Fan Chunlin: [Foreign Language] [Interpreted] So, the sales and marketing expenses in the first quarter of 2023 reached RMB380 million, with a year-over-year increase of more than 150%, and it’s also a slight increase from the previous quarter. The S&M expenses mainly include borrower acquisition expenses, employees’ conversations and other related expenses. So, the main reason for the substantial year-over-year increase was the increase in our — the volume of loan we just facilitated. So, after we just transform our business model from — I mean, the funding sources from the individuals to our funding partners from institutions, so in line with the company’s strategy on the rapid growth, we have adopted a very active borrower acquisition strategy and spending more on the acquisition process to ensure that we can achieve those high-quality assets efficiently.
So, the proportion of new borrowers of our platform has remained higher. And we plan to increase our spending on the high-quality borrower acquisition channels to ensure the LTV of our borrowers and to continuously optimize our borrower base where our business is developing rapidly. So, from the perspective of our operation and finance, we will also carry out a top-level planning on the ratio of S&M expenses to our revenue and also some budget control to ensure the accuracy and effectiveness of our sales and marketing. In the first quarter of 2023, you can see our — the S&M expenses accounted for above 33.9% of our revenue, basically at the same level as 33.1% in the whole fiscal year of 2022. And if you compare it with 35.5% in the fourth quarter of 2022, you can also see slight down.
So, just because we have a strong control and process on our sales and marketing, we are keeping our development at a very high quality, and we are confident that we will develop at a very sustainable way in the future as well.
Unidentified Analyst: [Foreign Language] Again, will do the translation for myself. Thanks for your answer. My second question is about account receivable. We noticed that account receivable account for large proportion of the total assets of the company right now and [indiscernible] about RMB200 million. Can you — from the end of 2022. Can you explain the main reasons?
Fan Chunlin: [Foreign Language] [Interpreted] Okay. So, you are right, Ms. Lin. At the end of the first quarter of 2023, the company’s balance of account receivable was RMB1.93 billion, which accounted for about 45% of our total assets. And you can see it has been steadily increasing at the end of each quarter. So, the vast majority of accounts receivable we have are acquisition and risk control service fees for our loan facilitation services, at the — so under the currently accounting principles. At the same time, as the loan is issued, the rights and obligations under our facilitation services have been fully met. So, the corresponding accounts receivable and income are recognized immediately when the loan is issued to the borrower.
And you can see that as our loan facilitation volume continues to increase and projects we recently signed will be usually collected within 12 months during the whole the whole loan term, so you may observe that our balance of receivables also continue to increase. So, under our currently — business model, as our volume — the volume we facilitate continues to increase, the absolute value of our AR balance would surely increase accordingly. I want to mention that the collection of our accounts receivable is very good. And after our — we just completed the transformation from personal funds to institutional funds in 2022, there have been almost no bad debts in the domestic loan facilitation business and no bad debt loss has been accrued so far either.
