{"url_path":"/sec/qfnhf/10-k/2026/item-19","section_key":"item-19","section_title":"Item 19 EXHIBITS","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-04-27","source_url":"https://www.sec.gov/Archives/edgar/data/1741530/0001104659-26-049501-index.html","accession_number":"0001104659-26-049501","cik":"0001741530","ticker":"QFIN","issuer_name":"Qfin Holdings, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1741530/0001104659-26-049501-index.html","primary_entity_key":"0001741530","primary_entity_name":"Qfin Holdings, Inc."},"word_count":33441,"has_tables":true,"body_markdown":"ITEM 19 EXHIBITS\n\n​\n\n​\n\n**Exhibit**\n\n​\n\n​\n\n**Number**\n\n**  ​ ​ ​**\n\n**Description of Document**\n\n1.1\n\n​\n\n[Fourth Amended and Restated Memorandum and Articles of Association of the Registrant, effective June 30, 2025 (incorporated herein by reference to Exhibit 3.1 to the Form 6-K furnished on June 30, 2025 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465925063772/tm2519300d1_ex3-1.htm)\n\n​\n\n​\n\n​\n\n1.2*\n\n​\n\n[Certificate of Incorporation on Change of Name](qfin-20251231xex1d2.htm)\n\n​\n\n​\n\n​\n\n2.1\n\n​\n\n[Registrant’s Specimen American Depositary Receipt (included in Exhibit 2.3) (incorporated herein by reference to Exhibit 4.3 to the Form F-1 filed on October 26, 2018 (File No. 333-228020))](https://www.sec.gov/Archives/edgar/data/1741530/000104746918006897/a2236823zex-4_3.htm)\n\n​\n\n​\n\n​\n\n2.2*\n\n​\n\n[Registrant’s Specimen Certificate for Class A Ordinary Shares](qfin-20251231xex2d2.htm)\n\n​\n\n​\n\n​\n\n2.3\n\n​\n\n[Deposit Agreement, among the Registrant, the depositary and holder of the American Depositary Receipts (incorporated herein by reference to Exhibit 4.3 to the registration statement on Form S-8 filed on June 3, 2019 (File No. 333-231892))](https://www.sec.gov/Archives/edgar/data/1741530/000110465919033306/a19-10977_1ex4d3.htm)\n\n​\n\n​\n\n​\n\n2.4*\n\n​\n\n[Description of Securities](qfin-20251231xex2d4.htm)\n\n​\n\n​\n\n​\n\n2.5\n\n​\n\n[Rights Agreement, dated as of June 9, 2022, between the Registrant and American Stock Transfer & Trust Company, LLC (incorporated herein by reference to Exhibit 2.5 to the Form 20-F filed on March 25, 2025 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000141057825000441/qfin-20241231xex2d5.htm)\n\n​\n\n​\n\n​\n\n4.1\n\n​\n\n[2018 Share Incentive Plan (incorporated herein by reference to Exhibit 4.1 to the Form 20-F filed on April 30, 2020 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465920054414/qfin-20191231xex4d1.htm)\n\n​\n\n​\n\n​\n\n4.2\n\n​\n\n[2019 Share Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Form S-8 filed on December 13, 2019 (File No. 333-235488)](https://www.sec.gov/Archives/edgar/data/1741530/000110465919072367/a19-24995_2ex10d1.htm) and [Exhibit 10.2 to the post-effective amendment No. 1 to Form S-8 filed on October 13, 2020 (File No. 333-235488))](https://www.sec.gov/Archives/edgar/data/1741530/000110465920114149/a20-32982_1ex10d2.htm)\n\n​\n\n​\n\n​\n\n4.3\n\n​\n\n[Form of Indemnification Agreement between the Registrant and its directors and executive officers (incorporated herein by reference to Exhibit 10.2 to the Form F-1 filed on October 26, 2018 (File No. 333-228020))](https://www.sec.gov/Archives/edgar/data/1741530/000104746918006897/a2236823zex-10_2.htm)\n\n​\n\n​\n\n​\n\n4.4\n\n​\n\n[Form of Employment Agreement between the Registrant and its executive officers (incorporated herein by reference to Exhibit 10.3 to the Form F-1 filed on October 26, 2018 (File No. 333-228020))](https://www.sec.gov/Archives/edgar/data/1741530/000104746918006897/a2236823zex-10_3.htm)\n\n​\n\n​\n\n​\n\n4.5\n\n​\n\n[English translation of the executed form of Voting Proxy Agreement regarding a VIE of the Registrant, between its shareholder and the WFOE of the Registrant as currently in effect, and a schedule of all executed Voting Proxy Agreement adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 4.5 to the Form 20-F filed on April 27, 2023 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465923050588/qfin-20221231xex4d5.htm)\n\n​\n\n​\n\n​\n\n4.6\n\n​\n\n[English translation of the executed form of Equity Interest Pledge Agreement among a VIE of the Registrant, its shareholder, and the WFOE of the Registrant, as currently in effect, and a schedule of all executed Equity Interest Pledge Agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 4.6 to the Form 20-F filed on April 27, 2023 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465923050588/qfin-20221231xex4d6.htm)\n\n4.7\n\n​\n\n[English translation of the executed form of Exclusive Business Cooperation Agreement between a VIE and the WFOE of the Registrant, as currently in effect, and a schedule of all executed the Exclusive Business Cooperation Agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 4.7 to the Form 20-F filed on April 27, 2023 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465923050588/qfin-20221231xex4d7.htm)\n\n189\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n**Exhibit**\n\n​\n\n​\n\n**Number**\n\n**  ​ ​ ​**\n\n**Description of Document**\n\n​\n\n​\n\n​\n\n4.8\n\n​\n\n[English translation of the executed form of Exclusive Option Agreement among a VIE of the Registrant, its shareholder, and the WFOE of the Registrant, as currently in effect, and a schedule of all executed the Exclusive Option Agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 4.8 to the Form 20-F filed on April 27, 2023 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465923050588/qfin-20221231xex4d8.htm)\n\n​\n\n​\n\n​\n\n4.9\n\n​\n\n[English translation of the executed form of Loan Agreement among a VIE of the Registrant, its shareholder, and the WFOE of the Registrant, as currently in effect, and a schedule of all executed the Loan Agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 4.9 to the Form 20-F filed on April 27, 2023 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465923050588/qfin-20221231xex4d9.htm)\n\n​\n\n​\n\n​\n\n4.10\n\n​\n\n[English Translation of the Joint Venture Agreement entered into in October 2020 by and between Shanghai Qiyu, Shanghai Jiehu Internet Technology Co., Ltd. and Shanghai Changfeng Investment (Group) Co., Ltd. (incorporated herein by reference to Exhibit 4.11 of the Form 20-F filed on April 21, 2021 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465921052802/qfin-20201231xex4d11.htm)\n\n​\n\n​\n\n​\n\n4.11\n\n​\n\n[English Translation of the Equity Transfer Agreement entered into in December 2021 by and between Shanghai Qiyu and Shanghai Jiehu Internet Technology Co., Ltd. (incorporated herein by reference to Exhibit 4.12 to the Form 20-F filed on April 28, 2022 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465922052204/qfin-20211231xex4d12.htm)\n\n​\n\n​\n\n​\n\n4.12\n\n​\n\n[English Translation of the Novation Agreement entered into in December 2021 by and between Shanghai Qiyu, Shanghai Jiehu Internet Technology Co., Ltd. and Shanghai Changfeng Investment (Group) Co., Ltd. in connection with rights and obligations of Shanghai Jiehu Internet Technology Co., Ltd. under the Joint Venture Agreement entered into in October 2020 (incorporated herein by reference to Exhibit 4.13 to the Form 20-F filed on April 28, 2022 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465922052204/qfin-20211231xex4d13.htm)\n\n​\n\n​\n\n​\n\n4.13\n\n​\n\n[English Translation of the Termination Agreement on the control documents in connection with Fuzhou Microcredit entered into in April 2021 by and between Fuzhou Microcredit, shareholders of Fuzhou Microcredit and our WFOE (incorporated herein by reference to Exhibit 4.14 to the Form 20-F filed on April 28, 2022 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465922052204/qfin-20211231xex4d14.htm)\n\n​\n\n​\n\n​\n\n4.14\n\n​\n\n[English Translation of the Equity Transfer Agreement entered into in April 2021 by and between shareholders of Fuzhou Microcredit and Shanghai Qiyu (incorporated herein by reference to Exhibit 4.15 to the Form 20-F filed on April 28, 2022 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465922052204/qfin-20211231xex4d15.htm)\n\n​\n\n​\n\n​\n\n4.15\n\n​\n\n[English translation of the executed form of Agreement on the Termination of the VIE Agreements among a VIE of the Registrant, its shareholder, and the WFOE of the Registrant, as currently in effect, and a schedule of all executed the Agreement on the Termination of the VIE Agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 4.16 to the Form 20-F filed on April 27, 2023 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465923050588/qfin-20221231xex4d16.htm)\n\n​\n\n​\n\n​\n\n4.16*\n\n​\n\n[Indenture, dated as of March 27, 2025, between the Registrant and Citibank, N.A., as trustee](qfin-20251231xex4d16.htm)\n\n​\n\n​\n\n​\n\n4.17*\n\n​\n\n[Form of 0.50% Convertible Senior Notes due 2030 (included in Exhibit 4.16)](qfin-20251231xex4d16.htm)\n\n​\n\n​\n\n​\n\n8.1*\n\n​\n\n[Significant subsidiaries of the Registrant and the VIEs and the VIEs’ subsidiaries](qfin-20251231xex8d1.htm)\n\n​\n\n​\n\n​\n\n11.1\n\n​\n\n[Amended and Restated Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 11.1 to the Form 20-F filed on April 26, 2024 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465924052378/qfin-20231231xex11d1.htm)\n\n​\n\n​\n\n​\n\n11.2\n\n​\n\n[Amended and Restated Statement of Policies Governing Material Non-public Information and the Prevention of Insider Trading of the Registrant (incorporated herein by reference to Exhibit 11.2 to the Form 20-F filed on March 25, 2025 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000141057825000441/qfin-20241231xex11d2.htm)\n\n​\n\n​\n\n​\n\n12.1*\n\n​\n\n[CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](qfin-20251231xex12d1.htm)\n\n​\n\n​\n\n​\n\n190\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n**Exhibit**\n\n​\n\n​\n\n**Number**\n\n**  ​ ​ ​**\n\n**Description of Document**\n\n12.2*\n\n​\n\n[CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](qfin-20251231xex12d2.htm)\n\n​\n\n​\n\n​\n\n13.1**\n\n​\n\n[CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](qfin-20251231xex13d1.htm)\n\n​\n\n​\n\n​\n\n13.2**\n\n​\n\n[CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](qfin-20251231xex13d2.htm)\n\n​\n\n​\n\n​\n\n15.1*\n\n​\n\n[Consent of Commerce & Finance Law Offices](qfin-20251231xex15d1.htm)\n\n​\n\n​\n\n​\n\n15.2*\n\n​\n\n[Consent of Deloitte Touche Tohmatsu Certified Public Accountants LLP](qfin-20251231xex15d2.htm)\n\n​\n\n​\n\n​\n\n15.3*\n\n​\n\n[Consent of Maples and Calder (Hong Kong) LLP](qfin-20251231xex15d3.htm)\n\n​\n\n​\n\n​\n\n97\n\n​\n\n[Clawback Policy (incorporated herein by reference to Exhibit 97 to the Form 20-F filed on April 26, 2024 (File No. 001-38752))](https://www.sec.gov/Archives/edgar/data/1741530/000110465924052378/qfin-20231231xex97.htm)\n\n​\n\n​\n\n​\n\n101.INS*\n\n​\n\nInline XBRL Instance Document - this instance document does not appear on the Interactive Data File because its XBRL tags are not embedded within the Inline XBRL document\n\n​\n\n​\n\n​\n\n101.SCH*\n\n​\n\nInline XBRL Taxonomy Extension Scheme Document\n\n​\n\n​\n\n​\n\n101.CAL*\n\n​\n\nInline XBRL Taxonomy Extension Calculation Linkbase Document\n\n​\n\n​\n\n​\n\n101.DEF*\n\n​\n\nInline XBRL Taxonomy Extension Definition Linkbase Document\n\n​\n\n​\n\n​\n\n101.LAB*\n\n​\n\nInline XBRL Taxonomy Extension Label Linkbase Document\n\n​\n\n​\n\n​\n\n101.PRE*\n\n​\n\nInline XBRL Taxonomy Extension Presentation Linkbase Document\n\n​\n\n​\n\n​\n\n104*\n\n​\n\nCover Page Interactive Data File (embedded within the Inline XBRL document)\n\n*\n\nFiled with this Annual Report on Form 20-F.\n\n**\n\nFurnished with this Annual Report on Form 20-F.\n\n191\n\n[Table of Contents](#TOC)\n\nSIGNATURES\n\nThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Qfin Holdings, Inc.**\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBy:\n\n/s/ Haisheng Wu\n\n​\n\n​\n\nName:\n\nHaisheng Wu\n\n​\n\n​\n\nTitle:\n\nChief Executive Officer\n\n​\n\n​\n\n​\n\n​\n\nDate: April 27, 2026\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n192\n\n[Table of Contents](#TOC)\n\nQFIN HOLDINGS, INC.\n\nINDEX TO CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n**PAGE(S)**\n\n**Audited Financial Statements of Qfin Holdings, Inc.**\n\n​\n\n​\n\n​\n\n[Reports of Independent Registered Public Accounting Firm](#REPORTOFINDEPENDENTREGISTEREDPUBLICACCOU) (PCAOB ID: 1113)\n\nF-2 - F-4\n\n[Consolidated Balance Sheets as of December 31, 2024 and 2025](#COMBINEDANDCONSOLIDATEDBALANCESHEETS_467)\n\nF-5\n\n[Consolidated Statements of Operations for the years ended December 31, 2023, 2024 and 2025](#COMBINEDANDCONSOLIDATEDSTATEMENTSOFOPERA)\n\nF-6\n\n[Consolidated Statements of Comprehensive Income or Loss for the years ended December 31, 2023, 2024 and 2025](#COMBINEDANDCONSOLIDATEDSTATEMENTSOFCOMPR)\n\nF-7\n\n[Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2024 and 2025](#COMBINEDANDCONSOLIDATEDSTATEMENTSOFCHANG)\n\nF-8\n\n[Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2024 and 2025](#COMBINEDANDCONSOLIDATEDSTATEMENTSOFCASHF)\n\nF-9\n\n[Notes to the Consolidated Financial Statements for the years ended December 31, 2023, 2024 and 2025](#a1ORGANIZATIONANDPRINCIPALACTIVITIES_446)\n\nF-10 - F-57\n\n[Additional Information - Financial Statement Schedule I](#SCHEDULEI)\n\nF-58 - F 61\n\n​\n\n​\n\nF-1\n\n​\n\n[Table of Contents](#TOC)\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nTo the shareholders and the Board of Directors of Qfin Holdings, Inc.\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Qfin Holdings, Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2025, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the financial statement listed in schedule I (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.\n\nWe have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 27, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.\n\nConvenience Translation\n\nOur audits also comprehended the translation of Renminbi amounts into United States dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 2. Such United States dollar amounts are presented solely for the convenience of the readers in the United States of America.\n\nBasis for Opinion\n\nThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nF-2\n\n​\n\n[Table of Contents](#TOC)\n\nManagement**’**s estimate of expected default rate primarily used in accounts of guarantee liabilities and allowance for loans receivable\n\n*Critical Audit Matter Description*\n\nThe Company estimates the fair value of stand-ready guarantee liabilities using a discounted cash flow model and the fair value of contingent guarantee liabilities using an expected credit loss model, both of which are based on expected default rate of underlying loans subject to guarantee. The Company also applies expected credit loss model to provide allowance for loans receivable, which is ultimately based on expected default rate of the underlying loans. The Company estimates the expected default rate on a pool basis according to the historical net default rate by vintage, adjusted by specific risk characteristics for loans within each vintage, correlated industrial and macro-economic factors, and other pertinent information in assessing future performance of the loan portfolio.\n\nWe identified the estimate of expected default rate as a critical audit matter because of the significant judgment required by management when developing the estimation. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimate of expected default rate.\n\n*How the Critical Audit Matter Was Addressed in the Audit*\n\nOur audit procedures related to expected default rate included the following, among others:\n\n●We tested the effectiveness of controls over the estimation of the expected default rate, including management’s controls over accurate capture of the historical delinquency and collection data at individual loan level that are used in the estimation process.\n\n●We tested the accuracy of the historical net default rate by vintage, delinquent loan collection rate and specific risk indicators used as an input to the model by comparing it with original data retrieved from the operating system.\n\n●With the assistance of our specialists, we evaluated the reasonableness of the (1) valuation models, (2) assumptions including correlated industrial and macro-economic factors used in the model, and tested the computational accuracy of the model.\n\n●We evaluated observable data close to the report issue date to evaluate whether the assumptions used by management are appropriate.\n\n/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP\n\nShanghai, China\n\nApril 27, 2026\n\nWe have served as the Company’s auditor since 2018.\n\n​\n\nF-3\n\n​\n\n[Table of Contents](#TOC)\n\n**REPORT OF INDEPENDENT REGISTERED****PUBLIC ACCOUNTING FIRM**\n\nTo the shareholders and the Board of Directors of Qfin Holdings, Inc.\n\nOpinion on Internal Control over Financial Reporting\n\nWe have audited the internal control over financial reporting of Qfin Holdings, Inc. and its subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.\n\nWe have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the financial statements as of and for the year ended December 31, 2025 of the Company and our report dated April 27, 2026 expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the convenience translation.\n\n**Basis for Opinion**\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\n**Definition and Limitations of Internal Control over Financial Reporting**\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP\n\nShanghai, China\n\nApril 27, 2026\n\n​\n\n​\n\nF-4\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\nCONSOLIDATED BALANCE SHEETS\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**As of December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**USD**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**(Note 2)**\n\n**ASSETS**\n\n \n\n  ​\n\n \n\n​\n\n \n\n  ​\n\n**Current assets:**\n\n \n\n  ​\n\n \n\n  ​\n\n \n\n  ​\n\nCash and cash equivalents\n\n \n\n4,452,416\n\n \n\n4,696,817\n\n \n\n671,636\n\nRestricted cash (including RMB771,798 and RMB1,470,555 from the consolidated trusts as of December 31, 2024 and 2025, respectively)\n\n \n\n2,353,384\n\n \n\n2,844,101\n\n \n\n406,701\n\nShort term investments\n\n​\n\n3,394,073\n\n​\n\n2,852,254\n\n​\n\n407,867\n\nSecurity deposit prepaid to third-party guarantee companies\n\n​\n\n162,617\n\n​\n\n325,698\n\n​\n\n46,574\n\nFunds receivable from third party payment service providers\n\n \n\n462,112\n\n \n\n848,163\n\n \n\n121,286\n\nAccounts receivable and contract assets, net (net of allowance of RMB261,496 and RMB181,843 as of December 31, 2024 and 2025, respectively)\n\n​\n\n2,214,530\n\n​\n\n950,267\n\n​\n\n135,886\n\nFinancial assets receivable, net (net of allowance of RMB390,649 and RMB380,406 as of December 31, 2024 and 2025, respectively)\n\n \n\n1,553,912\n\n \n\n1,510,205\n\n \n\n215,956\n\nAmounts due from related parties (net of allowance of RMB7,030 and nil as of December 31, 2024 and 2025, respectively)\n\n \n\n8,510\n\n \n\n—\n\n \n\n—\n\nLoans receivable, net (including RMB6,956,948 and RMB12,399,462 from the consolidated trusts as of December 31, 2024 and 2025, respectively)\n\n \n\n26,714,428\n\n \n\n34,680,954\n\n \n\n4,959,310\n\nPrepaid expenses and other assets (including RMB109,428 and RMB108,174 from the consolidated trusts as of December 31, 2024 and 2025, respectively)\n\n \n\n1,464,586\n\n \n\n772,999\n\n \n\n110,537\n\n**Total current assets**\n\n** **\n\n**42,780,568**\n\n** **\n\n**49,481,458**\n\n** **\n\n**7,075,753**\n\n**Non-current assets:**\n\n \n\n​\n\n \n\n​\n\n​\n\n​\n\nAccounts receivable and contract assets, net-noncurrent (net of allowance of RMB10,540 and RMB6,189 as of December 31, 2024 and 2025, respectively)\n\n​\n\n27,132\n\n​\n\n21,992\n\n​\n\n3,145\n\nFinancial assets receivable, net-noncurrent (net of allowance of RMB55,440 and RMB49,776 as of December 31, 2024 and 2025, respectively)\n\n​\n\n170,779\n\n​\n\n209,459\n\n​\n\n29,952\n\nAmounts due from related parties, non-current (net of allowance of RMB5 and nil as of December 31, 2024 and 2025, respectively)\n\n​\n\n51\n\n​\n\n—\n\n​\n\n—\n\nLoans receivable, net-noncurrent (including RMB631,575 and RMB1,754,356 from the consolidated trusts as of December 31, 2024 and 2025, respectively)\n\n​\n\n2,537,749\n\n​\n\n4,002,159\n\n​\n\n572,301\n\nProperty and equipment, net\n\n \n\n362,774\n\n \n\n636,994\n\n \n\n91,089\n\nLand use rights, net\n\n​\n\n956,738\n\n​\n\n966,582\n\n​\n\n138,219\n\nIntangible assets\n\n \n\n11,818\n\n \n\n10,670\n\n \n\n1,526\n\nGoodwill\n\n​\n\n42,414\n\n​\n\n45,200\n\n​\n\n6,464\n\nDeferred tax assets\n\n \n\n1,206,325\n\n \n\n1,379,933\n\n \n\n197,328\n\nOther non-current assets\n\n​\n\n36,270\n\n​\n\n195,348\n\n​\n\n27,934\n\n**Total non-current assets**\n\n** **\n\n**5,352,050**\n\n** **\n\n**7,468,337**\n\n** **\n\n**1,067,958**\n\n**TOTAL ASSETS**\n\n** **\n\n**48,132,618**\n\n** **\n\n**56,949,795**\n\n** **\n\n**8,143,711**\n\n**LIABILITIES AND EQUITY**\n\n \n\n​\n\n \n\n​\n\n​\n\n​\n\n**LIABILITIES**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Liabilities including amounts of the consolidated VIEs and trusts without recourse to the Company (Note 1 and 2):**\n\n \n\n​\n\n \n\n​\n\n​\n\n​\n\n**Current liabilities:**\n\n \n\n​\n\n \n\n​\n\n​\n\n​\n\nPayable to investors of the consolidated trusts-current\n\n \n\n8,188,454\n\n \n\n9,922,559\n\n \n\n1,418,907\n\nAccrued expenses and other current liabilities\n\n \n\n2,492,921\n\n \n\n2,935,726\n\n \n\n419,803\n\nAmounts due to related parties\n\n \n\n67,495\n\n \n\n—\n\n \n\n—\n\nShort term loans\n\n​\n\n1,369,939\n\n​\n\n1,202,891\n\n​\n\n172,011\n\nConvertible senior notes-current\n\n​\n\n—\n\n​\n\n1,019,130\n\n​\n\n145,734\n\nGuarantee liabilities-stand ready\n\n \n\n2,383,202\n\n \n\n2,314,865\n\n \n\n331,021\n\nGuarantee liabilities-contingent\n\n​\n\n1,820,350\n\n​\n\n1,872,149\n\n​\n\n267,714\n\nIncome tax payable\n\n \n\n1,040,687\n\n \n\n1,083,176\n\n \n\n154,892\n\nOther tax payable\n\n \n\n109,161\n\n \n\n9,333\n\n \n\n1,335\n\n**Total current liabilities**\n\n** **\n\n**17,472,209**\n\n** **\n\n**20,359,829**\n\n** **\n\n**2,911,417**\n\n**Non-current liabilities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDeferred tax liabilities\n\n​\n\n439,435\n\n​\n\n320,149\n\n​\n\n45,781\n\nPayable to investors of the consolidated trusts-noncurrent\n\n​\n\n5,719,600\n\n​\n\n9,930,000\n\n​\n\n1,419,971\n\nConvertible senior notes-noncurrent\n\n​\n\n—\n\n​\n\n1,583,213\n\n​\n\n226,396\n\nOther long-term liabilities\n\n​\n\n255,155\n\n​\n\n599,561\n\n​\n\n85,736\n\n**Total non-current liabilities**\n\n​\n\n**6,414,190**\n\n​\n\n**12,432,923**\n\n​\n\n**1,777,884**\n\n**TOTAL LIABILITIES**\n\n** **\n\n**23,886,399**\n\n** **\n\n**32,792,752**\n\n** **\n\n**4,689,301**\n\n**Contingencies (Note 19)**\n\n \n\n​\n\n \n\n​\n\n​\n\n​\n\n**SHAREHOLDERS’ EQUITY**\n\n \n\n​\n\n \n\n​\n\n​\n\n​\n\nOrdinary shares (USD0.00001 par value per share 5,000,000,000 shares authorized, 296,540,988 shares issued and 283,981,320 shares outstanding as of December 31, 2024, and 283,019,282 shares issued and 243,823,900 shares outstanding as of December 31, 2025, respectively)\n\n​\n\n21\n\n​\n\n20\n\n​\n\n3\n\nTreasury stock\n\n \n\n(1,113,608)\n\n \n\n(4,066,385)\n\n \n\n(581,485)\n\nAdditional paid-in capital\n\n​\n\n4,339,413\n\n​\n\n3,874,816\n\n​\n\n554,091\n\nRetained earnings\n\n \n\n20,952,340\n\n \n\n24,502,158\n\n \n\n3,503,762\n\nOther comprehensive income (loss)\n\n​\n\n11,877\n\n​\n\n(195,694)\n\n​\n\n(27,985)\n\n**TOTAL QFIN HOLDINGS, INC EQUITY**\n\n​\n\n**24,190,043**\n\n​\n\n**24,114,915**\n\n​\n\n**3,448,386**\n\nNon-controlling interests\n\n​\n\n56,176\n\n​\n\n42,128\n\n​\n\n6,024\n\n**TOTAL EQUITY**\n\n** **\n\n**24,246,219**\n\n** **\n\n**24,157,043**\n\n** **\n\n**3,454,410**\n\n**TOTAL LIABILITIES AND EQUITY**\n\n** **\n\n**48,132,618**\n\n** **\n\n**56,949,795**\n\n** **\n\n**8,143,711**\n\n​\n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n​\n\nF-5\n\n​\n\n[Table of Contents](#TOC)\n\nQFIN HOLDINGS, INC.\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**USD**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**(Note 2)**\n\n**Revenue, net of value-added tax and related surcharges:**\n\n​\n\n​\n\n \n\n  ​\n\n \n\n  ​\n\n \n\n  ​\n\n**Credit driven services**\n\n​\n\n**11,738,560**\n\n​\n\n**11,719,027**\n\n​\n\n**13,977,218**\n\n​\n\n**1,998,716**\n\nLoan facilitation and servicing fees-capital heavy (including revenue from related parties of RMB5,931, RMB2,052 and nil for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n1,667,119\n\n \n\n1,016,514\n\n \n\n1,604,903\n\n​\n\n229,498\n\nFinancing income\n\n​\n\n5,109,921\n\n \n\n6,636,511\n\n \n\n8,569,063\n\n​\n\n1,225,360\n\nRevenue from releasing of guarantee liabilities(including revenue from related parties of RMB42,499, RMB15,544 and RMB1,013 for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n4,745,898\n\n​\n\n3,695,017\n\n​\n\n3,412,952\n\n​\n\n488,046\n\nOther services fees\n\n​\n\n215,622\n\n​\n\n370,985\n\n​\n\n390,300\n\n​\n\n55,812\n\n**Platform services**\n\n​\n\n**4,551,467**\n\n​\n\n**5,446,629**\n\n​\n\n**5,227,841**\n\n​\n\n**747,571**\n\nLoan facilitation and servicing fees-capital light (including revenue from related parties of RMB199,185, RMB24,064 and RMB4,503 for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n3,213,955\n\n​\n\n2,116,797\n\n​\n\n1,162,563\n\n​\n\n166,244\n\nReferral services fees (including revenue from related parties of RMB8,601, RMB1,973 and nil for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n950,016\n\n​\n\n2,842,637\n\n​\n\n2,738,786\n\n​\n\n391,641\n\nOther services fees (including revenue from related parties of RMB45,552, RMB17,915 and RMB266 for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n387,496\n\n​\n\n487,195\n\n​\n\n1,326,492\n\n​\n\n189,686\n\n**Total net revenue**\n\n​\n\n**16,290,027**\n\n \n\n**17,165,656**\n\n \n\n**19,205,059**\n\n \n\n**2,746,287**\n\n**Operating costs and expenses:**\n\n​\n\n​\n\n \n\n​\n\n \n\n​\n\n \n\n​\n\nFacilitation, origination and servicing (including costs charged by related parties of RMB118,849, RMB116,511 and RMB123,968 for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n2,659,912\n\n \n\n2,900,704\n\n \n\n3,001,938\n\n \n\n429,271\n\nFunding costs\n\n​\n\n645,445\n\n​\n\n590,935\n\n​\n\n548,936\n\n​\n\n78,497\n\nSales and marketing (including expenses charged by related parties of RMB223,627, RMB103,786 and RMB156,020 for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n1,939,885\n\n \n\n1,725,877\n\n \n\n2,469,546\n\n \n\n353,140\n\nGeneral and administrative (including expenses charged by related parties of RMB13,610, RMB13,110 and RMB12,263 for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n421,076\n\n \n\n449,505\n\n \n\n658,980\n\n \n\n94,233\n\nProvision for loans receivable\n\n​\n\n2,151,046\n\n​\n\n2,773,323\n\n​\n\n3,625,042\n\n​\n\n518,374\n\nProvision for financial assets receivable (including provision generated from related parties of RMB633, RMB(200) and RMB(1,150) for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n386,090\n\n \n\n296,857\n\n \n\n234,924\n\n \n\n33,594\n\nProvision for accounts receivable and contract assets (including provision generated from related parties of RMB(10,197), RMB1,861 and RMB(1,523) for the years ended December 31, 2023, 2024 and 2025, respectively)\n\n​\n\n175,799\n\n​\n\n421,481\n\n​\n\n319,532\n\n​\n\n45,692\n\nProvision for contingent liabilities\n\n​\n\n3,053,810\n\n​\n\n478,404\n\n​\n\n1,667,742\n\n​\n\n238,484\n\n**Total operating costs and expenses**\n\n​\n\n**11,433,063**\n\n \n\n**9,637,086**\n\n \n\n**12,526,640**\n\n \n\n**1,791,285**\n\n**Income from operations**\n\n​\n\n**4,856,964**\n\n \n\n**7,528,570**\n\n \n\n**6,678,419**\n\n \n\n**955,002**\n\nInterest income, net\n\n​\n\n217,307\n\n \n\n237,015\n\n \n\n278,626\n\n \n\n39,843\n\nForeign exchange gain\n\n​\n\n2,356\n\n​\n\n1,512\n\n​\n\n159,570\n\n​\n\n22,818\n\nFair value change of derivatives\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(175,691)\n\n​\n\n(25,123)\n\nGain on debt extinguishment\n\n​\n\n—\n\n​\n\n—\n\n​\n\n270,135\n\n​\n\n38,629\n\nInvestment loss\n\n​\n\n(30,112)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\nOther income, net\n\n​\n\n230,936\n\n \n\n125,325\n\n \n\n165,076\n\n \n\n23,606\n\n**Income before income tax expense**\n\n​\n\n**5,277,451**\n\n \n\n**7,892,422**\n\n \n\n**7,376,135**\n\n \n\n**1,054,775**\n\nIncome tax expense\n\n​\n\n(1,008,874)\n\n \n\n(1,644,306)\n\n \n\n(1,400,492)\n\n \n\n(200,268)\n\n**Net income**\n\n​\n\n**4,268,577**\n\n \n\n**6,248,116**\n\n \n\n**5,975,643**\n\n \n\n**854,507**\n\nNet loss attributable to non-controlling interests\n\n​\n\n16,759\n\n​\n\n16,198\n\n​\n\n14,048\n\n​\n\n2,009\n\n**Net income attributable to ordinary shareholders of the Company**\n\n​\n\n**4,285,336**\n\n \n\n**6,264,314**\n\n \n\n**5,989,691**\n\n \n\n**856,516**\n\nNet income per ordinary share attributable to ordinary shareholders of Qfin Holdings, Inc.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic\n\n​\n\n13.36\n\n \n\n21.02\n\n \n\n22.48\n\n \n\n3.21\n\nDiluted\n\n​\n\n13.04\n\n \n\n20.64\n\n \n\n22.01\n\n \n\n3.15\n\nWeighted average shares used in calculating net income per ordinary share\n\n​\n\n​\n\n \n\n​\n\n \n\n​\n\n \n\n​\n\nBasic\n\n​\n\n320,749,805\n\n \n\n298,012,150\n\n \n\n266,496,992\n\n \n\n266,496,992\n\nDiluted\n\n​\n\n328,508,945\n\n \n\n303,449,864\n\n \n\n272,171,878\n\n \n\n272,171,878\n\nNet income per ADS attributable to ordinary shareholders of Qfin Holdings, Inc. (1)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic\n\n​\n\n26.72\n\n​\n\n42.04\n\n​\n\n44.96\n\n​\n\n6.42\n\nDiluted\n\n​\n\n26.08\n\n​\n\n41.28\n\n​\n\n44.02\n\n​\n\n6.30\n\n(1)\n\nBased on ADS ratio of 1 ADS to 2 ordinary shares.\n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n​\n\nF-6\n\n​\n\n[Table of Contents](#TOC)\n\nQFIN HOLDINGS, INC.\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OR LOSS\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**USD**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**(Note 2)**\n\nNet income\n\n \n\n4,268,577\n\n​\n\n6,248,116\n\n \n\n5,975,643\n\n \n\n854,507\n\nOther comprehensive income, net of tax of nil:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nForeign currency translation adjustment\n\n​\n\n17,118\n\n​\n\n46,534\n\n​\n\n(207,571)\n\n​\n\n(29,682)\n\nOther comprehensive income (loss)\n\n \n\n17,118\n\n​\n\n46,534\n\n \n\n(207,571)\n\n \n\n(29,682)\n\nTotal comprehensive income\n\n \n\n4,285,695\n\n​\n\n6,294,650\n\n \n\n5,768,072\n\n \n\n824,825\n\nComprehensive loss attributable to non-controlling interests\n\n​\n\n16,759\n\n​\n\n16,198\n\n​\n\n14,048\n\n​\n\n2,009\n\nComprehensive income attributable to ordinary shareholders\n\n \n\n4,302,454\n\n​\n\n6,310,848\n\n \n\n5,782,120\n\n \n\n826,834\n\n​\n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n​\n\nF-7\n\n​\n\n[Table of Contents](#TOC)\n\nQFIN HOLDINGS, INC.\n\nCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Number Of**\n\n​\n\n​\n\n​\n\n**Additional**\n\n​\n\n​\n\n​\n\n**Accumulated**\n\n​\n\n**Other**\n\n​\n\n**Non-**\n\n​\n\n​\n\n​\n\n​\n\n**outstanding**\n\n​\n\n**Ordinary**\n\n​\n\n**Paid-in**\n\n​\n\n**Treasury**\n\n​\n\n**Retained**\n\n​\n\n**Comprehensive**\n\n​\n\n**controlling**\n\n​\n\n**Total **\n\n​\n\n​\n\n**shares**\n\n​\n\n**shares**\n\n​\n\n**Capital**\n\n​\n\n**stock**\n\n​\n\n**Earnings**\n\n​\n\n**(loss)Income**\n\n​\n\n**interests**\n\n​\n\n**Equity**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**RMB**(1)\n\n​\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\n**Balance as of December 31, 2022**\n\n​\n\n**322,792,063**\n\n​\n\n**22**\n\n​\n\n**6,095,225**\n\n​\n\n**—**\n\n​\n\n**12,803,684**\n\n​\n\n**(51,775)**\n\n​\n\n**84,141**\n\n​\n\n**18,931,297**\n\nIssuance of ordinary shares – exercise of options and vesting of restricted shares\n\n​\n\n3,306,235\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\nRepurchase and retirement of ordinary shares\n\n​\n\n(10,872,170)\n\n​\n\n0\n\n​\n\n(221,390)\n\n​\n\n(384,637)\n\n​\n\n(30,152)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(636,179)\n\nShare-based compensation\n\n​\n\n—\n\n​\n\n—\n\n​\n\n185,604\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n185,604\n\nDividends to shareholders\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n(761,552)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(761,552)\n\nOther comprehensive income\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n17,118\n\n​\n\n—\n\n​\n\n17,118\n\nAcquisition of a subsidiary\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n—\n\n​\n\n4,992\n\n​\n\n4,992\n\nNet income (loss)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n4,285,336\n\n​\n\n—\n\n​\n\n(16,759)\n\n​\n\n4,268,577\n\n**Balance as of December 31, 2023**\n\n​\n\n**315,226,128**\n\n​\n\n**22**\n\n​\n\n**6,059,439**\n\n​\n\n**(384,637)**\n\n​\n\n**16,297,316**\n\n​\n\n**(34,657)**\n\n​\n\n**72,374**\n\n​\n\n**22,009,857**\n\nIssuance of ordinary shares – exercise of options and vesting of restricted shares\n\n​\n\n6,801,342\n\n​\n\n1\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n1\n\nRepurchase and retirement of ordinary shares\n\n​\n\n(38,046,150)\n\n​\n\n(2)\n\n​\n\n(1,887,639)\n\n​\n\n(728,971)\n\n​\n\n(356,580)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(2,973,192)\n\nShare-based compensation\n\n​\n\n—\n\n​\n\n—\n\n​\n\n167,613\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n167,613\n\nDividends to shareholders\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n(1,252,710)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(1,252,710)\n\nOther comprehensive income\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n46,534\n\n​\n\n—\n\n​\n\n46,534\n\nNet income (loss)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n6,264,314\n\n​\n\n—\n\n​\n\n(16,198)\n\n​\n\n6,248,116\n\n**Balance as of December 31, 2024**\n\n​\n\n**283,981,320**\n\n​\n\n**21**\n\n​\n\n**4,339,413**\n\n​\n\n**(1,113,608)**\n\n​\n\n**20,952,340**\n\n​\n\n**11,877**\n\n​\n\n**56,176**\n\n​\n\n**24,246,219**\n\nIssuance of ordinary shares – exercise of options and vesting of restricted shares\n\n​\n\n1,628,994\n\n​\n\n0\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\nRepurchase and retirement of ordinary shares\n\n​\n\n(41,786,414)\n\n​\n\n(1)\n\n​\n\n(842,971)\n\n​\n\n(2,952,777)\n\n​\n\n(1,052,367)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(4,848,116)\n\nShare-based compensation\n\n​\n\n—\n\n​\n\n—\n\n​\n\n378,374\n\n​\n\n**—**\n\n​\n\n—　\n\n​\n\n—\n\n​\n\n—\n\n​\n\n378,374\n\nDividends to shareholders\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n(1,387,506)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(1,387,506)\n\nOther comprehensive income\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n—\n\n​\n\n(207,571)\n\n​\n\n—\n\n​\n\n(207,571)\n\nNet income (loss)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n**—**\n\n​\n\n5,989,691\n\n​\n\n—\n\n​\n\n(14,048)\n\n​\n\n5,975,643\n\n**Balance as of December 31, 2025**\n\n​\n\n**243,823,900**\n\n​\n\n**20**\n\n​\n\n**3,874,816**\n\n​\n\n**(4,066,385)**\n\n​\n\n**24,502,158**\n\n​\n\n**(195,694)**\n\n​\n\n**42,128**\n\n​\n\n**24,157,043**\n\n(1)The amount less than RMB1 is rounded to zero.\n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n​\n\nF-8\n\n​\n\n[Table of Contents](#TOC)\n\nQFIN HOLDINGS, INC.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**USD**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**(Note 2)**\n\n**Cash Flows from Operating Activities:**\n\n \n\n​\n\n​\n\n  ​\n\n \n\n  ​\n\n​\n\n  ​\n\nNet income\n\n \n\n4,268,577\n\n​\n\n6,248,116\n\n \n\n5,975,643\n\n​\n\n854,507\n\n**Adjustments to reconcile net income to net cash provided by operating activities:**\n\n \n\n​\n\n​\n\n​\n\n \n\n　​\n\n​\n\n　​\n\nDepreciation, amortization and reduction in right-of-use assets\n\n \n\n73,762\n\n​\n\n74,894\n\n \n\n68,121\n\n​\n\n9,741\n\nShare-based compensation\n\n​\n\n185,604\n\n​\n\n167,613\n\n​\n\n378,374\n\n​\n\n54,107\n\nInvestment loss\n\n​\n\n30,112\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\nProvision for loan principal, financial assets receivables and other receivables\n\n​\n\n2,712,936\n\n​\n\n3,491,661\n\n​\n\n4,179,497\n\n​\n\n597,660\n\nProvision for contingent liabilities\n\n​\n\n3,053,810\n\n​\n\n478,404\n\n​\n\n1,667,742\n\n​\n\n238,484\n\nForeign exchange gain\n\n \n\n(2,356)\n\n​\n\n(1,512)\n\n \n\n(159,570)\n\n​\n\n(22,818)\n\nFair value change of derivatives\n\n​\n\n4,527\n\n​\n\n—\n\n​\n\n175,691\n\n​\n\n25,123\n\nGain on debt extinguishment\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(270,135)\n\n​\n\n(38,629)\n\nAmortization of issuance cost of convertible senior notes\n\n​\n\n—\n\n​\n\n—\n\n​\n\n22,242\n\n​\n\n3,181\n\n**Changes in operating assets and liabilities**\n\n \n\n​\n\n​\n\n​\n\n \n\n​\n\n​\n\n​\n\nFunds receivable from third party payment service providers\n\n​\n\n(444,638)\n\n​\n\n1,141,307\n\n​\n\n(386,050)\n\n​\n\n(55,204)\n\nAccounts receivable and contract assets\n\n \n\n(123,379)\n\n​\n\n367,808\n\n \n\n930,699\n\n​\n\n133,088\n\nFinancial assets receivable\n\n \n\n143,463\n\n​\n\n1,079,514\n\n \n\n(243,994)\n\n​\n\n(34,891)\n\nPrepaid expenses and other assets\n\n​\n\n58,265\n\n​\n\n(1,088,735)\n\n​\n\n742,013\n\n​\n\n106,106\n\nSecurity deposit prepaid to third-party guarantee companies\n\n \n\n189,628\n\n​\n\n44,454\n\n \n\n(163,081)\n\n​\n\n(23,320)\n\nDeferred tax\n\n​\n\n78,097\n\n​\n\n76,025\n\n​\n\n(292,894)\n\n​\n\n(41,883)\n\nOther non-current assets\n\n \n\n(28,011)\n\n​\n\n(27,711)\n\n \n\n22,563\n\n​\n\n3,227\n\nAmounts due to related parties\n\n \n\n355,262\n\n​\n\n28,144\n\n \n\n(58,934)\n\n​\n\n(8,427)\n\nGuarantee liabilities\n\n \n\n(3,435,682)\n\n​\n\n(3,431,717)\n\n \n\n(1,684,280)\n\n​\n\n(240,849)\n\nIncome tax payable\n\n \n\n76,333\n\n​\n\n298,477\n\n \n\n42,491\n\n​\n\n6,076\n\nOther tax payable\n\n \n\n13,038\n\n​\n\n(11,354)\n\n \n\n(66,562)\n\n​\n\n(9,518)\n\nAccrued expenses and other current liabilities\n\n​\n\n52,626\n\n​\n\n485,684\n\n​\n\n265,041\n\n​\n\n37,900\n\nOther long-term liabilities\n\n** **\n\n(7,269)\n\n​\n\n(4,160)\n\n** **\n\n6,634\n\n​\n\n949\n\nInterest receivable/ payable\n\n \n\n(136,355)\n\n​\n\n(73,601)\n\n \n\n(67,503)\n\n​\n\n(9,653)\n\n**Net cash provided by operating activities**\n\n \n\n**7,118,350**\n\n​\n\n**9,343,311**\n\n \n\n**11,083,748**\n\n​\n\n**1,584,956**\n\n**Cash Flows from Investing Activities:**\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPurchase of property and equipment and intangible assets\n\n \n\n(84,554)\n\n​\n\n(153,150)\n\n​\n\n(240,542)\n\n​\n\n(34,397)\n\nInvestment in loans receivable\n\n​\n\n(92,202,671)\n\n​\n\n(102,799,121)\n\n​\n\n(120,448,307)\n\n​\n\n(17,223,879)\n\nCollection of investment in loans receivable\n\n​\n\n81,131,580\n\n​\n\n98,311,782\n\n​\n\n107,477,329\n\n​\n\n15,369,054\n\nPurchase of short-term investments\n\n​\n\n(248,361)\n\n​\n\n(4,641,665)\n\n​\n\n(10,116,360)\n\n​\n\n(1,446,620)\n\nProceeds from disposal of short-term investments\n\n​\n\n303,301\n\n​\n\n1,308,446\n\n​\n\n10,453,869\n\n​\n\n1,494,883\n\nOther investing activities\n\n​\n\n(47,084)\n\n​\n\n(20,373)\n\n​\n\n(208,033)\n\n​\n\n(29,748)\n\n**Net cash used in investing activities**\n\n​\n\n**(11,147,789)**\n\n​\n\n**(7,994,081)**\n\n​\n\n**(13,082,044)**\n\n​\n\n**(1,870,707)**\n\n**Cash Flows from Financing Activities:**\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPayment of Secondary Listing costs\n\n​\n\n(16,023)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\nRepayment of short term loans\n\n​\n\n(176,000)\n\n​\n\n(1,318,586)\n\n​\n\n(2,037,754)\n\n​\n\n(291,395)\n\nRepayment of long-term loans\n\n​\n\n—\n\n​\n\n(369)\n\n​\n\n—\n\n​\n\n—\n\nProceeds from short-term loans\n\n​\n\n824,586\n\n​\n\n1,889,939\n\n​\n\n1,874,272\n\n​\n\n268,017\n\nProceeds from long-term loans\n\n​\n\n72,767\n\n​\n\n157,211\n\n​\n\n215,871\n\n​\n\n30,869\n\nCash received from investors of the consolidated trusts\n\n \n\n10,410,300\n\n​\n\n13,453,001\n\n \n\n19,131,400\n\n​\n\n2,735,754\n\nCash paid to investors of the consolidated trusts\n\n \n\n(8,471,288)\n\n​\n\n(12,059,532)\n\n \n\n(13,191,619)\n\n​\n\n(1,886,376)\n\nStock repurchase\n\n​\n\n(636,179)\n\n​\n\n(2,973,192)\n\n​\n\n(4,848,116)\n\n​\n\n(693,271)\n\nDividend to shareholders\n\n​\n\n(941,705)\n\n​\n\n(1,262,935)\n\n​\n\n(1,378,103)\n\n​\n\n(197,066)\n\nLoans received from non-controlling interests\n\n​\n\n—\n\n​\n\n—\n\n​\n\n9,171\n\n​\n\n1,311\n\nProceeds from convertible senior notes,net of issuance cost\n\n​\n\n—\n\n​\n\n—\n\n​\n\n4,917,431\n\n​\n\n703,183\n\nRepurchase of convertible senior notes\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(1,908,688)\n\n​\n\n(272,939)\n\n**Net cash from provided by (used in)financing activities**\n\n \n\n**1,066,458**\n\n​\n\n**(2,114,463)**\n\n \n\n**2,783,865**\n\n​\n\n**398,087**\n\nEffect of foreign exchange rate changes\n\n \n\n9,615\n\n​\n\n12,036\n\n \n\n(50,451)\n\n​\n\n(7,215)\n\n**Net (decrease) increase in cash and cash equivalents**\n\n​\n\n(2,953,366)\n\n​\n\n(753,197)\n\n​\n\n735,118\n\n​\n\n105,121\n\nCash, cash equivalents, and restricted cash, beginning of year\n\n​\n\n10,512,363\n\n​\n\n7,558,997\n\n​\n\n6,805,800\n\n​\n\n973,216\n\n**Cash, cash equivalents, and restricted cash, end of year**\n\n​\n\n**7,558,997**\n\n​\n\n**6,805,800**\n\n​\n\n**7,540,918**\n\n​\n\n**1,078,337**\n\n**Supplemental disclosures of cash flow information:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n　​\n\nIncome taxes paid\n\n​\n\n(852,562)\n\n​\n\n(1,264,982)\n\n​\n\n(1,607,926)\n\n​\n\n(229,930)\n\nInterest paid (not including interest paid to investors of consolidated trusts)\n\n \n\n(12,868)\n\n​\n\n(18,585)\n\n \n\n(34,181)\n\n​\n\n(4,888)\n\n**Reconciliation to amounts on consolidated balance sheets:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash and cash equivalents\n\n \n\n4,177,890\n\n​\n\n4,452,416\n\n \n\n4,696,817\n\n​\n\n671,636\n\nRestricted cash\n\n \n\n3,381,107\n\n​\n\n2,353,384\n\n \n\n2,844,101\n\n​\n\n406,701\n\n**Total cash, cash equivalents, and restricted cash**\n\n​\n\n**7,558,997**\n\n​\n\n**6,805,800**\n\n** **\n\n**7,540,918**\n\n​\n\n**1,078,337**\n\n​\n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n​\n\n​\n\n​\n\nF-9\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**1.**ORGANIZATION AND PRINCIPAL ACTIVITIES\n\nQfin Holdings, Inc. (formerly known as Qifu Technology, Inc.) (the “Company”) was incorporated in Cayman Islands with limited liability on April 27, 2018. The Company, its subsidiaries and its consolidated variable interest entities (“VIEs”) (together, the “Group”) are engaged in matching individual borrowers with credit demand to a diversified pool of financial institutions with credit to supply through a financial technology platform.\n\nThe Company’s significant subsidiaries and its consolidated VIEs as of December 31, 2025 are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Date of**\n\n**  ​ ​ ​**\n\n**Place of**\n\n​\n\n​\n\n**Incorporation**\n\n​\n\n**Incorporation**\n\n**Subsidiaries**\n\n​\n\n​\n\n​\n\n​\n\nHK Qirui International Technology Limited (“HK Qirui”)\n\n \n\nJune 14, 2018\n\n \n\nHong Kong\n\nShanghai Qiyue Information & Technology Co., Ltd. (“Qiyue”)\n\n \n\nAugust 7, 2018\n\n \n\nPRC\n\nShanghai Qidi Information Technology Co., Ltd. (“Qidi”)\n\n​\n\nJune 27, 2019\n\n​\n\nPRC\n\nBeihai Qi’ang Information & Technology Co., Ltd. (“Qi’ang”)\n\n​\n\nDecember 27, 2022\n\n​\n\nPRC\n\n**VIEs and VIEs**’**Subsidiaries**\n\n \n\n  ​\n\n \n\n  ​\n\nShanghai Qiyu Information & Technology Co., Ltd. (“Qiyu”)\n\n \n\nJuly 25, 2016\n\n \n\nPRC\n\nFuzhou Qifu Online Microcredit Co., Ltd. (“Fuzhou Microcredit”)\n\n \n\nMarch 30, 2017\n\n \n\nPRC\n\nFuzhou Qifu Financing Guarantee Co., Ltd. (“Fuzhou Guarantee”)\n\n \n\nJune 29, 2018\n\n \n\nPRC\n\nBeihai Yunhua Information & Technology Co., Ltd. (“Beihai Yunhua”)\n\n​\n\nJune 16, 2022\n\n​\n\nPRC\n\n​\n\nHistory of the Group\n\nThe Group started its business in 2016 through Qiyu, a limited liability company in the People’s Republic of China (“PRC”). In 2018, the Company undertook a series of transactions to redomicile its business from the PRC to the Cayman Islands and established intermediary companies of HK Qirui and Qiyue (“WFOE”) for the purpose of establishing a VIE structure of the Group. The WFOE entered into VIE agreements which effectively provided control to the WFOE over the operations of the VIEs.\n\nThe VIE arrangement\n\nPRC laws and regulations prohibit or restrict foreign control of companies involved in provision of internet content and certain finance business. To comply with these foreign ownership restrictions, the Company operates substantially all of its service through its VIEs in the PRC.\n\nThe VIEs hold leases and other assets necessary to provide services and generate the majority of the Company’s revenues. To provide the Company effective control over the VIEs and the ability to receive substantially all of the economic benefits of the VIEs, a series of contractual arrangements were entered into amongst Qiyue (“WFOE”), VIEs and their beneficial shareholders. In June 2022, the set of VIE agreements was terminated and replaced by a set of new VIE agreements signed by the same parties, with no material changes to the major terms.\n\nVoting Proxy Agreement\n\nPursuant to the voting proxy agreement entered into among WFOE, Qiyu and Shanghai Qibutianxia Information Technology Co., Ltd. (formerly known as Beijing Qibutianxia Technology Co., Ltd. “Qibutianxia”), the sole registered shareholder of Qiyu, Qibutianxia would irrevocably authorize the WFOE or any person designated by the WFOE to act as its attorney-in-fact to exercise all of its rights as a shareholder of Qiyu, including, but not limited to, the right: (i) to convene and participate in shareholders’ meetings pursuant to the constitutional documents of Qiyu in the capacity of a proxy of Qibutianxia; (ii) to exercise the voting rights pursuant to the relevant PRC laws and regulations and the articles of Qiyu, on behalf of Qibutianxia, and adopt resolutions, including but not limited to dividend rights, sale or transfer or pledge or disposal of part or all of Qiyu’s equity; (iii) to nominate, designate or appoint and remove the legal representative, directors, supervisors and other senior management of Qiyu pursuant to the constitutional documents of Qiyu.\n\nF-10\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**1.**ORGANIZATION AND PRINCIPAL ACTIVITIES – continued\n\n**The VIE arrangement** – continued\n\nVoting Proxy Agreement**–**continued\n\nThe Voting Proxy Agreement has an indefinite term and will be terminated in the event that (i) it is unilaterally terminated by the WFOE, or (ii) it is legally permissible for the WFOE, the Company or any of the subsidiaries to hold equity interests directly or indirectly in Qiyu and the WFOE or its designated person is registered to be the sole shareholder of Qiyu.\n\nEquity Interest Pledge Agreement\n\nPursuant to the equity interest pledge agreement, Qibutianxia agreed to pledge all of its equity interests in Qiyu to the WFOE as a security interest to guarantee the performance of contractual obligations and the payment of outstanding debts under the VIE arrangements. In the event of a breach by Qiyu or Qibutianxia of contractual obligations under the VIE Agreements, the WFOE, as pledgee, will have the right to dispose of the pledged equity interests in Qiyu. Qibutianxia has undertaken to the WFOE, among other things, not to transfer its equity interests in Qiyu and not to create or allow any pledge thereon that may affect the rights and interest of the WFOE without its prior written consent.\n\nExclusive Option Agreement\n\nPursuant to the exclusive option agreement entered into among WFOE, Qiyu and Qibutianxia, Qibutianxia irrevocably grants the WFOE an exclusive option to purchase or designate one or more persons to purchase, all or part of its equity interests in Qiyu, and Qiyu irrevocably grants the WFOE an exclusive option to purchase all or part of its assets, subject to applicable PRC laws. The WFOE or its designated person may exercise such options at the lowest price permitted under applicable PRC laws. Qibutianxia and Qiyu have undertaken that, among other things, without the WFOE’s prior written consent, including but not limited to:(i) they shall not in any manner supplement, change or amend the constitutional documents of Qiyu, increase or decrease their registered capital, or change the structure of their registered capital in other manner; (ii) they shall not at any time following the signing of the Exclusive Option Agreement, sell, transfer, pledge or dispose of in any manner any assets of Qiyu or interest in the business or revenues of Qiyu, or allow the encumbrance thereon of any security interest; (iii) they shall not cause or permit Qiyu to merge, consolidate with, acquire or invest in any person; (iv) Qiyu shall not in any manner distribute dividends to its shareholder, provided that upon the written request of the WFOE, Qiyu shall immediately distribute all distributable profits to its shareholders; (v) at the request of the WFOE, they shall appoint any persons designated by the WFOE as the directors, supervisors and/or senior management of Qiyu or terminate existing directors, supervisors and/or senior management of Shanghai Qiyu, and perform all relevant resolutions and filing procedures.\n\nThe Exclusive Option Agreement has an indefinite term commencing from its date of signing unless and until all the equity interests and assets subject to the agreement have been transferred to the WFOE and/or its designated person and the WFOE and its subsidiaries or affiliates can legally operate the business of Qiyu, whereby the exclusive option agreement shall terminate. WFOE is entitled to unilaterally terminate the Exclusive Option Agreement while other parties to the Exclusive Option Agreement may not terminate the Exclusive Option Agreement unilaterally, unless otherwise provided under PRC laws.\n\nF-11\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**1.**ORGANIZATION AND PRINCIPAL ACTIVITIES – continued\n\n**The VIE arrangement** – continued\n\nExclusive Business Cooperation Agreement\n\nPursuant to the exclusive business cooperation agreement between the WFOE and Qiyu, the WFOE has the exclusive right to provide Qiyu with the consulting and technical services required by Qiyu’s business. In consideration of the services provided by the WFOE, Qiyu shall pay services fees to the WFOE without contravening PRC laws, equal to the entirety of the total consolidated net profit of the Qiyu and its subsidiaries, after the deduction of any accumulated deficit in respect of the preceding financial year(s) (if applicable), operating costs, expenses, taxes and other payments required by the relevant laws and regulations to be reserved or withheld. The WFOE may also adjust the scope and amount of services fees in its discretion taking into account factors including but not limited to: (i) the complexity of the services provided by the WFOE; (ii) the exact content and business value of the services; and (iii) the market price of services of similar types. In addition, absent the prior written consent of the WFOE, during the term of the exclusive business cooperation agreement, with respect to the services subject to the exclusive business cooperation agreement and other matters, Qiyu and its subsidiaries shall not accept the same or any similar services provided by any third party and shall not establish cooperation relationships similar to that formed by the exclusive business cooperation agreement with any third party. The WFOE would have the exclusive ownership of all the intellectual property rights created as a result of the performance of the exclusive business cooperation agreement to the extent permitted by applicable PRC laws. The Company considers that the arrangement will ensure the economic benefits generated from the operations of the consolidated affiliated entities flow to the WFOE and hence, the Group as a whole.\n\nThe exclusive business cooperation agreement has an indefinite term. The exclusive business cooperation agreement may be terminated by the WFOE: (i) when Qiyu becomes insolvent, bankrupt or subject to liquidation or dissolution procedures; (ii) upon the transfer of the entire equity interests in and the transfer of all assets of Qiyu to the WFOE or its designated person pursuant to the exclusive option agreement entered into between the WFOE, Qiyu and Qibutianxia; (iii) when it is legally permissible for the WFOE to hold equity interests directly or indirectly in Qiyu and the WFOE or its designated person is registered to be the shareholder of Qiyu; (iv) when relevant government authorities refuse to renew the expired operating period of Qiyu or the WFOE; (v) by giving Qiyu a 30 days’ prior written notice of termination; or (vi) Qiyu breaches the exclusive business cooperation agreement. Qiyu is not contractually entitled to unilaterally terminate the exclusive business cooperation agreement with the WFOE.\n\nLoan Agreement\n\nPursuant to the loan agreement among the WFOE, Qiyu and Qibutianxia, the WFOE is entitled to provide interest-free loans, to the extent permitted by laws, regulations and industry policies of the PRC from time to time at such time and amount as it deems appropriate to Qibutianxia for the purpose of Qiyu’s business operation and development, including but not limited to directly injecting such funds to the registered capital of Qiyu. Each of the loans made under this loan agreement has no fixed term, and unless otherwise agreed, the WFOE shall unilaterally decide when to withdraw the loans, provided that the WFOE shall notify Qibutianxia in writing one month in advance. The loan agreement shall remain in effect during Qiyu’s term (and the renewable period stipulated by the laws of the PRC), and shall automatically terminate after the WFOE and/or other entities designated by the WFOE fully exercise all their rights under the exclusive option agreement.\n\nThe Company also has some other sets of VIE contractual arrangements. The arrangements with its significant VIEs include the arrangement among the WFOE, Fuzhou Guarantee and Qibutianxia, which are substantially similar to the set with Qiyu as described above.\n\nF-12\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**1.**ORGANIZATION AND PRINCIPAL ACTIVITIES – continued\n\n**The VIE arrangement** – continued\n\nRisks in relation to VIE structure\n\nThe Company believes that the contractual arrangements with Qiyu, Fuzhou Guarantee and their shareholders, Qibutianxia, are in compliance with existing PRC laws and regulations and are valid, binding and enforceable and will not result in any violation of applicable PRC laws or regulations. However, the PRC regulatory authorities may take a contrary view. If the ownership structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the regulatory authorities may exercise their discretion and:\n\n●revoke the business and operating licenses of WFOE or consolidated affiliated entities;\n\n●restrict the rights to collect revenues from any of the Company’s PRC subsidiaries;\n\n●discontinue or restrict the operations of the Company’s PRC subsidiaries or consolidated affiliated entities;\n\n●require the Company’s PRC subsidiaries or consolidated affiliated entities to restructure the relevant ownership structure or operations;\n\n●restrict or prohibit the use of proceeds from offshore offering to finance business and operations in PRC;\n\n●take other regulatory or enforcement action including levying fines that could be harmful to the Company’s business; or\n\n●impose additional conditions or requirements with which the Company may not be able to comply.\n\nThe imposition of any of these penalties may result in a material adverse effect on the Company’s ability to conduct its business. In addition, if the imposition of any of these penalties causes the Company to lose the rights to direct the activities of the VIEs or the right to receive substantially all of their economic benefits, the Company would no longer be able to consolidate the financial results of the VIEs.\n\nThese contractual arrangements allow the Company to effectively control Qiyu, Fuzhou Guarantee, and to derive substantially all of the economic benefits from them. Accordingly, the Company treats Qiyu, Fuzhou Guarantee as VIEs. Because the Company is the primary beneficiary, the Company has consolidated the financial results of the VIEs. Fuzhou Microcredit and Beihai Yunhua are subsidiaries of Qiyu.\n\nF-13\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**1.**ORGANIZATION AND PRINCIPAL ACTIVITIES – continued\n\n**The VIE arrangement** – continued\n\nRisks in relation to VIE structure – continued\n\nThe following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances. The table below does not include the financial information of the consolidated trusts (see note 2 “Consolidated Trusts”):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, **\n\n**  ​ ​ ​**\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n**ASSETS**\n\n \n\n  ​\n\n \n\n  ​\n\nCash and cash equivalents\n\n \n\n4,005,463\n\n \n\n2,995,112\n\nRestricted cash\n\n \n\n1,581,586\n\n \n\n1,373,146\n\nShort term investments\n\n​\n\n222\n\n​\n\n396,400\n\nSecurity deposit prepaid to third-party guarantee companies\n\n​\n\n162,617\n\n​\n\n325,698\n\nFunds receivable from third party payment service providers\n\n \n\n462,112\n\n \n\n848,163\n\nAccounts receivable and contract assets, net\n\n​\n\n981,541\n\n​\n\n788,140\n\nFinancial assets receivable, net\n\n \n\n1,553,912\n\n \n\n1,510,205\n\nAmounts due from related parties\n\n \n\n3,773\n\n \n\n—\n\nLoans receivable, net\n\n \n\n19,757,480\n\n \n\n22,281,492\n\nPrepaid expenses and other assets\n\n \n\n1,286,259\n\n \n\n417,058\n\nAccounts receivable and contract assets, net-noncurrent\n\n​\n\n21,538\n\n​\n\n20,876\n\nFinancial assets receivable, net-non current\n\n​\n\n170,779\n\n​\n\n209,459\n\nAmounts due from related parties, non-current\n\n​\n\n14\n\n​\n\n—\n\nLoans receivable, net-noncurrent\n\n​\n\n1,906,174\n\n​\n\n2,247,803\n\nProperty and equipment, net\n\n \n\n348,706\n\n \n\n628,112\n\nLand use rights, net\n\n​\n\n956,738\n\n​\n\n966,582\n\nIntangible assets\n\n \n\n2,616\n\n \n\n1,541\n\nDeferred tax assets\n\n \n\n1,124,612\n\n \n\n1,264,975\n\nOther non-current assets\n\n​\n\n23,256\n\n​\n\n26,994\n\n**Total Assets**\n\n** **\n\n**34,349,398**\n\n** **\n\n**36,301,756**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**LIABILITIES**\n\n \n\n​\n\n \n\n​\n\nAccrued expenses and other current liabilities\n\n \n\n2,150,644\n\n \n\n2,605,314\n\nAmounts due to related parties\n\n \n\n67,495\n\n \n\n—\n\nShort term loans\n\n​\n\n1,359,601\n\n​\n\n1,152,891\n\nGuarantee liabilities-stand ready\n\n \n\n2,383,202\n\n \n\n2,314,865\n\nGuarantee liabilities-contingent\n\n​\n\n1,820,350\n\n​\n\n1,872,149\n\nIncome tax payable\n\n​\n\n618,932\n\n​\n\n655,112\n\nOther tax payable\n\n​\n\n17,965\n\n​\n\n1,572\n\nDeferred tax liabilities\n\n​\n\n64,395\n\n​\n\n66,718\n\nOther long-term liabilities\n\n​\n\n253,136\n\n​\n\n475,218\n\n**Total liabilities**\n\n** **\n\n**8,735,720**\n\n** **\n\n**9,143,839**\n\n​\n\n​\n\nF-14\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**1.**ORGANIZATION AND PRINCIPAL ACTIVITIES – continued\n\n**The VIE arrangement** – continued\n\nRisks in relation to VIE structure – continued\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**  ​ ​ ​**\n\n**December 31, 2023**\n\n**  ​ ​ ​**\n\n**December 31, 2024**\n\n**  ​ ​ ​**\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nNet revenue\n\n \n\n12,902,396\n\n​\n\n13,826,053\n\n \n\n15,340,360\n\nNet income\n\n \n\n3,178,907\n\n​\n\n6,156,470\n\n \n\n4,906,407\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ended**\n\n**  ​ ​ ​**\n\n**Year ended**\n\n**  ​ ​ ​**\n\n**Year ended**\n\n​\n\n​\n\n**December 31, 2023**\n\n​\n\n**December 31, 2024**\n\n**  ​ ​ ​**\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nNet cash provided by operating activities\n\n \n\n4,406,482\n\n​\n\n8,355,774\n\n \n\n7,739,638\n\nNet cash used in investing activities\n\n \n\n(11,176,472)\n\n​\n\n(5,837,683)\n\n \n\n(5,420,076)\n\nNet cash provided by financing activities\n\n \n\n721,352\n\n​\n\n717,857\n\n \n\n21,898\n\n​\n\nThe consolidated VIEs contributed 79%, 81% and 80% of the Group’s consolidated revenue for the years ended December 31, 2023, 2024 and 2025, respectively. As of December 31, 2024 and 2025, the consolidated VIEs accounted for an aggregate of 71% and 64%, respectively, of the consolidated total assets, and 37% and 28%, respectively, of the consolidated total liabilities.\n\nThere are no assets of the VIEs that are collateral for the obligations of the VIEs and their subsidiaries and can only be used to settle the obligations of the VIEs and their subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholder of the VIEs.\n\nRelevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their statutory reserve and their share capital (see note 16 “Statutory Reserves and Restricted Net Assets”), to the Company in the form of loans and advances or cash dividends.\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES\n\nBasis of presentation\n\nThe accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).\n\nBasis of consolidation\n\nThe accompanying financial statements include the financial statements of the Company, its subsidiaries, and consolidated VIEs. All inter-company transactions and balances have been eliminated.\n\n​\n\nF-15\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued\n\nConsolidated Trusts\n\nLoans funded by the financial institution partners in the Group’s loan facilitation business are typically disbursed to the borrowers directly from such partners. Upon the need of certain the financial institution partners, loans from such financial institution partners are funded and disbursed indirectly through trusts. Some trusts were specifically set up for the purpose of assets backed securities (“ABS”) issuance to the asset backed special plans (the “ABS plans”). The Group also transferred part of the loans receivable funded by Fuzhou Microcredit to the ABS plans. The consolidated trusts and ABS plans are referred to as “the consolidated trusts” collectively.\n\nThe trusts fund loans facilitated by the Group using the funds received from its beneficiaries to the borrowers. The trusts provide the returns to its beneficiaries through interest payments made by the borrowers. The borrowers are charged with the interests by the trusts. For the majority of trusts, the Group is either entitled to the residual profit in the trusts or the Group has provided guarantee to the trusts by agreeing to repurchase any loans that are delinquent for 60 to 90 days from which the Group absorbs the credit risk of the trusts resulting from borrowers’ delinquencies,or both. The Group determined that the residual profit or the guarantee represents a variable interest in the trusts through which the Group has the right to receive benefits or the obligation to absorb losses from the trusts that could potentially be significant to the trusts. Since the trusts only invest in the loans facilitated by the Group and the Group continues to service the loans through a service agreement post origination and has the ability to direct default mitigation activities, the Group has the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. As a result, the Group is considered the primary beneficiary of the trusts and consolidated the trusts’ assets, liabilities, results of operations and cash flows. For the ABS plans set up to invest in the loans funded by Fuzhou Microcredit, the Group held the whole subordinated tranche securities to provide credit enhancement. Such subordinate rights represented a variable interest in the ABS plans through which the Group has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the ABS plans. As Fuzhou Microcredit continues to service the loans and has the ability to direct default mitigation activities, it has the power to direct the activities of the ABS plans that most significantly impact the economic performance. As a result, the Group is considered the primary beneficiary of the ABS plans and consolidated the ABS plans’ assets, liabilities, results of operations and cash flows.\n\nIn 2023, the Group received letter of approval for listing and transferring ABS on Shanghai Stock Exchange and Shenzhen Stock Exchange within the issue scale of RMB7.0 billion and RMB5.5 billion, respectively. In 2024, the Group received letter of approval for listing and transferring ABS on Shanghai Stock Exchange, Shenzhen Stock Exchange and National Association of Financial Market Institutional Investors within the issue scale of RMB6.1 billion, RMB7.3 billion and RMB1.8 billion, respectively. In 2025, the Group also received letter of approval for listing and transferring ABS on Shanghai Stock Exchange, Shenzhen Stock Exchange and National Association of Financial Market Institutional Investors within the issue scale of RMB8.1 billion, RMB9.0 billion and RMB4.3 billion, respectively. After proceeds are collected from ABS issuances, the trust beneficial rights, or the loans receivable, were transferred, as underlying assets, to the ABS plans. The beneficial rights and loans receivable of RMB6.9 billion, RMB6.8 billion and RMB12.4 billion in trusts were transferred to the ABS plans for the years ended December 31, 2023, 2024 and 2025, respectively. The loans receivable of RMB5.6 billion, RMB8.4 billion and RMB9.0 billion in Fuzhou Microcredit were transferred to the ABS plans for the years ended December 31, 2023, 2024 and 2025, respectively. The ABS plans were securitized and listed on Shanghai Stock Exchange, Shenzhen Stock Exchange and National Association of Financial Market Institutional Investors, with terms of one or two years. As of December 31, 2025, the Group held the whole subordinated tranche securities to provide credit enhancement. The underlying trusts were continued to be consolidated by the Group and the loans receivable remained on balance sheet of Fuzhou Microcredit. Senior tranche securities held by external financial institution partners were recorded as “payable to investors of the consolidated trusts – current” with the balance of RMB8,138,167 and RMB8,867,548 as of December 31, 2024 and 2025, respectively and “payable to investors of the consolidated trusts – noncurrent” with the balance of RMB5,719,600 and RMB9,930,000 as of December 31, 2024 and 2025, respectively on the consolidated balance sheet.\n\nF-16\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued\n\n**Consolidated Trusts** – continued\n\nAs of December 31, 2024 and 2025, the balance of delinquent loans repurchased by the Group from the consolidated trusts are RMB1,643,309 and RMB2,291,427, respectively. As of December 31, 2024 and 2025, the balance of performing loans upon liquidation of certain consolidated trusts repurchased by the Group from the consolidated trusts per the contracts agreed with the counterparty are RMB11,615 and RMB11,421, respectively. For the years ended December 31, 2023, 2024 and 2025, the provision for loan losses of RMB766,551, RMB798,886 and RMB1,697,718 were charged to the consolidated statements of operations, respectively. Loans receivable of RMB759,223, RMB658,030 and RMB855,416 are written off for the years ended December 31, 2023, 2024 and 2025, respectively.\n\nInterest on loans receivable is accrued and credited to income as earned. The Group determines a loan’s past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when the loan principal and interest are deemed to be uncollectible. In general, loans receivable is identified as uncollectible when it is determined to be not probable that the balance can be collected.\n\nThe following financial statement amounts and balances of the consolidated trusts were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, 2024**\n\n**  ​ ​ ​**\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n**ASSETS**\n\n \n\n​\n\n \n\n​\n\nRestricted cash\n\n \n\n771,798\n\n \n\n1,470,555\n\nLoans receivable, net\n\n \n\n6,956,948\n\n \n\n12,399,462\n\nPrepaid expenses and other assets\n\n​\n\n109,428\n\n​\n\n108,174\n\nLoans receivable, net-noncurrent\n\n​\n\n631,575\n\n​\n\n1,754,356\n\n**Total Assets**\n\n** **\n\n**8,469,749**\n\n** **\n\n**15,732,547**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, 2024**\n\n**  ​ ​ ​**\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n**LIABILITIES**\n\n \n\n  ​\n\n \n\n  ​\n\nPayable to investors of the consolidated trusts-current\n\n \n\n8,188,454\n\n \n\n9,922,559\n\nAccrued expenses and other current liabilities\n\n \n\n13,455\n\n \n\n15,436\n\nOther tax payable\n\n​\n\n50,719\n\n​\n\n—\n\nPayable to investors of the consolidated trusts-noncurrent\n\n​\n\n5,719,600\n\n​\n\n9,930,000\n\n**Total liabilities**\n\n** **\n\n**13,972,228**\n\n** **\n\n**19,867,995**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nNet revenue\n\n \n\n2,350,404\n\n​\n\n2,470,358\n\n \n\n3,035,144\n\nNet income\n\n \n\n948,139\n\n​\n\n1,121,050\n\n \n\n1,156,539\n\n​\n\n​\n\nF-17\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued\n\n**Consolidated Trusts** – continued\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nNet cash provided by operating activities\n\n \n\n1,664,700\n\n​\n\n1,946,359\n\n \n\n2,741,847\n\nNet cash provided by (used in) investing activities\n\n \n\n110,926\n\n​\n\n1,195,793\n\n \n\n(8,193,363)\n\nNet cash provided by financing activities\n\n \n\n1,939,011\n\n​\n\n1,393,467\n\n \n\n5,939,781\n\n​\n\nThe consolidated trusts contributed 14%, 14% and 16% of the Group’s consolidated revenue for the years ended December 31, 2023, 2024 and 2025 respectively. As of December 31, 2024 and December 31, 2025, the consolidated trusts accounted for an aggregate of 18% and 28%, respectively, of the consolidated total assets, and 58% and 61% respectively, of the consolidated total liabilities.\n\nThere are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company to provide financial support to the consolidated trusts.\n\nThe Group believes that the assets of the consolidated trusts could only be used to settle the obligations of the consolidated trusts.\n\nUse of estimates\n\nThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include revenue recognition, financial assets receivable, guarantee liabilities, allowance for loans receivable, allowance for uncollectible accounts receivable and contract assets, allowance for financial assets receivable.\n\nRevenue recognition\n\nThrough cooperating with channel partners to direct users with credit needs to its app, the Group provides services through its facilitation of loan transactions between the borrowers and the financial institution partners through the use of two business models.\n\nThe first business model involves the Group providing credit driven services through facilitating loans that are guaranteed by the Group directly or through third-party guarantee companies and insurance companies for which the Group compensates the borrowers’ default amount (referred to as “off-balance capital heavy loans” hereafter), or providing loans through the Consolidated Trusts and Fuzhou Microcredit. In either case, the Group ultimately bears all the credit risks when the borrowers default.\n\nThe second business model involves the Group providing platform services through facilitating loans with no or partial guarantee provided by the Group (referred to as “capital light loans” hereafter) and referral services. In these cases, the Group bears limited credit risks when the borrowers default.\n\n​\n\nF-18\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued\n\n**Revenue recognition** –****continued\n\nLoan facilitation and servicing fees\n\nThe Group earns loan facilitation and servicing fees from both off-balance capital heavy loans and capital light loans. The Group’s services mainly consist of:\n\n1)Performing customer acquisition, initial and credit screening and advanced risk assessment on the borrowers on its mobile platform and matching the financial institution partners to potential qualified borrowers and facilitating the execution of loan agreements between the parties, referred to as “Loan Facilitation Services” and;\n\n2)Providing collection and other repayment processing services for the financial institution partners over the loan term, referred to as “Post Facilitation Services”;\n\nBased on the agreements entered into between the Group’s financial institution partners and borrowers, the Group determined that it is not the legal lender or borrower in the loan origination and repayment process. Accordingly, the Group does not record loans receivable and payable arising from the loan between the financial institution partners and the borrowers.\n\nThe Group charges service fees directly from the financial institution partners based on the contractual agreements. The Group cooperates with insurance companies and financing guarantee companies to provide guarantee for the loans between the borrowers and the financial institution partners. Under this cooperation, the Group charges guarantee fees from the borrower.\n\nFor the loans the Group is entitled to the full service fee regardless of whether the borrowers choose to early repay or not, the Group has the unconditional right to the consideration. For the loans facilitated with borrowers who have the option of early repayment and upon termination they do not have the obligation to pay the remaining monthly service fees or not have to pay the excessive portion if the total fees are more than 24% of the origination principal on an annualized basis, the Group’s right to consideration for the service fees is conditional on whether or not the borrowers repay in advance.\n\nFor off-balance capital heavy loans, the Group enjoys a fixed rate of service fees. For capital light loans, the Group enjoys a fixed rate of service fees, while in certain cases, the service fee rate the Group entitled to is subject to adjustment based on the actual default rate of the underlying loans.\n\nUnder the off-balance capital heavy loans, the Group also provides a guarantee service to its financial institution partners whereas in the event of default, the financial institution partners are entitled to receive unpaid interest and principal from the Group. Given that the Group effectively takes on all of the credit risk of the borrowers and is compensated by the service fees charged, the guarantee is deemed as a service and the guarantee exposure is recognized as a stand-ready obligation in accordance with ASC Topic 460, Guarantees (see accounting policy for Guarantee Liabilities). Under the capital light model, the Group either provides no guarantee or partial guarantee service. Under the partial guarantee scenario, the Group agrees with each financial institution partner a fixed upper limit of guarantee amount the Group is liable of. If the accumulated defaulted loan amount exceeds the agreed upper limit, the excess portion is borne by the financial institution partners. The Company ceased to provide guarantee for the capital light model in 2023.\n\nThe Group recognizes revenue to depict the transfer of promised services to customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. To achieve that core principle, the Group applies the following steps:\n\n●Step 1: Identify the contract (s) with a customer\n\n●Step 2: Identify the performance obligations in the contract\n\n●Step 3: Determine the transaction price\n\n●Step 4: Allocate the transaction price to the performance obligations in the contract\n\n●Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation\n\nF-19\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\n**Revenue recognition** –****continued\n\nLoan facilitation and servicing fees – continued\n\nThe Group determines that both the financial institution partners and the borrowers are its customers because they both receive services provided by the Group pursuant to the contractual terms among the Group, the borrowers and the financial institution partners. For each loan facilitated on the platform, the Group considers the loan facilitation service, post facilitation service and guarantee service (not applicable for arrangements where the Group does not provide guarantee service) as three separate services. Of which, the guarantee service is accounted for in accordance with ASC Topic 460, Guarantees, at fair value. Revenue from the guarantee services is recognized once the Group is released from the underlying risk. The Group recognized the stand-ready guarantee liability at the inception of each loan, and it was amortized to “revenue from releasing of guarantee liabilities” over the term of the guarantee (see accounting policy for Guarantee Liabilities).While the post-origination service is within the scope of ASC Topic 860, the ASC Topic 606 revenue recognition model is applied due to the lack of definitive guidance in ASC Topic 860. The loan facilitation service and post-origination service are two separate performance obligations under ASC 606, as these two deliverables are distinct in that customers can benefit from each service on its own and the Group’s promises to deliver the services are separately identifiable from each other in the contract.\n\nThe Group determines the total transaction price to be the service fees chargeable from the borrowers or the financial institution partners. The Group’s transaction price includes variable considerations in the form of prepayment risk of the borrowers and service fee allocation rate under capital light model under certain agreements. The Group estimates the prepayment risk of borrowers using the expected value approach on the basis of historical information and current trends of the collection percentage of the borrowers. The service fee allocated to the Group under capital light model would be fluctuated along with the actual default rate of the loans facilitated as stipulated in the agreements. The Group determines the corresponding service fee allocation rate based on the estimated default rate of the underlying loans. The transaction price is allocated amongst the guarantee service, if any, and the other two performance obligations.\n\nThe Group first allocates the transaction price to the guarantee liabilities, if any, in accordance with ASC Topic 460, Guarantees which requires the guarantee to be measured initially at fair value based on the stand-ready obligation. Then the remaining considerations are allocated to the loan facilitation services and post facilitation services using their relative standalone selling prices consistent with the guidance in ASC 606. The Group does not have observable standalone selling price information for the loan facilitation services or post facilitation services because it does not provide loan facilitation services or post facilitation services on a standalone basis. There is no direct observable standalone selling price for similar services in the market reasonably available to the Group. As a result, the estimation of standalone selling price involves significant judgment. The Group uses expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services and post facilitation services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services and post facilitation services, the Group considers the cost incurred to deliver such services, profit margin for similar arrangements, customer demand, effect of competitors on the Group’s services, and other market factors.\n\nFor each type of service, the Group recognizes revenue when (or as) the entity satisfies the service/ performance obligation by transferring the promised service (that is, an asset) to customers. Revenues from loan facilitation services are recognized at the time a loan is originated between the financial institution partners and the borrowers and the principal loan balance is transferred to the borrowers, at which time the facilitation service is considered completed. Revenues from post facilitation services are recognized on a straight-line basis over the term of the underlying loans as the post- facilitation services are a series of distinct services that are substantially the same and that have the same pattern of transfer to the financial institution partners.\n\n​\n\nF-20\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\n**Revenue recognition** –****continued\n\nRevenue from releasing of guarantee liabilities\n\nFor the years ended December 2023, 2024 and 2025, revenue from guarantee liabilities were RMB4,745,898, RMB3,695,017 and RMB3,412,952, respectively.\n\nIncentives\n\nThe Group provides incentives to the borrowers by providing coupons which can only be used as a reduction of repayment and ultimately reduced the service fees received by the Group. Because the borrower does not enter into any enforceable commitment by picking up the coupons, no contract arises from the coupons. Therefore the Group records the incentives as a deduction to revenue upon redemption.\n\nFinancing income\n\nThe Group provides loans through the Consolidated Trusts and Fuzhou Microcredit. The interest rate charged to the borrowers are fixed. The Group recognized revenue under “financing income” the fees and interests charged to the borrowers over the lifetime of the loans using the effective interest method.\n\nReferral service fees\n\nThe Group provides the referral services to other platforms, by referring to them the borrowers who have not passed the credit assessment. Specifically, the Group receives a fixed rate of referral fee from the platforms once the borrowers are accepted by the other service providers on those platforms. The revenue is recognized once the referral is completed as confirmed by those platforms.\n\nThe Group provides the referral services to the financial institution partner and other lending companies also through the Group’s Intelligence Credit Engine platform, by matching the borrowers and the financial institution partner and other lending companies. For loans originated through the platform, the Group typically charges the financial institution partner and other lending companies mainly a fixed rate of service fees or a predetermined fee rate range linked with the actual default rate of the loans facilitated. The revenue is recognized upon receipt of confirmation by the financial institution partner and other lending companies of loan facilitation at which time the referral service is deemed completed, using the service fee rate applicable.\n\nFor the years ended December 31, 2023, 2024 and 2025, RMB950,016, RMB2,842,637 and RMB2,738,786 were generated from the referral service, respectively.\n\nF-21\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\n**Revenue recognition** –****continued\n\nOther service fees\n\nOther service fees mainly pertain to the revenue from late fees from borrowers under off-balance capital heavy loans and capital light loans and revenue from value-added services such as collection services for financial institution partners provided over the loan tenure.\n\nThe following table presents the disaggregation of revenue for the years ended December 31, 2023, 2024 and 2025:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n  ​ ​ ​\n\n**2025**\n\n​\n\n​\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nCredit driven services\n\n​\n\n​\n\n \n\n**11,738,560**\n\n** **\n\n**11,719,027**\n\n** **\n\n**13,977,218**\n\nLoan facilitation and servicing fees-capital heavy\n\n​\n\n​\n\n \n\n1,667,119\n\n \n\n1,016,514\n\n \n\n1,604,903\n\nRevenue from loan facilitation services\n\n​\n\nAt a point in time\n\n​\n\n1,081,699\n\n​\n\n638,814\n\n​\n\n1,143,395\n\nRevenue from post-facilitation services\n\n​\n\nOvertime\n\n​\n\n585,420\n\n​\n\n377,700\n\n​\n\n461,508\n\nFinancing income\n\n​\n\nOvertime\n\n \n\n5,109,921\n\n \n\n6,636,511\n\n \n\n8,569,063\n\nRevenue from releasing of guarantee liabilities\n\n​\n\nOvertime\n\n​\n\n4,745,898\n\n​\n\n3,695,017\n\n​\n\n3,412,952\n\nOther services fees\n\n​\n\nAt a point in time\n\n​\n\n215,622\n\n​\n\n370,985\n\n​\n\n390,300\n\nPlatform services\n\n​\n\n​\n\n​\n\n**4,551,467**\n\n​\n\n**5,446,629**\n\n​\n\n**5,227,841**\n\nLoan facilitation and servicing fees-capital light\n\n​\n\n​\n\n \n\n3,213,955\n\n \n\n2,116,797\n\n \n\n1,162,563\n\nRevenue from loan facilitation services\n\n​\n\nAt a point in time\n\n​\n\n2,096,085\n\n​\n\n1,246,541\n\n​\n\n683,929\n\nRevenue from post-facilitation services\n\n​\n\nOvertime\n\n​\n\n1,117,870\n\n​\n\n870,256\n\n​\n\n478,634\n\nReferral services fees\n\n​\n\nAt a point in time\n\n​\n\n950,016\n\n​\n\n2,842,637\n\n​\n\n2,738,786\n\nOther services fees\n\n​\n\nAt a point in time/Overtime\n\n \n\n387,496\n\n \n\n487,195\n\n \n\n1,326,492\n\nTotal net revenue\n\n​\n\n​\n\n** **\n\n**16,290,027**\n\n** **\n\n**17,165,656**\n\n** **\n\n**19,205,059**\n\n​\n\nTotal revenue recognized at a point in time is RMB4,485 million, RMB5,372 million and RMB5,317 million for the years ended December 31, 2023, 2024 and 2025, respectively. Total revenue recognized over time is RMB11,805 million, RMB11,794 million and RMB13,888 million for the years ended December 31, 2023, 2024 and 2025, respectively.\n\n​\n\nF-22\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\n**Revenue recognition** –****continued\n\nAccounts receivable and Contract Assets, net\n\nFor the loans the Group is entitled to the full service fee regardless of whether the borrowers choose to early repay or not, the Group has the unconditional right to the consideration and an accounts receivable is recorded for the monthly service fees allocated to loan facilitation service that have already been delivered in relation to loans facilitated on the Group’s platform when recognizing revenue from loan facilitation service. For the loans facilitated with borrowers who have the option of early repayment and upon termination they do not have the obligation to pay the remaining monthly service fees or do not have to pay the excessive portion if the total fees are more than 24% of the origination principal on an annualized basis, the Group’s right to consideration for the service fees of facilitation service is conditional on whether or not the borrowers repay in advance. In these instances, the Group records a corresponding contract asset when recognizing revenue from loan facilitation service.\n\nAccounts receivable and contract assets are stated at the historical carrying amount net of write-offs and allowance for collectability in accordance with ASC Topic 326. The Group established an allowance for uncollectible accounts receivable and contract assets based on estimates, which incorporate historical experience and other factors surrounding the credit risk of specific type of customers which is essentially the expected net default rates used in determining the fair value of guarantee liabilities. The Group evaluates and adjusts its allowance for uncollectible accounts receivable and contract assets on a quarterly basis or more often as necessary.\n\nUncollectible accounts receivable and contract assets are written off when the consideration entitled to be received by the Group is due and a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected. Contract assets and accounts receivable are identified as uncollectible when the underlying loan is determined to be not probable that the balance can be collected. The Group will write off contract assets and accounts receivable and the corresponding provisions if the underlying loan is deemed uncollectible.\n\nThe Group did not recognize any contract liabilities during the periods presented. The amount of the transaction price allocated to performance obligations that are unsatisfied as of December 31, 2024 and 2025 are RMB551,785 and RMB 635,422, respectively, all of which pertain to post- origination service. Remaining unsatisfied performance obligations that will be recognized as revenue by the Group within the following 12 months are 83% and 87% of the remaining performance obligations as of December 31, 2024 and 2025 respectively, with the remainder recognized thereafter.\n\nThe Group determines that acquisition cost paid for the financial institution partners based on the amount of loans facilitated represents costs to obtain a contract qualifying for capitalization since these payments are directly related to sales achieved during a period. Such cost was not material during the periods presented.\n\nThe Company recognized RMB1,374,474 in revenue from performance obligations satisfied (or partially satisfied) in prior periods primarily due to changes in variable consideration for the year ended December 31, 2025. The amount of revenue adjustments in this aspect is not material for the years ended December 31, 2023 and 2024.\n\nThe Group is subject to value-added tax and other surcharges including education surtax and urban maintenance and construction tax, on the services provided in the PRC. The Group has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by the governmental authority. Such taxes excluded from revenues are RMB991,176, RMB1,044,160 and RMB1,137,538, respectively, for the years ended December 31, 2023, 2024 and 2025, respectively.\n\nF-23\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\n**Allowance for credit losses**\n\nASC 326, Financial Instruments—Credit Losses requires recognition of allowances upon origination or acquisition of financial assets at an estimate of expected credit losses over the contractual term of the financial assets (the current expected credit loss or the “CECL” model). The Group’s financial assets subject to the CECL model mainly include: loans receivable, accounts receivable, contract assets and financial assets receivable, and the allowance for these financial assets is driven by estimated default rate of underlying loans. The Group does not assign internal risk ratings to loans facilitated as they are of small balance and homogeneous. The Group estimates the default rate of loans on a pool basis by taking into consideration the historical delinquency rate by vintage, adjusted by specific risks for loans within each vintage, correlated industrial and macro-economic factors, and other pertinent information such as CPI and delinquent loan collection rate in assessing future performance of the loan portfolio. The Group monitors the delinquency status by vintage of origination and writes off delinquent loans timely when the loans become uncollectible.\n\nThe allowance for loans receivable is calculated based on estimated default rate of loans facilitated through the Consolidated Trusts or Fuzhou Microcredit. The allowance for accounts receivable, contract assets, financial assets receivable and accounts receivable, contract assets and financial assets receivables from related parties (recorded as “amounts due from related parties”) is assessed in accordance with the estimated default rate of the underlying off-balance loans facilitated. Since the allowance is recorded at loan inception based on the estimated collectability over the entire loan tenure and adjusted in each subsequent reporting period based on update of relevant information, the adoption of the CECL model does not have material impact on the timing and amount of allowance recognized for these financial assets.\n\nOther financial receivables subject to the CECL model mainly include security deposit prepaid to third party guarantee companies, funds receivable from third party payment service providers, other receivables from related parties (recorded as “amounts due from related parties”) and other security deposit (recorded as “prepaid expenses and other assets”), which are of short term and shows no historical default record. The Group determines no allowance is needed for these receivables, except for receivables from related parties, which are based on the estimated default rate of underlying loans as discussed above.\n\nASC 326 also requires the Group to record financial guarantee on a gross basis. As such, the Group recognized a separate contingent guarantee liability with an allowance for credit losses following the CECL model at the inception of loans facilitated with guarantee services provided (see accounting policy for Guarantee Liabilities). The allowance is an estimate of future net-payout by the Group upon borrowers’ default, which is ultimately based on the same estimated default rate of loans facilitated as discussed above.\n\nCash and cash equivalents\n\nCash and cash equivalents mainly consist of funds in banks, which are highly liquid and are unrestricted as to withdrawal or use.\n\n​\n\nF-24\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\nRestricted cash\n\nRestricted cash represents:\n\n(i)Deposit to funding banks which is used to secure timely loan repayment. As of December 31, 2024 and 2025, the amount of restricted cash related to deposit to the funding banks is RMB1,106,378 and RMB934,546 respectively.\n\n(ii)Pledged term deposit for credit lines of short term loans. As of December 31, 2024 and 2025, the amount of pledged term deposit is RMB475,208 and RMB439,000, respectively.\n\n(iii)Cash held by the trusts and ABS plans through segregated bank accounts which can only be used to invest in loans or other securities as stipulated in the trust agreement and ABS plan. Substantially all trusts and ABS plans have a maximum operating period of ten years. The cash in the trusts and ABS plans is not available to fund the general liquidity needs of the Group.\n\n**Short-term investments**\n\nShort-term investments consist primarily of investments in terms deposits, wealth management products and derivative instruments. The Group invests in term deposits which have stated maturity and normally pay a prospective fixed rate of return, carried at amortized cost. Term deposits are bank deposits with original maturities longer than three months but less than one year. Wealth management products and derivative instruments are measured at fair value and the Group has intention to redeem or settle within one year.\n\nSecurity deposit prepaid to third-party guarantee companies\n\nSecurity deposit prepaid to third-party guarantee companies mainly represents deposit prepaid by the Group to provide guarantee to secure timely loan repayment for the financial institution partners.\n\n**Funds receivable from third party payment service providers**\n\nThe Group opened accounts with third party online payment service providers to collect and transfer the loan funds and interest to financial institution partners or borrowers. The Group also uses such accounts to collect the transaction fee and service fee, and repay and collect the default loan principal and interest. The balance of funds receivable from third party payment service providers mainly includes:\n\n(a)Funds provided by Fuzhou Microcredit but not yet transferred to the borrowers by third party payment service providers due to the settlement time lag;\n\n(b)Repayment of loan principal and interest amounts received from the borrowers but not yet transferred to the investors by third party payment service providers due to the settlement time lag; and\n\n(c)Accumulated amounts of transaction fee, service fee received, payment and collection of default loan and interest at the balance sheet date.\n\nFair value\n\nFair value is considered to be the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.\n\nF-25\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\n**Fair value** – continued\n\nAuthoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows:\n\nLevel 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.\n\nLevel 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.\n\nLevel 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.\n\nThe carrying values of financial instruments, which consist of cash and cash equivalents, restricted cash, short-term investments other than those wealth management products mentioned below, security deposits, accounts receivable and contract assets, financial assets receivable, funds receivable from third party payment service providers, loans receivable, short-term loans, payable to investors of the consolidated trusts, and amounts due from/to related parties are recorded at cost which approximates their fair value due to the short-term nature of these instruments.\n\nThe Group has the following long-term financial instruments that are not reported at fair value on balance sheet:\n\n*Loans receivable, payable to investors of the consolidated trusts, accounts receivable and contract assets and financial assets receivable*\n\nFair values of these financial instruments are estimated using a discounted cash flow model based on contractual cash flows. The fair values of loans receivable, accounts receivable and contract assets, financial assets receivable are classified as Level 3 fair value measurement due to the significant unobservable inputs concerning the estimation of default rate. The fair value of payable to investors of the consolidated trusts is classified as Level 2 fair value measurement. As of December 31, 2024 and 2025, the differences between fair values and carrying amount for loans receivable and payable to investors are due to the discount factor or interests in future periods, and the fair value approximates the carrying amount. For accounts receivable and contract assets, financial assets receivable, the differences are due to the discount factor solely and the fair value approximates the carrying amount.\n\n*Convertible senior notes*\n\nThe fair value of convertible senior notes is determined using quoted prices based on level 2 inputs in Note 9.\n\nThe Group has the following wealth management products and derivative instruments that are recorded at fair value subsequent to initial recognition on a recurring basis:\n\nAs of December 31, 2024 and 2025, the fair value of wealth management products recorded in “short-term investments” amounts to RMB160,028 and RMB125,096, respectively, which is estimated based on interbank market quoted price and is classified as Level 2 in the fair value hierarchy.\n\nAs of December 2025, the fair value of derivative instrument recorded in “other long-term liabilities” amounts to RMB121,902, which is estimated based on interbank market quoted price and is classified as Level 2 in the fair value hierarchy.\n\nF-26\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\n**Loans receivable**\n\nLoans receivable represents loans facilitated through the consolidated trusts and Fuzhou Microcredit. Loans receivable are recorded as receivable, reduced by a valuation allowance estimated as of the balance sheet date.\n\nThe allowance for loan losses is determined at a level believed to be reasonable to absorb probable losses inherent in the portfolio as of each balance sheet date in accordance with ASC 326 (see accounting policy of “Allowance for credit losses”).\n\nThe Group charges off loans receivable as a reduction to the allowance for loans receivable when the loan principal and interest are deemed to be uncollectible. In general, loans receivable is identified as uncollectible when it is determined to be not probable that the balance can be collected.\n\nProperty and equipment, net\n\nProperty and equipment are recorded at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:\n\n​\n\n​\n\n​\n\n​\n\nLeasehold improvements\n\n  ​ ​ ​\n\nOver the shorter of the lease term or expected useful lives\n\nElectronic equipment and software\n\n \n\n3-10 years\n\nFurniture and office equipment and others\n\n \n\n3-5 years\n\n​\n\nGains and losses from the disposal of furniture and equipment are recognized in the consolidated statements of operations.\n\nConstruction in progress represents property under construction and is stated at cost. Cost comprises original cost of property and equipment, installation, construction and other direct costs. Construction in progress is transferred to buildings and depreciation commences when the asset is ready for its intended use.\n\nDepreciation expense on property and equipment for the years ended December 31, 2023, 2024 and 2025 were RMB15,426, RMB12,931 and RMB10,695, respectively.\n\n**Land use rights, net**\n\nLand use rights represent lease prepayments to the local government authorities and are recorded at cost less accumulated amortization. Amortization is provided on a straight-line basis over the term of the agreement, which is 50 years. Under ASC 842, land use rights were identified as operating lease right-of-use assets, which is separately disclosed as “Land use rights, net” in the Group’s consolidated balance sheets.\n\n**Goodwill**\n\nGoodwill represents the excess of the purchase consideration over the acquisition date amounts of the identifiable tangible and intangible assets acquired and liabilities assumed from the acquired entity as a result of the Company’s business acquisitions. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. In accordance with ASC 350, the Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. Based on the qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is performed. As of December 31, 2025, goodwill related to the reporting unit was not impaired and therefore no impairment loss was recognized.\n\nF-27\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\nGuarantee liabilities\n\nFor the loans facilitated through the loan facilitation business, the Group provides a guarantee service to its financial institution partners whereas in the event of default, the financial institution partners are entitled to receive unpaid interest and principal from the Group. In general, any unpaid interest and principal are paid when the borrower does not repay as scheduled.\n\nFrom February 2018, to follow the recent regulation change, particularly the Circular 141 which came into effect in December 2017, the Group began to involve third-party licensed vendors including financing guarantee companies and insurance companies to provide guarantee for new loans facilitated for certain financial institution partners. Under the cooperation with financing guarantee companies, these guarantee companies initially reimburses the loan principal and interest to the financial institution partners upon borrower’s default. Although the Group does not have direct contractual obligation to the financial institution partners for defaulted principal and interest, the Group provides back to back guarantee to the licensed guarantee companies. As agreed in the back to back guarantee contract, the Group would pay the licensed guarantee companies for actual losses incurred based on defaulted principal and interest. Under the cooperation with insurance companies, the Group is obligated to provide funding in the form of security deposit with the insurance companies which is used to compensate the financial institution partners for borrowers’ default. Given that the Group effectively takes on all of the credit risk of the borrowers, the Group recognizes a stand ready obligation for its guarantee exposure in accordance with ASC Topic 460.\n\nUnder capital light model, in the condition of no guarantee service provided, the Group does not take any credit risk and not record any guarantee liabilities associated with those loans. Besides, in the condition of partial guarantee, the amount of guarantee exposure is immaterial for the years ended December 31, 2024 and 2025.\n\nAt inception of the guarantee, the Group recognize both a stand-ready guarantee liability under ASC 460 with an associated financial assets receivable, and a contingent guarantee liability with an allowance for credit losses under CECL model. Subsequent to the initial recognition, the ASC 460 stand-ready guarantee is released into guarantee revenue on a straight-line basis over the term of the guarantee, while the contingent guarantee is reduced by the payouts made by the Group to compensate the investors upon borrowers’ default. Allowance for credit losses under CECL model was included in “Provision for contingent liabilities” and revalued at each period end to reflect updated estimation for future net pay-out.\n\nFinancial assets receivable\n\nFinancial assets receivable is recognized at loan inception which is equal to the stand-ready guarantee liability recorded at fair value in accordance with ASC 460-10-30-2(b) and considers what premium would be required by the Group to issue the same guarantee service in a standalone arm’s-length transaction.\n\nThe fair value recognized at loan inception is estimated using a discounted cash flow model based on the expected net payouts by incorporating a markup margin. The Group estimates its expected net payouts according to the product mix, default rates, loan terms and discount rate. The financial assets receivable is accounted for as a financial asset, and reduced upon the receipt of the service fee payment. At each reporting date, the Group estimates the future cash flows and assesses whether there is any indicator of impairment. If the carrying amounts of the financial assets receivable exceed the expected cash to be received, an impairment loss is recorded for the financial assets receivable not recoverable and is recorded in the consolidated statements of operations (see accounting policy of “Allowance for credit losses”). Impairment losses of RMB408,585, RMB314,879 and RMB 249,019 were recorded in the consolidated statements of operations during the years ended December 31, 2023, 2024 and 2025, respectively.\n\nF-28\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** – continued\n\n**Convertible senior notes**\n\nConvertible senior notes are determined appropriately in accordance with the terms in relation to the conversion feature, call or/and put options, and other embedded features, if applicable. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt or/and equity components following the respective guidance described under ASC Topic 815, Derivatives and Hedging and ASC Topic 470, Debt. Debt discounts or premiums and debt issuance costs are recorded as a reduction of the principal amount and the related accretion is recorded as “Interest income, net” in the consolidated statements of operations using the effective interest method.\n\nFacilitation, origination and servicing\n\nFacilitation, origination and servicing expense represents cost of services which consists primarily of various expenses and vendor costs related to risk management, credit assessment, borrower and system support, payment processing services and third-party collection agencies with facilitating and servicing loans.\n\nFacilitation and origination expense includes expense related to the Group’s borrower referral program under which the Group provides cash incentives to existing borrowers who have successfully referred a new borrower/borrowers to the Group. Such cash reward is offered when the new borrower makes a drawdown. As the cash reward is directly associated with the new borrower acquisition, the Group accounted for it as origination expense to facilitate the loans. The Group recorded RMB12.2 million, RMB6.0 million and RMB2.4 million of cash reward for the years ended December 31, 2023, 2024 and 2025, respectively.\n\nSales and marketing expenses\n\nSales and marketing expenses primarily consist of various marketing and promotional expenses and general brand and awareness building, including fees paid to channel partners for directing user traffic to the Group. Salaries and benefits expenses related to the Group’s sales and marketing personnel and other expenses related to the Group’s sales and marketing team are also included in the sales and marketing expenses. For the years ended December 31, 2023, 2024 and 2025, the advertising and marketing related expenses were RMB1,693,585, RMB1,443,261 and RMB2,184,164, respectively.\n\n**Funding costs**\n\nFunding cost consists of interest expense the Group pays to the financial institution partners of the consolidated trusts, and issuance costs incurred by the consolidated trusts.\n\nGovernment grant\n\nGovernment grants are primarily referred to the amounts received from various levels of local governments from time to time which are granted for general corporate purposes and to support its ongoing operations in the region. The grants are determined at the discretion of the relevant government authority and there are no restrictions on their use. The government subsidies are recorded as other income in the period the cash is received and it is probable that the underlying requirements if any, will be met. The government grants received by the Group is RMB189,930, RMB112,564 and RMB224,665 for the years ended December 31, 2023, 2024 and 2025, respectively.\n\n​\n\nF-29\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued\n\nIncome taxes\n\nCurrent income taxes are provided on the basis of net profit (loss) for financial reporting purposes, adjusted for income and expenses which are not assessable or deductible for income tax purposes, in accordance with the laws of the relevant tax jurisdictions.\n\nDeferred income taxes are provided using assets and liabilities method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.\n\nDeferred tax assets are recognized to the extent that these assets are more likely than not to be realized. In making such a determination, the management consider all positive and negative evidence, including future reversals of projected future taxable income and results of recent operation.\n\nIn order to assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Group recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheets and under other expenses in its consolidated statements of operations. The Group did not have any significant unrecognized uncertain tax positions as of and for the years ended December 31, 2024 and 2025.\n\nValue added taxes (“VAT”)\n\nThe consolidated trusts are subject to VAT at the rate of 3%, while the other entities under the Group are subject to VAT at the rate of 6% as general taxpayers, and related surcharges on revenue generated from providing services. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in the line item of other tax payable on the consolidated balance sheets.\n\nCertain risks and concentrations\n\nAs of December 31, 2024 and 2025, substantially all of the Group’s cash and cash equivalents as well as restricted cash were held in major financial institutions located in the PRC and Hong Kong, which management considers to be of high credit quality.\n\nFor the year ended December 31, 2023 and 2024, financial institution partner A funded loans which generated greater than 10% of the total revenues. For the year ended December 31, 2025, financial institution partner B funded loans which generated greater than 10% of the total revenues.\n\nShare-based compensation\n\nShare-based payment transactions with employees, such as stock options and restricted shares are measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis in the consolidated statements of operations over the period during which the employee is required to perform service in exchange for the award. The Group has elected to account for forfeitures as they occur.\n\nF-30\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued\n\nShare-based compensation – continued\n\nThe share-based compensation expense related to the award which contains both service-based and performance-based vesting condition will be recognized when it is probable that the performance-based condition will be met. The probability of the performance condition to be met is not reflected when determining the fair value of the award. For some stock options and restricted shares subject to service, performance, and market conditions, the market conditions are considered when determining the grant date fair value. For awards with market and/or performance conditions, the individual cost of each vesting is amortized separately over each individual service period (the “graded vesting” method). The Group evaluates the probability of achieving the performance criteria throughout the performance period, and will adjust share-based compensation expense if it estimates that the achievement of the performance criteria is not probable.\n\nForeign currency translation\n\nThe reporting currency of the Group is the Renminbi (“RMB”).The Group’s operations are principally conducted through the companies located in the PRC where the RMB is the functional currency. The functional currency of the other major entities incorporated outside of PRC is the United States dollar (“USD”).\n\nTransactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than functional currency are translated into functional currency at the exchange rates prevailing at the balance sheet date. Transactions in currencies other than functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing on the transaction date. Transaction gains and losses are included in earnings as foreign exchange gains (loss).\n\nThe financial statements of the Group are translated from the functional currency into reporting currency. Assets and liabilities denominated in foreign currencies are translated using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated at the appropriate historical rates. Revenues, expenses, gains and losses are translated using the periodic average exchange rates. The resulting foreign currency translation adjustment are recorded in other comprehensive income (loss).\n\nConvenience translation\n\nThe Group’s business is primarily conducted in China and all of the revenues are denominated in RMB. The financial statements of the Group are stated in RMB. Translations of balances in the consolidated balance sheets, and the related consolidated statements of operations, changes in equity and cash flows from RMB into US dollars as of and for the year ended December 31, 2025 are solely for the convenience of the readers and were calculated at the rate of USD1.00=RMB6.9931, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2025. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate or at any other rate.\n\nF-31\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued\n\nEmployee defined contribution plan\n\nFull time employees of the Group in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the Group makes contributions to the government for these benefits based on a certain percentage of the employee’s salaries. The Group has no legal obligation for the benefits beyond the contributions, and the Group cannot utilize the contributed amount for future obligations if employee left the Group. The total amount that was expensed as incurred was RMB198,459, RMB238,577 and RMB263,396 for the years ended December 31, 2023, 2024 and 2025, respectively.\n\nIncome per share\n\nBasic income per ordinary share is computed by dividing net income attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period assuming the ordinary shares were issued and outstanding from the earliest period presented.\n\nDiluted income per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. Ordinary share equivalents are excluded from the computation in income periods should their effects be anti-dilutive. The Group had restricted shares, share options and convertible senior notes, which could potentially dilute basic earnings per share in the future.\n\n**Dividends**\n\nDividends of the Company are recognized when declared.\n\n**Treasury stock**\n\nThe Company accounts for treasury stock using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury stock account on the consolidated balance sheets. At retirement of the treasury stock, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury stock over the aggregate par value is allocated first to the corresponding additional paid-in capital of the repurchased shares with the remaining to retained earnings.\n\nSegment reporting\n\nThe Group uses management approach to determine operation segment. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocation of resource and assessing performance.\n\nThe Group’s CODM has been identified as the Chief Executive Officer who reviews the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group. The Group’s CODM manages the Company’s business activities as a single operating and reportable segment at the consolidated level. Accordingly, the Group’s CODM uses consolidated net income to assess performance. The CODM assesses performance for the segment by comparing actual versus budget results, and such results are used to decide whether to reinvest profits into the segment or to pay dividends. Significant segment expenses are the same as these presented under the operating costs and expenses in the consolidated statements of operations, and the difference between net revenue less the significant segment expenses and consolidated net income are the other segment items.\n\nSubstantially all of the Group’s long-lived assets are located in the PRC and substantially all of the Group’s revenues are derived from within the PRC. Therefore, no geographical segments are presented.\n\nF-32\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued\n\nOperating leases\n\nThe Group determines if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset and whether it has the right to direct the use of an identified asset in exchange for consideration, which relates to an asset the Group does not own. As part of the lease agreements, the Group may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise those options. Right of use (“ROU”) assets represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. ROU assets are initially measured based on the lease liability, adjusted for any initial direct costs, any lease payments made prior to lease commencement and for any lease incentives, and are included in other assets (long term) on the Group’s consolidated balance sheets. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date, and are included in accrued expenses and other current liabilities (short term) and other long-term liabilities on the Group’s consolidated balance sheets. The discount rate used to determine the present value of the future lease payments is the Group’s incremental borrowing rate, because the interest rate implicit in most of the Group’s leases is not readily determinable. The Group’s incremental borrowing rate represents the rate would be incurred to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. Operating lease expense is recorded on a straight-line basis over the lease term. The Company does not possess any leases that have variable lease payments or residual value guarantees.\n\n**Recent accounting pronouncements**\n\nRecently Adopted Accounting Guidance\n\nIn December 2023, the FASB issued ASU No. 2023-09,*Improvements to Income Tax Disclosures* (Topic 740). This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. This ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company adopted this ASU for the year ended December 31, 2025 prospectively, and disclosed additional descriptive information as required under ASC 740 (see Note 13 “Income Taxes”).\n\nRecent Accounting Guidance Not Yet Adopted\n\nIn November 2024, the FASB issued ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update intend to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general and administrative expenses, and research and development). ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Group is currently evaluating the impact from the adoption of this ASU on its consolidated financial statements.\n\n​\n\nIn August 2025, the FASB issued ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Trade Receivables and Contract Assets”. This ASU provides a practical expedient and accounting policy election to allow entities to measure expected credit losses on certain trade receivables and contract assets using a provision matrix approach. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the effect of this ASU on its credit loss estimation methodology.\n\n​\n\nIn December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which provides updated guidance on how to recognize, measure, and present government grants. The ASU will be effective for annual reporting periods beginning after December 15, 2028, including interim periods within those fiscal years. with early adoption permitted. The Group is currently evaluating the effect of this update on our consolidated financial statements.\n\n​\n\n​\n\nF-33\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**3.**ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET\n\nThe Group’s accounts receivable as of December 31, 2024 and 2025 are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**Allowance for**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n​\n\n**Accounts**\n\n​\n\n**uncollectible**\n\n​\n\n**Accounts**\n\n**As of December 31, 2024**\n\n​\n\n**receivable**\n\n​\n\n**Accounts receivable**\n\n​\n\n**receivable, net**\n\nAccounts receivable from referral services\n\n​\n\n20,945\n\n​\n\n—\n\n​\n\n20,945\n\n**Total**\n\n** **\n\n**20,945**\n\n​\n\n—\n\n** **\n\n**20,945**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Allowance for**\n\n​\n\n​\n\n​\n\n​\n\n**Accounts**\n\n​\n\n**uncollectible**\n\n​\n\n**Accounts**\n\n**As of December 31, 2025**\n\n**  ​ ​ ​**\n\n**receivable**\n\n**  ​ ​ ​**\n\n**Accounts receivable**\n\n**  ​ ​ ​**\n\n**receivable, net**\n\nAccounts receivable from referral services\n\n​\n\n72,851\n\n​\n\n—\n\n​\n\n72,851\n\n**Total**\n\n** **\n\n**72,851**\n\n** **\n\n**—**\n\n \n\n**72,851**\n\n​\n\nThe movement of allowance for uncollectible accounts receivable for the years ended December 31, 2023, 2024 and 2025 are nil.\n\n​\n\nThe Group’s contract assets as of December 31, 2024 and 2025 are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Allowance for**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Uncollectible**\n\n​\n\n**Contract assets,**\n\n**As of December 31, 2024**\n\n**  ​ ​ ​**\n\n**Contract assets**\n\n**  ​ ​ ​**\n\n**Contract assets**\n\n**  ​ ​ ​**\n\n**net**\n\nContract assets from loan facilitation service\n\n \n\n1,225,550\n\n \n\n(208,720)\n\n \n\n1,016,830\n\nContract assets from post facilitation service\n\n \n\n210,664\n\n \n\n(63,316)\n\n \n\n147,348\n\nContract assets from referral services\n\n​\n\n1,056,539\n\n​\n\n—\n\n​\n\n1,056,539\n\n**Total**\n\n** **\n\n**2,492,753**\n\n** **\n\n**(272,036)**\n\n** **\n\n**2,220,717**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Allowance for**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Uncollectible**\n\n​\n\n**Contract assets,**\n\n**As of December 31, 2025**\n\n**  ​ ​ ​**\n\n**Contract assets**\n\n​\n\n**Contract assets**\n\n​\n\n**net**\n\nContract assets from loan facilitation service\n\n \n\n637,587\n\n​\n\n(132,154)\n\n​\n\n505,433\n\nContract assets from post facilitation service\n\n \n\n114,425\n\n​\n\n(55,878)\n\n​\n\n58,547\n\nContract assets from referral services\n\n​\n\n335,428\n\n​\n\n—\n\n​\n\n335,428\n\n**Total**\n\n** **\n\n**1,087,440**\n\n​\n\n**(188,032)**\n\n​\n\n**899,408**\n\n​\n\nThe movement of allowance for uncollectible contract assets for the years ended December 31, 2023, 2024 and 2025 are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Opening**\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**Ending**\n\n​\n\n​\n\n**balance as of**\n\n​\n\n​\n\n​\n\n**Current**\n\n​\n\n**Write off in**\n\n​\n\n**balance as of**\n\n​\n\n​\n\n**January 1,**\n\n​\n\n​\n\n​\n\n**year net**\n\n​\n\n**the current**\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2023**\n\n​\n\n**Reclassification**(1)\n\n​\n\n**provision**\n\n​\n\n**year**\n\n​\n\n**2023**\n\nContract assets from loan facilitation service\n\n \n\n288,365\n\n​\n\n19,619\n\n​\n\n123,001\n\n​\n\n(154,678)\n\n​\n\n276,307\n\nContract assets from post facilitation service\n\n \n\n26,601\n\n​\n\n3,123\n\n​\n\n74,155\n\n​\n\n(59,510)\n\n​\n\n44,369\n\n**Total**\n\n** **\n\n**314,966**\n\n****​\n\n**22,742**\n\n​\n\n**197,156**\n\n****​\n\n**(214,188)**\n\n****​\n\n**320,676**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Opening**\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**Ending**\n\n​\n\n​\n\n**balance as of**\n\n​\n\n**Current**\n\n​\n\n**Write off in**\n\n​\n\n**balance as of**\n\n​\n\n​\n\n**January 1,**\n\n​\n\n**year net**\n\n​\n\n**the current**\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**provision**\n\n​\n\n**year**\n\n​\n\n**2024**\n\nContract assets from loan facilitation service\n\n \n\n276,307\n\n​\n\n295,839\n\n​\n\n(363,426)\n\n​\n\n208,720\n\nContract assets from post facilitation service\n\n \n\n44,369\n\n​\n\n148,957\n\n​\n\n(130,010)\n\n​\n\n63,316\n\n**Total**\n\n** **\n\n**320,676**\n\n​\n\n**444,796**\n\n****​\n\n**(493,436)**\n\n****​\n\n**272,036**\n\n​\n\nF-34\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**3.****ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET** – continued\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Opening**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Ending**\n\n​\n\n​\n\n**balance as of**\n\n​\n\n​\n\n​\n\n**Current**\n\n​\n\n**Write off in**\n\n​\n\n**balance as of**\n\n​\n\n** **\n\n**January 1,**\n\n** **\n\n​\n\n** **\n\n**year net**\n\n** **\n\n**the current**\n\n** **\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**Reclassification**(2)\n\n**  ​ ​ ​**\n\n**provision**\n\n**  ​ ​ ​**\n\n**year**\n\n**  ​ ​ ​**\n\n**2025**\n\nContract assets from loan facilitation service\n\n​\n\n208,720\n\n​\n\n262\n\n​\n\n182,957\n\n​\n\n(259,785)\n\n​\n\n132,154\n\nContract assets from post facilitation service\n\n​\n\n63,316\n\n​\n\n212\n\n​\n\n136,041\n\n​\n\n(143,691)\n\n​\n\n55,878\n\nContract assets from referral services\n\n​\n\n—\n\n​\n\n—\n\n​\n\n18,092\n\n​\n\n(18,092)\n\n​\n\n—\n\n**Total**\n\n****​\n\n**272,036**\n\n​\n\n**474**\n\n​\n\n**337,090**\n\n​\n\n**(421,568)**\n\n​\n\n**188,032**\n\n​\n\nThe Group’s contract assets generated from related parties and recorded in amounts due from related parties as of December 31, 2024 are as follows (The amounts as of December 31, 2025 are nil):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Accounts**\n\n**  ​ ​ ​**\n\n**Allowance for**\n\n**  ​ ​ ​**\n\n**Accounts**\n\n​\n\n​\n\n**receivable**\n\n​\n\n**uncollectible**\n\n​\n\n**receivable**\n\n​\n\n​\n\n**and contract**\n\n​\n\n**accounts receivable**\n\n​\n\n**and contract**\n\n**As of December 31, 2024**\n\n​\n\n**assets**\n\n​\n\n**and contract assets**\n\n​\n\n**Assets, net**\n\nContract assets from loan facilitation service\n\n \n\n4,949\n\n​\n\n(3,942)\n\n​\n\n1,007\n\nContract assets from post facilitation service\n\n \n\n2,979\n\n​\n\n(1,821)\n\n​\n\n1,158\n\nContract assets from referral services\n\n​\n\n58\n\n​\n\n—\n\n​\n\n58\n\n**Total**\n\n** **\n\n**7,986**\n\n​\n\n**(5,763)**\n\n​\n\n**2,223**\n\n​\n\nThe movement of allowance for uncollectible accounts receivables and contract assets generated from related parties and recorded in amounts due from related parties for the year ended December 31, 2023, 2024 and 2025 are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Opening**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Current**\n\n  ​ ​ ​\n\n  ​ ​ ​\n\n  ​ ​ ​\n\n**Ending**\n\n​\n\n​\n\n**balance as of**\n\n​\n\n​\n\n​\n\n**year net**\n\n​\n\n**Write off in**\n\n​\n\n**balance as of**\n\n​\n\n​\n\n**January 1,**\n\n​\n\n​\n\n​\n\n**(reversal)**\n\n​\n\n**the current**\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2023**\n\n​\n\n**Reclassification**(1)\n\n​\n\n**provision**\n\n​\n\n**year**\n\n​\n\n**2023**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nContract assets from loan facilitation service\n\n \n\n88,348\n\n \n\n(19,619)\n\n​\n\n(22,554)\n\n \n\n(27,633)\n\n \n\n18,542\n\nContract assets from post facilitation service\n\n \n\n7,259\n\n \n\n(3,123)\n\n​\n\n11,745\n\n \n\n(11,555)\n\n \n\n4,326\n\n**Total**\n\n** **\n\n**95,607**\n\n** **\n\n**(22,742)**\n\n​\n\n**(10,809)**\n\n** **\n\n**(39,188)**\n\n** **\n\n**22,868**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Opening**\n\n**  ​ ​ ​**\n\n**Current**\n\n  ​ ​ ​\n\n  ​ ​ ​\n\n  ​ ​ ​\n\n**Ending**\n\n​\n\n​\n\n**balance as of**\n\n​\n\n**year net**\n\n​\n\n**Write off in**\n\n​\n\n**balance as of**\n\n​\n\n​\n\n**January 1,**\n\n​\n\n**(reversal)**\n\n​\n\n**the current**\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**provision**\n\n​\n\n**year**\n\n​\n\n**2024**\n\nContract assets from loan facilitation service\n\n \n\n18,542\n\n \n\n(1,968)\n\n \n\n(12,632)\n\n \n\n3,942\n\nContract assets from post facilitation service\n\n \n\n4,326\n\n \n\n3,941\n\n \n\n(6,446)\n\n \n\n1,821\n\n**Total**\n\n** **\n\n**22,868**\n\n** **\n\n**1,973**\n\n** **\n\n**(19,078)**\n\n** **\n\n**5,763**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Opening**\n\n**  ​ ​ ​**\n\n​\n\n  ​ ​ ​\n\n**Current**\n\n  ​ ​ ​\n\n  ​ ​ ​\n\n  ​ ​ ​\n\n**Ending**\n\n​\n\n​\n\n**balance as of**\n\n​\n\n​\n\n​\n\n**year net**\n\n​\n\n**Write off in**\n\n​\n\n**balance as of**\n\n​\n\n​\n\n**January 1,**\n\n​\n\n​\n\n​\n\n**(reversal)**\n\n​\n\n**the current**\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2025**\n\n​\n\n**Reclassification**(2)\n\n​\n\n**provision**\n\n​\n\n**year**\n\n​\n\n**2025**\n\nContract assets from loan facilitation service\n\n \n\n3,942\n\n​\n\n(262)\n\n​\n\n324\n\n​\n\n(4,004)\n\n​\n\n—\n\nContract assets from post facilitation service\n\n \n\n1,821\n\n​\n\n(212)\n\n​\n\n1,289\n\n​\n\n(2,898)\n\n​\n\n—\n\n**Total**\n\n** **\n\n**5,763**\n\n​\n\n**(474)**\n\n​\n\n**1,613**\n\n​\n\n**(6,902)**\n\n****​\n\n**—**\n\n(1)Jinshang ceased to be a related party of the Company in 2023 and therefore outstanding balance with Jinshang was reclassified from amount due from related parties into accounts receivable and contract assets. See Note 12 Related party balances and transactions.\n\n​\n\nF-35\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**3.****ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET** – continued\n\n​\n\n(2)Kincheng ceased to be a related party of the Company in 2025 and therefore outstanding balance with Kincheng was reclassified from amount due from related parties into accounts receivable and contract assets. See Note 12 Related party balances and transactions.\n\n​\n\nThe principal of accounts receivable and contract assets by year of origination:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2022**\n\n**  ​ ​ ​**\n\n**Total**\n\n**As of December 31, 2024**\n\n​\n\n  ​\n\n​\n\n  ​\n\n​\n\n​\n\n​\n\n  ​\n\nLoan facilitation service\n\n \n\n1,009,370\n\n​\n\n180,515\n\n​\n\n35,665\n\n​\n\n1,225,550\n\nPost facilitation service\n\n \n\n176,794\n\n​\n\n14,366\n\n​\n\n19,504\n\n​\n\n210,664\n\nReferral Service\n\n \n\n1,074,429\n\n​\n\n2,447\n\n​\n\n608\n\n​\n\n1,077,484\n\n**Total**\n\n** **\n\n**2,260,593**\n\n****​\n\n**197,328**\n\n​\n\n**55,777**\n\n****​\n\n**2,513,698**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**Total**\n\n**As of December 31, 2025**\n\n \n\n  ​\n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n  ​\n\nLoan facilitation service\n\n \n\n439,787\n\n​\n\n183,006\n\n​\n\n14,794\n\n​\n\n637,587\n\nPost facilitation service\n\n \n\n45,308\n\n​\n\n58,834\n\n​\n\n10,283\n\n​\n\n114,425\n\nReferral Service\n\n \n\n228,953\n\n​\n\n179,302\n\n​\n\n24\n\n​\n\n408,279\n\n**Total**\n\n** **\n\n**714,048**\n\n​\n\n**421,142**\n\n​\n\n**25,101**\n\n​\n\n**1,160,291**\n\n​\n\n​\n\n​\n\n**4.**FINANCIAL ASSETS RECEIVABLE, NET\n\nThe Group’s financial assets receivable as of December 31, 2024 and 2025 are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, **\n\n**  ​ ​ ​**\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nFinancial assets receivable\n\n \n\n2,170,780\n\n \n\n2,149,846\n\nAllowance for uncollectible receivables\n\n \n\n(446,089)\n\n \n\n(430,182)\n\nFinancial assets receivable, net\n\n** **\n\n**1,724,691**\n\n** **\n\n**1,719,664**\n\n​\n\nThe movement of financial assets receivable for the years ended December 31, 2023, 2024 and 2025 is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**  ​ ​ ​**\n\n**December 31, 2023**\n\n**  ​ ​ ​**\n\n**December 31, 2024**\n\n**  ​ ​ ​**\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nBalance at beginning of year\n\n \n\n4,225,014\n\n​\n\n3,694,269\n\n \n\n2,170,780\n\nAddition in the current year\n\n \n\n4,906,586\n\n​\n\n2,350,319\n\n \n\n3,549,392\n\nCollection in the current year\n\n​\n\n(5,050,047)\n\n​\n\n(3,429,622)\n\n​\n\n(3,304,181)\n\nWrite-off\n\n \n\n(387,284)\n\n​\n\n(444,186)\n\n \n\n(266,145)\n\nBalance at end of year\n\n** **\n\n**3,694,269**\n\n​\n\n**2,170,780**\n\n** **\n\n**2,149,846**\n\n​\n\nThe movement of allowance for uncollectible receivables for the years ended December 31, 2023, 2024 and 2025 is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**  ​ ​ ​**\n\n**December 31, 2023**\n\n**  ​ ​ ​**\n\n**December 31, 2024**\n\n**  ​ ​ ​**\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n** **\n\n**RMB**\n\n** **\n\n**RMB**\n\nBalance at beginning of year\n\n \n\n554,095\n\n \n\n575,396\n\n \n\n446,089\n\nCurrent year net provision\n\n \n\n408,585\n\n \n\n314,879\n\n \n\n250,238\n\nWrite-off\n\n \n\n(387,284)\n\n \n\n(444,186)\n\n \n\n(266,145)\n\nBalance at end of year\n\n** **\n\n**575,396**\n\n** **\n\n**446,089**\n\n** **\n\n**430,182**\n\n​\n\nF-36\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**4.****FINANCIAL ASSETS RECEIVABLE, NET** – continued\n\nThe Group’s financial assets receivable generated from related parties and recorded in amounts due from related parties as of December 31, 2024 and 2025 are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, **\n\n**  ​ ​ ​**\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nFinancial assets receivable\n\n \n\n1,227\n\n \n\n—\n\nAllowance for uncollectible receivables\n\n \n\n(1,272)\n\n \n\n—\n\nFinancial assets receivable, net\n\n** **\n\n**(45)**\n\n** **\n\n**—**\n\n​\n\nThe movement of financial assets receivable generated from related parties and recorded in amounts due from related parties for the years ended December 31, 2023,2024 and 2025 is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ended**\n\n​\n\n**Year ended**\n\n**  ​ ​ ​**\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nBalance at beginning of year\n\n \n\n42,724\n\n​\n\n12,717\n\n \n\n1,227\n\nAddition in the current year\n\n \n\n19,981\n\n​\n\n—\n\n \n\n—\n\nCollection in the current year\n\n \n\n(49,581)\n\n​\n\n(10,062)\n\n \n\n(1,174)\n\nWrite-off\n\n \n\n(407)\n\n​\n\n(1,428)\n\n \n\n(53)\n\nBalance at end of year\n\n** **\n\n**12,717**\n\n​\n\n**1,227**\n\n** **\n\n**—**\n\n​\n\nThe movement of allowance for uncollectible receivables generated from related parties and recorded in amounts due from related parties for the years ended December 31, 2023,2024 and 2025 is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ended**\n\n​\n\n**Year ended**\n\n**  ​ ​ ​**\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nBalance at beginning of year\n\n \n\n2,648\n\n​\n\n2,912\n\n \n\n1,272\n\nCurrent year net provision (reversal)\n\n \n\n671\n\n​\n\n(212)\n\n \n\n(1,219)\n\nWrite-off\n\n \n\n(407)\n\n​\n\n(1,428)\n\n \n\n(53)\n\nBalance at end of year\n\n** **\n\n**2,912**\n\n​\n\n**1,272**\n\n** **\n\n**—**\n\n​\n\nThe following table summarizes the aging of the Group’s financial assets receivable.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**31-60**\n\n​\n\n**over 60**\n\n​\n\n​\n\n​\n\n**Total**\n\n​\n\n​\n\n**0-30 days**\n\n​\n\n**days**\n\n​\n\n**days**\n\n​\n\n​\n\n​\n\n**financial**\n\n​\n\n** **\n\n**past**\n\n** **\n\n**past**\n\n** **\n\n**past**\n\n​\n\n​\n\n** **\n\n**assets**\n\n​\n\n**  ​ ​ ​**\n\n**due**\n\n**  ​ ​ ​**\n\n**due**\n\n**  ​ ​ ​**\n\n**due**\n\n**  ​ ​ ​**\n\n**Current**\n\n**  ​ ​ ​**\n\n**receivable**\n\nDecember 31, 2024\n\n​\n\n20,764\n\n​\n\n23,495\n\n​\n\n—\n\n​\n\n2,126,521\n\n​\n\n2,170,780\n\nDecember 31, 2025\n\n \n\n29,290\n\n​\n\n33,841\n\n​\n\n—\n\n​\n\n2,086,715\n\n​\n\n2,149,846\n\n​\n\nThe principal of financial assets receivable by year of origination:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2022**\n\n**  ​ ​ ​**\n\n**Total**\n\nDecember 31, 2024\n\n​\n\n1,491,165\n\n \n\n549,475\n\n \n\n130,140\n\n \n\n2,170,780\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**Total**\n\nDecember 31, 2025\n\n \n\n1,876,676\n\n \n\n197,574\n\n \n\n75,596\n\n \n\n2,149,846\n\n​\n\n​\n\nF-37\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**5.****LOANS RECEIVABLE, NET**\n\nLoans receivable consists of the following:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, **\n\n**  ​ ​ ​**\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nLoans receivable\n\n \n\n31,946,604\n\n \n\n42,313,248\n\nLess allowance for loan losses\n\n \n\n(2,694,427)\n\n \n\n(3,630,135)\n\nLoans receivable, net\n\n \n\n**29,252,177**\n\n \n\n**38,683,113**\n\n​\n\nAs of December 31, 2024 and 2025, the accrued interest receivables are RMB311,226 and RMB396,043 (net of allowance RMB26,249 and RMB33,977, respectively), which is recorded under loans receivable.\n\n​\n\nThe following table presents the aging of loans as of December 31, 2024 and 2025:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**0-30 days**\n\n**  ​ ​ ​**\n\n**31-60 days**\n\n**  ​ ​ ​**\n\n**over**** 6****0 days**\n\n**  ​ ​ ​**\n\n**Total amount**\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n​\n\n** past due**\n\n​\n\n**past due**\n\n​\n\n** past due**\n\n​\n\n**past due**\n\n​\n\n**Current**\n\n​\n\n**Total loans**\n\nDecember 31, 2024 (RMB)\n\n \n\n258,759\n\n​\n\n197,490\n\n​\n\n—\n\n​\n\n456,249\n\n​\n\n31,490,355\n\n​\n\n31,946,604\n\nDecember 31, 2025 (RMB)\n\n \n\n517,775\n\n​\n\n433,961\n\n​\n\n—\n\n​\n\n951,737\n\n​\n\n41,361,511\n\n​\n\n42,313,248\n\n​\n\nThe Group has not recorded any financing income on an accrual basis for the loans that are past due for more than 60 days in 2025 (60 days in 2024). Loans are returned to accrual status if they are brought to non-delinquent status or have performed in accordance with the contractual terms for a reasonable period of time and, in the Group’s judgment, will continue to make periodic principal and interest payments as scheduled. For the years ended December 31, 2023, 2024 and 2025, the Group has charged off loans receivable of RMB1,844,349, RMB2,419,180 and RMB3,196,230, respectively.\n\nMovement of allowance for loan losses is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nBalance at beginning of year\n\n \n\n1,457,419\n\n​\n\n1,871,431\n\n \n\n2,694,427\n\nProvision for loan losses\n\n \n\n2,151,046\n\n​\n\n2,773,323\n\n \n\n3,625,042\n\nGross write-off\n\n \n\n(1,844,349)\n\n​\n\n(2,419,180)\n\n \n\n(3,196,230)\n\nRecoveries\n\n​\n\n107,315\n\n​\n\n468,853\n\n​\n\n506,896\n\nBalance at end of year\n\n \n\n**1,871,431**\n\n​\n\n**2,694,427**\n\n \n\n**3,630,135**\n\n​\n\nThe principal of loans receivable as of December 31, 2024 by year of origination is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2022**\n\n**  ​ ​ ​**\n\n**Total loans**\n\nLoans receivable\n\n \n\n31,214,931\n\n \n\n701,484\n\n \n\n30,189\n\n​\n\n31,946,604\n\n​\n\nThe principal of loans receivable as of December 31, 2025 by year of origination is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**Total loans**\n\nLoans receivable\n\n \n\n41,600,687\n\n \n\n680,573\n\n​\n\n31,988\n\n​\n\n42,313,248\n\n​\n\n​\n\nF-38\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n​\n\n**6.****LAND USE RIGHTS, NET**\n\nLand use rights represent acquired right to use the parcel of land on which the Group’s regional headquarters and affiliated industrial park stand. In 2021, the Group acquired the land use rights in Shanghai from the local authorities. Amortization of the land use right is made over the remaining term of the land use right period from the date when the land was made available for use by the Group. The land use rights are summarized as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ended**\n\n**  ​ ​ ​**\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n** **\n\n**2024**\n\n** **\n\n**2025**\n\n​\n\n** **\n\n**RMB**\n\n** **\n\n**RMB**\n\nCost\n\n \n\n1,036,178\n\n \n\n1,067,026\n\nAccumulated amortization\n\n \n\n(79,440)\n\n \n\n(100,444)\n\nLand use rights, net\n\n \n\n**956,738**\n\n \n\n**966,582**\n\n​\n\nThe total amortization expense for the year ended December 31, 2023, 2024 and 2025 amounted to RMB20,724, RMB20,723 and RMB21,004 respectively.\n\n**7.****SHORT-TERM LOANS**\n\nShort-term loans as of December 31, 2024 represents bank borrowings of RMB1,369,939 obtained from domestic commercial banks. The weighted average interest rate for the outstanding borrowings as of December 31, 2024 was 2.21%. Loan amount of RMB510,208 is pledged with bank deposit of RMB475,208.\n\nShort-term loans as of December 31, 2025 represents bank borrowings of RMB1,202,891 obtained from domestic commercial banks. The weighted average interest rate for the outstanding borrowings as of December 31, 2025 was 2.12%. Loan amount of RMB374,000 is pledged with bank deposit of RMB339,000.\n\nThe unused lines of credit for general loans per contractual arrangements are RMB500,410 as of December 31, 2025 which are revolving and effective within one year from their respective grant dates.\n\n​\n\n**8.**LONG-TERM LOANS\n\nIn June 2022, Shanghai Qifu Changfeng Technology, Co., Ltd. (“Qifu Changfeng”), one of the Group’s subsidiary, signed a mortgage loan agreement of RMB1 billion with tenure of 25 years. The interest rate is based on prevailing market price quote for loans with tenure of more than five years at the time of drawdown minus 136bps (“basepoints”). The loan is guaranteed by the land use rights owned by Qifu Changfeng and is for the specific use of construction of the regional headquarters and the affiliated industrial park. As of December 31, 2024 and 2025, the outstanding balance of the mortgage loan was RMB247,462 and RMB 463,333, which is included in other long-term liabilities. As of December 31, 2025, the principal of the long-term loans will be due according to the following schedule:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**Within**\n\n**  ​ ​ ​**\n\n**Between 1**\n\n**  ​ ​ ​**\n\n**Between 2**\n\n**  ​ ​ ​**\n\n**Between 3**\n\n**  ​ ​ ​**\n\n**Between 4**\n\n  ​ ​ ​\n\n**Beyond**\n\n​\n\n​\n\n**Total**\n\n​\n\n**1 year**\n\n​\n\n**to 2 years**\n\n​\n\n**to 3 years**\n\n​\n\n**to 4 years**\n\n​\n\n**to 5 years**\n\n​\n\n**5 years**\n\nLong-term loans\n\n \n\n463,333\n\n \n\n—\n\n \n\n3,000\n\n \n\n10,000\n\n \n\n15,000\n\n \n\n20,000\n\n \n\n415,333\n\n​\n\n​\n\nF-39\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**9.**CONVERTIBLE SENIOR NOTES\n\nIn March 2025, the Company issued US$690,000 of convertible senior notes due on April 1,2030(the “Notes”). The net proceeds from the issuance of the Notes were US$676,908 (RMB4,917,431), net of issuance costs of US$13,092 (RMB95,074). The Notes are unsecured obligations of the Company and bear interest at a rate of 0.50% per year, payable semiannually in arrears on April 1 and October 1 of each year, beginning on October 1, 2025. The issuance costs were presented as a direct deduction from the principal amount of the Notes in the consolidated balance sheets, and are amortized as interest expenses using the effective interest method. The interest expense recognized was RMB40,030 with coupon interest expense of RMB17,789 and the amortization of debt discount and issuance cost of RMB22,241 for the year ended December 31, 2025.\n\nOn or after the 50th scheduled trading day before the maturity date until the close of business on the third scheduled trading day immediately preceding the maturity date, holders may convert their Notes at their option at any time. The initial conversion rate of the Notes is 16.7475 ADSs, per US$1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately US$59.71 per ADS. The conversion rate of the Notes is subject to adjustment upon the occurrence of certain events. The Notes contemplate cash-par settlement upon conversion. Upon conversion, the Company will pay cash in the aggregate principal amount of the Notes being converted and have the right to elect to settle the conversion consideration for amounts in excess of the aggregate principal amount using cash, ADSs, or a combination of cash and ADSs.\n\nHolders of the Notes may require the Company to repurchase all or part of their Notes for cash on April 3, 2028 or in the event of certain fundamental changes, in each case, at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest, if any, to, but excluding, the relevant repurchase date. The Company believes that the likelihood of occurrence of the fundamental change is remote. The Notes are generally not redeemable prior to the maturity date, except that the Company may, at its option, redeem for cash all but not part of the Notes in the event of certain changes in the tax laws or if less than 10% of the aggregate principal amount of the Notes originally issued remains outstanding at such time, in each case. Any redemption may occur only prior to the 50th scheduled trading day immediately preceding the maturity date. As of December 31, 2025, there has been no such event occurred.\n\nThe Company accounted for the Notes as a single instrument. In November 2025, the Company repurchased principal amount of RMB2,185,365 of the Notes at a price of RMB1,908,688 and recorded RMB270,135 as “gain on debt extinguishment”. As of December 31, 2025, the carrying amount of RMB1,019,130 of the Notes is recorded as “Convertible senior notes-current” as the Company had a plan to repurchase such portion of the Notes within one year and the remaining carrying amount of RMB1,583,213 is recorded as “Convertible senior notes-noncurrent”.\n\nThe carrying amount of the Notes as of December 31, 2025 was as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31,**\n\n​\n\n​\n\n**2025**\n\n​\n\n**  ​ ​ ​**\n\n**RMB**\n\nPrincipal\n\n \n\n2,639,874\n\nLess: unamortized discount and debt issuance cost based on imputed interest rate of 1.14%  \n\n \n\n(37,531)\n\n**Net carrying amount**\n\n** **\n\n**2,602,343**\n\n​\n\nAs of December 31, 2025, the fair value of convertible senior notes based on level 2 inputs amounted to RMB2,300,339.\n\n​\n\nF-40\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**10****.**ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, **\n\n**  ​ ​ ​**\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nUser traffic direction fees\n\n \n\n384,364\n\n​\n\n477,533\n\nPayable to financial institution partners (1)\n\n \n\n114,437\n\n​\n\n56,350\n\nAccrued payroll and welfare\n\n \n\n509,917\n\n​\n\n433,820\n\nPayable for third-party service fee\n\n​\n\n303,932\n\n​\n\n411,419\n\nPayable to shareholder of non-controlling interests (2)\n\n​\n\n240,339\n\n​\n\n256,969\n\nOperating lease liability\n\n​\n\n27,258\n\n​\n\n18,357\n\nAccruals for purchase of property and equipment\n\n​\n\n109,018\n\n​\n\n192,353\n\nDeferred revenue\n\n​\n\n525,763\n\n​\n\n788,981\n\nOthers\n\n​\n\n277,893\n\n​\n\n299,944\n\n**Total**\n\n​\n\n**2,492,921**\n\n​\n\n**2,935,726**\n\n(1)\n\nPayable to financial institution partners mainly include amounts collected from the borrowers but have not been transferred to the financial institution partners due to holiday breaks.\n\n(2)\n\nPayable to shareholder of non-controlling interests mainly includes loans from non-controlling shareholder Qifu Changfeng to acquire land use right.\n\n​\n\n​\n\n**11****.**GUARANTEE LIABILITIES\n\nThe movement of guarantee liabilities during 2024 and 2025 is as follows:\n\n*Guarantee liabilities-stand ready*\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**RMB**\n\n**As of January 1, 2024**\n\n \n\n**3,949,601**\n\nProvision at the inception of new loans\n\n \n\n2,350,319\n\nReleased into revenue\n\n \n\n(3,916,718)\n\n**As of December 31, 2024**\n\n** **\n\n**2,383,202**\n\n​\n\n​\n\n​\n\n**As of January 1, 2025**\n\n** **\n\n**2,383,202**\n\nProvision at the inception of new loans\n\n \n\n3,549,392\n\nReleased into revenue\n\n​\n\n(3,617,729)\n\n**As of December 31, 2025**\n\n** **\n\n**2,314,865**\n\n​\n\n​\n\nF-41\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**11****.**GUARANTEE LIABILITIES – continued\n\n*Guarantee liabilities-contingent*\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**RMB**\n\n**As of January 1, 2024**\n\n \n\n**3,207,264**\n\nProvision for contingent liabilities\n\n \n\n478,404\n\nNet payout (1)\n\n​\n\n(1,865,318)\n\n**As of December 31, 2024**\n\n** **\n\n**1,820,350**\n\n​\n\n​\n\n​\n\n**As of January 1, 2025**\n\n \n\n**1,820,350**\n\nProvision for contingent liabilities\n\n \n\n1,667,742\n\nNet payout (1)\n\n​\n\n(1,615,943)\n\n**As of December 31, 2025**\n\n \n\n**1,872,149**\n\n(1)Net payout represents the amount paid upon borrowers’ default net of subsequent recoveries from the borrowers during a given period.\n\nThe following table summarizes the aging of the Group’s contractual amounts of the outstanding loans subject to guarantee:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**31-60**\n\n​\n\n**61-90**\n\n​\n\n**Over 90**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**0-30 days**\n\n​\n\n**days**\n\n​\n\n**days**\n\n​\n\n**days**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**past**\n\n​\n\n**past**\n\n​\n\n**past**\n\n​\n\n**past**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**due**\n\n**  ​ ​ ​**\n\n**due**\n\n**  ​ ​ ​**\n\n**due**\n\n**  ​ ​ ​**\n\n**due**\n\n**  ​ ​ ​**\n\n**Current**\n\n**  ​ ​ ​**\n\n**Total loans**\n\nDecember 31, 2024 (RMB):\n\n​\n\n200,765\n\n​\n\n96,403\n\n​\n\n10,661\n\n​\n\n—\n\n​\n\n24,515,488\n\n​\n\n24,823,317\n\nDecember 31, 2025 (RMB):\n\n​\n\n367,325\n\n​\n\n193,948\n\n​\n\n11,612\n\n​\n\n—\n\n​\n\n21,846,082\n\n​\n\n22,418,967\n\n​\n\nAs of December 31, 2024 and 2025, the contractual amounts of the outstanding loans subject to guarantee by the Group is estimated to be RMB24,823,317 and RMB22,418,967, respectively. The approximate term of guarantee compensation service ranged from 1 month to 36 months as of December 31, 2024 and 2025, respectively. As of December 31, 2024 and 2025, the contractual amounts of the outstanding loans (excluding loans that are written off) that have been compensated by the Group and therefore no longer subject to guarantee were estimated to be RMB2,509,177 and RMB2,413,098, respectively.\n\n​\n\n​\n\nF-42\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**12.**RELATED PARTY BALANCES AND TRANSACTIONS\n\nThe table below sets forth the major related parties and their relationships with the Group, with which the Group entered into transactions during the years ended December 31, 2023, 2024 and 2025:\n\n**Name of related parties**\n\n**  ​ ​ ​**\n\n**Relationship with the group**\n\nBeijing Qihu Technology Co., Ltd. (“Qihu”)\n\n​\n\nAn affiliate of an entity controlled by Mr. Zhou(3)\n\nShanghai Qibutianxia Information Technology Co., Ltd. (“Qibutianxia”)\n\n​\n\nEntity ultimately controlled by Mr. Zhou(3)\n\nHangzhou Qifei Huachuang Technology Co, Ltd (“Hangzhou Qifei”) (2)\n\n​\n\nInvestee of the Group\n\nKincheng Bank of Tianjin Co., Ltd. (“Kincheng Bank”)\n\n​\n\nAn affiliate of an entity controlled by Mr. Zhou(3)\n\nTianjin Yujie Technology Co., Ltd. (“Yujie”) (1)\n\n​\n\nEntity controlled by Mr. Zhou(3)\n\nBeijing 360 Shuzhi Technology Co., Ltd. (formerly known as Beijing Hongying Information Technology Co., Ltd.) (“Shuzhi”)\n\n​\n\nAn affiliate of an entity controlled by Mr. Zhou(3)\n\nBeijing 360 Zhiling Technology Co., Ltd. (“Zhiling”)\n\n​\n\nAn affiliate of an entity controlled by Mr. Zhou(3)\n\nOthers\n\n​\n\nEntities controlled by Mr. Zhou or Mr. Zhou has significant influence(3)\n\n(1)In September 2023, the Company acquired 100% equity interest in Yujie, and Yujie became a consolidated subsidiary of the Company.\n\n(2)In February 2024, the Company sold the entirety of our equity interest in Hangzhou Qifei to an independent third party.\n\n(3)In December 2025, Mr. Zhou ceased to be deemed to beneficially own over 10% of the shares of the Company and thus entities associated with him are no longer related parties of the Company.\n\nThe Group entered into the following transactions with its related parties:\n\nFor the years ended December 31, 2023, 2024 and 2025, services provided by the related parties were RMB356,086, RMB233,407 and RMB292,251, respectively.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nBrand fees charged by Qihu\n\n​\n\n94,340\n\n​\n\n94,340\n\n​\n\n94,340\n\nBandwidth service fee charged by Zhiling\n\n​\n\n—\n\n​\n\n—\n\n​\n\n91,657\n\nReferral service fee charged by Kincheng Bank\n\n​\n\n—\n\n​\n\n—\n\n​\n\n52,239\n\nBandwidth service fee charged by Qihu\n\n​\n\n117,983\n\n​\n\n115,134\n\n​\n\n30,396\n\nReferral service fee charged by Qihu\n\n​\n\n9,550\n\n​\n\n9,446\n\n​\n\n9,441\n\nRental expenses charged by Shuzhi\n\n​\n\n11,815\n\n​\n\n11,613\n\n​\n\n11,018\n\nReferral service fee charged by Yujie\n\n​\n\n119,737\n\n​\n\n—\n\n​\n\n—\n\nOthers\n\n \n\n2,661\n\n​\n\n2,874\n\n \n\n3,160\n\n**Total**\n\n \n\n**356,086**\n\n​\n\n**233,407**\n\n \n\n**292,251**\n\n​\n\nF-43\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**12.****RELATED PARTY BALANCES AND TRANSACTIONS** – continued\n\nFor the years ended December 31, 2023, 2024 and 2025, services provided to the related parties were RMB301,768, RMB61,548 and RMB5,782, respectively.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nReferral service fee charged from Kincheng Bank\n\n​\n\n8,601\n\n​\n\n1,973\n\n​\n\n—\n\nLoan facilitation services fee charged from Kincheng Bank\n\n​\n\n65,903\n\n​\n\n1,074\n\n​\n\n376\n\nPost-facilitation services fee charged from Kincheng Bank\n\n​\n\n139,213\n\n​\n\n25,042\n\n​\n\n4,127\n\nRevenue from releasing of guarantee liabilities from Kincheng Bank\n\n​\n\n42,499\n\n​\n\n15,544\n\n​\n\n1,013\n\nOthers\n\n \n\n45,552\n\n​\n\n17,915\n\n \n\n266\n\n**Total**\n\n \n\n**301,768**\n\n​\n\n**61,548**\n\n \n\n**5,782**\n\n​\n\nAs of December 31, 2024 and 2025, amounts due from related parties were RMB8,561 and nil, respectively, and details are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, **\n\n**  ​ ​ ​**\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nKincheng Bank\n\n \n\n6,268\n\n \n\n—\n\nOthers\n\n \n\n2,293\n\n \n\n—\n\n**Total**\n\n** **\n\n**8,561**\n\n** **\n\n**—**\n\n​\n\nAs of December 31, 2024 and 2025, amounts due to related parties were RMB67,495 and nil, respectively, and details are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, **\n\n**  ​ ​ ​**\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nQibutianxia\n\n \n\n1,656\n\n \n\n—\n\nQihu\n\n​\n\n58,405\n\n​\n\n—\n\nOthers\n\n \n\n7,434\n\n \n\n—\n\n**Total**\n\n \n\n**67,495**\n\n \n\n**—**\n\n​\n\nOther than the transactions disclosed above, the Company has held bank deposit with Kincheng Bank which amounted to RMB3,006,400 and RMB3,000,485 and nil as of December 31, 2023, 2024 and 2025, respectively. The related interest income was RMB145,731 and RMB119,341 and RMB53,677 for the years ended December 31, 2023, 2024 and 2025, respectively, and interest receivable as of December 31, 2023, 2024 and 2025 was RMB15,265 and RMB2,721 and nil, respectively.\n\nIn September 2023, the Company acquired 100% equity interest in Yujie for nil consideration based on the fair value of the assets acquired and the liabilities assumed. In addition, the Company also acquired the equity interest of certain related parties that engage in wealth management business with a total consideration of RMB81,780, which was fully paid in 2023. Upon the completion of the transactions, the Company consolidated financial statements of such related party entities and recognized goodwill of RMB41,210 in total in the consolidated balance sheets.\n\nIn September 2020, the Group acquired 25% equity interest in Hangzhou Qifei from Beijing Qifei with the subscribed capital of RMB50,000 into Hangzhou Qifei. As of December 31, 2023, the Group has fully impaired the investment given the business forecast of the investee. In February 2024, the Group sold the entirety of the equity interest in Hangzhou Qifei to a third party company.\n\nF-44\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**13.**INCOME TAXES\n\nPRC\n\nUnder the Law of the People’s Republic of China on Enterprise Income Tax (“EIT Law”), domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. Qiyu received its “high and new technology enterprises” status in 2018 and renewed it in 2021 and 2024 and was entitled for a preferential income tax rate of 15% from 2018 to 2026. In November 2020, Qiyue received its “high and new technology enterprises” status in 2020 and renewed it in 2023 and was entitled to a reduced EIT rate of 15% from 2020 to 2025. Beihai Borui Credit Service Co., Ltd., Beihai Qicheng Information & Technology Co., Ltd. (“Qicheng”), Qi’ang and Beihai Yunhua benefited from a preferential tax rate of 15% as their operation falls within the encouraged industries catalogue in western China. The 40% of the enterprise income tax payables of Qicheng, Qi’ang and Beihai Yunhua could be further reduced as they are located in an autonomous region of China. Therefore, Qicheng applied a preferential income tax rate of 9% from 2019 to 2023 and applied a preferential income tax rate of 15% from 2024 to 2030. Qi’ang and Beihai Yunhua applied a preferential income tax rate of 9% from 2023 to 2027. From 2023 to 2027, one subsidiary benefited from a preferential tax rate of 15% as they are registered in Hainan province and engaged in encouraged business activities.\n\nCayman Islands\n\nUnder the current laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, the Cayman Islands do not impose withholding tax on dividend payments.\n\nHong Kong\n\nUnder the current Hong Kong Inland Revenue Ordinance, the Company’s subsidiaries domiciled in Hong Kong has introduced a two-tiered profits tax rate regime which is applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first HK$2 million of profits of corporations will be lowered to 8.25%, while profits above that amount will continue to be subject to the tax rate of 16.5%. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax.\n\nThe following table presents income (loss) before income taxes disaggregated between domestic and foreign:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31,**\n\n​\n\n**December 31,**\n\n​\n\n**December 31,**\n\n​\n\n​\n\n**2023**\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n**  ​ ​ ​**\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\nMainland China\n\n \n\n5,455,438\n\n \n\n7,972,972\n\n \n\n7,336,643\n\nHong Kong (1)\n\n \n\n—\n\n \n\n—\n\n \n\n375,046\n\nOthers\n\n \n\n(177,987)\n\n \n\n(80,550)\n\n \n\n(335,554)\n\n**Total**\n\n** **\n\n**5,277,451**\n\n** **\n\n**7,892,422**\n\n** **\n\n**7,376,135**\n\n(1)Income before income taxes for Hong Kong was included in others and was not material for the year ended December 31, 2023 and 2024.\n\nThe current and deferred portion of income tax expenses included in the consolidated statements of operations, which were all attributable to the Group is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nCurrent tax\n\n \n\n935,897\n\n​\n\n1,560,830\n\n \n\n1,704,701\n\nDeferred tax\n\n \n\n72,977\n\n​\n\n83,476\n\n \n\n(304,209)\n\n**Total**\n\n \n\n**1,008,874**\n\n​\n\n**1,644,306**\n\n \n\n**1,400,492**\n\n​\n\n​\n\nF-45\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**13.****INCOME TAXES** – continued\n\nHong Kong – continued\n\nThe following table presents the reconciliations of the differences between the mainland China statutory income tax, and the Company’s effective income tax for 2025, following the prospective adoption of ASU No. 2023-09, *Improvements to Income Tax Disclosures*:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, 2025**\n\n \n\n​\n\n**  ​ ​ ​**\n\n**RMB**\n\n  ​ ​ ​\n\n**%**\n\n** **\n\nIncome before income tax expenses\n\n \n\n7,376,135\n\n \n\n​\n\n​\n\nStatutory tax rate in the PRC\n\n \n\n25\n\n%  \n\n​\n\n​\n\nIncome tax at statutory tax rate\n\n \n\n1,844,033\n\n \n\n25.0\n\n%\n\n**Foreign Tax Effects**\n\n \n\n​\n\n \n\n​\n\n​\n\nHong Kong\n\n \n\n(93,831)\n\n \n\n(1.3)\n\n%\n\nTax exemption\n\n \n\n(94,774)\n\n \n\n(1.3)\n\n%\n\nChanges in valuation allowance\n\n \n\n943\n\n \n\n0.0\n\n%\n\nOther foreign jurisdictions\n\n \n\n(10,421)\n\n \n\n(0.1)\n\n%\n\n**Non-deductible expenses**\n\n \n\n​\n\n \n\n​\n\n​\n\nShare-based compensation\n\n \n\n94,593\n\n \n\n1.3\n\n%\n\nOthers\n\n \n\n3,300\n\n \n\n0.0\n\n%\n\nPreferential tax rate\n\n \n\n(679,618)\n\n \n\n(9.2)\n\n%\n\nResearch and development super-deduction\n\n \n\n(62,704)\n\n \n\n(0.9)\n\n%\n\nEffect of cross - border tax laws\n\n \n\n292,627\n\n \n\n4.0\n\n%\n\nChanges in valuation allowance of deferred tax assets\n\n \n\n12,513\n\n \n\n0.2\n\n%\n\n**Income tax expense**\n\n \n\n**1,400,492**\n\n \n\n**19.0**\n\n**%**\n\n​\n\nIncome tax paid for the year ended December 31, 2025 are almost all in mainland China.\n\nThe following table presents the reconciliations of the differences between the mainland China statutory income tax rate and the Company’s effective income tax rate for 2024 and 2023:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n** **\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n** **\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n** **\n\nIncome before income tax expenses\n\n \n\n5,277,451\n\n​\n\n7,892,422\n\n​\n\nStatutory tax rate in the PRC\n\n \n\n25\n\n%\n\n25\n\n%\n\nIncome tax at statutory tax rate\n\n \n\n1,319,363\n\n​\n\n1,973,106\n\n​\n\nEffect of different tax rate of subsidiary operation in other jurisdiction\n\n​\n\n(4,016)\n\n​\n\n(10,324)\n\n​\n\nEffect of non-deductible expenses\n\n \n\n47,467\n\n​\n\n42,726\n\n​\n\nEffect of preferential tax rate\n\n​\n\n(488,462)\n\n​\n\n(744,996)\n\n​\n\nEffect of research and development super-deduction\n\n \n\n(98,914)\n\n​\n\n(102,658)\n\n​\n\nEffect of withholding income tax\n\n​\n\n206,721\n\n​\n\n470,966\n\n​\n\nEffect of valuation allowance movement of deferred tax assets\n\n​\n\n26,715\n\n​\n\n15,486\n\n​\n\n**Income tax expense**\n\n** **\n\n**1,008,874**\n\n​\n\n**1,644,306**\n\n​\n\n​\n\nF-46\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**13.****INCOME TAXES** – continued\n\nHong Kong – continued\n\nThe effect of the preferential tax rates on the income per share is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n**Year Ended December 31, **\n\n​\n\n \n\n**(Amounts in Thousands Except Per Share Data)**\n\n​\n\n \n\n**2023**\n\n \n\n**2024**\n\n​\n\n**2025**\n\n​\n\n  ​ ​ ​\n\n**RMB**\n\n  ​ ​ ​\n\n**RMB**\n\n  ​ ​ ​\n\n**RMB**\n\nTax saving amount due to preferential tax rates\n\n \n\n488,462\n\n  ​ ​ ​\n\n744,996\n\n  ​ ​ ​\n\n679,618\n\nIncome per share effect-basic\n\n \n\n1.52\n\n​\n\n2.50\n\n​\n\n2.55\n\nIncome per share effect-diluted\n\n \n\n1.49\n\n​\n\n2.46\n\n​\n\n2.50\n\n​\n\nDeferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets and deferred tax liabilities are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n**Deferred tax assets**\n\n​\n\n​\n\n​\n\n​\n\nGuarantee liabilities\n\n​\n\n2,017,547\n\n​\n\n571,232\n\nProvision for loan losses\n\n​\n\n1,735,395\n\n​\n\n2,238,472\n\nDepreciation of land use rights\n\n​\n\n55,539\n\n​\n\n66,999\n\nNet operating loss carry forwards\n\n \n\n78,356\n\n \n\n77,475\n\nOthers\n\n​\n\n12,500\n\n​\n\n11,694\n\n**Gross deferred tax assets**\n\n** **\n\n**3,899,337**\n\n** **\n\n**2,965,872**\n\nValuation allowance on deferred tax assets\n\n​\n\n(116,174)\n\n​\n\n(116,462)\n\n**Total deferred tax assets**\n\n​\n\n**3,783,163**\n\n​\n\n**2,849,410**\n\nUncollected revenues\n\n \n\n(2,841,099)\n\n \n\n(1,533,009)\n\nWithholding income tax\n\n​\n\n(173,305)\n\n​\n\n(254,955)\n\nOthers\n\n​\n\n(1,869)\n\n​\n\n(1,662)\n\n**Total deferred tax liabilities**\n\n​\n\n**(3,016,273)**\n\n​\n\n**(1,789,626)**\n\n**Net deferred tax assets**\n\n** **\n\n**766,890**\n\n** **\n\n**1,059,784**\n\n​\n\n​\n\nManagement assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with tax attributes expiring unused and tax planning alternatives. Considering all the above factors, as of December 31, 2024 and 2025, the Group recorded an allowance of RMB116,174 and RMB116,462 respectively for deferred tax assets which are not more likely than not to be realized.\n\nAs of December 31, 2025, the Group had net operating loss carryforwards in PRC entities of RMB240,563, which will expire from 2026 to 2030.\n\nThe authoritative guidance requires that the Group recognizes the impact of a tax position in the financial statements if that position is more likely than not of being sustained upon audit by the tax authority, based on the technical merits of the position. Under PRC laws and regulations, arrangements and transactions among related parties may be subject to examination by the PRC tax authorities. If the PRC tax authorities determine that the contractual arrangements among related companies do not represent a price under normal commercial terms, they may make adjustments to the companies’ income and expenses. A transfer pricing adjustment could result in additional tax liabilities.\n\nF-47\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**13.****INCOME TAXES** – continued\n\nHong Kong – continued\n\nAccording to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion.\n\nIn accordance with the EIT Law, dividends, which arise from profits of foreign invested enterprises (“FIEs”) earned after January 1, 2008, are subject to a 10% withholding income tax. In addition, under tax treaty between the PRC and Hong Kong, a lower withholding tax rate of 5% is applicable if direct foreign investors with at least 25% equity interest in the PRC company are incorporated in Hong Kong and meet the relevant requirements pursuant to the tax arrangement between Chinese mainland and Hong Kong. Since the equity holders of the major PRC subsidiaries of the Company are Hong Kong incorporated companies and meet the relevant requirements pursuant to the tax arrangement between Chinese mainland and Hong Kong, the Company has used 5% to provide for deferred tax liabilities on retained earnings which are anticipated to be distributed.\n\nFor the year ended December 31, 2025, the Group has repatriated a portion of its earnings from its PRC subsidiaries to overseas for dividend distribution and share repurchase and paid related withholding income tax of RMB200,550 accordingly. The Company recorded a deferred tax liability of RMB254,955 as of December 31, 2025 associated with all of its earnings expected to be distributed from its PRC subsidiaries to overseas. The remaining undistributed profits of the Company’s PRC subsidiaries as of December 31, 2025 would be indefinitely reinvested with unrecognized deferred tax liabilities of approximately RMB804,294 if calculated at the tax rate of 5%.\n\nUnder applicable accounting principles, a deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting basis over tax basis in a domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Group completed its feasibility analysis on a method, which the Group will ultimately execute if necessary to repatriate the undistributed earnings of the VIE without significant tax costs. As such, the Group does not accrue deferred tax liabilities on the earnings of the VIE given that the Group will ultimately use the means.\n\nThe Organization for Economic Co-operation and Development (“OECD”) published Pillar Two model rules in December 2021, with the effect that a jurisdiction may enact domestic tax laws (“Pillar Two legislation”) to implement the Pillar Two model rules on a globally agreed common approach. Pillar Two legislation applies to a member of a multinational group within the scope of the Pillar Two model rules, which the Group is reasonably expected to fall into. It imposes a top-up tax on profits arising in a jurisdiction whenever the effective tax rate determined by the Pillar Two model rules on a jurisdictional basis is below a minimum rate of 15%. The Group has reviewed its corporate structure in light of the introduction of Pillar Two model rules in various jurisdictions and engaged external tax specialists in assessing its tax exposure.\n\n​\n\nAs at December 31, 2025, the Group mainly operates in the Mainland of China, where exposures to Pillar Two income taxes might exist in the future although the legislation is not yet enacted. In addition, certain subsidiaries of the Company are located in jurisdictions mainly including Hong Kong and United Kingdom where Pillar Two legislation has been enacted and become effective. It is estimated that the application of Pillar Two legislation in the above jurisdictions is not expected to have a material impact on the Group’s income tax for the year ended December 31, 2025. Accordingly, the Group has not recognized any Pillar Two-related tax expense for the year ended December 31, 2025.\n\n​\n\nF-48\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**14.****SHARE-BASED COMPENSATION**\n\nShare incentive plan\n\nIn May 2018, the shareholders and board of directors of the Company adopted the Share Incentive Plan (the “2018 plan”) for the granting of share options and restricted shares to employees, directors and consultants to reward them for services to the Company and to provide incentives for future service, and the 2018 plan was later amended in November 2019. Under the 2018 plan, the maximum aggregate number of shares which may be issued is 25,336,096 ordinary shares. Those share options will expire 10 years from the grant date.\n\nThe Company’s board of directors and shareholders approved the 2019 Share Incentive Plan (the “2019 Plan”) and amended it in August 2020, for the granting of share options and restricted shares to employees, directors and consultants to reward them for services to the Company and to provide incentives for future service. Under the 2019 plan, the maximum aggregate number of shares which may be issued is 17,547,567 ordinary shares, and may increase annually by an amount up to 1.0% of the total number of ordinary shares then issued and outstanding commencing with the first fiscal year beginning January 1, 2021 or such fewer amount as determined by the board of directors. The share options and restricted shares expire 10 years from the date of grant.\n\nStock options\n\nIn February 2023, the Company granted 47,300 stock options with an exercises price of US$0.00001 per share, which contains contractual schedules within three years and vesting condition related to the grantee’s individual performance. The weighted average grant date fair value per option was RMB54.93. In May 2025, the Company granted 1,079,134 stock options with an exercises price of US$0.00001 per share, which contains contractual schedules within three years and vesting condition related to the operational performance of the Group, the grantee’s individual performance and the market condition metrics. The weighted average grant date fair value per option was RMB152.48.\n\nIn May 2025, the compensation committee of the board of directors of the Company approved to convert the form of 3,906,464 outstanding restricted shares into stock options to purchase the same number of shares as represented by the restricted share with an exercises price of US$0.00001 per share. This conversion did not affect the fair value of the awards immediately before and after the modification as the exercise price is nominal. In addition, there were no other changes to the awards including the vesting conditions and classification. Accordingly, modification accounting is not required and the cost will continue to be recognized based on the grant-date fair-value-based measure.\n\nThe Company used the Black-Scholes model to estimate the fair value of the options granted without market conditions. For options with market conditions, the Company used Monte Carlo simulation to estimate the probability that the market conditions will be achieved, which was incorporated into the fair value of such options.\n\nThe significant assumptions used in Black - Scholes model were as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n​\n\n​\n\n**December 31, 2023**\n\n​\n\n**December 31, 2025**\n\nRisk-free rate of interest\n\n \n\n4.13%\n\n \n\n4.22%\n\nEstimated volatility rate\n\n \n\n76.20%\n\n \n\n56.00%\n\nDividend yield\n\n \n\n4.70%\n\n \n\n4.17%\n\nExpected life (years)\n\n \n\n5.78\n\n \n\n5.50\n\nExercise price\n\n \n\nUSD 0.00001\n\n \n\nUSD 0.00001\n\n​\n\nThe risk-free rate of interest is based on the yield to maturity of US Treasury Strip Bond as of the valuation date. The expected volatility of the underlying ordinary shares during the life of the options was estimated based on the historical share price volatility of comparable companies over a period comparable to the expected term of the options. The dividend yield was estimated by the Group based on its expected dividend policy over the expected term of the options.\n\nF-49\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**14.****SHARE-BASED COMPENSATION** – continued\n\n**Share incentive plan** – continued\n\nStock options – continued\n\nThe significant assumptions used in Monte Carlo simulation include risk-free rate and estimated volatility rate which were based on the same data set as above-mentioned, except for the period which is in line with the term of the market condition. The amounts were 4.24% and 55.30% for the year ended December 31, 2025.\n\nA summary of option activity during period from December 31, 2024 to December 31, 2025 was as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Weighted **\n\n​\n\n​\n\n​\n\n**Weighted**\n\n​\n\n** **\n\n​\n\n** **\n\n**Weighted **\n\n** **\n\n**Average **\n\n​\n\n​\n\n** **\n\n**Average**\n\n​\n\n​\n\n**Number of**** **\n\n** **\n\n**Average**** **\n\n** **\n\n**Remaining**\n\n​\n\n**Aggregate **\n\n​\n\n**Grant-date**\n\n​\n\n**  ​ ​ ​**\n\n**Options**\n\n**  ​ ​ ​**\n\n**Exercise Price**\n\n**  ​ ​ ​**\n\n**Contract Life**\n\n**  ​ ​ ​**\n\n**Intrinsic Value**\n\n**  ​ ​ ​**\n\n**Fair value**\n\n​\n\n​\n\n​\n\n** **\n\n**USD**\n\n** **\n\n**Years**\n\n​\n\n**RMB**\n\n** **\n\n**RMB**\n\nOptions outstanding at December 31, 2024\n\n \n\n1,635,250\n\n​\n\n0.00001\n\n​\n\n4.22\n\n​\n\n229,049\n\n​\n\n49.78\n\nOptions granted in 2025\n\n​\n\n1,079,134\n\n​\n\n0.00001\n\n​\n\n9.39\n\n​\n\n72,712\n\n​\n\n152.48\n\nOptions converted in 2025\n\n​\n\n3,906,464\n\n​\n\n0.00001\n\n​\n\n8.89\n\n​\n\n263,218\n\n​\n\n109.75\n\nOptions exercised in 2025\n\n \n\n(1,008,084)\n\n​\n\n0.00001\n\n​\n\n6.57\n\n​\n\n(67,925)\n\n​\n\n77.60\n\nOptions adjusted for performance conditions in 2025\n\n​\n\n(196,580)\n\n​\n\n0.00001\n\n​\n\n—\n\n​\n\n(13,246)\n\n​\n\n152.64\n\nOptions outstanding at December 31, 2025\n\n \n\n5,416,184\n\n​\n\n0.00001\n\n​\n\n7.69\n\n​\n\n364,942\n\n​\n\n104.58\n\nOptions exercisable at December 31, 2025\n\n \n\n2,161,753\n\n​\n\n0.00001\n\n​\n\n5.70\n\n​\n\n145,659\n\n​\n\n80.42\n\nOptions vested or expected to be vested at December 31, 2025\n\n \n\n5,416,184\n\n​\n\n0.00001\n\n​\n\n7.69\n\n​\n\n364,942\n\n​\n\n104.58\n\n​\n\nFor the years ended December 31, 2023, 2024 and 2025, the Company recognized share-based compensation expense related to share options of RMB123,981, RMB78,531 and RMB212,593, respectively. For the years ended December 31, 2023, 2024 and 2025, the total fair values of options vested on their respective vesting dates were RMB157,879, RMB563,119 and RMB127,860, respectively. The aggregate intrinsic value of options exercised during the year ended December 31, 2023, 2024 and 2025 was RMB124,114, RMB860,708 and RMB67,925, respectively. As of December 31, 2025, there was RMB184,673 of unrecognized compensation cost related to share options that are expected to be recognized over a weighted-average vesting period of 0.82 years.\n\nRestricted Shares\n\nA summary of the restricted shares for the year ended December 31, 2025 was stated below:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Weighted-Average**\n\n​\n\n​\n\n**Number of**\n\n​\n\n**Grant-Date**\n\n​\n\n**  ​ ​ ​**\n\n**Restricted Shares**\n\n**  ​ ​ ​**\n\n**Fair Value**\n\nOutstanding at December 31, 2024\n\n​\n\n5,138,656\n\n​\n\n99.97\n\nGranted\n\n \n\n422,932\n\n​\n\n98.18\n\nConverted\n\n​\n\n(3,906,464)\n\n​\n\n109.75\n\nVested\n\n \n\n(620,910)\n\n​\n\n77.66\n\nForfeited\n\n \n\n(152,452)\n\n​\n\n80.34\n\nOutstanding at December 31, 2025\n\n \n\n881,762\n\n​\n\n74.90\n\n​\n\n​\n\nF-50\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**14.****SHARE-BASED COMPENSATION** – continued\n\n**Share incentive plan**– continued\n\nRestricted Shares – continued\n\nThe restricted shares granted shall vest in accordance with contractual schedules over a period from two to four years. The fair value of these restricted shares was determined by the closing sales price of the shares on the grant date, adjusted by the present value of expected dividends to be paid during the vesting period. In 2024 and 2025, the Company granted 3,224,370 and 422,932 restricted shares to its employees with vesting condition related to the grantee’s individual performance. In late 2024, the Company also granted 1,034,064 restricted shares with several vesting conditions including the performance condition related to the operational performance of the Group, the grantee’s individual performance and the market condition metrics in addition to a service condition. As the market condition was satisfied at the grant date, the impact of market condition was not factored into the measurement of fair value.\n\nThe weighted-average grant-date fair value per restricted share was RMB51.43, RMB109.26 and RMB98.18 for the year ended December 31, 2023, 2024 and 2025, respectively. The total fair value of the restricted shares vested was RMB60,376, RMB36,277 and RMB48,222 for the years ended December 31, 2023, 2024 and 2025, respectively. For the years ended December 31, 2023, 2024 and 2025, the Company recognized share-based compensation expense related to restricted shares of RMB61,622, RMB89,082 and RMB165,781, respectively. As of December 31, 2025, there was RMB34,697 of unrecognized compensation cost related to restricted shares that are expected to be recognized over a weighted-average vesting period of 0.87 years.\n\nThe Company recognizes the compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting period. Total share-based compensation expense of share-based awards granted to employees and directors was as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\n**Year ended ,**\n\n  ​ ​ ​\n\n**Year ended ,**\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n​\n\n​\n\n**December 31, 2023**\n\n​\n\n**December 31, 2024**\n\n​\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nFacilitation, origination and servicing expenses\n\n​\n\n75,152\n\n​\n\n64,658\n\n \n\n40,070\n\nSales and marketing expenses\n\n​\n\n(375)\n\n​\n\n(118)\n\n \n\n1,503\n\nGeneral and administrative expenses\n\n​\n\n110,827\n\n​\n\n103,073\n\n \n\n336,801\n\n**Total**\n\n​\n\n**185,604**\n\n​\n\n**167,613**\n\n** **\n\n**378,374**\n\n​\n\n​\n\n**15.**ORDINARY SHARES\n\nIn June 2023, the Company announced that its board of directors had approved a share repurchase plan, under which the Company may repurchase up to US$150 million worth of its American depositary shares or Class A ordinary shares over the next 12 months starting from June 20, 2023 (the “2023 Share Repurchase Plan”). From the launch of the share repurchase plan to December 31, 2023, the Company in aggregate purchased 10,872,170 ordinary shares in the open market at an aggregate cost of RMB636,179. The repurchased shares were recorded at their historical cost in “Treasury stock” and 3,961,160 ordinary shares were retired in 2023, resulting a decrease of RMB221,390 in additional paid-in capital and RMB30,152 in retained earnings.\n\nOn March 12, 2024, the Company’s board of directors approved a share repurchase plan (the “2024 Share Repurchase Plan”), whereby the Company is authorized to repurchase its American depositary shares or Class A ordinary shares with an aggregate value of up to US$350 million during the 12-month period from April 1, 2024. For the year ended December 31, 2024, the Company in aggregate purchased 38,046,150 ordinary shares in the open market at an aggregate cost of RMB2,973,192. The repurchased shares were recorded at their historical cost and 34,552,764 ordinary shares were retired in 2024, resulting a decrease of RMB1,887,639 in additional paid-in capital and RMB356,580 in retained earnings.\n\nF-51\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**15.****ORDINARY SHARES** – continued\n\nOn November 19, 2024, the Company’s board of directors approved a new share repurchase plan whereby the Company is authorized to repurchase up to US$450 million worth of its American depositary shares or Class A ordinary shares over the next 12 months starting from January 1, 2025. As of December 31, 2025, the Company in aggregate purchased 31,532,770 ordinary shares in the open market at an aggregate cost of RMB3,200,823. The repurchased shares were recorded at their historical cost and 15,697,778 ordinary shares were retired in 2025, resulting a decrease of RMB842,971 in additional paid-in capital and RMB 1,052,367 in retained earnings.\n\nOn March 25, 2025, the Company’s board of directors approved a share repurchase plan (the “March 2025 Share Repurchase Plan”) whereby the Company is authorized to use to the net proceeds from the offering of convertible senior notes due 2030 to repurchase its ADSs and/or Class A ordinary shares, which runs in addition to the Company’s 2025 Share Repurchase Plan, on March 25, 2025, the Company repurchased 10,253,644 ordinary shares at an aggregate cost of RMB1,647,293. The repurchased shares were recorded at their historical cost in “Treasury stock”.\n\nThe Company’s proposed repurchases may be made from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations.\n\n**16.**STATUTORY RESERVES AND RESTRICTED NET ASSETS\n\nIn accordance with the PRC laws and regulations, the PRC entities of the Group are required to make appropriation to certain statutory reserves, namely general reserve, industry specific reserve, enterprise expansion reserve, and staff welfare and bonus reserve, all of which are appropriated from net profit as reported in their PRC statutory accounts. The PRC entities of the Group are required to appropriate at least 10% of their after-tax profits to the general reserve until such reserve has reached 50% of their respective registered capital.\n\nAppropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the board of directors of the PRC entities of the Group. There are no appropriations to these reserves by the PRC entities of the Group for the years ended December 31, 2024 and 2025.\n\nAs a result of PRC laws and regulations and the requirement that distributions by the PRC entities of the Group can only be paid out of distributable profits computed in accordance with the PRC GAAP, the PRC entities of the Group restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid-in capital, capital reserve and statutory reserves of the PRC entities of the Group. As of December 31, 2024 and 2025, the aggregated amounts of paid-in capital, capital reserve and statutory reserves represented the amount of net assets of the relevant entity in the Group not available for distribution amounted to RMB17,073,166 and RMB17,235,827, respectively (including the statutory reserve fund of RMB915,669 and RMB1,078,330 as of December 31, 2024 and 2025, respectively).\n\n​\n\n​\n\nF-52\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**17.****DIVIDENDS**\n\nSemi-Annual Dividend Policy\n\nOn May 18, 2023, the board of directors of the Company approved the adoption of a semi-annual cash dividend policy (the “New Dividend Policy”) to replace previous quarter cash dividend policy. Under the New Dividend Policy, the Company will declare and distribute a recurring cash dividend semi-annually, starting from the first half of 2023, at an amount equivalent to approximately 20% to 30% of the Company’s net income after tax for the previous six-month period. The determination to make dividend distributions and the exact amount of such distributions in any particular six-month period will be based upon the Company’s operations and financial conditions, and other relevant factors, and subject to adjustment and determination by the board of directors.\n\nIn 2023, the board of directors of the Company approved dividends for the fourth quarter of 2022 and for the first half of 2023 in accordance with the Company’s dividend policy with the total amount of RMB761,552.\n\nIn 2024, the board of directors of the Company approved dividends for the second half of 2023 and for the first half of 2024 in accordance with the Company’s dividend policy with the total amount of RMB1,252,710.\n\nIn 2025, the board of directors of the Company approved dividends for the second half of 2024 and for the first half of 2025 in accordance with the Company’s dividend policy with the total amount of RMB1,387,506.\n\n​\n\nF-53\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**18.****LEASE**\n\nOperating lease as lessee\n\nThe Group enters into operating leases primarily for general office space. The Group’s leases typically have original terms not exceeding 5 years. These leases have remaining lease terms of 1 year to 3 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year.\n\nLease costs are included in general and administrative expenses. Operating lease expenses were RMB61,034, RMB62,449 and RMB61,267 for the years ended December 31, 2023, 2024 and 2025, respectively, including amortization expenses of land use rights of RMB20,724, RMB20,723 and RMB21,004 for the years ended December 31, 2023, 2024 and 2025, respectively. Under ASC 842, land use rights agreements are also considered as operating lease contracts. See Note 6 for separate disclosures related to land use rights.\n\nSupplemental cash flow information related to leases was as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n​\n\n​\n\n**December 31, 2024**\n\n​\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nCash paid for amounts included in the measurement of lease liabilities:\n\n \n\n  ​\n\n \n\n  ​\n\nOperating cash flows from operating leases\n\n​\n\n37,150\n\n​\n\n42,091\n\nRight-of-use assets obtained in exchange for lease obligations:\n\n \n\n​\n\n \n\n​\n\nOperating leases\n\n​\n\n29,483\n\n​\n\n38,935\n\n​\n\nThe following table shows ROU (“Right of Use assets”) and lease liabilities as of December 31, 2024 and 2025 (except for lease term and discount rate):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n​\n\n​\n\n**December 31, 2024**\n\n​\n\n**December 31, 2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\nRight-of-use assets\n\n \n\n35,635\n\n \n\n35,733\n\nOperating lease liabilities-current\n\n​\n\n27,258\n\n​\n\n18,357\n\nOperating lease liabilities-non current\n\n \n\n7,693\n\n \n\n14,326\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n**  ​ ​ ​**\n\n**Year ended ,**\n\n​\n\n​\n\n​\n\n**December 31, 2024**\n\n​\n\n**December 31, 2025**\n\n​\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\nWeighted-average remaining lease term\n\n \n\n1.41\n\n \n\n2.03\n\n​\n\nWeighted-average discount rate\n\n \n\n3.77\n\n%\n\n3.27\n\n%\n\n​\n\n​\n\nF-54\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**18.****LEASE** – continued\n\nOperating lease as lessee – continued\n\nThe maturities of operating lease liabilities as of December 31, 2024 and 2025 are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, 2024**\n\n​\n\n  ​ ​ ​\n\n**RMB**\n\n2025\n\n \n\n27,736\n\n2026\n\n \n\n7,061\n\n2027\n\n \n\n1,074\n\n2028 and thereafter\n\n​\n\n—\n\n**Total undiscounted lease payments**\n\n​\n\n**35,870**\n\nImputed interest\n\n​\n\n(919)\n\n**Total lease liabilities**\n\n \n\n**34,951**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, 2025**\n\n​\n\n  ​ ​ ​\n\n**RMB**\n\n2026\n\n​\n\n18,591\n\n2027\n\n \n\n11,049\n\n2028\n\n \n\n3,665\n\n2029 and thereafter\n\n​\n\n—\n\n**Total undiscounted lease payments**\n\n​\n\n**33,305**\n\nImputed interest\n\n​\n\n(622)\n\n**Total lease liabilities**\n\n \n\n**32,683**\n\n​\n\n​\n\n​\n\nF-55\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**19.**CONTINGENCIES\n\nIn July 2020 and February 2021, CBIRC promulgated two regulations stating that regional banks that carry out internet lending business shall mainly serve local customers, and are not allowed to conduct the internet lending business beyond the local administrative area of their registered place, except those who have no physical business branch, conducting business primarily online as well as meeting the other conditions prescribed by the CBIRC. The Company has changed its distribution strategy so that only local borrowers would be matched to regional banks for new loans facilitated starting from January 1, 2022. The Company believed that, as advised by its PRC legal counsel, given the lack of exact definition regarding the regional banks in the existing laws and regulations, there are uncertainties as to how the regulation will be implemented, therefore the impact to the Company’s current business operations cannot be reasonably estimated.\n\nIn September 2021, the People’s Bank of China (“PBOC”) issued a new regulation stating that organizations that engage in credit reporting business should obtain the credit reporting business license and comply with its other provisions within an 18-month grace period from its effectiveness date of January 1, 2022. Given that there remain uncertainties in the interpretation and implementation of the rule as advised by its PRC legal counsel, the Company has concluded, that it is not reasonably possible to estimate its impact on the Company’s current business operations for credit assessment on borrowers and the potential penalties incurred by the Company thereof.\n\n​\n\n**20.**NET INCOME PER SHARE\n\nBasic and diluted net income per share for each of the periods presented were calculated as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2023**\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n**  ​ ​ ​**\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\n**  ​ ​ ​**\n\n**RMB**\n\n**Numerator:**\n\n \n\n​\n\n​\n\n  ​\n\n \n\n  ​\n\nNet income attributable to shareholders of the Company\n\n​\n\n4,285,336\n\n​\n\n6,264,314\n\n​\n\n5,989,691\n\n**Denominator:**\n\n \n\n​\n\n \n\n​\n\n \n\n​\n\nWeighted average ordinary shares outstanding used in computing basic income per ordinary share\n\n \n\n320,749,805\n\n \n\n298,012,150\n\n \n\n266,496,992\n\nPlus: incremental weighted average ordinary shares from assumed exercise of stock options and restricted shares using the treasury stock method\n\n \n\n7,759,140\n\n \n\n5,437,714\n\n \n\n5,674,886\n\nWeighted average ordinary shares outstanding used in computing diluted income per ordinary share\n\n \n\n328,508,945\n\n \n\n303,449,864\n\n \n\n272,171,878\n\n**Basic net income per share**\n\n** **\n\n**13.36**\n\n** **\n\n**21.02**\n\n** **\n\n**22.48**\n\n**Diluted net income per share**\n\n** **\n\n**13.04**\n\n** **\n\n**20.64**\n\n** **\n\n**22.01**\n\n​\n\nFor the years ended December 31, 2023, 2024 and 2025, options or restricted shares excluded from the calculation of diluted net income per share due to anti-dilutive effect were 370,590, 30,874 and 30,090 respectively.\n\nFor the convertible senior note, diluted EPS was calculated using the if-converted method by determining the number of shares needed to settle the conversion premium and adding that amount to shares outstanding to calculate the diluted EPS denominator. As the average market price of the shares was less than the conversion price, the conversion premium was zero and there were no dilutive effect for the year ended December 31, 2025.\n\n​\n\nF-56\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”)**\n\n**except for number of shares and per share data, or otherwise noted)**\n\n**21.****SUBSEQUENT EVENTS**\n\nOn March 18, 2026, the board of directors of the Company (the “Board”) has approved a dividend of US$0.39 per Class A ordinary share, or US$0.78 per ADS for the second half of 2025 to holders of record of Class A ordinary shares and ADSs as of the close of business on April 22, 2026 Hong Kong Time and New York Time, respectively, in accordance with the Company’s dividend policy.\n\nAs of March 17, 2026, the Company has repurchased approximately US$460 million (RMB3,217 million) in aggregate principal amount of the 2030 Notes for US$399 million (RMB2,790 million) in cash on the open market and in off-market privately negotiated transactions, including the amount of RMB2,185 million repurchased in November 2025.\n\n​\n\n​\n\n​\n\nF-57\n\n​\n\n[Table of Contents](#TOC)\n\n**QFIN HOLDINGS, INC.**\n\n**ADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I**\n\nThe following Schedule I has been provided pursuant to the requirements of Rules 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented as the restricted net assets of the Company’s PRC subsidiaries and VIEs which may not be transferred to the Company in the forms of loans, advances or cash dividends without the consent of PRC government authorities as of December 31, 2025, was more than 25% of the Company’s consolidated net assets as of December 31, 2025.\n\nCONDENSED BALANCE SHEETS\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”))**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**USD**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**(Note 2)**\n\n**ASSETS**\n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n​\n\nCash and cash equivalents\n\n \n\n274,514\n\n​\n\n518,855\n\n​\n\n74,195\n\nShort term investments\n\n​\n\n493,947\n\n​\n\n—\n\n​\n\n—\n\nPrepaid expenses and other assets\n\n \n\n12,080\n\n​\n\n182,430\n\n​\n\n26,087\n\nAmount due from subsidiaries and VIEs\n\n \n\n3,016,777\n\n​\n\n4,083,237\n\n​\n\n583,895\n\nInvestments in subsidiaries and VIEs\n\n​\n\n20,393,966\n\n​\n\n22,058,713\n\n​\n\n3,154,354\n\n**TOTAL ASSETS**\n\n** **\n\n**24,191,284**\n\n​\n\n**26,843,235**\n\n​\n\n**3,838,531**\n\n**LIABILITIES AND EQUITY**\n\n** **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**LIABILITIES**\n\n** **\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccrued expenses and other current liabilities\n\n \n\n1,241\n\n​\n\n4,075\n\n​\n\n583\n\nConvertible notes-current\n\n​\n\n—\n\n​\n\n1,019,130\n\n​\n\n145,734\n\nConvertible notes-noncurrent\n\n​\n\n—\n\n​\n\n1,583,213\n\n​\n\n226,396\n\nOther long-term liabilities\n\n​\n\n—\n\n​\n\n121,902\n\n​\n\n17,432\n\n**TOTAL LIABILITIES**\n\n** **\n\n**1,241**\n\n** **\n\n**2,728,320**\n\n** **\n\n**390,145**\n\n**EQUITY**\n\n \n\n​\n\n** **\n\n​\n\n** **\n\n​\n\nOrdinary shares (USD0.00001 par value per share 5,000,000,000 shares authorized, 296,540,988 shares issued and 283,981,320 shares outstanding as of December 31, 2024 and 283,019,282 shares issued and 243,823,900 shares outstanding as of December 31, 2025, respectively)\n\n \n\n21\n\n​\n\n20\n\n​\n\n3\n\nTreasury stock\n\n​\n\n(1,113,608)\n\n​\n\n(4,066,385)\n\n​\n\n(581,485)\n\nAdditional paid-in capital\n\n \n\n4,339,413\n\n​\n\n3,874,816\n\n​\n\n554,091\n\nRetained earnings\n\n \n\n20,952,340\n\n​\n\n24,502,158\n\n​\n\n3,503,762\n\nOther comprehensive income (loss)\n\n \n\n11,877\n\n​\n\n(195,694)\n\n​\n\n(27,985)\n\n**TOTAL EQUITY**\n\n \n\n**24,190,043**\n\n​\n\n**24,114,915**\n\n​\n\n**3,448,386**\n\n**TOTAL LIABILITIES AND EQUITY**\n\n \n\n**24,191,284**\n\n​\n\n**26,843,235**\n\n​\n\n**3,838,531**\n\n​\n\n​\n\nF-58\n\n​\n\n[Table of Contents](#TOC)\n\nQFIN HOLDINGS, INC.\n\nADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I\n\nCONDENSED STATEMENTS OF OPERATIONS\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”))**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n  ​ ​ ​\n\n**2023**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**2025**\n\n​\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**RMB**\n\n​\n\n**USD**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**(Note 2)**\n\nOperating costs and expenses\n\n \n\n(25,517)\n\n​\n\n(19,770)\n\n​\n\n(24,973)\n\n​\n\n(3,571)\n\nInterest income, net\n\n​\n\n17,316\n\n​\n\n24,376\n\n​\n\n27,734\n\n​\n\n3,966\n\nForeign exchange (losses) gains\n\n \n\n(574)\n\n​\n\n316\n\n​\n\n6,613\n\n​\n\n946\n\nFair value change of derivatives\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(181,205)\n\n​\n\n(25,912)\n\nGain on debt extinguishment\n\n​\n\n—\n\n​\n\n—\n\n​\n\n270,135\n\n​\n\n38,629\n\nOther income, net\n\n​\n\n29,311\n\n​\n\n15,939\n\n​\n\n12,090\n\n​\n\n1,729\n\n**Net income before taxes and income from equity in subsidiaries and VIEs**\n\n​\n\n**20,536**\n\n​\n\n**20,861**\n\n​\n\n**110,394**\n\n​\n\n**15,787**\n\nEquity in earnings of subsidiaries and VIEs\n\n \n\n4,264,800\n\n​\n\n6,248,235\n\n​\n\n5,882,969\n\n​\n\n841,254\n\n**Net income before taxes**\n\n \n\n**4,285,336**\n\n​\n\n**6,269,096**\n\n​\n\n**5,993,363**\n\n​\n\n**857,041**\n\nIncome tax expenses\n\n​\n\n—\n\n​\n\n(4,782)\n\n​\n\n(3,672)\n\n​\n\n(525)\n\nNet income attributable to shareholders of the Company\n\n** **\n\n4,285,336\n\n****​\n\n6,264,314\n\n​\n\n5,989,691\n\n​\n\n856,516\n\n**Net income attributable to ordinary shareholders of the Company**\n\n​\n\n**4,285,336**\n\n​\n\n**6,264,314**\n\n​\n\n**5,989,691**\n\n​\n\n**856,516**\n\n​\n\n​\n\nF-59\n\n​\n\n[Table of Contents](#TOC)\n\nQFIN HOLDINGS, INC.\n\nADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I\n\nCONDENSED STATEMENTS OF COMPREHENSIVE INCOME OR LOSS\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”))**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n** **\n\n**December 31, **\n\n** **\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n** **\n\n**RMB**\n\n** **\n\n**RMB**\n\n​\n\n**RMB**\n\n** **\n\n**USD**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(Note 2)**\n\nNet income attributable to shareholders of the Company\n\n \n\n4,285,336\n\n​\n\n6,264,314\n\n​\n\n5,989,691\n\n​\n\n856,516\n\nOther comprehensive income, net of tax of nil:\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nForeign currency translation adjustment\n\n \n\n17,118\n\n​\n\n46,534\n\n​\n\n(207,571)\n\n​\n\n(29,682)\n\nOther comprehensive income (loss)\n\n​\n\n17,118\n\n​\n\n46,534\n\n​\n\n(207,571)\n\n​\n\n(29,682)\n\nTotal comprehensive income\n\n \n\n4,302,454\n\n​\n\n6,310,848\n\n​\n\n5,782,120\n\n​\n\n826,834\n\nComprehensive income attributable to ordinary shareholders\n\n​\n\n4,302,454\n\n​\n\n6,310,848\n\n​\n\n5,782,120\n\n​\n\n826,834\n\n​\n\n​\n\nF-60\n\n​\n\n[Table of Contents](#TOC)\n\nQFIN HOLDINGS, INC.\n\nADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I\n\nCONDENSED STATEMENTS OF CASH FLOWS\n\n**(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”))**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n**Year ended**\n\n​\n\n** **\n\n**December 31, **\n\n** **\n\n**December 31, **\n\n​\n\n**December 31, **\n\n** **\n\n**December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n** **\n\n**RMB**\n\n** **\n\n**RMB**\n\n​\n\n**RMB**\n\n** **\n\n**USD**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**(Note 2)**\n\n**Cash Flows from Operating Activities:**\n\n \n\n  ​\n\n \n\n​\n\n​\n\n  ​\n\n​\n\n  ​\n\nNet income attributable to shareholders of the Company\n\n \n\n4,285,336\n\n​\n\n6,264,314\n\n​\n\n5,989,691\n\n​\n\n856,516\n\n**Adjustments to reconcile net income to net cash used in operating activities:**\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nEquity in earnings of subsidiaries and VIEs, net of dividends\n\n \n\n(3,474,800)\n\n​\n\n1,706,075\n\n​\n\n(1,428,319)\n\n​\n\n(204,247)\n\nAmortization of convertible senior notes issuance cost\n\n​\n\n—\n\n​\n\n—\n\n​\n\n22,241\n\n​\n\n3,180\n\n**Changes in operating assets and liabilities**\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccrued expenses and other current liabilities\n\n \n\n2,282\n\n​\n\n87\n\n​\n\n3,326\n\n​\n\n476\n\nPrepaid expenses and other assets\n\n \n\n(17,667)\n\n​\n\n20,229\n\n​\n\n(198,412)\n\n​\n\n(28,373)\n\nInterest receivable/payable\n\n​\n\n1,320\n\n​\n\n(9,091)\n\n​\n\n8,095\n\n​\n\n1,158\n\nForeign exchange gain\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(6,613)\n\n​\n\n(946)\n\nGain on debt extinguishment\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(270,135)\n\n​\n\n(38,629)\n\nFair value change of foreign exchange options\n\n \n\n4,527\n\n​\n\n—\n\n​\n\n181,205\n\n​\n\n25,912\n\n**Net Cash provided by Operating Activities**\n\n \n\n**800,998**\n\n​\n\n**7,981,614**\n\n​\n\n**4,301,079**\n\n​\n\n**615,047**\n\n**Cash Flows from Investing Activities:**\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nRepayment of loans provided to subsidiaries and VIEs\n\n \n\n378,148\n\n​\n\n2,881,606\n\n​\n\n5,395,300\n\n​\n\n771,518\n\nLoans provided to subsidiaries and VIEs\n\n​\n\n(71,706)\n\n​\n\n(5,920,169)\n\n​\n\n(6,576,973)\n\n​\n\n(940,495)\n\nProceeds from disposal of short-term investments\n\n​\n\n216,301\n\n​\n\n291,520\n\n​\n\n2,323,576\n\n​\n\n332,267\n\nPurchase of short-term investments\n\n​\n\n(203,361)\n\n​\n\n(776,418)\n\n​\n\n(1,926,552)\n\n​\n\n(275,493)\n\n**Net Cash provided by (used in) Investing Activities**\n\n \n\n**319,382**\n\n​\n\n**(3,523,461)**\n\n​\n\n**(784,649)**\n\n​\n\n**(112,203)**\n\n**Cash Flows from Financing Activities:**\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPayment of Secondary Listing costs\n\n \n\n(16,023)\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\nDividends to shareholders\n\n​\n\n(941,705)\n\n​\n\n(1,262,935)\n\n​\n\n(1,378,103)\n\n​\n\n(197,066)\n\nProceeds from convertible senior notes, net of issuance cost\n\n \n\n—\n\n​\n\n—\n\n​\n\n4,917,431\n\n​\n\n703,183\n\nRepurchase of convertible senior notes\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(1,908,688)\n\n​\n\n(272,939)\n\nStock repurchase\n\n​\n\n(636,179)\n\n​\n\n(2,973,192)\n\n​\n\n(4,848,116)\n\n​\n\n(693,271)\n\n**Net Cash used in Financing Activities**\n\n** **\n\n**(1,593,907)**\n\n​\n\n**(4,236,127)**\n\n​\n\n**(3,217,476)**\n\n​\n\n**(460,093)**\n\nEffect of foreign exchange rate changes\n\n \n\n11,840\n\n​\n\n49,852\n\n​\n\n(54,613)\n\n​\n\n(7,811)\n\nNet (decrease) increase in cash and cash equivalents\n\n \n\n(461,687)\n\n​\n\n271,878\n\n​\n\n244,341\n\n​\n\n34,940\n\nCash, cash equivalents, and restricted cash, beginning of year\n\n \n\n464,323\n\n​\n\n2,636\n\n​\n\n274,514\n\n​\n\n39,255\n\n**Cash, cash equivalents, and restricted cash, end of year**\n\n** **\n\n**2,636**\n\n​\n\n**274,514**\n\n​\n\n**518,855**\n\n​\n\n**74,195**\n\n​\n\n**Supplemental disclosures of cash flow information:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPayables for dividends:\n\n  ​ ​ ​\n\n—\n\n  ​ ​ ​\n\n—\n\n  ​ ​ ​\n\n—\n\n  ​ ​ ​\n\n—\n\nPayables for capitalized issuance costs\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\n—\n\n​\n\nNotes to condensed financial statements\n\n1.The condensed financial statements of Qfin Holdings, Inc. have been prepared using the same accounting policies as set out in the Financial Statements except that the equity method has been used to account for investments in subsidiaries and VIEs. Such investment in subsidiaries and VIEs are presented on the balance sheets as interests in subsidiaries and VIEs and the profit of the subsidiaries and VIEs is presented as equity in earnings of subsidiaries and VIEs on the statement of operations.\n\n2.As of December 31, 2024 and 2025, there were no material contingencies, significant provisions of long-term obligations of the Company, except for those which have been separately disclosed in the Financial Statements.\n\n3.Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The footnote disclosure certain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying Financial Statements.\n\nF-61\n\n​"}