,436)Total assets47,389,07121,952,78924,695,812 22,336,752(70,555,852)45,818,572Payable to investors of the consolidat

183、edtrusts-current8,942,2918,942,291Guarantee liabilities-stand ready3,949,6013,949,601Guarantee liabilities-contingent3,207,2643,207,264Income tax payable648,89379,80613,511742,210Payable to investors of the consolidatedtrusts-noncurrent3,581,8003,581,800Intercompany payables4,276,21814,1532,364,7912

184、03,254(6,858,416)Total liabilities27,597,27215,3062,651,752402,801(6,858,416)23,808,715Total equity19,791,79921,937,48322,044,06021,933,951(63,697,436)22,009,857Table of Contents15 As of December 31,2022PrimaryBeneficiariesof VIEsexcluding theOtherVIEs The Company Company(1)Subsidiaries Eliminations

185、 Consolidated Total (RMB in thousands)Cash and cash equivalents 6,437,420 464,323 175,243 88,598 7,165,584Restricted cash 3,346,779 3,346,779Security deposit prepaid to third-partyguarantee companies 396,699 396,699Accounts receivable and contract assets,net 1,933,292 1,196,652 3,129,944Financial as

186、sets receivable,net 3,670,919 3,670,919Loans receivable,net 18,484,656 18,484,656Land use right,net 998,185 998,185Intercompany receivables 5,906,972 295,180 2,030,097 4,163,777 (12,396,026)Investments in subsidiaries and VIEs 18,275,772 19,305,251 15,692,041 (53,273,064)Total assets 44,093,493 19,0

187、41,600 21,535,086 21,342,081 (65,669,090)40,343,170Payable to investors of the consolidatedtrusts-current 6,099,520 6,099,520Guarantee liabilities-stand ready 4,120,346 4,120,346Guarantee liabilities-contingent 3,418,391 3,418,391Income tax payable 614,687 33,295 13,033 661,015Payable to investors o

188、f the consolidatedtrusts-noncurrent 4,521,600 4,521,600Intercompany payables 6,327,635 3,038,297 3,030,094 (12,396,026)Total liabilities 27,325,894 194,444 3,221,252 3,066,309 (12,396,026)21,411,873Total equity 16,767,599 18,847,156 18,313,834 18,275,772(53,273,064)18,931,297Selected Condensed Conso

189、lidated Cash Flows Information For the Year Ended December 31,2024PrimaryBeneficiariesof VIEsexcluding theOtherVIEs The Company Company(1)Subsidiaries Eliminations Consolidated Total(RMB in thousands)Net cash provided by/(used in)operatingactivities6,036,201 7,981,614 7,294,507 8,964,299(20,933,310)

190、9,343,311Net cash(used in)/provided by investingactivities(4,641,892)(3,523,461)1,049,614 592,485(1,470,827)(7,994,081)Net cash(used in)/provided by financingactivities(2,453,608)(4,236,127)(8,458,395)(9,370,470)22,404,137(2,114,463)Table of Contents16 For the Year Ended December 31,2023PrimaryBenef

191、iciariesof VIEsexcluding theOtherVIEs The Company Company(1)Subsidiaries Eliminations Consolidated Total(RMB in thousands)Net cash provided by/(used in)operatingactivities5,685,945 800,998 985,396 1,376,011(1,730,000)7,118,350Net cash(used in)/provided by investingactivities(11,065,537)319,382(105,7

192、35)(618,160)322,261(11,147,789)Net cash provided by/(used in)financingactivities3,013,752(1,593,907)(940,000)(821,126)1,407,739 1,066,458 For the Year Ended December 31,2022PrimaryBeneficiariesof VIEsexcluding theOtherVIEs The Company Company(1)Subsidiaries Eliminations Consolidated Total(RMB in tho

193、usands)Net cash provided by/(used in)operatingactivities 6,378,135 (66,836)491,296(880,080)5,922,515Net cash(used in)/provided by investingactivities(7,360,063)1,583,956 (1,327,281)468,077 (720,664)(7,355,975)Net cash provided by/(used in)financingactivities 3,516,690 (1,039,580)(1,222)7,516 720,664

194、 3,204,068Note:(1)The financial statement amounts for our consolidated subsidiaries are prepared using same accounting policies as set out in theconsolidated financial statements except that equity method has been used to account for investments in VIEs.A.ReservedB.Capitalization and IndebtednessNot

195、 applicable.C.Reasons for the Offer and Use of ProceedsNot applicable.D.Risk FactorsSummary of Risk FactorsAn investment in our ADSs involves significant risks.Below is a summary of material risks we face,organized under relevantheadings.These risks are discussed more fully below in“Item 3.Key Infor

196、mationD.Risk Factors.”Table of Contents17Risks Related to Our Business and IndustryRisks and uncertainties related to our business include,but not limited to,the following:The Credit-Tech industry is rapidly evolving,which makes it difficult to effectively assess our future prospects;We have a limit

197、ed operating history and are subject to credit cycles and the risk of deterioration of credit profiles ofborrowers;We are subject to uncertainties surrounding regulations and administrative measures of the loan facilitation business.If anyof our business practices are deemed to be non-compliant with

198、 applicable laws and regulations,our business,financialcondition and results of operations would be adversely affected;We are subject to uncertainties surrounding regulations and administrative measures of micro-lending business andfinancing guarantee business.If any of our business practices are de

199、emed to be non-compliant with such laws andregulations,our business,financial condition and results of operations would be adversely affected;We are subject to uncertainties surrounding regulations and administrative measures of credit reporting business.If any ofour business practices is deemed to

200、be non-compliant with such laws and regulations,our business,financial condition andresults of operations would be materially and adversely affected;The pricing of loans facilitated through our platform may be deemed to exceed interest rate limits imposed by regulations;Our transaction process may r

201、esult in misunderstanding among borrowers;Fraudulent activity on our platform could negatively impact our operating results,brand and reputation and cause the use ofloan products facilitated by us and our services to decrease;We rely on our proprietary credit profiling model in assessing the creditw

202、orthiness of borrowers and the risks associatedwith loans.If our model is flawed or ineffective,or if we otherwise fail or are perceived to fail to manage the default risksof loans facilitated through our platform,our reputation and market share would be materially and adversely affected,which would

203、 severely impact our business and results of operations;We rely on our risk management team to establish and execute our risk management policies.If our risk management teamor key members of such team were unable or unwilling to continue in their present positions,our business may be severelydisrupt

204、ed;If we are unable to protect the private information of our users and adapt to the relevant regulatory framework as toprotection of such information,our business and operation may be adversely affected;andOur business is subject to complex and evolving PRC laws and regulations regarding data priva

205、cy and cybersecurity,assuch regulations and laws are newly promulgated,many of which are subject to further interpretation.Any changes in theselaws and regulations have caused and could continue to cause changes to our business practices and increase costs ofoperations,and any security breaches or o

206、ur actual or perceived failure to comply with such laws and regulations couldresult in claims,penalties,damages to our reputation and brand,declines in user growth or engagement,or otherwise harmour business,results of operations and financial condition.Table of Contents18Risks Related to Our Corpor

207、ate StructureRisks and uncertainties related to our corporate structure include,but not limited to,the following:We are a Cayman Islands holding company with no equity ownership in the VIEs and we conduct our operations in Chinathrough(i)our PRC subsidiaries and(ii)the VIEs,with which we have mainta

208、ined contractual arrangements.Investors inour ADSs thus are not purchasing equity interest in the VIEs in China but instead are purchasing equity interest in aCayman Islands holding company.If the PRC government finds that the agreements that establish the structure foroperating our business do not

209、comply with PRC laws and regulations,or if these regulations or their interpretations changein the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.Ourholding company,our PRC subsidiaries,the VIEs,and investors of our company face uncertaint

210、y about potential futureactions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and,consequently,significantly affect the financial performance of the VIEs and our company as a whole.The PRC regulatoryauthorities could disallow the VIEs struct

211、ure pursuant to the new regulations promulgated by the PRC government,whichwould likely result in a material adverse change in our operations,and our class A ordinary shares or our ADSs maydecline significantly in value;We rely on contractual arrangements with the VIEs and the shareholders of the VI

212、Es for all of our business operations,which may not be as effective as direct ownership in providing operational control;andAny failure by the VIEs or the shareholders of the VIEs to perform their obligations under our contractual arrangementswith them would have a material adverse effect on our bus

213、iness.Risks Related to Doing Business in ChinaWe are also subject to risks and uncertainties relating to doing business in China in general,including,but not limited to,thefollowing:The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financ

214、ialstatements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors withthe benefits of such inspections;Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable toinspect or investigate co

215、mpletely auditors located in China.The delisting of the ADSs,or the threat of their being delisted,may materially and adversely affect the value of your investment;The PRC governments significant oversight and discretion over our business operation and any failure to comply withPRC laws and regulati

216、ons could result in a material adverse change in our operations and the value of the ADSs;andUncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections availableto us.Risks Related to the ADSs and our class A ordinary sharesIn addition to the ri

217、sks described above,we are subject to general risks relating to our ADSs and class A ordinary shares,including,but not limited to,the following:We adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong StockExchange;andThe trading prices for our

218、 listed securities have been and are likely to continue to be volatile.Table of Contents19Risks Related to Our Business and IndustryThe Credit-Tech industry is rapidly evolving,which makes it difficult to effectively assess our future prospects.The Credit-Tech industry in the PRC is in a developing

219、stage.The regulatory framework for this market is also evolving andmay remain uncertain for the foreseeable future.In addition,the Credit-Tech industry in China has not witnessed a full credit cycle.Themarket players in the industry,including us,may not be able to respond to the change of market sit

220、uations effectively and maintainsteady business growth when the industry enters a different stage.In addition,we cannot assure you that a contraction in the availabilityof funds will not happen at later stages of the credit cycle.As such,we may not be able to sustain our historical growth rate in th

221、e future.You should consider our business and prospects in light of the risks and challenges we encounter or may encounter given therapidly evolving market in which we operate,along with our limited operating history.These risks and challenges include our ability to,among other things:offer competit

222、ive products and services;broaden our prospective borrower base;increase the utilization of our products by existing borrowers as well as new borrowers;maintain and enhance our relationship and business collaboration with our partners;maintain low delinquency rates of loans we facilitated;develop an

223、d maintain cooperative relationships with financial institution partners to secure sufficient,diversified,cost-efficient funding to the drawdown requests;continue to develop,maintain and scale our platform and sustain our historical growth rates;continue to develop and improve the effectiveness,accu

224、racy and efficiency of our proprietary credit assessment andprofiling technologies;navigate through a complex and evolving regulatory environment;improve our operational efficiency and profitability;attract,retain and motivate talented employees to support our business growth;enhance our technology

225、infrastructure to support the growth of our business and maintain the security of our system and theconfidentiality of the information provided and utilized across our system;navigate through economic conditions and fluctuations;anddefend ourselves against legal and regulatory actions,such as action

226、s involving intellectual property or privacy claims.Table of Contents20We have a limited operating history and are subject to credit cycles and the risk of deterioration of credit profiles of borrowers.We were established in 2016 and officially launched our capital-light model in May 2018.Our busine

227、ss is subject to creditcycles associated with the volatility of the general economy and with the trends of the Credit-Tech industry in China.As we have alimited operating history,we have not experienced a full credit cycle in China.As of December 31,2022,2023 and 2024,the 90 day+delinquency rate for

228、 all loans facilitated through our platform,includingthose under credit-driven services and platform services,was 2.03%,2.35%and 2.09%,respectively.The increase in 90 day+delinquency rates from 2022 to 2023 was primarily due to soft consumer sentiment under the challenging macroenvironment following

229、the pandemic.The decrease in 90 day+delinquency rates from 2023 to 2024 was mainly due to our proactive tightening of overall creditstandards,although macroeconomic headwinds persisted.For more details,see“Item 5.Operating and Financial Review and ProspectsA.Operating ResultsLoan Performance Data90

230、day+delinquency rates.”To effectively manage credit risks,we have adopted aprudent approach to focus on improving the quality of our business through continued optimization of our asset portfolio and ourdynamic adjustments in loan mix.We also expect to continue focusing on enhancing our technology a

231、nd credit assessment capabilitiesand fine-tuning our services and solutions to address financial institution partners evolving needs and risk preferences.However,therecan be no assurance that we will be able to successfully manage our risk exposure in an effective manner.If economic conditions deter

232、iorate or any event beyond our control occurs to our operation,we may face an increased risk ofdefault or delinquency of borrowers,which will result in lower returns or even losses.In the event that the creditworthiness of borrowersdeteriorates,or we cannot track the deterioration of their creditwor

233、thiness,the criteria we use for the analysis of user credit profiles maybe rendered inaccurate,and our credit profiling system may be subsequently rendered ineffective.This in turn may lead to higher defaultrates and adversely impact our results of operations.In addition,deterioration in borrowers c

234、reditworthiness,or increase in our delinquency rate may discourage our financialinstitution partners from cooperating with us.If our financial institution partners choose to adopt a tight credit approval and drawdownfunding policy,our ability to secure funding will be materially restricted.We are su

235、bject to uncertainties surrounding regulations and administrative measures of the loan facilitation business.If any of ourbusiness practices are deemed to be non-compliant with applicable laws and regulations,our business,financial condition and resultsof operations would be adversely affected.The l

236、aws and regulations governing the loan facilitation business are evolving,and uncertainties exist with respect to theirinterpretation and implementation.Since 2017,the PRC government and relevant regulatory authorities have issued various laws andregulations governing the loan facilitation business,

237、including,among others,(i)the Notice on Regulating and Rectifying“Cash Loan”Business issued on December 1,2017,or Circular 141,which introduces the regulating guidance on cash loan businesses includingonline micro-lending companies,P2P platforms and banking financial institutions,(ii)the Interim Mea

238、sures for Administration ofInternet Loans Issued by Commercial Banks,provides that“core risk management functions such as credit granting approval andcontract conclusion shall be independently and effectively carried out by the commercial bank,”and(iii)the Supplementary Provisionson the Supervision

239、and Administration of Financing Guarantee Companies promulgated on October 9,2019,or the SupplementaryFinancing Guarantee Provisions,which further require that institutions providing services such as borrower recommendation and creditassessment for various lending institutions,including us as a Cred

240、it-Tech company,shall not provide,directly or in a disguised form,financing guarantee services without prior approval.For a discussion of the related laws and regulations,please see“Item 4.Informationon the CompanyB.Business OverviewRegulationRegulation on Online Finance Services IndustryRegulations

241、 on the businessof loan facilitation”and“Item 4.Information on the CompanyB.Business OverviewRegulationRegulations on FinancingGuarantee.”Table of Contents21We have experienced,and may from time to time be required to make adjustments to our operations in order to maintaincompliance with changes in

242、laws,regulations and policies.However,we may still be deemed non-compliant with these regulations orother rules in the following aspects of our business:Guarantee practice.Currently,third-party guarantee companies or the licensed VIE provides guarantee or other creditenhancement services to our fina

243、ncial institution partners.We engage third-party guarantee companies to provide guaranteeservices,and we,under certain circumstances,provide back-to-back guarantees for external guarantee companies.We currentlyprovide back-to-back guarantees only through the licensed VIE.As advised by our PRC legal

244、counsel,our back-to-backguarantee model is not prohibited by Circular 141,because we have not directly provided guarantee to banking financialinstitutions.However,in the absence of authoritative interpretation of Circular 141,we cannot assure you that all the PRCregulatory authorities will have the

245、same view as our PRC legal counsel on this issue.Moreover,given the lack of furtherinterpretations,the exact definition and scope of“providing financing guarantee business in a disguised form”under theSupplementary Financing Guarantee Provisions is unclear.Therefore,we cannot be certain that our bac

246、k-to-back guarantee modelwill not be determined to be in violation of the Supplementary Financing Guarantee Provisions.For additional information onpotential risk related to compliance with the leverage ratio limits for financing guarantee business,please see“We are subjectto uncertainties surroundi

247、ng regulations and administrative measures of micro-lending business and financing guarantee business.If any of our business practices are deemed to be non-compliant with such laws and regulations,our business,financial conditionand results of operations would be adversely affected.”Payment.We have

248、adopted a payment model and applied it to our cooperation with all financial institution partners.Under ourpayment model,we do not charge interests to borrowers for loans funded by our financial institution partners;instead,we chargeservice fees to financial institutions.In certain cases,some financ

249、ial institution partners further engage us and a third-partypayment system service provider to together arrange payment clearance,pursuant to which borrowers first repay to a third-partypayment system and we work together with the payment system service provider to split the total repayment amount,i

250、ncludingprincipal,interest and service fees,to the portions that financial institution partners and we are each entitled to.The third-partypayment service providers are engaged per our financial institution partners request and are mainly for the purpose of generalpayment processing and clearance.We

251、 do not charge any fees from borrowers under our payment model for loans funded by ourfinancial institution partners.As advised by our PRC legal counsel,such payment model does not violate Circular 141 or theInterim Measures for Administration of Internet Loans Issued by Commercial Banks.However,in

252、the absence of authoritativeinterpretation of Circular 141 and given substantial uncertainties regarding the interpretation and application of PRC laws andregulations,we cannot assure you that PRC regulatory authorities will share this view.If our products or services are deemed to be non-compliant

253、with the PRC laws and regulations,we may need to further adjust ourpractices and our business operations may be negatively impacted.Further,if our financial institution partners cease to fund the loans,either on a temporary basis to await more clarity on the newregulatory environment,or on a permane

254、nt basis for non-compliance concerns,our operation will be adversely impacted.If fewer financialinstitutions are willing to fund the loans,the competition for funding may become more intense,and the cost of funding may increase,whichmay adversely impact our results of operations.Besides,in April 202

255、1,we and 12 other major financial technology platforms were invited to meet with the Peoples Bank of China,the China Banking and Insurance Regulatory Commission,the CSRC,SAFE and other financial regulators to discuss the operations andcompliance practice of these platforms internet financial busines

256、ses in China.We have been making rectifications and adjustments to ouroperations to address the issues discussed during the meeting and results of our self-examination according to the guidance provided by theregulators.We have substantially completed the rectification measures based on our self-exa

257、mination results according to the guidance providedby the relevant authorities.The regulatory authorities have reviewed our rectification measures in general.Since January 2023,the regulatoryauthorities have moved on to the regular regulatory supervision status from the self-examination and rectific

258、ation status with respect toregulating these major financial technology platforms,including us.Our rectification results remain subject to the regulators regularsupervision,and we cannot assure you that the measures we have taken and rectifications we have made will satisfy the requirements from the

259、regulators.If the regulators deem our rectification efforts to be insufficient or unsatisfactory,we may face further rectification orders or otheradministrative actions,in which case our business and operations may be materially and negatively affected.Table of Contents22We are subject to uncertaint

260、ies surrounding regulations and administrative measures of micro-lending business and financingguarantee business.If any of our business practices are deemed to be non-compliant with such laws and regulations,our business,financial condition and results of operations would be adversely affected.A po

261、rtion of loans facilitated on our platform are funded by Fuzhou Microcredit,the subsidiary of Shanghai Qiyu,one of theVIEs.We also provide financing guarantees to our financial institution partners through Fuzhou Financing Guarantee and ShanghaiFinancing Guarantee(before its financing guarantee lice

262、nse was canceled upon its voluntary application),for some loans we facilitate.As a result,we are subject to a complex and evolving body of regulations in relation to these businesses.On August 2,2017,the PRC State Council promulgated the Regulations on the Supervision and Administration of Financing

263、Guarantee Companies,which became effective on October 1,2017.The regulations set forth that the outstanding guarantee liabilities ofa financing guarantee company shall not exceed ten times its net assets,and that the balance of outstanding guarantee liabilities for thesame guaranteed party shall not

264、 exceed 10%of a financing guarantee companys net assets,while the balance of outstanding guaranteeliabilities for the same guaranteed party and its affiliated parties shall not exceed 15%of a financing guarantee companys net assets.On November 2,2020,the China Banking and Insurance Regulatory Commis

265、sion and the Peoples Bank of China published theInterim Measures for the Administration of Online Micro-Lending Business(Draft for Comments),adding new requirements to onlinemicro-lending business.In particular,the draft,among other things,strengthens the condition for licensing and other approvals

266、forconducting online micro-lending business.Pursuant to the draft,to the extent a micro-lending company engages in online micro-lendingbusiness,said business shall mainly be carried out within the provincial-level administrative region to which its place of registrationbelongs,and shall not operate

267、beyond such region without the approval of the banking regulator under the State Council.On December31,2021,the Peoples Bank of China issued the Regulations on Local Financial Supervision and Administration(Draft for Comments),which reaffirm that local financial organizations(including micro-lending

268、 companies and financing guarantee companies)are required tooperate business within the area approved by the local financial regulatory authority,and are not allowed to conduct business acrossprovinces in principle.On December 31,2024,the National Financial Regulatory Administration of the PRC issue

269、d the Interim AdministrativeMeasures for Micro-Lending Companies.The measures(i)clarify the business scope of micro-lending companies and the loanconcentration ratio requirements,and optimize the upper limit standard for single-household loan balances;(ii)prohibit the leasing orlending of licenses a

270、nd other non-compliant“channel”businesses;(iii)regulate external financing by strictly enforcing leverage ratioindicators and specifying the conditions for microfinance companies to issue bonds and asset securitization products;(iv)standardize thebusiness systems of micro-lending companies,requiring

271、 them to meet conditions such as full-process online operations,a robust riskcontrol system,and compliance with network and information security management requirements;(v)require that micro-lendingcompanies file its websites,apps,or mini-programs with local financial regulatory authorities;and(vi)p

272、rovide a transition period,whichshall not exceed two years in principle to gradually meet all the requirements stipulated in the measures.We will closely monitor theregulatory requirements,seek guidance from regulatory authorities,and take applicable measures in a timely manner to ensure ourcomplian

273、ce with the laws and regulations applicable to us.We may incur costs and expenses to ensure compliance and to make necessarychanges to our internal policies and practices to maintain compliance with the laws and regulations applicable to us in the future.Fuzhou Microcredit has obtained the approval

274、to operate micro-lending businesses from the competent supervising authority,which allows Fuzhou Microcredit to conduct micro-lending businesses through the internet.As of the date of this annual report,FuzhouMicrocredit had increased its registered capital to RMB5 billion,which has been fully paid.

275、Currently,Fuzhou Microcredit can conductcross-province business with its valid license.However,if the Interim Measures for the Administration of Online Micro-LendingBusiness(Draft for Comments)were to be adopted in its current form,Fuzhou Microcredit may need to obtain the legal approval of thebanki

276、ng regulator under the State Council in order to engage in online micro-lending business across provincial-level administrativeregions.The specific rules for licensing or approvals for cross-province online micro-lending business are yet to be formulated as of thedate of this annual report.We cannot

277、 assure you that,if the authorities later promulgate such rules for micro-lending business or otherrules imposing licensing or approval requirements on financing guarantee business,Fuzhou Microcredit or Fuzhou Financing Guaranteewill be qualified for such licenses or approvals in accordance with the

278、 requirements thereunder.If we fail to obtain the regulatoryapprovals to further increase the registered capital or to establish additional online micro-lending companies if needed,we may not beable to obtain sufficient funding to fulfill our future growth needs.From time to time,we may need additio

279、nal licenses to operate ourbusiness.Failure to obtain,renew,or retain requisite licenses,permits or approvals may adversely affect our ability to conduct or expandour business.Table of Contents23Furthermore,Fuzhou Microcredit is subject to the laws,regulations,policies and measures in Fuzhou in resp

280、ect of registeredcapital and of loan-to-capital and other leverage ratios,among other things,and our financing guarantee companies are subject to thesupervision of local financial authorities in Fuzhou,Shanghai(before the financing guarantee license of Shanghai Financing Guaranteewas canceled upon i

281、ts voluntary application)and Tianjin where the branch office of Fuzhou Financing Guarantee is located.We may besubject to regulatory warnings,correction orders,condemnation and fines and may be required to further adjust our business if any of ourmicro-lending and financing guarantee companies is de

282、emed to have violated national,provincial or local laws and regulations orregulatory orders and guidance.We are subject to uncertainties surrounding regulations and administrative measures of credit reporting business.If any of ourbusiness practices is deemed to be non-compliant with such laws and r

283、egulations,our business,financial condition and results ofoperations would be materially and adversely affected.The PRC government has adopted several regulations governing personal and enterprise credit reporting businesses.Theseregulations include the Regulation for the Administration of Credit Re

284、porting Industry enacted by the State Council and effective inMarch 2013,and the Management Rules on Credit Agencies issued by the Peoples Bank of China,in the same year.According to theRegulation for the Administration of Credit Reporting Industry,“credit reporting business”refers to the gathering,

285、organizing,preservingand processing of credit information on organizations such as enterprises and public service units and individuals,as well as distributionof such information to information users,and a“credit reporting agency”refers to credit reporting entity established in accordance withlaw an

286、d mainly engaged in credit reporting business.Entities engaged in personal/enterprise credit reporting business without suchapproval/completing filing formality may be subject to fine or criminal liability.In addition,the Administrative Measures for Credit Reporting Business issued by the Peoples Ba

287、nk of China on September 27,2021 and effective on January 1,2022,or the Credit Reporting Measures,define“credit information”to include“basic information,borrowing and lending information and other relevant information legally collected in the offering of services of finance or otheractivities for pu

288、rposes of identifying and judging the credit standing of businesses and individuals,as well as result of analysis andevaluation based on the aforesaid information,”and define“credit reporting business”as the collection,collation,keeping and processingof credit information and provision of such infor

289、mation to information users.The Credit Reporting Measures apply to entities that carryout credit reporting business and“activities relating to credit reporting business”in China.Separately,entities providing“services ofcredit reporting function”in the name of“credit information service,credit servic

290、e,credit evaluation,credit rating,credit repair,amongothers”are also subject to the measures.The measures provide for an 18-month grace period from their effectiveness date fororganizations that engage in credit reporting business to obtain the credit reporting business license and comply with its o

291、ther provisions.Furthermore,on July 7,2021,the Credit Information System Bureau of the Peoples Bank of China further issued the Notice Relating toDisconnecting Direct Connection to 13 internet platforms including us,requiring the internet platforms to achieve a complete“disconnected direct connectio

292、n”in terms of personal information with financial institutions,meaning that the direct flow of personalinformation from internet platforms that collect such information to financial institutions is prohibited.Historically,we provided preliminary credit assessment assistance directly to financial ins

293、titution partners which mainlydepended on the evaluation of information regarding personal credit status.Such practice may be deemed as engaging in credit reportingbusiness or credit reporting function services by the PRC authorities.To comply with the Credit Reporting Measures and the NoticeRelatin

294、g to Disconnecting Direct Connection,we have involved two licensed credit reporting institutions and have substantiallycompleted our business adjustments with respect to disconnecting direct connection for credit reporting as of the date of this annualreport.In particular,we have entered into collab

295、oration agreements with two licensed credit reporting institutions to ensure the flow ofpersonal information complies with the requirements of the Credit Reporting Measures and the Notice Relating to Disconnecting DirectConnection.However,there remain uncertainties with respect to the interpretation

296、 and implementation of the Credit Reporting Measures.Therefore,we cannot rule out the possibility that some aspects of our business may subsequently be deemed as incompliant and berequired to be ceased or adjusted in a way that will have a negative impact on our business and prospects.If our credit

297、assessmentassistance is prohibited,it may affect the collaboration between us and our financial institution partners.If we are prohibited fromconducting our credit assessment,our operation will be adversely affected.The lack of clear guidance under,and the uncertaintyassociated with,the Credit Repor

298、ting Measures may also result in substantial compliance cost incurred by us.Table of Contents24We will closely monitor the regulatory requirements,seek guidance from regulatory authorities and take applicable measures ina timely manner to ensure our compliance with the laws and regulations applicabl

299、e to us.We may incur costs and expenses to ensurecompliance and to make necessary changes to our internal policies and practices to maintain compliance with the laws and regulationsapplicable to us in the future.According to the Notice Relating to Disconnecting Direct Connection,the Credit Reporting

300、 Measures andother related laws and regulations,any failure or perceived failure by us to meet the requirements may subject us to fine or criminalliability,which could have an adverse effect on our business,financial condition and results of operations.See“Item 4.Information onthe CompanyB.Business

301、OverviewRegulationRegulations on Credit Reporting Business”for details.The pricing of loans facilitated through our platform may be deemed to exceed interest rate limits imposed by regulations.Circular 141 requires online platforms,micro-lending companies and other entities to charge synthetic fund

302、costs,including theinterest and fees paid by the borrowers,in compliance with the rules provided by the Supreme Peoples Court,and such costs shall bewithin the legally allowed annualized interest rate for private lending.According to the Provisions of the Supreme Peoples Court onSeveral Issues conce

303、rning the Application of Law in the Trial of Private Lending Cases promulgated on September 1,2015,in the eventthat the sum of the annualized interest that lenders charge and the fees we and our financial institution partners charge exceeds the 24%limit,and borrowers refused to pay the portion that

304、exceeds the 24%limit,PRC courts would not uphold our request to demand theportion of the fees that exceeds the 24%limit from such borrowers.If the sum of the annual interest that lenders charge and the fees weand our financial institution partners charge exceeds 36%,the portion that exceeds the 36%l

305、imit is invalid.The Supreme Peoples Courtissued the Several Opinions on Further Strengthening the Judicial Work in the Finance Sector in August 2017,if an online lendinginformation intermediary and a lender intentionally collude to evade the interest rate ceiling as set out by the law through disgui

306、sing loaninterest as loan facilitation service fees,then such arrangements shall be declared invalid.On July 22,2020,the Supreme Peoples Courtand the National Development and Reform Commission,or the NDRC,jointly released the Opinions on Providing Judicial Services andSafeguards for Accelerating the

307、 Improvement of the Socialist Market Economic System for the New Era.The opinions set out that if theinterest and fees,including interest,compound interest,penalty interest,liquidated damages and other fees,claimed by one party to theloan contract exceed the upper limit under judicial protection,the

308、 claim will not be supported by the court,and if the parties to the loandisguise the financing cost in an attempt to circumvent the upper limit,the rights and obligations of all parties to the loan will bedetermined by the actual loan relationship.On August 20,2020,the Supreme Peoples Court issued t

309、he Decision on Amending the Provisions of the Supreme PeoplesCourt on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases,or the Judicial InterpretationAmendment,which was revised on January 1,2021 and amended the upper limit of private lending interest rates under

310、 judicialprotection.According to the Judicial Interpretation Amendment,if the service fees or other fees that we charge are deemed to be loaninterest or fees related to loans(inclusive of any default rate and default penalty and any other fee),in the event that the sum of theannualized interest that

311、 lenders charge and fees we and our financial institution partners charge exceeds four times the one-year LoanPrime Rate at the time of the establishment of the agreement,which we refer to as the Quadruple LPR Limit,borrowers may refuse topay the portion that exceeds the Quadruple LPR Limit.In that

312、case,PRC courts will not uphold our request to demand the payment offees that exceed the Quadruple LPR Limit from such borrowers.If borrowers have paid the fees that exceed the Quadruple LPR Limit,such borrowers may request us to refund the portion exceeding the Quadruple LPR Limit and the PRC court

313、s may uphold such requests.The aforementioned one-year Loan Prime Rate refers to the one-year loan market quoted interest rate issued by the National BankInterbank Funding Center on the 20th of each month starting from August 20,2019,and the one-year loan market quoted interest rateissued by the Nat

314、ional Bank Interbank Funding Center on February 20,2025 was 3.10%.We cannot assure you that the one-year loanmarket quoted interest rate and the Quadruple LPR Limit will not decrease further in the future.On December 29,2020,the Supreme Peoples Court issued the Reply to Issues Concerning the Scope o

315、f Application of the NewJudicial Interpretation on Private Lending,which clarifies that seven types of local financial organizations,including micro-lendingcompanies,financing guarantee companies,regional equity markets,pawnshops,financing lease companies,commercial factoringcompanies and local asse

316、t management companies under the regulation of local financial regulatory authorities,are financial institutionsestablished upon approval by financial regulatory authorities.The Judicial Interpretation Amendment is not applicable to disputes arisingfrom their engagement in relevant financial busines

317、ses.Table of Contents25Although the Judicial Interpretation Amendment and the Reply to Issues Concerning the Scope of Application of the NewJudicial Interpretation on Private Lending provide that they do not apply to licensed financial institutions,including micro-lendingcompanies that conduct loan

318、business,there remain uncertainties in the interpretation and implementation of the amendment,includingwhether licensed financial institutions may be subject to its jurisdiction under Circular 141 or in certain circumstances,the basis of thecalculation formula used to determine the interest limit,th

319、e scope of inclusion of related fees and insurance premiums,as well asinconsistencies between the standard and level of enforcement by different PRC courts.We cannot assure you that there will not beinterpretations of the Judicial Interpretation Amendment expanding its jurisdiction to cover licensed

320、 financial institutions,nor can weguarantee that there will not be any changes to the detailed calculation formula used to determine the interest limit,that our future feerates will not be lowered as a result of the Quadruple LPR Limit,or that the Quadruple LPR Limit will not be applied to our histo

321、ricaland legacy products where the related dispute cases are accepted by PRC courts of first instance on or after August 20,2020.In suchcases,we and our financial institution partners may be required to repay certain borrowers if our historical and legacy loan products aredeemed to have violated the

322、 applicable laws and regulations concerning the limit of lending interest and fee rates.Our business,results ofoperations and financial condition may therefore be materially and adversely affected by the implementation of the Judicial InterpretationAmendment.In addition to rules,opinions and decisio

323、ns issued by the PRC courts,we and our financial institution partners are also subject toregulatory agencies requirements,supervision or guidance.We have lowered the pricing on loans we facilitate and may further adjustthe pricing from time to time as a result of changes in regulations or our busine

324、ss strategies.Currently,we adhere to the pricing policythat no loan should have an IRR exceeding 36%.As of December 31,2024,IRR for on-balance sheet loans and loans facilitated throughcapital heavy and capital light loan facilitation model was under 24%.If we are unable to keep up with the evolvemen

325、t of regulations andmaintain compliance or are deemed to price loans at a rate that exceeds the regulatory limits,we could be ordered to suspend,rectify orterminate our practices or operations,subject to cancelation of qualifications,or ordered to relinquish the excessive portion of the interestinco

326、me.If any of these occurs,our business,financial condition,results of operations and our cooperation with financial institutionpartners could be materially and adversely affected.See also“We are subject to uncertainties surrounding regulations andadministrative measures of the loan facilitation busi

327、ness.If any of our business practices are deemed to be non-compliant with applicablelaws and regulations,our business,financial condition and results of operations would be adversely affected.”Our transaction process may result in misunderstanding among borrowers.Our paperless transaction process is

328、 facilitated primarily on our mobile platform.While such transaction process is streamlinedand convenient,it involves certain inherent risks.Borrowers may not read the electronic agreements closely,which may result inmisunderstanding of certain terms and conditions.Furthermore,information in our pro

329、duct promotion materials and our app may resultin misunderstanding among borrowers and be deemed misleading.For instance,we utilize the internal rate of return methodology tocalculate the total interest and service fees to be paid by borrowers and to determine the pricing of loan products facilitate

330、d by us.Despite the fact that we have disclosed our fee structure in the agreements with borrowers and display on our mobile platform howservice fees are calculated using the internal rate of return,they may overlook or misunderstand such service fees,interest rates and otherfees,and calculate the t

331、otal interest and service fees utilizing a different methodology,which may result in misunderstanding of our feestructure.If the government authorities and the courts determine that the interest rate disclosed in our product promotion and our app ismisleading,the courts may support the borrowers req

332、uest to rescind the agreement or determine a lower interest and service fee to bepaid by the borrower,and we may be subject to fines and penalties by the courts and government authorities for the misleadingpromotion.In addition,such misunderstanding may arouse negative publicity and complaints among

333、 borrowers,harm our brand nameand reputation and in turn hurt our ability to retain and attract borrowers,which could have a material adverse effect on our business,financial condition and results of operations.Table of Contents26Fraudulent activity on our platform could negatively impact our operating results,brand and reputation and cause the use of loanproducts facilitated by us and our service