Huize Holding Limited

Ladies and gentlemen, thank you for standing by, and welcome to WHOIS Holding Limited Second Quarter 2023 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 reply will be available. Please visit whoisirvc.com. 100-day events and podcast section. I would like to end the conference over to your host today, Ms. Harriet Hu, who is Investor Relations Director. Please go ahead, Harriet.

Thank you, operator. Hello, everyone, and welcome to our earnings conference call for the second quarter of 2023. Our financial and operating results were released earlier today and are currently available on both our IR websites and the newsletter. Before we continue, I would like to refer you to the safe harbor statement in our earnings credit release, which also applies to this cost of making thorough 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 ACP. Joining us today are our founder and CEO, Mr. Tanjin Ma, CEO of Mr. Lead Down. Co-DFO, Mr. Ming Panxiang, and Co-DFO, Mr. Ronald Hamm. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights for the second quarter of 2023. And Mr. Hamm 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. Welcome to Huize's second quarter of 2023. In the second quarter of 2023, the macroeconomic economy will continue to recover. The insurance industry will develop more clearly. The consumer confidence index in the second quarter reached 68.2, which is higher than the same level as in 2021 and 2022. Huize has the opportunity to accelerate the growth of the market. With the advantage of long-term strategy, online and offline integrated business layout, and the leading product innovation and customer capacity in the industry. The second quarter, the whole platform raised the insurance fee to RMB 13.8 billion, which increased by 58% in total. The total profit was about RMB 3.7 billion, which increased by 48.3% in total. After adjusting the net profit to RMB 19.01 million, profit was achieved in three consecutive quarters.

Hello everyone and thank you for joining with the second quarter 2023 earnings conference call. In the second quarter of 2023, macroeconomy continued to recover and operating conditions in the insurance industry continued to improve. The life insurance industry's consumer confidence index reached 68.2 in the second quarter of 2023, which is higher than it was in the same period of 2021 and 2022. Riding on this positive market trend and combined with our competitive age in long-term insurance products, comprehensive online to offline integration, and industry-leading product innovation and customer acquisition capabilities, we reported another set of encouraging results today In the second quarter, total growth return premium, or GWP, facilitated on our platform reached RMB 1.4 billion, up by a considerable 58% year-over-year. Our total operating revenue increased by 48.3% year-over-year to RMB 370 million. We also achieved our third consecutive quarter of non-GAAP net profit, with RMB 19 million in the second quarter.

In terms of product mix,

First year premiums, or FYT, facilitated on our platform increased by 85.2% year-over-year to approximately RMB 900 million in the second quarter. Renewal premiums continue to grow steadily, increasing by 24% year-over-year to RMB 480 million. During the quarter, amid the surge in demand for savings products, we leverage our diversified product offerings and solid omni-channel distribution capabilities to capture the market opportunity. As such, FYP of our long-term savings products increased by 136% year-over-year to RMB 670 million in the second quarter. FYP of our long-term health products also increased by 10.4% year-over-year to RMB 140 million. GWP contribution of our long-term insurance product was 93.6%, marking the 15th consecutive quarter about 90%.

At the same time as high-quality growth, our user image shows youngness, high potential and high connectivity, and user value continues to rise. As of the end of the second quarter, the platform has accumulated about 8.9 million users. Among the long-term users of the second quarter, the percentage of users in cities above the second quarter is 66%, and the average age is 34.4 years old. In terms of first-tier insurance, the long-term salary of the establishment army is about RMB 5,400, which has increased by 56.4% in the same ratio. The salary of the establishment army in Chuxu County has increased significantly to about RMB 60,000. While achieving high-quality business growth, our customers remain young with high potential and high sickness, and we continue to capitalize the lifetime value of our existing customers.

At the end of the second quarter, our accumulated number of insurance clients reached 8.9 million. During the quarter, about 66% of our long-term insurance customers were from higher-tier cities with an average age of 34.4 years old. In terms of FYP, the average ticket size of long-term insurance products was approximately RMB 5,400. up by 56.4% year-over-year, while the average ticket size of savings products was approximately RMB 63,000, up by 43.2% year-over-year. As of the end of May, our cumulative persistence ratios for long-term insurance in the 13th and 25th months remained at industry-high levels of more than 95%.

Taiwan Taiwan We signed a strategic cooperation agreement with Taibao Sanxian and systematically introduced the Hsiao Xin'an No. 3 old age people accident line to provide full accident protection for the elderly community. In August, we signed a strategic cooperation agreement with Taibao Shouxian Hong Kong company and systematically introduced a gold version of a variety currency version for Hong Kong customers. We first realized the service and supply capabilities of Hong Kong城堡 and Baishang Yanglao.

As of the end of the second quarter, we had cooperated with 110 insurer partners. During the period, we continued to optimize our product offerings from leading insurance companies, striving to develop more customized and reliable products for our users. Apart from our strategic partnership with Penang Health Insurance and Penang Property and Casualty Insurance to co-develop Changxiang An, a customized long-term medical insurance product, and Xiaoshentong No. 3, a customized accident insurance product for children, respectively. We also strengthened our strategic cooperation with various subsidiaries of China Pacific Insurance Group. we signed a new strategic partnership agreement with China Pacific Property Insurance and jointly launched Xiao Xin An No. 3, which is a comprehensive accident insurance product customized to meet the protection needs of the elderly. In August, we signed a strategic partnership agreement with China Pacific Life Insurance Hong Kong and announced the co-launch of Jin Ma Yi Zu Multicurrency, which is an increasing whole life insurance product targeting Hong Kong customers. This is an innovative product in the market, promoting the concept of underwriting Hong Kong and retirement in the mainline, representing a milestone in the development of cross-boundary insurance services in the Greater Bay Area.

Agilu, we continue to deepen the integration strategy of online and offline. and achieved stage-proof results. So far, we have equipped 18 provinces across the country with branches that have been approved by the management to fully cover the first-tier cities such as Jingjingyi, Jiangzhehu, and Zhusanjiao. At the A-end, we will continue to explore new technologies and use rich intelligent tools to attract rich agents. We have built our own user management system, Remink, and hot chain system. has greatly improved the efficiency and accuracy of users and services, allowing agents to easily respond to high-speed growth in business and the constant increase in service pressure from the number of trading users. In the future, we will further strengthen the functions of the hot chain system, from pure artificial business clues to AR-supported artificial business clues. In the second quarter, the new unit cost of the A unit line has reached RMB1.6 billion, which has increased by 2.7 times and increased by 1.1 times.

In the second quarter, we continue to deepen the online to offline integration of our insurance service ecosystem, which continues to yield encouraging results. At present, we have opened branches with regulatory approvals self-qualifications in 18 provinces and cities across the country, with a full coverage in major tier one localities, including the Beijing, Tianjin, Hebei region, the Yangtze River Delta, and the Pearl River Delta. In the 2A segment, we kept exploring new technology, and we have empowered independent agents with sophisticated intelligent tools. During the period, we launched RayLink, a proprietary user management system that helps agents manage users more efficiently and effectively, enabling them to scale up businesses and customer bases with ease. Going forward, we will make further improvements to the RayLink system, upgrading it from manual lead management to AI-assisted lead management. In the second quarter, FYP facilitated by the 2A business reached RMB 160 million, up by 270% year-over-year and 110% sequentially. In the first half of 2023, the FYP facilitated by the 2A business amounted to RMB 230 million, surpassing the FYP facilitated facilitated in the whole year of 2022.

At the C-end, HuiZhe has always insisted on using users as the center. Through the detailed integration operation, users of different types and groups, we have done a good job of identifying needs and risks, matching products and services. Second, we have launched a series of sales and delivery mechanisms for new and old users, high-value users, and parent users. private interaction, and health promotion services, which attracted more than 60,000 users to participate in the event, and successfully transferred more than 20,000 users to Tobao. At the same time, we continue to provide professional, fast, and efficient courier services to users. In the first half of the year, we helped 370,000 cases of small horse couriers, and the amount of cases reached RMB 2.9 billion, and re-initiated the small horse assistance service model, widening the service boundary,

In the QC segment, we remain committed to our customer-centric approach and continue to fine-tune our operations to better recognize client needs and risks and provide targeted product and service matching for various customer segments. In the second quarter, we launched a series of brand promotions and customer engagement activities, including company anniversary celebrations and various value-added health care services targeting existing and new users, high lifetime value users, and parent group users. We successfully reached more than 60,000 users through these efforts. and achieved more than 20,000 sales conversions. We also continue to provide users with professional and efficient claims assistance services. In the first half of 2023, the total number of insurance claim cases assisted by Hui Ze reached 37,000, with a total claim settlement amount of approximately RMB 290 million. We further expanded the scope of our Xiaoma Clam Services and offering Clam Sediment Services to a wider range of users in need.

We believe that in the online and offline integration, we believe that in the online and offline integration, we believe that in the online and offline integration, we believe that in the online and offline integration, we believe that in the online and offline integration, we believe that in the online and offline integration, we believe that in the online and offline integration, we believe that in the online and offline integration,

Going forward, we strive to create a win-win dynamic for insurance companies and insurance customers, demonstrating the value added of insurance intermediaries and driving the high quality and sustainable development of the industry. For insurance customers, we will continue to enhance our product and service offerings and strengthen our user engagement and online to offline integration. With a further optimized operational system, sales process, and localized deployment plan, we believe Huize will be able to provide more flexibility to users to choose between online and offline one-stop insurance services. For insurance companies, We will continue to explore new industry dynamics and new growth drivers to help bring down operating costs and improve operational efficiency for our insured partners and empowering them to build a high-quality customer base and deliver top-notch insurance services.

This concludes my prepared remarks for today.

I will now turn the floor over to our CFO, Mr. Ron Temp, and he will provide an overview of our key financial highlights for the second quarter.

Thank you, Mr. Ma and Harriet, and good evening, everyone, in the Asia time zone. In the second quarter, amidst further recovery in consumer confidence and household incomes, the insurance industry in China grew steadily. Sector-wide growth return premiums increased by 22% year-over-year to RMB $900 billion during the quarter. At Fraser, we leveraged on our O2O integrated insurance service ecosystem, and our business growth continued to significantly outpace the broader market. We delivered a 58% year-over-year increase in total GWP facilitated on our platform, which reached RMB $1.4 billion in the second quarter. We have also added about 200,000 new customers to our ecosystem in the second quarter, bringing the total number to 8.9 million at the end of the June quarter. During the quarter, we recorded a non-GAAP net profit of RMB 19 million, marking our third consecutive quarter of profitability and putting us on track to meet the upward revised full-year non-GAAP net profit guidance of RMB 15 million that we have issued in the last quarter. This can be attributed to the successful execution of our key business strategies. First, we continued our strategic focus on long-term insurance products, with GWP contribution from these products remaining about 90% for the 15th straight quarter. Second, we continued to target high-quality, mass-affluent customers and empower insurance agents through our omni-channel distribution platform, rich product offerings, and sophisticated technologies. Our 2A-2C business line remains solid with total FYP of RMB 156 million in the second quarter, representing a year-over-year increase of over 2x and a sequential increase of over 1x. And third, we continue to place an emphasis on optimizing operational efficiency throughout our business, and this can be demonstrated by the improving operating leverage and profitability for the quarter. Some key highlights and takeaways from this quarter's operating results include the following. Total growth rate in premiums increased by 58% year-over-year, reaching RMB 1.4 billion, and this growth was mainly driven by an 85.2% year-over-year increase in first-year premiums, or FYP, as well as a 24% year-over-year increase in renewal premiums. Our persistency ratios for long-term life and health insurance were made at an industry-high level, As of May, the 13th and 25th month persistency ratios are maintained at about 95% respectively. The average ticket size for a long-term savings insurance product increased by 44% year-over-year to about RMB 63,000. These positive metrics reflect our high-quality customer profile and our relentless efforts to enhance upselling opportunities and tap into the lifetime value potential of our customer base. In the second quarter, we solidified our market-leading position in long-term savings products. In particular, the increasing some assured whole life and retirement annuities product categories. The FYP of a long-term savings product surged by 1.4x year-over-year to RMB 665 million. The FYP of a long-term health products also increased by 10.4% year-over-year to RMB 139 million in the second quarter. Looking ahead, we anticipate to achieve a more balanced product mix between the long-term health and savings categories in adaptation with the evolving customer needs. The robust growth in FYP helped drive a 48% year-over-year increase in our total operating revenue, which reached RMB's $368 million in the second quarter. We remain focused on tightening marketing channel costs and optimizing our operations to improve our margins and efficiencies. As a result, our operating costs in the second quarter increased at a slower pace than revenue, rising 40% year-over-year to RMB $244 million, and this has led to a healthy improvement in our gross margin to 34% compared to 30% in the second quarter of last year. In Q2, our total operating expenses continued to decrease, falling by 1.8% year-over-year, resulting in our expense-to-revenue ratio improvement to 32%, in the second quarter from 48% over the same period of last year. Our GAAP and non-GAAP net profit figures were approximately RMB 14 million and RMB 19 million in the second quarter, respectively. At the end of the second quarter, we continued to maintain ample liquidity as demonstrated by our combined balance of cash and cash equivalents of RMB 248 million. We have continued to repurchase shares from the open market under our assisting share repurchase mandate. And as of the end of the June quarter, we have repurchased an aggregate of approximately 1 million ADSs, demonstrating our continued confidence in the business prospects and the long-term growth prospects. Moving forward, leveraging our continued investments in generative AI technologies will further improve operational efficiencies across our business value chain. strengthening the integration of our O2O ecosystem, enriching our product and service offerings across all scenarios, and empowering our agent and insurance partners with technology enhancements. These efforts should help us gain market share and solidify our position as a top-tier digital insurance product and service platform, and ultimately striping to enhance shareholder value and achieve sustainable business resilience. Now turning to our outlook for the year. While we remain cautiously optimistic regarding the macro and insurance industry outlook in China. In light of the better than expected results in the first half and our strong execution in acquiring high quality customers from the market, improving cost efficiencies and enhancing customer engagement, we once again revised our outlook guidance upwards and currently expect to achieve a non-gap net profit of not less than RMB 60 million in 2023. And with that, we will now open up the call to questions. Thank you and over to you operator.

Ladies and gentlemen, we now begin the question and answer session. If you wish to ask a question, please press star 11 on your telephone. Please can you state your question in Chinese first and English translation after. We are now taking the first question. Please stand by. And the first question from Coco Gong from MS. Please go ahead. Your line is open.

Hi. Oh, thanks. So I also want to ask the management team about the third quarter and the first half of last year, because the sales situation of the first half of this year should be relatively good. So I want to ask the management team about the sales situation of the third quarter, including the sales situation and the sales situation of the first half of next year. And then the other one is also about the construction of our entire Big Bay area. Hi, everyone. I'm from Morgan Stanley. So congratulations to the management on the very good results. So I have two questions. And the first one would be on the product transition and product performances potentially in the third quarter and first half of 2021. next year because of the pressing interest rate cut on basically August 1st. So we're wondering if, you know, management sees any sort of potential product transition and how the performance will be in third quarter. And because of the high base this year, how is management thinking about moving forward into next year first half? That's the first question. And the second would be what ways of strategy in Great Bay Area Given that, you know, the new products which launched with CPSC Life Hong Kong and overall, what would be the outlook and strategy for this opportunity area? Thank you.

Thank you for the question, Coco. It's Ron here. So regarding your first question on the outlook for Q3, I think indeed the 3.5% pricing products have came off the shelves recently. effective from August 1st. In Q3, we do have the month of July contributing to our Q3 results. So we can say that the July sales numbers are quite strong across the board. And I think as one of the leading participants in this industry, I think we also have benefited from good sales in July. In the fourth quarter, I think over the next two quarters, I think the overall industry is going through an adaptation phase. with respect to the product structure. I think the mainstream opinions on this topic is highly topical right now. A lot of people are discussing what's the more mainstream product that will be coming to the market in the next two quarters. I think a lot of the insurance companies now have rolled out the 3.0% pricing product already. This will be the traditional type products increasing some assured with guaranteed 3% or close to 3% RRR, should I say. There's also an anticipation of rollout of participating products with variable returns with a slightly lower 2.5% guarantee, but variable returns depending on investment performance. So I think the whole industry is still going through this adaptation right now. It's a bit too early to tell, but we do think that the overall savings product category will continue to be well received by the average insurance customer in China, mainly because of the continued anticipation of a declining rates environment, leading to the relative attractiveness of these savings products that continue to have an appeal to customers versus other wealth management alternatives in China, for example, bank deposits and other wealth management products in the market. So our anticipation is that the savings product category would continue to perform well, but then over the medium term and long term, but then in the short term, there will be a slight lukewarm market demand for such products, particularly on the back of the strong sales in the second quarter and the month of July itself. So that will be the outlook for the product perspective. And the second question on the Greater Bay Area business plans for ourselves. I think overall, we have been in the industry for 17 years already, and we have the benefit of geographically being located in the center or the heart of GBA in Shanghai, Shenzhen. So we sit right in the center of the whole GBA region. So with the open up the borders of Hong Kong this year, we are now capitalizing on this new opportunity on potential cross-border activities. And this latest product launch that we have achieved with CPIC Hong Kong Live is a good testament of our continued innovation to provide the right products for the customers in our respective markets. And this marks our first foray into the Hong Kong market with this product targeting Hong Kong customers and also new immigrants into Hong Kong from China. These two sets of customers are our prime target customers for this product, and we do believe that with the long-term trends of retirement demand from the Hong Kong residents in the Greater Bay region, we believe that this product would address this market niche very precisely, and we do have a very strong anticipation for the sales of this new product with CPIT in Hong Kong.

Thank you for your question. We're now taking the next question. And the next question from Mindy Gao for CLCA. Please go ahead.

Yeah, line is up. Thank you for giving me the opportunity to ask this question. I'm Mindy from CLCA. I have two questions. The first question is about the trend of the interest rate. I would like to ask how the management thinks about the trend of the interest rate in the second half of this year and the reasons behind this judgment. The second question is about the overseas expansion plan of the company. I would like to ask the management to share more information on this aspect with us. And the answer is Thank you for taking my question. This is Mindy from CLSA. My first question is about the growth margin trend. So I wonder how do you see the trend of growth margin in the second half and the rationale behind? So my second question is... about your overseas expansion plan. So can you share with us more color about Huesa's overseas expansion plan, and when do you expect to see a more meaningful revenue contribution from this part of business? Thank you.

Thank you, Mindy. It's Ron here. Two questions. The first question on our gross margin outlook. I think we have been demonstrating that we have achieved cost efficiencies throughout our business lines. And as a result, our growth margin for the second quarter has improved by almost 4 percentage points from the same period last year. I think we continue to strive to maintain growth margins at the current level through three main areas. One is we continue to have a very disciplined cost control on our marketing spend, on our customer acquisition channel cost. We have actually been quite stringent on our direct acquisition budgets. We have been quite focused on harvesting our existing customer base as well in terms of repurchases. We have actually achieved more than 3% repurchase rate from our direct to C business line in this quarter. So this demonstrates that we have been able to achieve premium growth for my existing customer base. And we balance that very carefully with new customer acquisition spend to attract new customers. Secondly, I think we continue to invest in the technology and we have been also deploying more capital into AI efforts. I think we are expecting to yield efficiency enhancements again on many aspects of our business across the value chain. So that will be a second measure. And I think a combination of these measures and strategies will help us maintain our growth margins at the current level. So that will be the answer to your first question. There's a second question on overseas expansion. I think Hong Kong is the first destination in terms of international strategy or expansion. Hong Kong is a natural extension for our mainland China business because Hong Kong, we do have a very good opportunity in the overall MCV business in the Hong Kong market. This is a $40 billion Hong Kong dollar market pre-COVID, and we expect that to be around 80% or 100% recovery this year. So as a major player in the mainland Chinese insurance brokerage industry, with the brand recognition that we have with many of the Hong Kong local residents who have a linkage with mainland China. We believe that our brand equity was able to help us achieve a decent market share in the Hong Kong local market as well. So we are targeting to become a top-tier broker in the Hong Kong market in the next three years and to achieve a meaningful market share as well in the MCV business and also for the local Hong Kong market business. And I think on the back of the Hong Kong expansion, we are looking into potential investment opportunities in Southeast Asia. We are now currently in the feasibility study stage. We are in preparation for a potential rollout of our business across the region. But right now, we are still in the early phase of identifying opportunities and identifying potential joint venture partners in targeted countries in Southeast Asia.

Thank you for your question. As a reminder, if you wish to ask a question, please press star 1-1 on your telephone. Please press star 1-1 if you wish to ask a question. We are now taking the next question. And the next question from Michelle Ma from Citi. Please go ahead. Your line is open.

Thank you for giving me the opportunity to ask this question. I'm actually quite interested. We just talked about some topics related to AI. I'd like to ask Mr. Ma, how do you look at insurance technology? We also see that some of the giants in the industry have actually invested a huge amount of money into it, including products. And now it may be better to return to the construction of channels. How do we see the advantage of the first or second generation in the insurance technology? How do we see and think about this issue? And then the second one is a small problem, which is what we see in the numbers. The tick rate is decreasing, and then our entire payback rate is actually pretty good, including the brokerage income, which is also pretty good. But if we compare it with the first quarter, we can see that some of our other costs are growing faster. The first question is about our thoughts on Asia Tech. So for smaller players, should we think about a first mover or early mover advantage, or we should follow the steps of those industry chains for Asian techs for Asia Tech consideration so just want to have a sense of the management thoughts on this issue and the second thing is about the operating leverage and we are seeing some deterioration in the operating leverage but with I think a very promising net profit outlook for Houyi and for the second half this year so Will Hui Ce return to a path to continue expansion or we should pay more attention to the cost control? And how about the revenue growth outlook in the second half? Thank you.

Thank you, Michelle. I'll take your questions. So the first question on AI, I think I think the way that we look at AI is we don't really see it as a first mover or second mover. I think the more pertinent question is for AI to really work for any particular company in their respective industry vertical, I think the key prerequisite is you have data in the platform. You have the right data in the platform to help you deploy AI technology to improve efficiency. So to that regard, I think what we have is we have over 17 years now of transaction data, and this encompasses pre-sales consultation conversations because we have a real-time compliance monitoring system, as you all know. So we have a lot of daily conversations between our consultants and the end customers as data to be fed into AI training models. We also have a lot of underwriting data. We have also claims processing data. As you understand, we have Xiaoma Li Pei, the Xiaoma Claims Service. So therefore, we actually have accumulated a lot of this data. So all this is actually helping us to effectively train any kind of AI algorithms internally so that we can potentially derive game-changing AI technologies to be deployed in-house. So I think that to the extent would be the answer to your first question. I think we have the natural advantage to deploy AI because we hold proprietary data within our ecosystem, within our platform. And hopefully, over the next six to 12 months, we will be able to release to the market or to announce to the market some milestone achievements in this regard. So in relation to your second question also, some expenses might have creeped up in the second quarter, but we still intend to maintain cost discipline very, very rigidly to the extent that the macro economy in China, as everyone is well aware, is still relatively challenging, although overall it's in a recovery mode. I think most industry participants remain cautious the outlook. We do think that the overall business dynamics with respect to Huesa continue to be very solid and resilient and sustainable as we have proven over the last few years now, starting from COVID, where everything needs to be happening online and we have a natural advantage being an online native platform. And over the last one year or so when Chinese economy has been negatively impacted by restrictions relating to COVID, leading to much dampening in consumer confidence and demand. We have been able to ride through these cyclical challenges and have emerged since the fourth quarter of last year, being profitable for three consecutive quarters. So I think the overall trajectory is, in terms of medium to long term, as an insurance intermediary, As a leading player in this space, we have very positive outlook in the long term in terms of the market share of a digital brokerage like ourselves with the increasing separation between the distribution and the product manufacturing in China. The single digit percentage market share of insurance brokerage should go up to more of double-digit as we have seen in the advanced economies. So I think that would be the overall outlook on that front. The second half of this year, we are constructive. I think there will be some product transitions in this period. Everyone is anticipating that. But at the end of the day, I think it depends on what the customer's in the market with demand. I think that savings product would continue to be the mainstream product in the insurance industry. And we still hold an advantage in customizing better and newer products with insurance companies. And we already have a backlog of new products to be launched in the Q2 and Q4 when the time is right, which would be suitable for the average customer in the new environment. Thank you.

Thank you for your question. I will now hand the conference over to Ms. Seijie Tu for closing remarks.

Thank you, operator. On behalf of Huizhou's management team, we would like to thank you for your participation in today's call. And if you require any further information, please feel free to reach out to Huizhou IRT. And thank you all for joining us today. This concludes the call.

And that concludes the conference for today. Thank you for participating. You may hold this connect.