So I’d like to highlight that this is — there’s really 4 things at play here, right? There’s 4 areas where we’re changing mix and emphasis to get the kind of growth we want and the credit quality we want. So on the customer side, clearly, what we’re doing is we’re prioritizing more what we call strong small business owners. And these are small business owners whose companies have a clear legal structure, have a longer operating history, operate more in industries with a stabler capital position and stronger long-term distribution networks of their own business. And these strong SBOs, if you look over the last 18 months, have performed significantly better than the rest of the portfolio. These strong business owners make up about 56% of our E&R today.
So that is the #1 shift. Our mix will increasingly be focused on the non-consumer finance portion to these customers. And even for the consumer finance portion, we will also try and serve these customers’ individual needs. So there’s a change in mix on customer. The second is really greater emphasis on the more resilient economic regions. Historically, we have covered a large number of cities. Here, we’re being more selective in terms of where we view new business growth based on our view of their ability to recover in a difficult environment and to be in reasonably good standing over the next couple of years perhaps compared to weaker geographies. Then on layering on top of that shift in region, you have the shift in mix on product where there’s more emphasis on the consumer finance side.
And then we have our shift in channel where if you remember, historically, we had 40% of the business, 40% more of the business coming from cooperation with third-party channels. Here, we’re placing much greater emphasis on our direct sales and they make up now a greater proportion of our new business because they have tighter control, understanding the customer and in creating a more complete service bundle for the customer across now guarantee products and consumer finance products as well as being able to detect a better fraud where it may exist. So all of these shifts when you add them up, it does mean that we are operating off of a narrower scope, right, than historically in terms of our focus of customers. But within this prioritized scope, we believe that we can then achieve the new business at the credit quality we want.
With regard to pricing, because we have a mixed year of a secured product, unsecured product, consumer finance product, what we’re finding is that our ability, once we’ve got these good customers to provide them with the ticket size that they’re looking for, to provide them with the duration they’re looking for, there isn’t as much price sensitivity to be honest. So we think that keeping kind of a 20% APR and then keeping within our focus is a way to obviously not grow very quickly, right — we’re still going for prudence — but to serve business that will give us the right top line take rates and the right bottom line results as we look out over the next 12 months. So a lot of that transition, a lot of those changes in mix are really now underway for 6 to 9 months, and we’ll continue to push in that direction.
Operator: Our next question comes from Yada Li of CICC.
Yada Li: This is Yada with CICC. And I just have one quick question for today. Could you please share more color on the F1 ’23 outlook of the top line and bottom line? And how do I understand it in the current macroeconomic environment? And that’s all.
