Huize Holding Limited

This conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience. Once again, today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience. Thank you. Thank you. Ladies and gentlemen, thank you for standing by and welcome to the Heroes Holding Limited first quarter 2021 earnings conference call. At this time, all participants are in the list of . After the management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded and a webcast replay will be available. Please visit Hewlett's IR website at ir.hewlett.com under the Events and Webcast section. Now I'd like to hand the conference over to your speaker host today, Ms. Harriet Hughes. Hugh is the Investor Relations Director. Please go ahead, Harriet.

Thank you, Alfreda. Hello everyone and welcome to our earnings conference call for the first quarter of 2021. Our financial and operating results were released earlier today and are currently available on our IR website and the newsletter. Before we continue, I would like to refer you to the safe harbor statement in our earnings press release which also applies to this call as we will be making forward-looking statements Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained in our earnings release and followings with the SEC. Joining us today are our founder and CEO, Mr. Kenji Ma, COO, Mr. Li Jiang, co-CFO, Mr. Ming Han Xiao, and co-CFO, Mr. Ronald Chen. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights for the fourth quarter of 2021. Mr. Tam will then provide details on the financial results for the period before we open up the call for questions. I will now turn the call over to Mr. Ma.

Hello, everyone. Thank you for attending the first quarter of 2021. Looking back at the improvement of the pandemic in China, with the opening of the insurance industry and the change of the new and old business, the insurance market has maintained a steady growth overall. According to the data issued by the Bank of China, in the first quarter, the insurance industry achieved a revenue of 180 million yuan from the original insurance fee, which increased by 5.5% from the same period last year. The total growth of health insurance business is 16.1%, 3,066.6 billion yuan. Under the guidance of the industry, we will continue to strengthen our labor capacity, accelerate the digital transformation process, and successfully acquire more market share. The stock market has increased by 1.3 times the total stock price, reaching RMB 13.9 billion. The total income has increased by 2 times, reaching RMB 1.3 billion. Since the start of the industry, it has reached 3.1 billion yuan.

Hello, everyone, and thank you all for joining with us for the 2021 Earnings Conference Call. In the first quarter, China's insurance market maintained steady growth, driven by continuous improvement in the pandemic situation in China. Regional strength for the life and health insurance sector and the increasing market demand caused by the transition between old and new statutory definitions of critical illness. According to data released by the CBRC, the insurance industry achieved insurance premium income of RMB 1.8 trillion in the first quarter, an increase of 5.5 percentage points from the same period last year. Among them, the health insurance segment increased by 16.1% year-over-year to RMB 306.6 billion. With the backdrop of strong industry fundamentals, Quiver continues to strengthen its core capabilities, accelerate its digital transformation, and capture greater market share. Total GWP facilitated on our platform increased by 1.3 times year-over-year to RMB 1.4 billion, while total operating revenues nearly doubled to RMB 730 million. both achieving record 40 highs.

Since then, GuiZhe has been on the road of managing long-term insurance. We strive to provide the first long-term insurance insurance for young people. For the first insurance, we chose the long-term health insurance that is very high on the online sales threshold. There are three layers of logic behind it. First, a long-term insurance is usually up to 20 to 30 years. The longer the user stays in the brand, the longer the service we provide and the longer the two-way call interaction. It is easier to build trust, improve connection, and increase value. According to the growth and transformation of young users, there are corresponding safety requirements at different stages of life. For example, when they start to build a family and welcome new people, they will naturally consider child-rearing. These opportunities are the core of the long-term value of users. Third, from long-term sales, insurance, compensation, etc., we can obtain better user data. From there, we can generate more rich and accurate images. The ultimate movement of users' needs, preferences, and behaviors is the key to creating the best product.

has been making steady progress on our long-term insurance strategy. As part of our commitment to providing the first long-term insurance policy for younger generations, we chose to focus on offering a long-term health insurance policy with a higher threshold for online sales. This strategy is driven by three main factors. First, The payment terms for a critical illness insurance policy can often be as long as 20 or even 30 years. The longer the user stays on our platform, the longer our service and interaction period is, making it easier to establish trust and increase user sickness. Second, as younger users age and enter into more mature life stages, new insurance needs will emerge, for example, When they start a family, they will naturally consider coverage for their children, such as critical illness insurance and education savings insurance. Serving users evolving needs and generating repeat purchase opportunities are the four of Quasar's operations in creating long-term user value. Third, a long-term relationship allows us to obtain more user data from the sales, underwriting, and planned activities to generate more accurate user profiles. These deep insights on user needs, preferences, and purchasing behaviors enable us to create higher-growth insurance products while also providing us a foundation in preventing adverse selection.

Here, I would like to share with you the key indicators of the value of the user value. First is the user image. As of the end of the year, the total number of users who have been registered has reached 7 million. The total number of users who have been registered has reached 5842 million. Out of the users who have been registered for a long period of time, 73.2% are from the city of Aqian. The average age is only 32.7 years old. They are young and have a strong sense of security. The second indicator is the unit price. According to the calculation of the U.S. defense budget, the U.S. defense budget for the first quarter will be up to 4508 yuan. The third indicator is the demand rate. Since the second quarter of last year, the demand rate of the 13th month and the long-term demand rate of the second quarter of the 5th month has been stable at more than 94% for four consecutive quarters. We believe that the long-term demand rate of this business is ultimately not the real flow, Next, I would like to share a few key indicators that highlight the value of our insurance user base. First, our user profile.

As of this quarter end, the cumulative number of insurance clients reached 7 million and the cumulative number of insurance clients was approximately 58.4 million. Among insurance clients who purchased long-term insurance products in the first quarter, 73.2% were from higher tier cities and their average age was 32.7 years old. demonstrating strong insurance awareness. The second indicator is the average ticket size. In the first quarter, the average first-year premium for long-term policies distributed was around RMB 4,508. The third indicator is our consistency ratio. Starting from the second quarter of last year, resistance ratios for long-term life and health insurance in the 13th and 25th months have maintained at about 94% before consecutive quarters. Ultimately, we believe that the long-term insurance business is a competition for user quality instead of user traffic. Our advantages in customer targeting as well as our business positioning and differentiation in the industry are demonstrated through our user insurance consumption capacity and the average quality of our user profile.

At the product end, Zhongji Xinggui is officially effective. It has brought challenges and created opportunities for the Zhongji County market. Relying on years of accumulation, it continues to develop its customized capabilities. We completed the product upgrade in the first place and ensured continuity. In April, we held the first spring product launch of HuiZhe. We shared the five standards of HuiZhe's customization with thousands of friends online. In the letter, we discussed the needs, the advantages and disadvantages, the flexible choice, and the human temperature, and introduced the eight new customized products released by HuiZhe in the first quarter. Among them, the gold-plated one, the double-layered one, This is a re-innovation of our customized product. It is different from the traditional real-life plastic surgery. It has the responsibility of deep skin care and full recovery. In the case of guaranteeing income, it can also better adhere to the guaranteeing function. It is a newly developed heavy-duty product. Erwin No. 5 Lung Medicine Edition sets up a special drug such as painkillers, immunotherapy drugs, and other specific drugs. It also increases the burden of the negative general trend. The unprotected person can get up to three times of compensation. It only needs to be restricted to one year. Every time, 40% of the amount of compensation. It solves the problem of the second compensation basket of most products in the market. In addition, the additional compensation of new and new products can be set as a selectable responsibility. Users can make more choices based on the economic situation and the budget-limited family. From a long-term perspective, From the product perspective, the new statutory definitions of critical illness brought both challenges and opportunities to the critical illness insurance market.

leveraging our years of experience and continuous improvement in product customization capabilities. We upgraded our product soon after the revised definition went into effect and ensured the continuity of our quality product supply. In April, we held our first online product launch conference. Sharing with thousands the highlights of a suite of eight new customized products launched in the first quarter. For example, Jinba Yizu Endowment Life Insurance is yet another innovation in our saving product customization. Different from traditional whole life insurance, this product includes both safe clamps and maturity clamps. providing protection as well as serving function in a single insurance policy. Meanwhile, the new definition for your illness product, Starwing 5 Glory, provides allowance for specific drugs such as targeted cancer medication and immunotherapy drugs. Moreover, it provides additional coverage for malignant tumors. The insured client can receive up to three payments with 40% of the amount insured, each subjecting to a one-year waiting period, helping clients break the limit of mandatory three-year waiting periods stated by most of the products in the market. Furthermore, additional coverage for mild, mild risk and severe illnesses is optional, which offers more flexibility. In the long term, we believe there is still room for greater demand for critical illness protection, and we will continue to explore and develop children's critical illness insurance products, multiple claims products, products for impaired life, and other innovative products with value-added services.

In this quarter, we have completed the certification of technology and R&D related knowledge, including information security management system certification, information technology service management system certification, and CMMI software R&D process capability maturity level certification, and so on. This marks the full recognition of the standardization of R&D capabilities.

In terms of digital transformation, during the quarter, we acquired authoritative certificates and qualifications in technology and R&D, including the information security management system certification, the information technology services management system certification, and our R&D center has successfully achieved CMNI maturity level 3 certification. Such recognition signifies with the sound R&D capabilities and our high standard of information security. And we will continue to develop and optimize our technologies in order to provide users with quality product and efficient and safe services.

Until the end of the season, we have completed the organization and implementation of the Shenzhen offline service team. In the selection of target users, based on the multi-dimensional user data accumulated on the platform and the detailed label management, the selection of local users who have strong insurance needs in the platform and have strong insurance needs will be contacted by the offline team to lead the participation of family health, insurance, and savings, etc. products.

打通线上线下联动,满足高端保险需求的最后一公里。 Regarding our online to offline strategy, we have established a service team in Shenzhen and put into trial operation during the quarter. Target users were selected based on multi-dimensional user data accumulated on our platform, driven by refined user portrait management capabilities. Our offline team initiated contact with local users who have made purchases on our platform and demonstrating stronger insurance demand and higher potential to convert. By offering differentiated products such as family health insurance coverage and endowment insurance, we are laying the foundation for solving the last mile problem of high end product conversion by connecting online traffic with premium offline services.

With the official launch of the online insurance business management method, the online insurance industry will inevitably lead to a more regular and healthy development environment. It is always the job of the management team to manage the good management and good management. In the context of the industry entering the health development highway, Huize will continue to use users as the center, and continue to polish the core capabilities and improve operation efficiency. Online and offline communication provides users with more diversified and personalized products and services. At the same time, we will actively grasp the opportunity for the insurance industry to accelerate digitalization and online transformation, and use the digital and technology-adjusted industry upstream and downstream and the insurance ecosystem to produce more comprehensive insurance technology solutions to achieve sustainable development and high-quality growth.

With the official implementation of the regulation of internet insurance business in China, the online insurance industry is expected to thrive in a more sustainable and healthy environment. Maintaining compliance and strong corporate governance has always been an important aspect of Huize's management. As the industry enters a phase of fast and healthy development, Huize will continue to focus on users polish our core capabilities, improve operational efficiency, and provide users with more diversified and personalized products and services through both online and offline channels. Moreover, we will assist the opportunity presented by the accelerating digital transformation of the insurance industry, empower upstream and downstream partners, and the whole insurance ecosystem with data and technology. develop more mature insurance technology solutions, and strive to achieve sustainable development and high-quality growth going forward.

This concludes my prepared remarks for today. I will now turn the call over to our CFO, Mr. Ronald Chen.

he will provide an overview of our key financial highlights for the quarter.

Thank you, Ms. Pema and Harriet, and hi, everyone. We're very, very pleased to report another record quarter for Q1 in terms of total GWP on the platform as well as our total operating revenue. For the first quarter, total GWP amounted to RMB 1.4 billion, representing a very strong 1.3x growth year-over-year. In particular, the first-year premiums, or FYP, accounted for RMB 889.8 million, or 1.4 billion total, or approximately 64% of total GWP, which represents 2.2x growth year-over-year. The strong operating performance in FYP, on the one hand, is a result of industry factors, particularly with respect to the transition of critical illness definition from old to new regime during the period, which really concentrated in the spike in consumer demand in the month of January, as well as the traditional seasonal strength in the auspicious good start time period in the first quarter for the industry. On the other hand, a strong vote in FYP can also be attributed to our more aggressive marketing spend during the quarter, in terms of both customer acquisition and service fees paid to our channel partners. In order to really capture a disproportionate market share of each of these competitions, And given our focus on acquiring high-quality, long-term insurance customers, we believe the quarterly results have shown that the effort was so far. In terms of our renewal business, renewal premiums accounted for RMB $504 million, or 36% of the $1.4 billion total GWP, representing a year-over-year increase of 57%. As Marjun has touched on earlier, we are very proud to report consistently strong persistency metrics maintaining at about 94% plus for 13th and 25th month persistencies during the past quarter. We believe that high persistency is very critical as we continue to drive efforts to increase the lifetime values of our customers, which we have demonstrated by our increased distribution of savings insurance products during the quarter. In the first quarter, approximately 18.6% of our FYP was contributed from long-term life and annuity products distribution. We have been able to generate and keep purchases of my existing users or savings products with about 39% of accumulated savings product customers haven't purchased one or more products before on our platform. In terms of product makers, in the first quarter, as mentioned earlier, due to market and industry factors as well as our proactive marketing strategies to capture market share, our GWP for long-term health insurance increased by 123% year-over-year, to RMB 1.1 billion. During the quarter, GWP for long-term life and health insurance accounted for approximately 96.9% of total GWP. And GWP for co-developed products with our insurance company partners were approximately RMB 850 million, accounting for 61% of total GWP distributed, and representing an increase of 10 percentage points from the same period of last year. which continues to reflect our increasing engagement with our upstream industry partners. Among them, the most well-known product, Darwin No. 3, which is one of the best-selling critical illness insurance products online, which we developed to facilitate life insurance, contributed first-year premiums of approximately $320 million RMB in the quarter. Now, thanks to our revenues. Total operating revenue for Q1 was RMB $735 million, a record quality high, which was up by 196% year-over-year, and outperformed our guidance previously given to the market in our previous comment scores. The increase in revenues was primarily driven by the increase in brokerage income due to the 133% increase in total GWP facilitated during the quarter. Cost of revenue for Q1 increased to RMB $557 million, primarily on the back of increased service fees paid to our channel partners, as we have mentioned earlier. Selling expenses per quarter increased by 45.4% year-over-year to RMB $77 million, which was primarily attributable to an increase in advertising marketing spend during the quarter, which increased by almost 1x year-over-year. as we again proactively increased spend during the quarter to capitalize on the significant market opportunity and demand for critical illness products. The increase in selling expenses is also attributable to increased sales and marketing headcount year-over-year. G&A expenses per quarter increased by 38.7% year-over-year to RMB 54.1 million. This increase was primarily attributable to increased rental expenses due to office extension as well as an increase in of G&A salaries and employment benefits, which is offset by a decrease in share-based community expenses year-over-year. R&D expenses for the quarter grew by 68.4% to RMB 18.8 million, which is mainly driven by our investment, our continued investment in overall RMB and data analytics headcounts. For the quarter, we have recorded a gap on debt profit of RMB 28.5 million. If we exclude share-based compensation, non-GAAP profit was RMB 38.7 million. We continue to maintain robust liquidity and a relatively strong financial position as of today, with a combined balance of cash and cash interference of approximately $76 million. Turning to our Q2 guidance, we currently expect total operating revenue for Q2 to be in the range of RMB 230 to $250 million. We note that it was essentially flat last year, as we observed that market demand for critical interest products has been largely absorbed in advance during the Q1 period, and Q2 is a traditionally slow quarter for China's insurance industry. Taken together with Q1, the guidance represents a first half revenue growth of 1x over a year versus the same half of last year. This forecast reflects the company's current and preliminary views on the market conditions, and operational conditions, which is subject to change caused by rare uncertainties, which includes the ongoing COVID-19 pandemic . With that, it concludes our prepared remarks for today. We will now open up the call to Q&A. Thank you.

As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. When asking the question, please state your question in Chinese first, then immediately repeat your question in English for the convenience of everyone in the call. Your first question comes from the line. Your question. Thank you. My name is Xu Kang.

I would like to thank the company for giving me this opportunity. We also congratulate Guanlincheng on such a good performance in the first quarter of 2021. I have two questions here. The first question is that Mr. Ma mentioned just now that during the first quarter of this year, the sales of the whole prepayment was very good. We really want to know how much of our old customers' home insurance comes from our prepayment and how much of it comes from our new customers' acquisition. Also, how do our leaders view the acquisition of new customers in the future? From the perspective of the source, is it more from the structure of our free flow or is it from our need to acquire more new customers? This is the first question. The second question is about our... Thank you.

Okay, I will translate the question into English. So she comes from that the company for the first quarter is very good and he wanted to know that how much of the GWP was coming from repurchase clients and how much from new customers. And also, he wants to know that what's the company's following customer acquisition strategy? And also, he wants to know that is there any available data regarding the repurchase rates that a company can share?

Okay, it's Ron here, and let me address this question for Ron. for the team. I think in terms of repeat purchases, we're definitely increasing our efforts in maintaining existing customers' engagement and also trying to increase lifetime values with these customers. And I think that I just mentioned in our pre-prep report that around 39% of our savings products are coming from repeat purchases. And we also shared that around approximately 19% of the FYP for the first quarter comes from savings-related products. So with those two numbers, you can basically have an idea of roughly less than 10% of the customers are repeat purchasers. So I think this number is still relatively low, and definitely there's a lot of upside and room for growth in this area. I think we have mentioned before to the market, for the last three years or so, this has been ramped up and scaled up. Most of the efforts that we have been spending are obviously towards acquiring new customers in the market. But with the, I guess, establishment of customers that we have and the data insights that we have into our existing customers, we are definitely going to increase engagement and drive long-term values and lifetime value to the customers that we have through more precise data analytics. And that's why also we've been investing heavily on the R&D aspect to make sure that our platform can efficiently stream and empower our agents or consultants to pursue these repeat purchase customers. And as I mentioned before, with the online to offline strategy, this is also a very critical piece or starting point for us to drive LTVs on the platform. And I think that right now the initiative is still very much in the trial phase. We have now established a trial team in Shenzhen to really scale up the business, and I think that we will be happy to share more detailed metrics with the market when we have reached more critical mass. Okay, I answered the question.

Thank you. Okay, thank you, Raman.

I think yes.

Your next question comes from the line of the interview of CLSA. Please ask your question.

Thank you, Ms. Guan, for giving me this opportunity. Actually, I have only one question here, which is for the previous question. My question is related to the new regulation for the internet insurance bills. which is expected to be implemented in January next year. You know, within the rule, there are some requirements in terms of pricing and also expense ratio. So I just wonder, you know, what kind of corresponding measures has placed them in access. Thank you.

Great. Thanks, everyone, for joining the call. So I think a very quick response to the questions is that we are obviously in constant dialogue with both regulators as well as more importantly our industry partners with respect to the insurance companies. I think right now this new rule which you just mentioned is actually still in consultative phase. although there's a likelihood of being passed through and being enacted or effective next year. I think what we try to do as a platform is that, first of all, compliant operations is key, and I guess in terms of our own internal systems, upgrades and so forth, we are quite confident that we can be able to get ready when certain rules are coming into effect. With respect to the industry pricing, et cetera, I think this is still a bit fluid at this stage. I think the industry as a whole is still trying to But I think the critical aspect for Fraser is that we have very strong relationships with our insurance company partners, as we have demonstrated through our years of track record in terms of customizing products with our upstream partners. And therefore, in terms of product design, pricing, and structure, I think we are very well positioned to manage and cope with the changes, so they be brought about by the regulatory changes.

It's great.

Thank you. Thank you, Devon.

Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. When asking a question, please state your question in Chinese first, then immediately repeat your question in English for the convenience of everyone in the call. Your next question comes from the line of thinking now of CICC. Please ask your question. Okay. Hello, everyone. I'm Mao Qingqing, an analyst from Zhongjing. First of all, congratulations to the company for achieving a very good performance. I have two questions for the company. The first one is, this year's first quarter, the stock market has stopped. In fact, the growth of many companies in March and April has brought great difficulties. Thanks for taking my questions. It's from CSCC. My first question is, we have seen some negative effects caused by the switch of critical units definition. When do you think this effect will fade away? My second question is, how do you expect the trend of profitability considering the increasing marketing expenses?

Okay, thanks, Qingqing. Again, thanks for joining the call. I get two questions here. The first relating to the CI products in the market. Definitely, I think that the first quarter has been a significant spike in demand. for the old definition products in the marketplace and I think a lot of the industry participants including ourselves has tried to really proactively capture market share during the period and that's reflected in the upward trend in the cost side of things and I think that also brings us a lot of good quality customers during the period and I think the effort was very well found for the long term business of the company. I think for the new definition products to really come on stream and become, I guess, scale up sales in the market, I think that we probably need to wait until the later part of each quarter when the products are now being marketed for a longer period of time and being more well understood by the market and by the consumers. So I think that probably we'll see more recovery in critical illness product distribution in the month of June. and into the third quarter of the year. So I think that's the first question. In terms of the second question on our view on profitability, I think that you can see in the first quarter with the strong revenue growth and that also demonstrates the platform scalability in terms of both our 2C and 2B businesses. We have been able to achieve such a significant growth in a single quarter without really So it demonstrates the scalability and also the operating leverage of the business, as we have also shown that we have been profitable this quarter. Going forward in the next few quarters, I think that definitely Q2 will be a very slow quarter, as you can see from our guidance. So Q2 is likely going to be profitable. I think that going forward we will see how market demand will evolve and I think that for us we will be balancing growth and profitability as a major objective for the rest of the year.

Thank you. Thank you.

Your next question comes from the line of . Please ask your question.

Okay, thank you. Thank you. I also want to know if the land has any impact on our business. And the last question is, because we have a two-week guidance, I would like to ask if we can provide a copy of our revenue in the second half of the year. Let me see. So the first question that we have is we would like to understand the impact of mutual aid platforms on who is assisting, whether we have impacted resourcing new customers and directing old mutual aid services to our clients. And on the other hand, We want to know if there's been any impact from continued rise of , which medical incidents lately. And we also know, you know, you can give us some assistance on the second because obviously the operating.

Okay, thank you. I guess we have three questions there. The first question is about 4.2. I guess that's the question. So obviously we have seen that the market players have been shutting down various mutual aid platforms or mutual aid programs. I think overall this is a very realistic reflection of the healthy and long-term sustainable development of the industry. I think the regulators are taking a stand And I think overall, it should mean that the competition for traffic or users may be alleviated a little bit. But I guess for Crazy, we have been very focused on focusing on the long-term insurance product segments in the marketplace. And I think most of these platforms, the targeted customers or the user profile may not be exactly what we are looking for as a core strategy. So I think the impact will be relatively limited in terms of the business to our strategy. So that's the first question. The second question on Huilingbao and the impact on this new government initiative. I think overall it should be very encouraging in terms of promoting general population's insurance awareness. and the opportunity to procure protection for themselves and their families. And again, I think that the target audience here with this directive is really people who are maybe more of an advanced age or people who are not the standard kind of clientele for the commercial insurance or the medical reimbursement insurance. So I think that with this new policy from the government, it might affect more with respect to the platforms that are more focused on short-term insurance products, the medical insurance products, like the reimbursement products. But for ourselves, we are more, again, on the critical illness side, on the long-term life and health side, and I think that this may not necessarily have a great impact on our business. So again, we are very focused on targeting the higher GSTD customers, people who are relatively younger of age with higher income levels and relatively better education backgrounds, and who would desire a high-quality, sustainable protection policy for their own and for their families. So with regards to the third question on guidance, I think that the Q2 guidance is a reflection of reality. I think we are seeing weakness in the market, not just ourselves but across the board, particularly with respect to the incumbents, the top five insurance incumbents in the country are facing a pattern during this quarter. I think this really has to do with the so-called critical illness absorption of demand in the first quarter. So I think Q2 and Q1 as all taken together, again, I think it's still a very strong year-over-year revenue growth of almost 1x. And I think for the second half of the year, we're still sticking to our company's practice of giving quarterly guidance. So I think that we will wait until the next quarter to give further indications on the rest of the year. Thank you. Thank you, Ron.

Thank you, Ron. Your next question comes from the line of Yanli of Huatai. Please ask your question.

Thank you, Manager. I am from Huatai. I have a question. I would like to ask Manager, how do you see the current competitive situation compared to traditional insurance companies and other Internet platforms? So I just have one question. Can the management share some views about the competition landscape, i.e., comparing with traditional insurers and other online platforms? Thanks.

Okay, thank you. Yeah, yeah. So I think the question on the competitive differentiation of Placer versus our other competing platforms or the more traditional offline brokerages. I think first of all, I think that we are very focused on utilizing technology and data to help make everything more efficient, which is our genesis of the business model from 15 years ago. I think that we have really solved some of the pain points in the marketplace, including providing customers with a more comprehensive suite of products to select from, providing them with the tools to compare and contrast products to get the best value for money products for themselves and the most suitable products for themselves. I think the challenges that are being faced by the traditional industry players are with respect to maybe some of the aging sports and maybe more of a homogeneous product offering to the consumers. So I guess we differentiate by saying from the customer's perspective, allowing to get the best insurance product for their own needs. I guess the other depressing factor, which is very critical, is the user base that we have. We have now 7 million users on our platform, accumulated on our platform. Both of these customers are very young, with the average age of 32.7 years. And most important of all, 73% of these clients are coming from the high-key cities in China. So I think that with respect to our product strategy, we have always been targeting relatively high ticket size. We have this growth just now that the average ticket size for a long-term policy is RMB 4,500, which also reflects the quality of the user base that we are able to generate and to acquire through our online marketing channels. And, you know, we have also been able to deliver consistent consistency ratios. You know, at 94%, I think that is maybe probably the top quartile in the marketplace and also giving our insurance company partners with additional confidence in working with us together to develop more innovative and more, you know, super products for the market. Thank you.

Thank you. Thank you. Thank you.

Your last question comes from the line of Halsey Wu of AMTD Group. Please ask your question. .

I think that's a good question. My question is on the company . The company has a very strong sequential growth of . So, it is because the more

Hey, Brian,

So there are no questions. I'd like to hand the conference back to the management for the closing remarks.

Hi, thank you for joining with us today. We look forward to seeing you next time. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you, everyone. Good night.

Thank you.