QFIN-S：ANNUALREPORT2024.pdf

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1、Stock Code:3660(Incorporated in the Cayman Islands with limited liability)Annual Report 20241Qifu Technology,Inc.|ANNUAL REPORT 2024UNITED 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

2、 ACT OF 1934OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024.OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934OR SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURIT

3、IES EXCHANGE ACT OF 1934Date of event requiring this shell company reportFor the transition period from toCommission file 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 Incorpor

4、ation or Organization)7/F Lujiazui Finance Plaza No.1217 Dongfang RoadPudong New Area,Shanghai 200122Peoples Republic of China(Address of Principal Executive Offices)Alex Xu,Chief Financial Officer7/F Lujiazui Finance PlazaNo.1217 Dongfang RoadPudong New Area,Shanghai 200122Peoples Republic of China

5、Phone:+86 21 5835-7668Email:(Name,Telephone,Email and/or Facsimile number and Address of Company Contact Person)2Securities registered or to be registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredAmerican depositary shares,each

6、representing two Class A ordinary shares,par value US$0.00001 per shareQFINThe Nasdaq Global Select MarketClass A ordinary 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

7、)Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:None(Title of Class)Indicate 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 we

8、re 283,981,320 class A ordinary shares issued and outstanding,par value US$0.00001 per share.Indicate by 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 reg

9、istrant is not required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 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 their obligations under

10、 those Sections.Indicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been sub

11、ject to such filing requirements for the past 90 days.Yes No 3Qifu Technology,Inc.|ANNUAL REPORT 2024Indicate by check mark whether the registrant 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 t

12、he 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 registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or an emerging growth company.See the definitions of“large accelerat

13、ed filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark

14、if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accoun

15、ting Standards Board to its Accounting Standards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes

16、-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 Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an

17、error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.1

18、0D-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 International Financial Reporting Standards as issued by the International Accounting Standards Board Other If“Other”has been checked in response to t

19、he previous question,indicate by check mark which financial statement item the registrant has elected to follow.Item 17 Item 184If this is an annual report,indicate 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

20、 INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d)of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed b

21、y a court.Yes No 5Qifu Technology,Inc.|ANNUAL REPORT 2024TABLE OF CONTENTSPageINTRODUCTION6FORWARD-LOOKING STATEMENTS9PART I.10 ITEM 1 IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS10 ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE11 ITEM 3 KEY INFORMATION12 ITEM 4 INFORMATION ON THE COMPANY115

22、 ITEM 4A UNRESOLVED STAFF COMMENTS187 ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS188 ITEM 6 DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES219 ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS236 ITEM 8 FINANCIAL INFORMATION241 ITEM 9 THE OFFER AND LISTING243 ITEM 10 ADDITIONAL INFORMATION2

23、44 ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK267 ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES269PART II.275 ITEM 13 DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES275 ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS276 ITEM

24、 15 CONTROLS AND PROCEDURES277 ITEM 16 RESERVED278 ITEM 16A AUDIT COMMITTEE FINANCIAL EXPERT278 ITEM 16B CODE OF ETHICS278 ITEM 16C PRINCIPAL ACCOUNTANT FEES AND SERVICES278 ITEM 16D EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES279 ITEM 16E PURCHASES OF EQUITY SECURITIES BY THE ISSUER A

25、ND AFFILIATED PURCHASERS279 ITEM 16F CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT281 ITEM 16G CORPORATE GOVERNANCE281 ITEM 16H MINE SAFETY DISCLOSURE282 ITEM 16I DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS282 ITEM 16J INSIDER TRADING POLICIES282 ITEM 16K CYBERSECURITY282PART I

26、II.285 ITEM 17 FINANCIAL STATEMENTS285 ITEM 18 FINANCIAL STATEMENTS286 ITEM 19 EXHIBITS287SIGNATURES2906INTRODUCTIONUnless otherwise indicated and except where the context otherwise requires,references in this annual report to:“Qifu Technology,”“we,”“us,”“our”and“our company”are to Qifu Technology,I

27、nc.and its subsidiaries,and,in the context of describing our operations and consolidated financial information,the VIEs in China and their respective subsidiaries;“360 Group”are to 360 Security Technology Inc.and its controlled affiliates and predecessors;“ADSs”are to American depositary shares,each

28、 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 Securities Clearing Company Limited,a wholly-owned subsidiary of Hong Kong Exchange and Clearing Limited;“China”or“the PRC”are to the Peoples Repu

29、blic of China.Unless otherwise indicated,the policies,laws,regulations and interpretations adopted by the government of mainland China,which are specifically referenced in this annual report,are not applicable to Hong Kong,Macau or Taiwan.To the extent that mainland China laws and regulations are ap

30、plied in Hong Kong,the legal and operational risks associated with operating in mainland China may also apply to our operations in Hong Kong;“class A ordinary shares”are to our class A ordinary shares,par value US$0.00001 per share;“Fuzhou Financing Guarantee”are to Fuzhou Qifu Financing Guarantee C

31、o.,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 the context of describing our share capital before March 31,2023,also include our class B

32、ordinary shares,par value US$0.00001 per share,as the context requires and as applicable;“RMB”or“Renminbi”are to Renminbi,the legal currency of the PRC;“Shanghai Financing Guarantee”are to Shanghai Qiyaoxin Technology Co.,Ltd.(formerly known as Shanghai 360 Financing Guarantee Co.,Ltd.);“Shanghai Qi

33、butianxia”are to Shanghai Qibutianxia Information Technology Co.,Ltd.(formerly known as Beijing Qibutianxia Technology Co.,Ltd.);“Shanghai Qiyu”are to Shanghai Qiyu Information Technology Co.,Ltd.;“US$”or“U.S.dollars”are to United States dollars,the lawful currency of the United States;7Qifu Technol

34、ogy,Inc.|ANNUAL REPORT 2024INTRODUCTION“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 Financing Guarantee;and“WFOE”or“Shanghai Qiyue”are to Shanghai Qiyue Informatio

35、n 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 were made 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.Federal Reserve Board.In addi

36、tion,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 we facilitated in a fiscal quarter that become delinquent for more than 180 days,less the

37、total amount of recovered past due principal 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 Intelligent Credit Engine and other technology

38、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 among the total amount of principal that is overdue as of a specified date,divided by(ii)the total amount of principal tha

39、t is overdue 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 sheet loans we facilitated that are 91 to 180 calendar days past due,divided by(ii)the total outstanding loan balance of on and off-balance sheet

40、loans we facilitated across our platform as of a specific date;loans that are charged-off and loans under Intelligent Credit Engine and other technology solutions are not included in the delinquency rate calculation;“capital-light model”are to a comprehensive suite of technology-enabled loan facilit

41、ation services spanning the loan lifecycle,from borrower acquisition,technology empowerment in credit assessment to post-facilitation services,under which we do not take any credit risk;“capital-heavy loans”are to loans under which we bear credit risks;“Credit-Tech”are to credit technology services,

42、which refer to services using technology solutions to empower and enhance credit services;8INTRODUCTION“loan facilitation volume”are to the total principal amount of loans facilitated or originated by,as the context mandates,a Credit-Tech platform,a traditional financial institution or other market

43、players in the credit industry;in the context of the volume of loans we facilitated or originated,the total principal amount of loans we facilitated or originated during the given period,including loan volume facilitated through Intelligence Credit Engine(ICE)and other technology solutions and retro

44、spectively excluding the impact of discontinued service under other technology solutions in 2024,which did not have 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 of principal outst

45、anding 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 at the end of each period;in the context of the outstanding balance of loans we facilitated or originated,the total amount o

46、f principal outstanding for loans we facilitated or originated at the end of each period,including loan balance for ICE and other technology solutions excluding loans delinquent for more than 180 days and retrospectively excluding the impact of discontinued service under other technology solutions i

47、n 2024,which did not have and is not expected to have a material impact 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 of which is the principal amount of loans

48、borrowed during that period by borrowers who had historically made at least one successful drawdown,and the denominator of which is the total loan facilitation volume through our platform during that period;“SME”are to small and micro-enterprises and owners of small and micro-enterprises;and“users w

49、ith approved credit lines”are to users who have submitted their credit applications and are approved with a credit line at the end of each period.9Qifu Technology,Inc.|ANNUAL REPORT 2024FORWARD-LOOKING STATEMENTSThis annual report contains forward-looking statements that relate to our current expect

50、ations and views of future events.These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results,performance or achievements to be materially different from those expressed or implied by the forward-looking statements.These statements are made unde

51、r the“safe harbor”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 oth

52、er similar expressions.We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition,results of operations,business strategy and financial needs.These forward-looking statements include statem

53、ents relating to:our 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

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

55、 this annual report and have filed as exhibits to this annual 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 perfo

56、rmance.Moreover,we operate in an evolving environment.New risk factors emerge from time to time and it is not possible for our management to predict all risk factors,nor can we assess the impact of all factors on our business or the extent to which any factor,or combination of factors,may cause actu

57、al results to differ materially from those contained in any forward-looking statements.We qualify all of our forward-looking statements by these cautionary statements.You should not rely upon forward-looking statements as predictions of future events.The forward-looking statements made in this annua

58、l report relate only to events or information as of the date on which the statements are made in this annual report.Except as required by law,we undertake no obligation to update or revise publicly any forward-looking statements,whether as a result of new information,future events or otherwise,after

59、 the date on which the statements are made or to reflect the occurrence of unanticipated events.10PART I.ITEM 1 IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERSNot applicable.11Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.12ITEM 3 KEY INFORM

60、ATIONOUR HOLDING COMPANY STRUCTURE AND CONTRACTUAL ARRANGEMENTS WITH THE VIES AND VIES SUBSIDIARIESQifu Technology,Inc.is not a Chinese operating company but rather a Cayman Islands holding company that does not conduct business directly and has no equity ownership in the VIEs and VIEs subsidiaries.

61、We conduct our operations in China through(i)our PRC subsidiaries and(ii)the VIEs with which we have maintained contractual arrangements.PRC laws and regulations restrict and impose conditions on foreign investment in internet-based businesses,such as the distribution of online information.For examp

62、le,foreign investors are generally not allowed to own more than 50%of the equity interests in a value-added telecommunications service provider in accordance with the Special Management Measures for the Access of Foreign Investment(Negative List)and other applicable laws and regulations.We are a Cay

63、man Islands exempt company and our PRC subsidiaries are considered foreign-invested enterprises.Accordingly,we operate certain of our businesses in China through the VIEs,and rely on contractual arrangements among our PRC subsidiaries,the VIEs and the nominee shareholders of the VIEs to control the

64、business operations of the VIEs.Revenues contributed by the VIEs accounted for 92%,94%and 95%of our total net revenue for the years of 2022,2023 and 2024,respectively.As used in this annual report,“we,”“us,”“our company,”“our”or“Qifu Technology,”refers to Qifu Technology,Inc.,its subsidiaries,and,in

65、 the context of describing our operations and consolidated financial 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 our ADSs are not purchasing equity interest

66、 in the VIEs in China but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands.A series of contractual agreements,including(i)voting proxy agreements,equity interest pledge agreements and loan agreements,which provide us with effective control over the VIEs

67、in China,(ii)exclusive business cooperation agreements,which allow us to receive economic benefits from the VIEs in China,and(iii)exclusive option agreements,which provide us with the option to purchase the equity interests in,and assets of,the VIEs(collectively,“contractual arrangements”).Terms con

68、tained in each set of contractual arrangements with the VIEs and their respective shareholders are substantially similar.For more details of these contractual arrangements,see“Item 4.Information on the Company C.Organizational Structure Contractual Arrangements with the VIEs and Their Shareholders.”

69、However,the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs and we may incur substantial costs to enforce the terms of the arrangements.All of these contractual arrangements are governed by and interpreted in accordance with PRC law,and

70、 disputes arising from these contractual arrangements between us and the VIEs will be resolved through arbitration in China.Accordingly,these contracts would be interpreted in accordance with PRC law and any disputes arising from these contracts would be resolved in accordance with PRC legal procedu

71、res.These arrangements have not been tested in arbitral tribunals or courts.The legal system in the PRC is different from the legal system of some other jurisdictions,and the uncertainties involved in it could limit our ability to enforce these contractual arrangements.Further,there are very few pre

72、cedents and little formal guidance as to how contractual arrangements in the context of a VIE should be interpreted or enforced under PRC law.There remain significant 13Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONuncertainties regarding the ultimate outcome of such arbitration shoul

73、d legal action become necessary.See“Item 3.Key Information D.Risk Factors Risks Related to Our Corporate Structure We rely on contractual arrangements with the VIEs and the shareholders of the VIEs for all of our business operations,which may not be as effective as direct ownership in providing oper

74、ational control”and“Item 3.Key Information D.Risk Factors Risks Related to Our Corporate Structure Any failure by the VIEs or the shareholders of the VIEs to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.”There are also su

75、bstantial uncertainties regarding the interpretation and application of current and future PRC laws,regulations and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the VIEs and its nominee shareholders.It is uncertain w

76、hether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted,what they would provide.If we or any of the VIEs is found to be in violation of any existing or future PRC laws or regulations,or fail to obtain or maintain any of the required permit

77、s or approvals,the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant indust

78、ries,or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.Our holding company,our PRC subsidiaries and VIEs,and investors of our c

79、ompany face uncertainty about potential future actions 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 VIEs subsidiaries and our company as a whole.For a detailed

80、description of the risks associated with our corporate structure,please refer to risks disclosed under“Item 3.Key Information D.Risk Factors Risks Related to Our Corporate Structure.”We face various risks and uncertainties related to doing business in China.Our business operations are primarily cond

81、ucted in China,and we are subject to complex and evolving PRC laws and regulations.For example,we face risks associated with regulatory approvals on offshore offerings,anti-monopoly regulatory actions,and oversight on cybersecurity and data privacy,which may impact our ability to conduct certain bus

82、inesses,accept foreign investments,or list on a United States or other foreign exchange.These risks could result in a material adverse change in our operations and the value of our ADSs,significantly limit or completely hinder our ability to continue to offer securities to investors,or cause the val

83、ue of such securities to significantly decline.Pursuant to the Holding Foreign Companies Accountable Act,or the HFCAA,if the U.S.Securities and Exchange Commission,or the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspec

84、tions by the Public Company Accounting Oversight Board,or the PCAOB,for two consecutive years,the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.On December 16,2021,the PCAOB issued a report

85、to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong,including our auditor.In May 2022,the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA fo

86、llowing the filing of the annual report on Form 20-F for the fiscal year ended December 31,2021.On December 15,2022,the PCAOB issued a report that vacated its December 16,2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or inves

87、tigate completely registered public accounting firms.As of the date of this annual report,the PCAOB has not issued any new determination regarding its ability to inspect or investigate registered public accounting firms headquartered in mainland China and Hong Kong.For this reason,we do not expect t

88、o be identified as 14ITEM 3 KEY INFORMATIONa Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F.Each year,the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong,among other jurisdictions.If the PC

89、AOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in certain jurisdictions and we use an accounting firm headquartered in one of those jurisdictions to issue an audit report on our financial statements to be filed with the SEC,we wo

90、uld be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year,and if we were so identified for two consecut

91、ive years,we would become subject to the prohibition on trading under the HFCAA.See“Item 3.Key Information D.Risk Factors Risks Related to Doing Business in China The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and

92、the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections”and“Item 3.Key Information D.Risk Factors Risks Related to Doing Business in China Our ADSs may be prohibited from trading in the United States under the HFCA

93、A in the future if the PCAOB is unable to inspect or investigate completely 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.”PRC governments significant authority in regulating our operations a

94、nd its oversight and control over offerings conducted offshore by,and foreign investment in,China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.Implementation of industry-wide regulations in this nature may cause the va

95、lue of such securities to significantly decline or become worthless.For more details,see“Item 3.Key Information D.Risk Factors Risks Related to Doing Business in China The PRC governments significant oversight and discretion over our business operation and any failure to comply with PRC laws and reg

96、ulations 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 of laws and quickly evolving rules and regulations in China,could result in a mat

97、erial adverse change in our operations and the value of our ADSs.For more details,see“Item 3.Key Information D.Risk Factors Risks Related to Doing Business in China Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to us.”15Qi

98、fu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONPERMISSIONS 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 China are governed by PRC laws and regulations.A

99、s of the date of this annual report,our PRC subsidiaries,the VIEs or their subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company,our PRC subsidiaries and the VIEs in China,including,among

100、 others,financing guarantee business license owned by Fuzhou Financing Guarantee,value-added telecommunications license owned by Shanghai Qiyu and Fuzhou Microcredit,and the incorporation approval of Fuzhou Microcredit.Given the uncertainties of interpretation and implementation of the laws and regu

101、lations and the enforcement practice by government authorities,we may be required to obtain additional licenses,permits,filings or approvals for the functions and services of our platform in the future.For more detailed information,see“Item 3.Key Information D.Risk Factors Risks Related to Doing Bus

102、iness in China We may be adversely affected by the complexity,uncertainties and changes in PRC regulation of internet-related businesses and companies,and any lack of requisite approvals,licenses or permits applicable to our business may have a material adverse effect on our business and results of

103、operations.”Furthermore,we and the VIEs will be required to obtain permissions from or complete the filing procedures with the China Securities Regulatory Commission,or the CSRC,and may be required to go through cybersecurity review by the Cyberspace Administration of China,or the CAC,in case of any

104、 future issuance of securities to foreign investors.Any failure to obtain or delay in obtaining such approval or completing such procedures would subject us to sanctions by the CSRC,CAC or other PRC regulatory authorities.These regulatory authorities may impose fines and penalties on our operations

105、in China,limit our ability to pay dividends outside of China,limit our operating privileges in China,delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business,financial condition,results of

106、operations,and prospects,as well as the trading price of our ADSs.See“Item 3.Key Information D.Risk Factors Risks Related to Doing Business in China The PRC governments significant oversight and discretion over our business operation and any failure to comply with PRC laws and regulations could resu

107、lt in a material adverse change in our operations and the value of the ADSs”and“Item 3.Key Information D.Risk Factors Risks Related to Doing Business in China The approval of and filing with the CSRC or other PRC government authorities will be required if we conduct offshore offerings in the future,

108、and we cannot predict whether or for how long we will 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 China primarily through our subsidi

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

110、es paid by the VIEs.16ITEM 3 KEY INFORMATIONIf any of our subsidiaries incurs debt on its own behalf in the future,the instruments governing such debt may restrict its ability to pay dividends to Qifu Technology,Inc.In addition,our PRC subsidiaries are permitted to pay dividends to Qifu Technology,I

111、nc.only out of their retained earnings,if any,as determined in accordance with PRC accounting standards and regulations.Further,our PRC subsidiaries and the VIEs are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds,which are

112、 not distributable as cash dividends except in the event of a solvent liquidation of the companies.For more details,see“Item 5.Operating and Financial Review and Prospects B.Liquidity and Capital Resources Holding Company Structure.”For risks relating to the fund flows of our operations in China,see

113、“Item 3.Key Information D.Risk Factors Risks Related to Doing Business in China We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have,and any limitation on the ability of our PRC subsidiaries to make payments t

114、o us could have a material adverse effect 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 paying dividends or otherwise transferring any of their net assets to us.Remittance of dividends by a

115、 wholly foreign-owned enterprise out of China is also subject to examination by the banks designated by the State Administration of Foreign Exchange,or SAFE,and payment of withholding tax.As a result of these PRC laws and regulations,amounts restricted include paid-in capital,capital reserve and sta

116、tutory reserves of our PRC subsidiaries and the 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.Our PRC subsidiaries,the VIEs and their subsidiaries generate their revenue primarily in Renminbi,which is

117、 not freely convertible into other currencies.As a result,any restriction on currency exchange may limit the ability of our PRC subsidiaries to pay dividends to us.In addition,under the Enterprise Income Tax Law of the PRC and its implementation rules,profits of a foreign investment enterprise gener

118、ated in or after 2008 that are distributed to its immediate holding company outside mainland China are subject to withholding tax at a rate of 10%,unless the foreign holding companys jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding tax.For exa

119、mple,a holding company in Hong Kong,subject to approval of the PRC local tax authority,will be eligible to a 5%withholding tax rate under the Arrangement Between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect

120、to Taxes on Income and Capital if such holding company is considered to be a non-PRC resident enterprise and holds at least 25%of the equity interests in the PRC foreign investment enterprise distributing the dividends.Since the equity holders of the major PRC subsidiaries of our company are Hong Ko

121、ng incorporated companies and meet the relevant requirements pursuant to the tax treaty between PRC and Hong Kong,we have used 5%to provide for deferred tax liabilities on retained earnings which are anticipated to be distributed.See also“Item 3.Key Information D.Risk Factors Risks Related to Doing

122、Business in China Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and affect the value of your investment”and“Item 5.Operating and Financial Review and Prospects B.Liquidity and Capital Resources Holding Company Structure.”In 2024,our WFOE mad

123、e dividend payments of RMB8,476.0 million(US$1,161.2 million)to our Hong Kong subsidiaries and paid related withholding income tax(net of tax refund)of RMB405.6 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)associa

124、ted with all of our earnings expected to be distributed from mainland China subsidiaries to overseas for dividend distribution and share repurchase.The remaining undistributed profits of mainland China subsidiaries as of December 31,2024 would be indefinitely reinvested with unrecognized deferred ta

125、x liabilities of approximately RMB768.8 million(US$105.3 million).In 2024,our Hong Kong subsidiaries made dividend payments of RMB7,954.3 million(US$1,089.7 million)to our holding company,Qifu Technology,Inc.17Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONFor purposes of illustration,

126、the following discussion reflects the hypothetical taxes that might be required to be paid within mainland China,assuming 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

127、 earnings(2)100%Tax on earnings at statutory rate of 25%(3)(25)%Net earnings available for distribution75%Withholding tax at rate of 5%(3.75)%Net distribution to Parent/Shareholders71.25%Notes:(1)For purposes of this example,the tax calculation has been simplified.The hypothetical book pre-tax earni

128、ngs amount,not considering book to tax adjustment,is assumed to equal taxable income in China.(2)Assume all the profits 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

129、income tax rate in China.However,such rate is subject to qualification,is temporary in nature,and may not be available in a future period when distributions are paid.For purposes of this hypothetical example,the table above reflects a maximum tax scenario under which the full statutory rate would be

130、 effective.Under PRC law,Qifu Technology,Inc.may provide funding to our mainland China subsidiaries only through capital contributions or loans,and to the VIEs only through loans,subject to satisfaction of applicable government registration and approval requirements.The VIEs may transfer cash to our

131、 relevant WFOE by paying service fees according to the exclusive business cooperation agreements.The VIEs agree to pay our WFOE service fees,the amount of which are subject to adjustment at our WFOEs sole discretion taking into consideration of the complexity of the services,the actual cost that may

132、 be incurred for providing such services,as well as the value and comparable price on the market of the service provided,among others.Our WFOE would have the exclusive ownership of all the intellectual property rights created as a result of the performance of the exclusive business cooperation agree

133、ment,to the extent permitted by applicable PRC laws.18ITEM 3 KEY INFORMATIONThe following table sets forth the amount of the transfers for the years presented.Years Ended December 31,202220232024(RMB in thousands)Funds from Qifu Technology,Inc.to our subsidiaries,net/(repayment by our subsidiaries t

134、o Qifu Technology,Inc.,net)7,698(31,815)3,038,563Funds from Qifu Technology,Inc.to the VIEs,net/(repayment by the VIEs to Qifu Technology,Inc.,net)(1,588,312)(274,627)Funds from WFOE to the other subsidiaries,(1)net28,277Funds from our subsidiaries to the VIEs,net/(repayment by the VIEs to our subsi

135、diaries,net)859,935628,014(6,765,934)Dividend from WFOE to our subsidiaries(940,000)(8,476,000)Dividend from our subsidiaries to 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 VIEs103,094209,033133,379Serv

136、ice fees paid by the VIEs to WFOE420,2901,306,1733,052,595Service fees paid by the VIEs to the other subsidiaries(1)3,2635,6966,013Investment paid by our subsidiaries to WFOE7,267Investment paid by WFOE to the other subsidiaries(1)20,000Investment paid by our subsidiaries to the VIEs 2,201,000 Note:

137、(1)Refers to our subsidiaries other than the WFOE.In 2022,2023 and 2024,no assets other than cash flows discussed above 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$178.8 million were paid to shareh

138、olders of record as of designated record dates.On May 18,2023,our board of directors approved the adoption of a semi-annual cash dividend policy.Under the policy,we intend to declare and distribute a recurring cash dividend on a semi-annual basis,starting from the first half of 2023,at an amount equ

139、ivalent to approximately 20%to 30%of our companys net income after tax for the previous six-month period based upon our operations and financial conditions,and other factors,subject to adjustment and determination by the board of directors of Qifu Technology,Inc.See“Item 8.Financial Information A.Co

140、nsolidated Statements and Other Financial Information Dividend Policy.”For PRC and United States federal income tax considerations of an investment in our ADSs,see“Item 10.Additional Information E.Taxation.”Selected Financial DataOur Selected Consolidated Financial DataThe following selected consoli

141、dated statements of operations data for the years ended December 31,2022,2023 and 2024,selected consolidated balance sheet data as of December 31,2023 and 2024 and selected consolidated cash flow data for the years ended December 31,2022,2023 and 2024 have been derived from our audited consolidated

142、financial statements included elsewhere in this annual report.Our selected consolidated balance sheets data as of December 31,2020,2021 and 2022 and the selected consolidated statements of operations data and cash flow data for the years ended December 31,2020 and 2021 have been derived from our aud

143、ited combined and consolidated financial statements not included in this annual report.Our consolidated financial statements are prepared and presented in accordance with U.S.GAAP.19Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONYou should read the summary consolidated financial inform

144、ation in conjunction with our consolidated financial statements and related notes and“Item 5.Operating and Financial Review and Prospects”included elsewhere in this annual report.Our historical results are not necessarily indicative of our results expected for future periods.Years Ended December 31,

145、20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands,except for per share data)Selected Consolidated Statements of Operations Data:Net revenueCredit driven services(1)11,403,67510,189,16711,586,25111,738,56011,719,0271,605,500Loan facilitation and servicing fees-capital heavy4,596,5552,326,0272,086,4

146、141,667,1191,016,514139,262Financing income2,184,1802,184,1283,487,9515,109,9216,636,511909,198Revenue from releasing of guarantee liabilities4,506,9355,583,1355,899,1534,745,8983,695,017506,215Other services fees116,00595,877112,733215,622370,98550,825Platform services(1)2,160,2796,446,4784,967,679

147、4,551,4675,446,629746,185Loan facilitation and servicing fees-capital light1,826,6545,677,9414,124,7263,213,9552,116,797290,000Referral services fees265,300620,317561,372950,0162,842,637389,440Other services fees68,325148,220281,581387,496487,19566,745Total net revenue13,563,95416,635,64516,553,9301

148、6,290,02717,165,6562,351,685Operating costs and expenses:(2)Facilitation,origination and servicing1,600,5642,252,1572,373,4582,659,9122,900,704397,395Funding costs595,623337,426504,448645,445590,93580,958Sales and marketing1,079,4942,090,3742,206,9481,939,8851,725,877236,444General and administrativ

149、e455,952557,295412,794421,076449,50561,582Provision for loans receivable698,701965,4191,580,3062,151,0462,773,323379,944Provision for financial assets receivable312,058243,946397,951386,090296,85740,669Provision for accounts receivable and contract assets237,277324,605238,065175,799421,48157,743Prov

150、ision for contingent liabilities4,794,1273,078,2244,367,7763,053,810478,40465,541Total operating costs and expenses9,773,7969,849,44612,081,74611,433,0639,637,0861,320,276Income from operations3,790,1586,786,1994,472,1844,856,9647,528,5701,031,409Interest(expense)income,net77,169126,256182,301217,30

151、7237,01532,471Foreign exchange(loss)gain101,53435,549(160,225)2,3561,512207Investment income(loss)10,115(19,888)(30,112)Other income,net112,88464,590268,000230,936125,32517,169Income before income tax benefit4,081,7457,022,7094,742,3725,277,4517,892,4221,081,256Income tax expense(586,036)(1,258,196)

152、(736,804)(1,008,874)(1,644,306)(225,269)20ITEM 3 KEY INFORMATIONYears Ended December 31,20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands,except for per share data)Net income3,495,7095,764,5134,005,5684,268,5776,248,116855,987Net loss attributable to non-controlling interests89717,21218,60516,7591

153、6,1982,219Net income attributable to ordinary shareholders of the Company3,496,6065,781,7254,024,1734,285,3366,264,314858,206Net income per ordinary share attributable to ordinary shareholders of Qifu Technology,Inc.Basic11.7218.8212.8713.3621.022.88Diluted11.4017.9912.5013.0420.642.83Net income per

154、 ADSs attributable to ordinary shareholders of Qifu Technology,Inc.Basic23.4437.6425.7426.7242.045.76Diluted22.8035.9825.0026.0841.285.66Weighted average shares used in calculating net income per ordinary shareBasic298,222,207307,265,600312,589,273320,749,805298,012,150298,012,150Diluted306,665,0993

155、21,397,753322,018,510328,508,945303,449,864303,449,864Notes:(1)We report revenue streams in two categories credit driven services and platform services,to provide more relevant information.We also revised the comparative period presentation to conform to current period classification.(2)Share-based

156、compensation expenses were allocated as follows:Years Ended December 31,20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands)Facilitation origination and servicing72,19275,20973,94575,15264,6588,858Sales and marketing8,16412,3404,328(375)(118)(16)General and administrative220,805166,373121,464110,827

157、103,07314,121Total301,161253,922199,737185,604167,61322,96321Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONThe following table presents our selected consolidated balance sheet data as of the dates indicated.As of December 31,20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands)Selected

158、 Consolidated Balance Sheets Data:Current assets:Cash and cash equivalents4,418,4166,116,3607,165,5844,177,8904,452,416609,978 Restricted cash2,355,8502,643,5873,346,7793,381,1072,353,384322,412 Security deposit prepaid to third-party guarantee companies915,144874,886396,699207,071162,61722,278 Shor

159、t term investments57,00015,0003,394,073464,987 Accounts receivable and contract assets,net2,394,5283,097,2542,868,6252,909,2452,214,530303,389 Financial assets receivable,net3,565,4823,806,2432,982,0762,522,5431,553,912212,885 Loans receivable,net7,500,6299,844,48115,347,66224,604,48726,714,4283,659

160、,862Total current assets21,876,04227,757,22334,097,46639,796,02842,780,5685,860,913Land use rights,net1,018,908998,185977,461956,738131,073Total non-current assets2,511,2635,747,7726,245,7046,022,5445,352,050733,229Total assets24,387,30533,504,99540,343,17045,818,57248,132,6186,594,142Current liabil

161、ities:Payable to investors of the consolidated trusts-current3,117,6342,304,5186,099,5208,942,2918,188,4541,121,814 Guarantee liabilities-stand ready4,173,4974,818,1444,120,3463,949,6012,383,202326,497 Guarantee liabilities-contingent3,543,4543,285,0813,418,3913,207,2641,820,350249,387 Income tax pa

162、yable1,227,314624,112661,015742,2101,040,687142,574Total current liabilities13,384,50814,143,18616,749,91819,899,61917,472,2092,393,684 Payable to investors of the consolidated trusts-noncurrent1,468,8904,010,5974,521,6003,581,8005,719,600783,582Total non-current liabilities1,521,7074,145,2004,661,9

163、553,909,0966,414,190878,740Total shareholders equity9,481,09015,216,60918,931,29722,009,85724,246,2193,321,718Total liabilities and equity24,387,30533,504,99540,343,17045,818,57248,132,6186,594,14222ITEM 3 KEY INFORMATIONThe following table presents our selected combined and consolidated cash flow d

164、ata for the years ended December 31,2020,2021,2022,2023 and 2024.Years Ended December 31,20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands)Summary Combined and Consolidated Cash Flow Data:Net cash provided by operating activities5,325,8105,789,7005,922,5157,118,3509,343,3111,280,027Net cash provid

165、ed by/(used in)investing activities892,770(6,064,328)(7,355,975)(11,147,789)(7,994,081)(1,095,184)Net cash(used in)/provided by financing activities(3,282,400)2,263,7203,204,0681,066,458(2,114,463)(289,680)Net increase/(decrease)in cash and cash equivalents2,938,4161,985,6811,752,416(2,953,366)(753,

166、197)(103,188)Cash,cash equivalents,and restricted cash at the beginning of year3,835,8506,774,2668,759,94710,512,3637,558,9971,035,578Cash,cash equivalents,and restricted cash at the end of year6,774,2668,759,94710,512,3637,558,9976,805,800932,390We present our financial results in RMB.We make no re

167、presentation that any RMB or U.S.dollar amounts could have been,or could be,converted into U.S.dollars or RMB,as the case may be,at any particular rate,or at all.The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into fore

168、ign exchange and through restrictions on foreign trade.Unless otherwise noted,all translations from Renminbi to U.S.dollars and from U.S.dollars to Renminbi in this 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

169、Our Consolidated Variable Interest EntitiesThe following table presents the condensed consolidated schedule of financial position,results of operations and cash flow data for our company,our consolidated VIEs,our primary beneficiaries of VIEs excluding our company and other subsidiaries as of the da

170、tes or for the years presented,as the case may be.23Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONFor the Year Ended December 31,2024PrimaryBeneficiariesof VIEsexcluding theOtherConsolidated TotalVIEs The CompanyCompany(1)SubsidiariesEliminations(RMB in thousands)Total net revenues16,

171、415,3595,020,162962,412(5,232,277)17,165,656Total operating costs and expenses14,121,45519,770378,419349,719(5,232,277)9,637,086Income(loss)from operations2,293,904(19,770)4,641,743612,6937,528,570Income before income tax expense2,465,14120,8614,712,203694,2177,892,422Investments in subsidiaries and

172、 VIEs6,248,2352,794,4276,067,994(15,110,656)Net income2,185,9956,264,3146,660,2286,248,235(15,110,656)6,248,116 Net(loss)income attributable to ordinary shareholders of the Company2,202,1936,264,3146,660,2286,248,235(15,110,656)6,264,314For the Year Ended December 31,2023PrimaryBeneficiariesof VIEse

173、xcluding theOtherConsolidated TotalVIEs The CompanyCompany(1)SubsidiariesEliminations(RMB in thousands)Total net revenues15,472,4301,485,7111,051,284(1,719,398)16,290,027Total operating costs and expenses12,346,06125,517338,912441,971(1,719,398)11,433,063Income(loss)from operations3,126,369(25,517)1

174、,146,799609,3134,856,964Income before income tax expense3,364,78820,5361,258,871633,2565,277,451Investments in subsidiaries and VIEs4,264,8003,395,8943,903,935(11,564,629)Net income(loss)2,798,6404,285,3364,484,4304,264,800(11,564,629)4,268,577Net income(loss)attributable to ordinary shareholders of

175、 the Company2,815,3994,285,3364,484,4304,264,800(11,564,629)4,285,336For the Year Ended December 31,2022PrimaryBeneficiariesof VIEsexcluding theOtherConsolidated TotalVIEs The CompanyCompany(1)SubsidiariesEliminations(RMB in thousands)Total net revenues15,362,636893,9681,296,242(998,916)16,553,930To

176、tal operating costs and expenses11,681,63517,468421,181960,378(998,916)12,081,746Income(loss)from operations3,681,001(17,468)472,787335,8644,472,184Income(loss)before income tax expense3,856,803(34,045)569,614350,0004,742,372Investments in subsidiaries and VIEs4,058,2183,526,0613,793,486(11,377,765)

177、Net income(loss)3,230,6594,024,1734,070,2834,058,218(11,377,765)4,005,568Net income(loss)attributable to ordinary shareholders of the Company3,249,2644,024,1734,070,2834,058,218(11,377,765)4,024,17324ITEM 3 KEY INFORMATIONSelected Condensed Consolidated Balance Sheets InformationAs of December 31,20

178、24PrimaryBeneficiariesof VIEsexcluding theOtherConsolidated TotalVIEs The CompanyCompany(1)SubsidiariesEliminations(RMB in thousands)Cash and cash equivalents4,005,463274,514882171,5574,452,416Restricted cash2,353,3842,353,384Security deposit prepaid to third-party guarantee companies162,617162,617S

179、hort term investments222493,9477,2992,892,604Accounts receivable and contract assets,net1,003,0791,238,5832,241,662Financial assets receivable,net1,724,6911,724,691Loans receivable,net29,252,17729,252,177Land use right,net956,738956,738Intercompany receivables9,121,1753,016,7772,483,7392,490,196(17,

180、111,887)Investments in subsidiaries and VIEs20,393,96621,388,84721,117,637(62,900,450)Total assets51,940,32224,191,28423,949,12228,064,227(80,012,337)48,132,618Payable to investors of the consolidated trusts-current10,389,454(2,201,000)8,188,454Guarantee liabilities-stand ready2,383,2022,383,202Guar

181、antee liabilities-contingent1,820,3501,820,350Income tax payable618,932401,32020,4351,040,687Payable to investors of the consolidated trusts-noncurrent5,719,6005,719,600Intercompany payables4,897,8874,826,5277,387,474(17,111,888)Total liabilities29,806,8361,2415,720,9497,670,261(19,312,888)23,886,39

182、9Total equity22,133,48624,190,04318,228,17320,393,966(60,699,449)24,246,21925Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONAs of December 31,2023PrimaryBeneficiariesof VIEsexcluding theOtherConsolidated TotalVIEs The CompanyCompany(1)SubsidiariesEliminations(RMB in thousands)Cash and

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

184、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 assets47,389,07121,952,78924,695,81222,336,752(70,555,852)45,818,572Payable to investors of the consolidate

185、d trusts-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 consolidated trusts-noncurrent3,581,8003,581,800Intercompany payables4,276,21814,1532,364,791

186、203,254(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)22,009,85726ITEM 3 KEY INFORMATIONAs of December 31,2022PrimaryBeneficiariesof VIEsexcluding theOtherConsolidated TotalVIEs The CompanyCompany(1)Sub

187、sidiariesEliminations(RMB in thousands)Cash and cash equivalents6,437,420464,323175,24388,5987,165,584Restricted cash3,346,7793,346,779Security deposit prepaid to third-party guarantee companies396,699396,699Accounts receivable and contract assets,net1,933,2921,196,6523,129,944Financial assets recei

188、vable,net3,670,9193,670,919Loans receivable,net18,484,65618,484,656Land use right,net998,185998,185Intercompany receivables5,906,972295,1802,030,0974,163,777(12,396,026)Investments in subsidiaries and VIEs18,275,77219,305,25115,692,041(53,273,064)Total assets44,093,49319,041,60021,535,08621,342,081(

189、65,669,090)40,343,170Payable to investors of the consolidated trusts-current6,099,5206,099,520Guarantee liabilities-stand ready4,120,3464,120,346Guarantee liabilities-contingent3,418,3913,418,391Income tax payable614,68733,29513,033661,015Payable to investors of the consolidated trusts-noncurrent4,5

190、21,6004,521,600Intercompany payables6,327,6353,038,2973,030,094(12,396,026)Total liabilities27,325,894194,4443,221,2523,066,309(12,396,026)21,411,873Total equity16,767,59918,847,15618,313,83418,275,772(53,273,064)18,931,29727Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONSelected Conde

191、nsed Consolidated Cash Flows InformationFor the Year Ended December 31,2024PrimaryBeneficiariesof VIEsexcluding theOtherConsolidated TotalVIEsThe CompanyCompany(1)SubsidiariesEliminations(RMB in thousands)Net cash provided by/(used in)operating activities6,036,2017,981,6147,294,5078,964,299(20,933,3

192、10)9,343,311Net cash(used in)/provided by investing activities(4,641,892)(3,523,461)1,049,614592,485(1,470,827)(7,994,081)Net cash(used in)/provided by financing activities(2,453,608)(4,236,127)(8,458,395)(9,370,470)22,404,137(2,114,463)For the Year Ended December 31,2023PrimaryBeneficiariesof VIEse

193、xcluding theOtherConsolidated TotalVIEsThe CompanyCompany(1)SubsidiariesEliminations(RMB in thousands)Net cash provided by/(used in)operating activities5,685,945800,998985,3961,376,011(1,730,000)7,118,350Net cash(used in)/provided by investing activities(11,065,537)319,382(105,735)(618,160)322,261(1

194、1,147,789)Net cash provided by/(used in)financing activities3,013,752(1,593,907)(940,000)(821,126)1,407,7391,066,458For the Year Ended December 31,2022PrimaryBeneficiariesof VIEsexcluding theOtherConsolidated TotalVIEsThe CompanyCompany(1)SubsidiariesEliminations(RMB in thousands)Net cash provided b

195、y/(used in)operating activities6,378,135(66,836)491,296(880,080)5,922,515Net cash(used in)/provided by investing activities(7,360,063)1,583,956(1,327,281)468,077(720,664)(7,355,975)Net cash provided by/(used in)financing activities3,516,690(1,039,580)(1,222)7,516720,6643,204,068Note:(1)The financial

196、 statement amounts for our consolidated subsidiaries are prepared using same accounting policies as set out in the consolidated financial statements except that equity method has been used to account for investments in VIEs.A.ReservedB.Capitalization and IndebtednessNot applicable.C.Reasons for the

197、Offer and Use of ProceedsNot applicable.28ITEM 3 KEY INFORMATIOND.Risk FactorsSummary of Risk FactorsAn investment in our ADSs involves significant risks.Below is a summary of material risks we face,organized under relevant headings.These risks are discussed more fully below in“Item 3.Key Informatio

198、n D.Risk Factors.”Risks 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 limited operating history an

199、d are subject to credit cycles and the risk of deterioration of credit profiles of borrowers;We are subject to uncertainties surrounding regulations and administrative measures of the loan facilitation business.If any of our business practices are deemed to be non-compliant with applicable laws and

200、regulations,our business,financial condition and results of operations would be adversely affected;We are subject to uncertainties surrounding regulations and administrative measures of micro-lending business and financing guarantee business.If any of our business practices are deemed to be non-comp

201、liant with such laws and regulations,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 of our business practices is deemed to be non-compliant

202、with such laws and regulations,our business,financial condition and results 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 result in misunde

203、rstanding among borrowers;Fraudulent activity on our platform could negatively impact our operating results,brand and reputation and cause the use of loan products facilitated by us and our services to decrease;We rely on our proprietary credit profiling model in assessing the creditworthiness of bo

204、rrowers and the risks associated with loans.If our model is flawed or ineffective,or if we otherwise fail or are perceived to fail to manage the default risks of loans facilitated through our platform,our reputation and market share would be materially and adversely affected,which would severely imp

205、act our business and results of operations;29Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATION We rely on our risk management team to establish and execute our risk management policies.If our risk management team or key members of such team were unable or unwilling to continue in their p

206、resent positions,our business may be severely disrupted;If we are unable to protect the private information of our users and adapt to the relevant regulatory framework as to protection of such information,our business and operation may be adversely affected;and Our business is subject to complex and

207、 evolving PRC laws and regulations regarding data privacy and cybersecurity,as such regulations and laws are newly promulgated,many of which are subject to further interpretation.Any changes in these laws and regulations have caused and could continue to cause changes to our business practices and i

208、ncrease costs of operations,and any security breaches or our actual or perceived failure to comply with such laws and regulations could result in claims,penalties,damages to our reputation and brand,declines in user growth or engagement,or otherwise harm our business,results of operations and financ

209、ial condition.Risks Related to Our Corporate 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 China through(i)our PRC subsidiaries

210、 and(ii)the VIEs,with which we have maintained contractual arrangements.Investors in our ADSs thus are not purchasing equity interest in the VIEs in China but instead are purchasing equity interest in a Cayman Islands holding company.If the PRC government finds that the agreements that establish the

211、 structure for operating our business do not comply with PRC laws and regulations,or if these regulations or their interpretations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.Our holding company,our PRC subsidiaries,the VI

212、Es,and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and,consequently,significantly affect the financial performance of the VIEs and our company as a whole.The PRC regu

213、latory authorities could disallow the VIEs structure pursuant to the new regulations promulgated by the PRC government,which would likely result in a material adverse change in our operations,and our class A ordinary shares or our ADSs may decline significantly in value;We rely on contractual arrang

214、ements with the VIEs and the shareholders of the VIEs for all of our business operations,which may not be as effective as direct ownership in providing operational control;and Any failure by the VIEs or the shareholders of the VIEs to perform their obligations under our contractual arrangements with

215、 them would have a material adverse effect on our business.30ITEM 3 KEY INFORMATIONRisks 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,the following:The PCAOB had historically been unable t

216、o inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections;Our ADSs may be prohibited from trading in the United States

217、under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely 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 discretio

218、n over our business operation and any failure to comply with PRC laws and regulations could result in a material adverse change in our operations and the value of the ADSs;and Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available

219、to us.Risks Related to the ADSs and our class A ordinary sharesIn addition to the risks 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

220、 other companies listed on the Hong Kong Stock Exchange;and The trading prices for our listed securities have been and are likely to continue to be volatile.31Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONRisks Related to Our Business and IndustryThe Credit-Tech industry is rapidly ev

221、olving,which makes it difficult to effectively assess our future prospects.The Credit-Tech industry in the PRC is in a developing stage.The regulatory framework for this market is also evolving and may remain uncertain for the foreseeable future.In addition,the Credit-Tech industry in China has not

222、witnessed a full credit cycle.The market players in the industry,including us,may not be able to respond to the change of market situations effectively and maintain steady business growth when the industry enters a different stage.In addition,we cannot assure you that a contraction in the availabili

223、ty of 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 the future.You should consider our business and prospects in light of the risks and challenges we encounter or may encounter given the rapidly evolving market in which

224、we operate,along with our limited operating history.These risks and challenges include our ability to,among other things:offer competitive products and services;broaden our prospective borrower base;increase the utilization of our products by existing borrowers as well as new borrowers;maintain and

225、enhance our relationship and business collaboration with our partners;maintain low delinquency rates of loans we facilitated;develop and maintain cooperative relationships with financial institution partners to secure sufficient,diversified,cost-efficient funding to the drawdown requests;continue to

226、 develop,maintain and scale our platform and sustain our historical growth rates;continue to develop and improve the effectiveness,accuracy and efficiency of our proprietary credit assessment and profiling technologies;navigate through a complex and evolving regulatory environment;32ITEM 3 KEY INFOR

227、MATION improve our operational efficiency and profitability;attract,retain and motivate talented employees to support our business growth;enhance our technology infrastructure to support the growth of our business and maintain the security of our system and the confidentiality of the information pro

228、vided and utilized across our system;navigate through economic conditions and fluctuations;and defend ourselves against legal and regulatory actions,such as actions involving intellectual property or privacy claims.We have a limited operating history and are subject to credit cycles and the risk of

229、deterioration of credit profiles of borrowers.We were established in 2016 and officially launched our capital-light model in May 2018.Our business is subject to credit cycles associated with the volatility of the general economy and with the trends of the Credit-Tech industry in China.As we have a l

230、imited 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 all loans facilitated through our platform,including those under credit-driven services and platform services,was 2.03%,2.35%and 2.09%,respectively.The i

231、ncrease in 90 day+delinquency rates from 2022 to 2023 was primarily due to soft consumer sentiment under the challenging macroenvironment following the pandemic.The decrease in 90 day+delinquency rates from 2023 to 2024 was mainly due to our proactive tightening of overall credit standards,although

232、macroeconomic headwinds persisted.For more details,see“Item 5.Operating and Financial Review and Prospects A.Operating Results Loan Performance Data 90 day+delinquency rates.”To effectively manage credit risks,we have adopted a prudent approach to focus on improving the quality of our business throu

233、gh continued optimization of our asset portfolio and our dynamic adjustments in loan mix.We also expect to continue focusing on enhancing our technology and credit assessment capabilities and fine-tuning our services and solutions to address financial institution partners evolving needs and risk pre

234、ferences.However,there can be no assurance that we will be able to successfully manage our risk exposure in an effective manner.If economic conditions deteriorate or any event beyond our control occurs to our operation,we may face an increased risk of default or delinquency of borrowers,which will r

235、esult in lower returns or even losses.In the event that the creditworthiness of borrowers deteriorates,or we cannot track the deterioration of their creditworthiness,the criteria we use for the analysis of user credit profiles may be rendered inaccurate,and our credit profiling system may be subsequ

236、ently rendered ineffective.This in turn may lead to higher default rates and adversely impact our results of operations.In addition,deterioration in borrowers creditworthiness,or increase in our delinquency rate may discourage our financial institution partners from cooperating with us.If our financ

237、ial institution partners choose to adopt a tight credit approval and drawdown funding policy,our ability to secure funding will be materially restricted.33Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONWe are subject to uncertainties surrounding regulations and administrative measures

238、of the loan facilitation business.If any of our business practices are deemed to be non-compliant with applicable laws and regulations,our business,financial condition and results of operations would be adversely affected.The laws and regulations governing the loan facilitation business are evolving

239、,and uncertainties exist with respect to their interpretation and implementation.Since 2017,the PRC government and relevant regulatory authorities have issued various laws and regulations governing the loan facilitation business,including,among others,(i)the Notice on Regulating and Rectifying“Cash

240、Loan”Business issued on December 1,2017,or Circular 141,which introduces the regulating guidance on cash loan businesses including online micro-lending companies,P2P platforms and banking financial institutions,(ii)the Interim Measures for Administration of Internet Loans Issued by Commercial Banks,

241、provides that“core risk management functions such as credit granting approval and contract conclusion shall be independently and effectively carried out by the commercial bank,”and(iii)the Supplementary Provisions on the Supervision and Administration of Financing Guarantee Companies promulgated on

242、October 9,2019,or the Supplementary Financing Guarantee Provisions,which further require that institutions providing services such as borrower recommendation and credit assessment for various lending institutions,including us as a Credit-Tech company,shall not provide,directly or in a disguised form

243、,financing guarantee services without prior approval.For a discussion of the related laws and regulations,please see“Item 4.Information on the Company B.Business Overview Regulation Regulation on Online Finance Services Industry Regulations on the business of loan facilitation”and“Item 4.Information

244、 on the Company B.Business Overview Regulation Regulations on Financing Guarantee.”34ITEM 3 KEY INFORMATIONWe have experienced,and may from time to time be required to make adjustments to our operations in order to maintain compliance with changes in laws,regulations and policies.However,we may stil

245、l be deemed non-compliant with these regulations or other rules in the following aspects of our business:Guarantee practice.Currently,third-party guarantee companies or the licensed VIE provides guarantee or other credit enhancement services to our financial institution partners.We engage third-part

246、y guarantee companies to provide guarantee services,and we,under certain circumstances,provide back-to-back guarantees for external guarantee companies.We currently provide back-to-back guarantees only through the licensed VIE.As advised by our PRC legal counsel,our back-to-back guarantee model is n

247、ot prohibited by Circular 141,because we have not directly provided guarantee to banking financial institutions.However,in the absence of authoritative interpretation of Circular 141,we cannot assure you that all the PRC regulatory authorities will have the same view as our PRC legal counsel on this

248、 issue.Moreover,given the lack of further interpretations,the exact definition and scope of“providing financing guarantee business in a disguised form”under the Supplementary Financing Guarantee Provisions is unclear.Therefore,we cannot be certain that our back-to-back guarantee model will not be de

249、termined to be in violation of the Supplementary Financing Guarantee Provisions.For additional information on potential risk related to compliance with the leverage ratio limits for financing guarantee business,please see“We are subject to uncertainties surrounding regulations and administrative mea

250、sures 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 condition and results of operations would be adversely affected.”Payment.We have adopted a payment model and applied

251、it to our cooperation with all financial institution partners.Under our payment model,we do not charge interests to borrowers for loans funded by our financial institution partners;instead,we charge service fees to financial institutions.In certain cases,some financial institution partners further e

252、ngage us and a third-party payment system service provider to together arrange payment clearance,pursuant to which borrowers first repay to a third-party payment system and we work together with the payment system service provider to split the total repayment amount,including principal,interest and

253、service fees,to the portions that financial institution partners and we are each entitled to.The third-party payment service providers are engaged per our financial institution partners request and are mainly for the purpose of general payment processing and clearance.We do not charge any fees from

254、borrowers under our payment model for loans funded by our financial institution partners.As advised by our PRC legal counsel,such payment model does not violate Circular 141 or the Interim Measures for Administration of Internet Loans Issued by Commercial Banks.However,in the absence of authoritativ

255、e interpretation of Circular 141 and given substantial uncertainties regarding the interpretation and application of PRC laws and regulations,we cannot assure you that PRC regulatory authorities will share this view.35Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONIf our products or se

256、rvices are deemed to be non-compliant with the PRC laws and regulations,we may need to further adjust our practices 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 ne

257、w regulatory environment,or on a permanent basis for non-compliance concerns,our operation will be adversely impacted.If fewer financial institutions are willing to fund the loans,the competition for funding may become more intense,and the cost of funding may increase,which may adversely impact our

258、results of operations.Besides,in April 2021,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 and compliance practice of

259、 these platforms internet financial businesses in China.We have been making rectifications and adjustments to our operations to address the issues discussed during the meeting and results of our self-examination according to the guidance provided by the regulators.We have substantially completed the

260、 rectification measures based on our self-examination results according to the guidance provided by the relevant authorities.The regulatory authorities have reviewed our rectification measures in general.Since January 2023,the regulatory authorities have moved on to the regular regulatory supervisio

261、n status from the self-examination and rectification status with respect to regulating these major financial technology platforms,including us.Our rectification results remain subject to the regulators regular supervision,and we cannot assure you that the measures we have taken and rectifications we

262、 have made will satisfy the requirements from the regulators.If the regulators deem our rectification efforts to be insufficient or unsatisfactory,we may face further rectification orders or other administrative actions,in which case our business and operations may be materially and negatively affec

263、ted.We are subject to uncertainties surrounding 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 condition and results of operations

264、 would be adversely affected.A portion of loans facilitated on our platform are funded by Fuzhou Microcredit,the subsidiary of Shanghai Qiyu,one of the VIEs.We also provide financing guarantees to our financial institution partners through Fuzhou Financing Guarantee and Shanghai Financing Guarantee(

265、before its financing guarantee license 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.36ITEM 3 KEY INFORMATIONOn August 2,2017,the PRC State Council promulgated the Reg

266、ulations on the Supervision and Administration of Financing Guarantee Companies,which became effective on October 1,2017.The regulations set forth that the outstanding guarantee liabilities of a financing guarantee company shall not exceed ten times its net assets,and that the balance of outstanding

267、 guarantee liabilities for the same guaranteed party shall not exceed 10%of a financing guarantee companys net assets,while the balance of outstanding guarantee liabilities for the same guaranteed party and its affiliated parties shall not exceed 15%of a financing guarantee companys net assets.On No

268、vember 2,2020,the China Banking and Insurance Regulatory Commission and the Peoples Bank of China published the Interim Measures for the Administration of Online Micro-Lending Business(Draft for Comments),adding new requirements to online micro-lending business.In particular,the draft,among other th

269、ings,strengthens the condition for licensing and other approvals for conducting online micro-lending business.Pursuant to the draft,to the extent a micro-lending company engages in online micro-lending business,said business shall mainly be carried out within the provincial-level administrative regi

270、on to which its place of registration belongs,and shall not operate beyond such region without the approval of the banking regulator under the State Council.On December 31,2021,the Peoples Bank of China issued the Regulations on Local Financial Supervision and Administration(Draft for Comments),whic

271、h reaffirm that local financial organizations(including micro-lending companies and financing guarantee companies)are required to operate business within the area approved by the local financial regulatory authority,and are not allowed to conduct business across provinces in principle.On December 31

272、,2024,the National Financial Regulatory Administration of the PRC issued the Interim Administrative Measures for Micro-Lending Companies.The measures(i)clarify the business scope of micro-lending companies and the loan concentration ratio requirements,and optimize the upper limit standard for single

273、-household loan balances;(ii)prohibit the leasing or lending of licenses and other non-compliant“channel”businesses;(iii)regulate external financing by strictly enforcing leverage ratio indicators and specifying the conditions for microfinance companies to issue bonds and asset securitization produc

274、ts;(iv)standardize the business systems of micro-lending companies,requiring them to meet conditions such as full-process online operations,a robust risk control system,and compliance with network and information security management requirements;(v)require that micro-lending companies file its websi

275、tes,apps,or mini-programs with local financial regulatory authorities;and(vi)provide a transition period,which shall not exceed two years in principle to gradually meet all the requirements stipulated in the measures.We will closely monitor the regulatory requirements,seek guidance from regulatory a

276、uthorities,and take applicable measures in a timely manner to ensure our compliance with the laws and regulations applicable to us.We may incur costs and expenses to ensure compliance and to make necessary changes to our internal policies and practices to maintain compliance with the laws and regula

277、tions applicable to us in the future.Fuzhou Microcredit has obtained the approval 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,Fuzhou Microcre

278、dit had increased its registered capital to RMB5 billion,which has been fully paid.Currently,Fuzhou Microcredit can conduct cross-province business with its valid license.However,if the Interim Measures for the Administration of Online Micro-Lending Business(Draft for Comments)were to be adopted in

279、its current form,Fuzhou Microcredit may need to obtain the legal approval of the banking regulator under the State Council in order to engage in online micro-lending business across provincial-level administrative regions.The specific rules for licensing or approvals for cross-province online micro-

280、lending business are yet to be formulated as of the date of this annual report.We cannot assure you that,if the authorities later promulgate such rules for micro-lending business or other rules imposing licensing or approval requirements on financing 37Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 K

281、EY INFORMATIONguarantee business,Fuzhou Microcredit or Fuzhou Financing Guarantee will be qualified for such licenses or approvals in accordance with the requirements thereunder.If we fail to obtain the regulatory approvals to further increase the registered capital or to establish additional online

282、 micro-lending companies if needed,we may not be able to obtain sufficient funding to fulfill our future growth needs.From time to time,we may need additional licenses to operate our business.Failure to obtain,renew,or retain requisite licenses,permits or approvals may adversely affect our ability t

283、o conduct or expand our business.Furthermore,Fuzhou Microcredit is subject to the laws,regulations,policies and measures in Fuzhou in respect of registered capital and of loan-to-capital and other leverage ratios,among other things,and our financing guarantee companies are subject to the supervision

284、 of local financial authorities in Fuzhou,Shanghai(before the financing guarantee license of Shanghai Financing Guarantee was canceled upon its voluntary application)and Tianjin where the branch office of Fuzhou Financing Guarantee is located.We may be subject to regulatory warnings,correction order

285、s,condemnation and fines and may be required to further adjust our business if any of our micro-lending and financing guarantee companies is deemed to have violated national,provincial or local laws and regulations or regulatory orders and guidance.We are subject to uncertainties surrounding regulat

286、ions and administrative measures of credit reporting business.If any of our business practices is deemed to be non-compliant with such laws and regulations,our business,financial condition and results of operations would be materially and adversely affected.The PRC government has adopted several reg

287、ulations governing personal and enterprise credit reporting businesses.These regulations include the Regulation for the Administration of Credit Reporting Industry enacted by the State Council and effective in March 2013,and the Management Rules on Credit Agencies issued by the Peoples Bank of China

288、,in the same year.According to the Regulation for the Administration of Credit Reporting Industry,“credit reporting business”refers to the gathering,organizing,preserving and processing of credit information on organizations such as enterprises and public service units and individuals,as well as dis

289、tribution of such information to information users,and a“credit reporting agency”refers to credit reporting entity established in accordance with law and mainly engaged in credit reporting business.Entities engaged in personal/enterprise credit reporting business without such approval/completing fil

290、ing formality may be subject to fine or criminal liability.In addition,the Administrative Measures for Credit Reporting Business issued by the Peoples Bank of China on September 27,2021 and effective on January 1,2022,or the Credit Reporting Measures,define“credit information”to include“basic inform

291、ation,borrowing and lending information and other relevant information legally collected in the offering of services of finance or other activities for purposes of identifying and judging the credit standing of businesses and individuals,as well as result of analysis and evaluation based on the afor

292、esaid information,”and define“credit reporting business”as the collection,collation,keeping and processing of credit information and provision of such information to information users.The Credit Reporting Measures apply to entities that carry out credit reporting business and“activities relating to

293、credit reporting business”in China.Separately,entities providing“services of credit reporting function”in the name of“credit information service,credit service,credit evaluation,credit rating,credit repair,among others”are also subject to the measures.The measures provide for an 18-month grace perio

294、d from their effectiveness date for organizations that engage in credit 38ITEM 3 KEY INFORMATIONreporting business to obtain the credit reporting business license and comply with its other provisions.Furthermore,on July 7,2021,the Credit Information System Bureau of the Peoples Bank of China further

295、 issued the Notice Relating to Disconnecting Direct Connection to 13 internet platforms including us,requiring the internet platforms to achieve a complete“disconnected direct connection”in terms of personal information with financial institutions,meaning that the direct flow of personal information

296、 from internet platforms that collect such information to financial institutions is prohibited.Historically,we provided preliminary credit assessment assistance directly to financial institution partners which mainly depended on the evaluation of information regarding personal credit status.Such pra

297、ctice may be deemed as engaging in credit reporting business or credit reporting function services by the PRC authorities.To comply with the Credit Reporting Measures and the Notice Relating to Disconnecting Direct Connection,we have involved two licensed credit reporting institutions and have subst

298、antially completed our business adjustments with respect to disconnecting direct connection for credit reporting as of the date of this annual report.In particular,we have entered into collaboration agreements with two licensed credit reporting institutions to ensure the flow of personal information

299、 complies with the requirements of the Credit Reporting Measures and the Notice Relating to Disconnecting Direct Connection.However,there remain uncertainties with respect to the interpretation and implementation of the Credit Reporting Measures.Therefore,we cannot rule out the possibility that some

300、 aspects of our business may subsequently be deemed as incompliant and be required to be ceased or adjusted in a way that will have a negative impact on our business and prospects.If our credit assessment assistance is prohibited,it may affect the collaboration between us and our financial instituti

301、on partners.If we are prohibited from conducting our credit assessment,our operation will be adversely affected.The lack of clear guidance under,and the uncertainty associated with,the Credit Reporting Measures may also result in substantial compliance cost incurred by us.We will closely monitor the

302、 regulatory requirements,seek guidance from regulatory authorities and take applicable measures in a timely manner to ensure our compliance with the laws and regulations applicable to us.We may incur costs and expenses to ensure compliance and to make necessary changes to our internal policies and p

303、ractices to maintain compliance with the laws and regulations applicable to us in the future.According to the Notice Relating to Disconnecting Direct Connection,the Credit Reporting Measures and other related laws and regulations,any failure or perceived failure by us to meet the requirements may su

304、bject us to fine or criminal liability,which could have an adverse effect on our business,financial condition and results of operations.See“Item 4.Information on the Company B.Business Overview Regulation Regulations on Credit Reporting Business”for details.The pricing of loans facilitated through o

305、ur 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 costs,including the interest and fees paid by the borrowers,in compliance with the rules provided by the Supreme

306、Peoples Court,and such costs shall be within the legally allowed annualized interest rate for private lending.According to the Provisions of the Supreme Peoples Court on Several Issues concerning the Application of Law in the Trial of Private Lending Cases promulgated on September 1,2015,in the even

307、t that 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 39Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONthat exceeds the 24%limit,PRC courts would not upho

308、ld our request to demand the portion of the fees that exceeds the 24%limit from such borrowers.If the sum of the annual interest that lenders charge and the fees we and our financial institution partners charge exceeds 36%,the portion that exceeds the 36%limit is invalid.The Supreme Peoples Court is

309、sued the Several Opinions on Further Strengthening the Judicial Work in the Finance Sector in August 2017,if an online lending information intermediary and a lender intentionally collude to evade the interest rate ceiling as set out by the law through disguising loan interest as loan facilitation se

310、rvice fees,then such arrangements shall be declared invalid.On July 22,2020,the Supreme Peoples Court and the National Development and Reform Commission,or the NDRC,jointly released the Opinions on Providing Judicial Services and Safeguards for Accelerating the Improvement of the Socialist Market Ec

311、onomic System for the New Era.The opinions set out that if the interest and fees,including interest,compound interest,penalty interest,liquidated damages and other fees,claimed by one party to the loan contract exceed the upper limit under judicial protection,the claim will not be supported by the c

312、ourt,and if the parties to the loan disguise the financing cost in an attempt to circumvent the upper limit,the rights and obligations of all parties to the loan will be determined by the actual loan relationship.On August 20,2020,the Supreme Peoples Court issued the Decision on Amending the Provisi

313、ons of the Supreme Peoples Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases,or the Judicial Interpretation Amendment,which was revised on January 1,2021 and amended the upper limit of private lending interest rates under judicial protection.According to

314、 the Judicial Interpretation Amendment,if the service fees or other fees that we charge are deemed to be loan interest or fees related to loans(inclusive of any default rate and default penalty and any other fee),in the event that the sum of the annualized interest that lenders charge and fees we an

315、d our financial institution partners charge exceeds four times the one-year Loan Prime Rate at the time of the establishment of the agreement,which we refer to as the Quadruple LPR Limit,borrowers may refuse to pay the portion that exceeds the Quadruple LPR Limit.In that case,PRC courts will not uph

316、old our request to demand the payment of fees 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 courts may uphold such requests.

317、The aforementioned one-year Loan Prime Rate refers to the one-year loan market quoted interest rate issued by the National Bank Interbank Funding Center on the 20th of each month starting from August 20,2019,and the one-year loan market quoted interest rate issued by the National Bank Interbank Fund

318、ing Center on February 20,2025 was 3.10%.We cannot assure you that the one-year loan market 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 of Application of the New

319、 Judicial Interpretation on Private Lending,which clarifies that seven types of local financial organizations,including micro-lending companies,financing guarantee companies,regional equity markets,pawnshops,financing lease companies,commercial factoring companies and local asset management companie

320、s under the regulation of local financial regulatory authorities,are financial institutions established upon approval by financial regulatory authorities.The Judicial Interpretation Amendment is not applicable to disputes arising from their engagement in relevant financial businesses.40ITEM 3 KEY IN

321、FORMATIONAlthough the Judicial Interpretation Amendment and the Reply to Issues Concerning the Scope of Application of the New Judicial Interpretation on Private Lending provide that they do not apply to licensed financial institutions,including micro-lending companies that conduct loan business,the

322、re remain uncertainties in the interpretation and implementation of the amendment,including whether licensed financial institutions may be subject to its jurisdiction under Circular 141 or in certain circumstances,the basis of the calculation formula used to determine the interest limit,the scope of

323、 inclusion of related fees and insurance premiums,as well as inconsistencies between the standard and level of enforcement by different PRC courts.We cannot assure you that there will not be interpretations of the Judicial Interpretation Amendment expanding its jurisdiction to cover licensed financi

324、al institutions,nor can we guarantee that there will not be any changes to the detailed calculation formula used to determine the interest limit,that our future fee rates will not be lowered as a result of the Quadruple LPR Limit,or that the Quadruple LPR Limit will not be applied to our historical

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

326、plicable laws and regulations concerning the limit of lending interest and fee rates.Our business,results of operations and financial condition may therefore be materially and adversely affected by the implementation of the Judicial Interpretation Amendment.In addition to rules,opinions and decision

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

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

329、ment of regulations and maintain compliance or are deemed to price loans at a rate that exceeds the regulatory limits,we could be ordered to suspend,rectify or terminate our practices or operations,subject to cancelation of qualifications,or ordered to relinquish the excessive portion of the interes

330、t income.If any of these occurs,our business,financial condition,results of operations and our cooperation with financial institution partners could be materially and adversely affected.See also“We are subject to uncertainties surrounding regulations and administrative measures of the loan facilitat

331、ion business.If any of our business practices are deemed to be non-compliant with applicable laws and regulations,our business,financial condition and results of operations would be adversely affected.”41Qifu Technology,Inc.|ANNUAL REPORT 2024ITEM 3 KEY INFORMATIONOur transaction process may result

332、in misunderstanding among borrowers.Our paperless transaction process is facilitated primarily on our mobile platform.While such transaction process is streamlined and convenient,it involves certain inherent risks.Borrowers may not read the electronic agreements closely,which may result in misunders

333、tanding of certain terms and conditions.Furthermore,information in our product promotion materials and our app may result in misunderstanding among borrowers and be deemed misleading.For instance,we utilize the internal rate of return methodology to calculate the total interest and service fees to be paid by borrowers and to determine the pricing of loan products facilitated by us.Despite the fact