There’s some area effect to regulate and emphasize. You have to have license to do loan business, nothing to do with your quality of your portfolio, okay? Second one, you have with the joint loan. You should show that even if you have a capability manage your loan as big as a few trillion dollars with low — very low manageable risk, but still whatever job you do is not that important. Important is the loan should be issued by the banks and the financial system with license and provide the money for it. That’s the best answer for you. A similar time thinking goes for everybody else.
Unidentified Analyst: That’s very helpful. So as far as you know, X Financial is fully compliant that stands right now and your interpretation of it. And I assume you’re in reasonably close contact with those regulators at this point. Is that fair to say?
Kan Li: Yes, it’s fair.
Unidentified Analyst: Okay. And in terms of the loan ceiling of 24%, how is the Company progressing towards meeting that goal? And how much of the current loans on your book are above 24%?
Frank Fuya Zheng: We rather not disclose that kind of information, but we have been making great progress in this area for the last year or so. But we are — that’s also the fact that we are not 100% within 24%. And I don’t think — once again, the loan rate as the current structure is not defined by us as long as the banks or whoever provided money for the loan that — they have the right to issue that kind of loan. We are just to facilitate it. So strictly speaking, we are not legally determined that kind of loan rate as long as help financial institutions with license to issue those loans, they are regulated. It’s okay with that. That’s okay with us. I think that’s the best way I can answer your question.
Unidentified Analyst: Okay. Now it appears that the country is returning to a more normalized period of economic activity. So can you just remind us, you’ve given guidance for loan facilitation in the first quarter, and that’s sequentially above the fourth quarter. But generally speaking, is the first quarter, in terms of seasonal impacts, is that a period of lower loan facilitation volume for you in terms of Q2, Q3, Q4?
Kan Li: In terms of the volume that we normally will see the first half of the year has the higher volume. But if you look at our 2022 that we actually continue to grow from Q1 all the way to Q4. And I think this year, again, that we are talking about the expectation — forecast, which I’m not 100% confident, but we do expect that this year is likely to follow last year’s trend. So we should be able to see quarterly growth facilitate amongst us.
Unidentified Analyst: Okay. Great. Your tax rate was slightly elevated in 2022. It appears that it began to normalize a little bit in the fourth quarter. Can you provide us with an outlook on what you think your tax rate is going to be in 2023?
Frank Fuya Zheng: 2023, the tax rate — effect tax will be lower. The reason is the Chinese — the tax you actually pay will eventually reflect what the U.S. — the effect you see on the U.S. But there’s time lag about 6 months because Chinese have a different collection cycle and so far so on. But in terms of the number you see right now, we just apply to like 25%, but as we more — because all our operations, all our entity, operational entity are based in China. And those entities get a more favorable treatment into the tax — effective tax rate — U.S. effective tax rate will also will follow the downward trend. I can’t give you — because it’s a little bit harder to project the forecast for that, but overall trend is going down this year, for 2023.
