Huize Holding Limited

Ladies and gentlemen, thank you for standing by and welcome to the Hoysa Holdings Limited first half and second quarter 2021 earnings conference call. At this time all participants are in a listen only mode. After the management's prepared remarks, we will have a question and answer session. Today's conference call is being recorded and a webcast replay will be available. please visit Hoysa IR website at ir.huive.com under the events and webcast section. I'd now like to hand the conference over to your speaker, host of today's conference, Ms. Harriet Fu, Hoysa's Investor Relations Director. Please go ahead, ma'am.

Thank you, Operator. Hello, everyone, and welcome to our earnings conference call for the first half and second quarter of 2021. Our financial and operating results were released earlier today and are currently available on both our IELTS websites 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 filing with the ACC. Joining us today are our founder and CEO, Mr. Sunjin Ma, COO, Mr. Li Jiang, co-CFO, Mr. Minghan 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 first half and second quarter of 2021. Mr. Chen 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.

Welcome to the second quarter of the second quarter of the first half of 2021. The first half of the year, our performance has created a new height in history. In this challenging industry environment, it is especially difficult to return. In the first half of the year, the total investment of the platform reached RMB 20.6 billion, which increased by 72.7%. The total revenue reached RMB 9.5 billion, which increased by nearly double. The growth of the raw material cost of the industry, especially in the second quarter, was affected by the opening red of the beginning of the year and the downfall of the first quarter, which determined the price of the product. The need for customer investment was released in advance. Ren Shengxian's company also had a negative growth. In the general sales of the insurance industry, it achieved a total cost of 6.7 billion yuan, and still maintained a double-digit growth.

Hello, everyone, and thank you for joining with us first half and second quarter 2021 earnings conference call. We achieved record results in the first half, which is particularly commendable given the challenging environment we currently face. Total growth return premiums facilitated on our platform increased by 72.7% year-over-year to RMB 2.06 billion, well above the industry average growth in the first half. And total operating revenue nearly doubled to RMB 950 million. In the second quarter, most life insurance companies reported year-over-year declines in GWT. due to seasonality from jumpstart cells at the beginning of the year and the statutory definition change of critical illness. Nonetheless, we have demonstrated strong resilience in our operations during this traditionally slow season, with total GWP amounting to RMB 670 million in the second quarter, sustaining a double-digit growth year-over-year.

In addition to the high growth of capital and income, until the end of the second quarter, Weize's total number of insurance users has reached 7.2 million, and the total number of insurance customers has exceeded 60 million. Here, I would like to continue the sharing of the first quarter and continue to discuss with you Weize's differentiated user image and long-term value. In the first half of the year, About 72% are from cities above the second-tier. The average age is 33 years old. In the first half of the year, the unit price continues to maintain a higher level of water. In the first half of the year, the cost of building a fleet for a long period of time is 4,332 yuan. The cost of building a fleet for a long period of time is up to 2.8 million yuan. In addition, in the first half of the year, the continuation rate for the 13th month and the 25th month

Apart from the robust growth in total GDP and operating revenues, our cumulative number of insurance clients and insured clients reached 7.2 million and 60.3 million respectively. I would like to further emphasize the differentiation of our user profile and how this could benefit our business. In the first half, about 72% of long-term insurance customers were from higher tier cities with an average age of 33 years old. In terms of first year premium, the average ticket size of our long-term insurance products has maintained at a relatively high level of RMB 4,332 in the first half, while the average TP size of our savings insurance product has reached RMB 28,439 in the first half. Moreover, in the first half, our consistency ratio for long-term Lifetime Health Insurance in the 13th and 25th months have maintained at about 95%. We believe these indicators highlight the strong thickness and high lifetime value of Huize's customers.

In the last 100 years, long-term insurance premiums accounted for 95.3% of total premiums, fully displaying Huize's advantage in sales and service capabilities as a first-stage insurance e-commerce platform. It also proves that we have been operating on long-term risk accumulation and storage for many years. Long-term risk not only lengthens the user's value cycle of service, multi-dimensional data and precise user images have extraordinary strategic significance in optimizing customized products, improving service capabilities, and building ecological systems. At the same time, we have further expanded the depth and breadth of the product coverage. Through insurance and pension, the multi-factor product system has created a comprehensive layout that covers the entire life cycle of the user. It also digs into the value of the stock market and the potential of developing the stock market. It is worth mentioning that in the first half of the year, the stock market products, i.e. long-term risk and annual income, contributed to the new single policy from 17.1% in the same period last year to

In the first half, GWP for long-term life and health insurance products accounted for 95.3% of our total GWP. This not only demonstrates our competitive edge in both sales and service capabilities among China's online insurance platforms, but also proves our prominent position in long-term insurance products. after years of operations. Our strategic focus on distributing long-term insurance products can help extend the reach to customers through various services. And the multi-dimensional user data and increased precision of our user profile will be strategically important for us to optimize our customized products, improve our service capabilities, and build our ecosystem. At the same time, we have further expanded the depth and breadth of our product coverage with a diversified product portfolio, including protection, savings insurance, and retirement planning products, covering the entire customer lifecycle, thereby tapping the value of existing markets and exploring the growth potential from new markets. It's worth mentioning that our savings insurance, including annuity and long-term life insurance, contributed to 23.6% of first-year premium in the first half, increasing from 17.1% over the same period last year.

GAN BIN BIN is one of Huize's core competitiveness. We continue to work hard on product design and innovation, and the cost of customized products developed together with insurance companies and partners is up to 55.1%. Last year, it increased significantly by 14.3% in the same period. In April, the Banking Commission issued guidance on further enriching the supply of life insurance products, repeatedly mentioning individualization, difference, and customization, This indicates that the customization of insurance products will be a big thing. Customization cannot live up to the value of insurance technology capabilities. With Huize's joint collaboration with Guangda, Yongming, Dongbang, Yanglao, and Lianjin products, Guangming will be an example. At the stage of product development, Huize has been able to collect user data for a long time. After a high-quality machine learning analysis process, we found that there were many points in the market at that time, and when the product was designed, This is a breakthrough. At the same time, we use artificial intelligence to find the most suitable customer interest rate and terms and conditions. We have created innovative customized products based on core indicators. Finally, we have greatly reduced the cost of promotion of products through the modernized online marketing platform. We have also obtained significant cost-effective advantages for mainstream products.

Product innovation is one of Huizhou's core competencies. In the first half, we continued to make progress on new product design and innovation. As a result, GWP for co-developed insurance products accounted for 55.1% of total GWP, increasing significantly by 14.3 percentage points from the same period last year. The CBIRC issued a guidance that emphasized the personalization, differentiation, and customization of insurance products. This signals that the customization of insurance products will be a major trend moving forward, and we believe that insure-take capability is the key to drive product customization. We have recently partnered with Sun Life Everbrite Life Insurance to launch Everbrite Smart Choice, a retirement annuity product. When developing this product, we identified numerous standpoints in the market and resolved them one by one through our long accumulated user data and machine learning algorithm. At the same time, we used AI technology to estimate the combination of premium rates and trends and conditions of the products that best fit our clients' interests, thereby creating a comprehensive and innovative product that stands out in the market. Finally, our online marketing strategy has significantly reduced the promotion cost of our products. enhancing our price competitiveness over other mainstream offline products.

In addition to product customization, we also strive to create deep service capabilities. We believe that the insurance industry has changed from quantity growth to quality growth. Traditional man-made tactics have reached a turning point. The core of future industry competition will become how to truly solve problems and create Thank you. Thank you. On top of product customization, we are also committed to enhancing our service capabilities. We believe that the insurance industry

has moved to a quality and sustainable growth space, and the traditional business model of relying on numerous insurance agents has reached an inflection point. Rather, future competition in the industry will focus on solving problems and creating value for customers. Since the beginning of the year, we have been exploring and building a value-added service system to provide users with online consultation, early cancer screening, and other health management services. In July, we partnered with Sun Growth to launch immune cell cryopreservation as a value-added service to meet demand for high-end and diversified healthcare services of millennial customers. We believe such services throughout the duration of the policy will not only increase the core competitiveness of our platform in the marketplace, but also help us to create longer term engagement with our users and maximize their lifetime value.

data analysis and artificial intelligence and other technologies into the key business processes, not only to promote the improvement of platform operation efficiency, but also to achieve better risk management. Through the calculation, our AI plan book saves about 83% of the time for the consultant. The function of peer-to-peer explanation reduces the period of transaction and the number of communications by half. In terms of compliance, Digitalization and technology are the core strengths for the development of the Huize 3.0 era.

We believe that embedding technologies such as data analytics and AI into key business processes will help improve the operating efficiency and risk management capability of our platform. Our calculations show that AI proposal application has made it possible to save up to 83% of our consultants' time. and the average time needed to complete a transaction has been halved. Our technology has also been critical to our platform's regulatory compliance with our AI-driven quality assurance system, enabling us to achieve full coverage of consultants' compensation inspections through NLP technology. This has significantly improved our quality assurance efficiency. by over 80 times and accumulated over 200 million lines of conversation data.

Next, I would like to share with you the important milestone of O2O. We have signed a memorandum with Hubei Shanshan Health Insurance Co., Ltd. to acquire its control shares. We believe Ancon has a profound insight into customers and a deep understanding of the human resources market. With its professional sales team and extensive service experience for customers, Ancon will complete the last mile of offline deployment, allowing us to have the ability to provide products and services online and offline, and further improve the full coverage of the market We hope to achieve high-quality expansion of the business through joint effects and promote the growth of performance at a high speed.

Finally, I would like to share with you an important milestone in our O2O integration strategy. We have entered into a MOU with Shenz Life & General to acquire a controlling interest in the company. We believe Shenz Life & General has accumulated deep customer insights in the mass affluent life and health insurance market. Leveraging its robust sales team of professional industry veterans, extensive coverage and experience of serving clients, Chen's life in general greatly compliments our last mile offline presence, allowing us to provide products and services both online and offline, which will further improve the market presence of our customized products. and enhance the brand awareness of Kwege. We intend to utilize our digital capabilities to empower change life in general, accelerating the establishment of our open insurance product and service platform, covering sales management, product offerings, and back-end support with the aim to significantly enhance the efficiency of traditional insurance operations. We look forward to the business expansion and realizing revenue growth synergies from this mutually beneficial integration. 接下来请我们的CFO Ron给大家详细介绍一下业绩和财务的数据。 This concludes my prepared remarks for today. I will now turn the call over to our CFO, Mr. Ronald Tan, who will provide an overview of our key financial highlights for the first half and second quarter.

Thank you, Mr. Ma and Harriet, and hi, everyone. We are very pleased to report a set of record first half operating and financial results in terms of total growth within premiums, or GWP, facilitated on our platform, as well as total operating revenues. In the first half of 2021, total GWP amounted to RMB 2.1 billion, representing a very strong growth of 72.7% year over year. First year premiums, or FYP, accounted for RMB 1.2 billion, or 57.9 percent of total GWP, which has doubled from the same period of last year. Renewal premiums accounted for RMB 868 million, or 42.1 percent of total GWP, representing a year-on-year increase of 45.4 percent in the first half. And as of the half-year mark, We have already achieved over two-thirds of the total GWP for the entire year of 2020 and almost 80% of total revenue for last year. In the first quarter of the year, we recall that we have capitalized on tremendous market demand for critical illness products by consumers by taking upon a more aggressive approach on marketing spend and customer acquisition strategies. which has resulted in a very strong 2.2X growth in FYP in Q1, as well as the acquisition of many high-quality users onto our platform, with average FYP per policy of over RMB 4,000. For the second quarter, as we have expected it to be a relatively slower quarter due to seasonality as a result of the jumpstart sales campaign in Q1, and also expected softness in the critical illness product segment after the absorption of pens of demand in the first quarter. We have, therefore, strategically focused on the marketing and distribution of savings insurance products, including our customized endowment life insurance and annuity products, which we have co-developed with our insurance carrier partners. As a result of our strategy, we have maintained a healthy growth in total GWP of 12% year-over-year to RMB 668 million in the second quarter. This was driven by the robust year-on-year growth in renewal premiums of 32%, which again is a testament to the high quality of the users that our platform is able to attract and acquire through our marketing channels, as evidenced by the consistently high 13-month and 25-month consistency ratios of over 95% that we have achieved during the second quarter. As for FYP, although in the second quarter we saw a modest 5% decrease year over year, mainly on the back of a slow pickup in critical illness market demand, we were still able to drive through a very strong growth in the distribution of savings insurance products, which has accounted for 38.2% of total FYP distributed in the second quarter. Another highlight with respect to the savings insurance product segment is that 31% of the FYP in savings insurance was contributed by repeat purchases from the existing users on the platform, which again speaks to the high quality of a 7 million plus user base. And in particular, the high LTV or lifetime value potential of our users, given the high average ticket size of over RMB 28,000 that we have achieved in distributing our savings insurance products. We're continuing to see very strong momentum in our savings insurance product segments going into the third quarter, which again will greatly complement to our overall FYP and top line growth for the rest of the year, and also becoming an increasingly important contributor to our general diversification in our revenue and overall product portfolio. Now turning to the financial line items. Total operating revenue for the second quarter was RMB 218.6 million, which is a slight decrease of 7% year over year. The decrease was primarily due to the 5% decrease in FYP facilitated, as we mentioned earlier, which totaled RMB 303 million for the quarter, but offset by the strong 32% increase in renewal premiums, which amounted to RMB 364.8 million in the second quarter. Operating costs for the quarter increased by 8% year over year to RMB 152 million, which is primarily due to increased customer acquisition and channel costs. Selling expenses for the quarter increased by 62% year over year to RMB 77.9 million, mainly attributable to increased salaries and employment benefits due to an increase in sales and marketing headcount as well as an increase in advertising and marketing expenses, which is offset by a decrease in share-based compensation expenses. Selling expenses as a percentage of total operating revenue for the first half, however, has decreased from 20.9% last year to 16.2% this year, representing a 4.7 percentage point improvement year over year. G&A expenses for the quarter decreased by 7% year-over-year to RMB $43.5 million, primarily due to a decrease in share-based compensation expenses. The G&A expense-to-revenue ratio also decreased to 9.9% in the first half of this year from 17% in the same period of last year, resulting in a 7.1 percentage point improvement which is a reflection of the overall operating efficiency and leverage that we have demonstrated. During the quarter, we have continued to invest heavily in our technology upgrades for our core platform, and R&D expenses for the quarter grew by 104.3% year-over-year to R&D 25.7 million, which was mainly driven by an increase in technology investment and the related number of R&D personnel increased. Overall for the quarter, we have recorded a gap net loss of RMB 77 million. We continue to maintain a robust liquidity and a strong financial position. As of quarter end, we had a combined balance of cash and cash equivalents of approximately 67 million US dollars. And coming to our official guidance, we currently expect total operating revenue for the full year 2021 to be approximately RMB 1.7 billion, which represents approximately a 40% growth rate year over year. This forecast reflects the company's current and preliminary views on the market and operational conditions, which are subject to change caused by various uncertainties, including those related to the ongoing COVID-19 pandemic globally, and also any recurrent waves of infections in China. With that, that concludes our prepared remarks for today's call. We will now turn the call over to a Q&A session. Thank you.

Thank you, sir. Ladies and gentlemen, when asking the question, please state your question in Chinese first and then repeat your question in English for the convenience of everyone in the call. If you wish to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press the pound or the hash key. Please note it's star 1 on your telephone keypad if you wish to ask a question. We have the first question from the line of Michelle Ma from Citi. Please ask your question. 管理長你好,我是花旗的

Hello, my name is Michelle. I have two questions. The first one is about a topic that has been discussed more recently, which is the governance of the Internet. I would like to ask, from the perspective of management, what is the impact of this matter on our investment and our 2B channels? What is the process of regularization of our 2B channel? This is the first question, which is about the level of influence of our 2B channel. The second question is that we also see that we still have a lot of cash in our account, and the space in this industry is also quite large. 我们之后的一个strategy是怎么样的呢 就咱们怎么样来考量的 就咱们最近也是做了一些改革吧 比如说开放平台之类的 就是咱们后面还是像以前交流的那样 就是把这个2C做起来 还是有一些其他的一个想法 So my first question is regarding to a recent directory crackdown on irregularities in the online insurance sales space. So just wondering what's the impact on our 2B channel? And the second question is about our future strategy. So we have obviously a large amount of cash on balance. Will we have any new initiatives regarding future business strategies? Actually, we mentioned before that we want to strengthen our 2C channel previously. So, going forward. Thank you.

Okay. Thank you, Michelle. It's Ron here. Let me take your questions. So the first question regarding regulations, I think the market has obviously been quite concerned overall, not just in our industry but also across various sectors on the recent wave of government regulations coming out to the market. So I think in particular with relating to the insurance industry or the Internet insurance industry, particularly where we are participating in, the recent number 87 document The context of which is actually not any new regulations per se. It's more of a re-emphasis on the implementation timetable for the underlying regulations that was actually released in December of last year and was coming into effect this February of this year. Overall, of course, I think Quasar is a long-established platform with 15 years of track record. We are very embracive of this new regulatory regime and development because this is a new definitely good for the overall long-term sustainable growth of the industry as a whole. And it's one of the more leading and compliant platforms in the industry. I think that we see ourselves as a beneficiary of the regulatory developments. So particularly pertaining to the points relating to regulations, I think that the regulators are more focused on reselling activities by platforms, forced bundle sales of insurance non-compliant operations during the business processes and so forth. So I think given that we have been adapting to the changes since last year or late last year, we have already taken in a complete and comprehensive review of our operations so that we have established the relevant rules and policies with respect to our own self-operated activities as well as the other channels that we cooperate with to make sure that all the contents that are marketing materials that will be delivered to the marketplace, which will be consumed or read by the users to be compliant from a regulatory standpoint. And also, I think that on the mis-selling or product pricing perspective, because we have always been more focused on the high-avail long-term health products, we are less involved with the short-term medical or reimbursement kind of insurance products. where I think most of the mis-selling risk may fall into. So I think that overall, as a conclusion, I think that we are very well-coped as a platform to manage through these regulatory changes, and we don't see any particular material impact on the business as a whole. So going on to your second question on the cash balance and our potential use of this cash resources, I think that we have obviously just announced the Shenzhen Life & General acquisition. And overall, that will be a very important element to accelerate our online to offline integration strategy, as our CEO mentioned in his prepared remarks, and also to make sure that we be able to deepen our engagement with our customers and to be able to generate more lifetime value through the additional offline coverage or in-person interactions with these customers. So M&A is definitely one of the potential areas where we can deploy our cash resources. Secondly, I think that we're also very focused on implementing and executing on our new open platform strategy, which we are still in the very early stage, which will require additional capital with respect to increasing our investment in the core platform and technology. And that is reflected in our continued investment in R&D since we have listed this as an IPO. And thirdly, I think that we'll also be increasing investments in our branding and marketing. to further improve our 2C business and to be able to generate more traffic to the platform on an organic basis. I hope that answers the questions, Michelle. Thank you.

Thank you.

We have the next question from the line of Edwin Yu from CLSA. He's asked you a question.

Thank you for giving me the opportunity to ask this question. I am Liu Da, a security engineer at Zhongxin Liang. I actually have a question about storage products. Because the company also mentioned that in the first half of this year, the price of storage and first-year expenses has been increased. So actually, I want to ask you more specifically about storage products. If we calculate the take rate, if the share price is calculated by FYP, So it's good to see that the saving insurance has accounted for larger portion of the FYP. So I just want to understand more about the details of the savings insurance. In particular, if we are to calculate the tech rate with the denominator as FYP, what would be the tech rate level for the savings insurance? And also, if we calculate the cost of revenue percentage of the brokerage income for the savings insurance, what would be the level, especially if we compare to other type of products like the long-term health insurance? Thank you.

Okay. Hi, everyone. Thank you for joining the call again. So on your question on our latest development on the saving insurance product, I think that, first of all, I think it's very encouraging to see that we are making headway into scaling up this portion of the portfolio, not only because of the weakness or softness in critical illness, as we all know in the market, but also as a long-term strategy for us to extract further LTV from our existing users. And also we have touched upon the relatively high proportion of repeat purchases of savings insurance products from our existing users. So I think that that is a very good reflection of our overall business strategy and it's working out fine. With respect to the tick rate or commission rate, I think to put it simply, take an example for our latest endowment life insurance product. I think you're looking at roughly around 10 to 20 percentage points commission rate a bit lower than your typical customized long-term critical illness products. But I think you need to bear in mind also that the average ticket size for these products is quite a lot higher than critical illness products. So I think we've been telling the market and disclosing to the market that on average the CI products we distribute carries around about 4,000-ish kind of RMB ticket size on average. But now we're seeing that the average savings insurance products are going at around 28,000 RMB. So I think despite the relatively lower tick rate, if you will, but the overall economics accretion to our P&L or to our revenue-wise is actually quite promising. that would be the answer to your commission rate or take rate question. In terms of cost, I think that if you look at our Q2 results versus our Q1 on a quarter-on-quarter basis, you can actually see that there's a 5 percentage point improvement on the gross margin. So I think that also is partly due to the reasons I've stated above.

Great. Thank you. It's very clear. Thank you.

Thank you, Edwin.

We have the next question from the line of Alan Fang from Morgan Stanley. Please ask your question.

Hello, Mr. Guan. I'm Alan, a researcher at Morgan Stanley. I have two quick questions. The first is a question from an analyst friend. In the next few weeks, can we continue to look forward to In terms of FYP, there will be a continuous rise in the background of heavy sales. The second question is about our acquisition of Shengshi Ancang's leading online and offline partners. Can you give one or two examples of how exactly the effect of this partner is played out? I will simply translate it. I have two quick questions for management today. So first, should we continue to expect an increase of mix for savings products in the upcoming quarters, given that the critical illness sales are still pretty weak in China? And secondly, so you talk about a lot about the O2O synergies between, in a sense, life in general or agency and your core business. Could you maybe just elaborate and give us a few examples? Thank you.

Okay. Thank you, Alan. Thanks for joining the call again. So two questions here. I think the first question on the proportion or contribution from our savings insurance products going forward in the second half this year. I think you're very correct to point out that it's very likely that we'll see an increasing proportion of contribution from savings products in the third quarter and fourth quarter due to the overall market sentiment around BCI products. And also, I think the consumers right now as a whole is definitely more geared towards consuming life insurance or endurance products. So I think you can also see that we have recently just launched the new retirement annuity product with Sun Life Everbright. So I think that's a very good example of how we are constantly adapting to market changes and also leveraging on our product development expertise to co-develop and work with our insurance carry partners. I think that the endowment life insurance product that we have co-developed with Hong Kong Life has been doing very well in the second and third quarter. And we are already seeing, I think we can also disclose on this call that we are also seeing already sequential growth, quite strong growth in this area. So I think we can expect that there will be a meaningful increase in the contribution from savings in the third and fourth quarter. However, I think that the critical illness products should come back to life, if you will, towards the end of this year. We are also gearing up towards launching a new product in this phase. probably towards the back end of this quarter or next quarter. And I think with the new product launch, we should also be able to drive improved sales in this area, given that we have a more innovative and probably more market-friendly product design features so that we can encourage ourselves, our own consultants, also our channel partners to market and distribute this new product. With respect to the potential integration revenue synergies with the offline agencies at Shem's Life in general that we have targeted, I think that there are a few things that we can probably look forward to. I think the most important thing is that we are able to leverage on the offline presence to serve our customers on an offline context, so not just that we can see them face-to-face, we can further deepen the engagement with them to understand more about the needs and the family's needs, and therefore to have a more insightful customer profile which will feed back to our own consultants for cross-selling and up-selling opportunities. The other thing that we can also derive synergies from is because the comprehensive suite of products that we have on the Playjet platform, we are also able to provide to this offline partner immediately on an overnight basis so that we can empower them with a full suite of products As you probably understand, typically in China, for these regional agencies, they suffer from a relative lack of product supply from the mainstream insurance companies, and also they probably receive less favorable commissions treatment from the insurance carriers. So by plugging into the Huizhe system, obviously we can empower them on the product supply, We also empower them on a digital platform and digital tools to increase the efficiency of the offline agents, therefore to improve productivity further on a per-agent, per-month basis. So I think that will be the overall concept they're looking at with respect to this acquisition. Hope that's clear.

Thank you, sir. Can we go ahead and move to the next question?

Yes, please.

Thank you. We have the next question from the line of Quynh Quynh Mao from CICC. Please ask your question.

我这边有两个问题,第一个问题还是关于这个储蓄型产品的。 我们看到了公司刚刚也提到说这个储蓄型产品的占比有提升。 我想问一下储蓄型产品这个来自老客户购买的占比有多少。 那我先翻译一下我的第一个问题。 My first question is about the savings products. We can see an increase in the proportion of savings products. What percentage of savings products are from existing customers? The second question is, have you seen the drop of CEC due to the headwind posed to online education industry in the second quarter? Thanks. Okay, thank you. Thanks for joining the call.

Two questions here. First question was about the savings product, how much of the FYP is coming from existing users. So I think we have actually touched upon this earlier. We see that in the second quarter, around 31% of our savings product is coming from repeat purchases or existing users on the platform who have purchased a policy with us before. So that's the answer to the first question. And the second question on the traffic cost trend, whether we, the overall, have been facing the education or the ed tech sector. I think that what we have seen here at Quasar is that we do not see, perhaps we have a very different marketing strategy than maybe our peers. And the target customers that the ad tech sector look at is probably not exactly the users that we're targeting. So we do not see a material or obvious impact on where we see cost of acquisition on our platform. Thank you.

Thank you, sir. At this time, I would like to hand the call back to the speakers for any closing remarks. Thank you.

Hi. Thank you. Thank you, operators. Thank you, everyone. So we would like to thank you all for joining the call today. And if you require any further information, please feel free to reach out to us. Thank you for joining us today.

Thank you.

Thank you, sir. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.