Huize Holding Limited

Ladies and gentlemen, thank you for standing by. Welcome to Hui Ze's second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the management's repair remarks, we will have a question and answer session. Today's conference call is being recorded and a webcast replay will be available on Hui Ze's website at ir.huize.com under the events and webcast section. I would now like to hand the conference over to your speaker host today, Mr. Kenny Law, which is Investor Relations Manager. Please go ahead, Kenny.

Thank you, operator. Hello, everyone, and welcome to our second quarter 2024 earnings conference call. Our financial and operational results were released earlier today and are currently available on both our IR website and global newswire services. 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 filings with the SEC. Joining us today are our final and CEO, Mr. Chen Junma, COO, Mr. Li Jian, Co-CFO, Mr. Min Hangxiao, and Co-CFO, Mr. Ron Tam. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights, followed by Mr. Tam, who will go over our financial results for the quarter before we open up the call for questions. I will now turn the call over to Mr. Ma.

Hello everyone.

Welcome everyone to the second quarter of the year in 2024. Since 2024, due to the change in the habits of residents' consumption habits, the influence of interest rates decline, and the influence of violence and unity, the Chinese insurance intermediary industry has experienced a critical stage of transformation. At the same time, the potential of the Chinese insurance market is still huge. As the policy of supervision continues to fall and the guidance of the regulations is clear, industry-based opportunities and challenges. In the context of this change, WIZER actively responded to the overall wave of the industry in the second quarter of 2024, adhering to the supply of diverse products and the innovation of customized products, and at the same time the ability to distribute all channels. We continued to advance the construction of AI capabilities, focusing on serving high-quality customers, and at the same time continuing to expand the international layout to firmly grasp the strategic development opportunities of the global market in the second quarter, Hello, everyone, and thank you for joining Huijia's second quarter 2024 earnings conference call.

Throughout the year, China's insurance intermediary industry has been undergoing a pivotal transformation, driven by changes in consumer behavior, declining interest rates, and the implementation of the unified commissions and fees in reporting and underwriting. Despite these changes, the potential of the Chinese insurance market remains immense. As new regulatory policies gradually take effect and guidelines become increasingly clearer, the industry is presented with both opportunities and challenges. In response to the industry-wide volatility in the second quarter of 2024, we proactively adapted to market conditions by offering a diverse product mix, driving innovation in customized products, and strengthening our omnichannel distribution capabilities. We also continue to advance our AI capabilities, prioritize serving high-quality clients, and expand our international presence to capitalize on regional growth opportunities. In the second quarter of 2024, total gross region premiums or GWP, facilitated on our platform reached RMB 1.34 billion, with total revenue amounting to RMB 280 million. In the second quarter, the platform contributed RMB 6.5 billion to the first-tier health insurance.

In terms of the structure of the previous product, the long-term health insurance's first-tier health insurance amounted to about RMB 1.2 billion. The growth trend has been maintained throughout the year. The long-term risk of new orders is about 3.8 billion yuan, which is 5% higher than the second quarter. The next quarter's insurance fee is about 6.9 billion yuan, which is 42.8% higher than the second quarter, reflecting the continued growth and strategic positioning of the long-term risk market. Due to this strategy, the second quarter's long-term risk of business insurance has reached 91.3% and has been higher than 90% for 19 consecutive quarters. At the same time, In the second quarter, our total FYP facilitated on the platform amounted to RMB 650 million. From a product mix perspective,

Our long-term health insurance FYP amounted to RMB 120 million, maintaining a growth trend throughout the year, while FYP of long-term life insurance grew by 5% year-over-year to RMB 318 million. Renewal premiums reached RMB 690 million in the same quarter, up 42.8% year-over-year, reflecting our continued strategic focus on long-term insurance. As a result, long-term insurance premiums accounted for 91.3% of total GWP, marking the 19th consecutive quarter with this number standing above 90%. Moreover, our short-term insurance business also maintained positive momentum, with FYP increasing by 32.5% year-over-year to approximately $120 million, further reinforcing our diversified product offerings.

Huize has always been the core of high-quality users, dedicated to providing customers with high-quality service experiences. In the second quarter, we successfully attracted more than 70,000 users to participate through monthly management, private interaction, holiday promotion, and member day activities, and transferred more than 30,000 users to Tuobao. At the same time, we continue to provide users with professional, fast, and new Li Pei services. In the first half of the year, Xiaoma Li Pei assisted 80,000 cases,

Poison remains dedicated to serving high-quality customers by delivering superior service experiences. Throughout the quarter, we have launched a number of marketing initiatives, such as monthly marketing campaigns, company anniversaries, festivals, celebrations, and membership day events. We successfully reached more than 70,000 users through these efforts and achieved more than 30,000 sales conversion. We also continue to provide users with professional and efficient claims assistance services. In the first half of 2024, the total number of insurance claim cases assisted by Huizer reached 80,000, with a total claim settlement amount of approximately 400 million.

9.8 million, 24 million new insurance users, of which the average age of long-term insurance users in the second quarter is 34.7 years old. The ratio of users in the second and above cities is about 66.3%, maintaining a high-quality customer group image. In the second quarter of the UN Security Council, the number of candidates in the second quarter reached 7.8 million, which increased by 22.7% in total. The process of salary users shows continuous documents, As of the end of the second quarter, our cumulative number of insurance customers has grown to 9.8 million, with 240,000 new customers added during the quarter.

The average age of long-term insurance customers was 34.7 years, with 66.3% from higher-tier cities, maintaining a high-quality customer profile. Furthermore, the average FYP ticket size of savings products reached around 78,000, up 22.7% year-over-year. Our customer retention rate have also remained stable, with repurchase rates of long-term insurance customers reaching 40.5%, a year-over-year increase of 6.5 percentage points. As of end of June, our cumulative persistence ratios for long-term insurance in the 13th and 25th months remained at industry high levels of over 95%.

will maintain a stable cooperation relationship with 125 insurance companies. Under the double-D background of low interest rates and low risk, to meet the needs of users' supply and demand, and to achieve the growth of asset value, in April of this year, we launched a limited-to-priced life-saving service, Fumanjia, which was widely recognized after its launch. At the same time, with the deep insight and stable operating capacity of the market demand, will continue to launch the continuous upgrade of existing products. In July this year, we jointly recruited businessmen and people to launch the No. 3 Shao'er Major Disease Insurance. In the course of continuing the IP consistent high-performance ratio, we target the needs of users in detail and further optimize the security details. In September this year, we carried out the 14th supply of the D'Arwen series. The company has introduced the No. 10 Major Disease Insurance, which expands the scope of insurance to 185 major diseases, and adds more selectable insurance plans and additional recovery scenarios to meet the needs of customers who are constantly evolving. In the second quarter, the ratio of new single insurance fees from customized products reached 41.2%, which increased by 16.9%, and increased by 18.1%. As of the end of the second quarter, we had cooperated with 125 insurance companies.

In response to the low interest rate and risk adverse environment, we quickly adapted to meet customers' needs for inflation hedge and asset preservation. In April, we partnered with to launch a customized participating whole life insurance product, Fumenjia, which has been widely recognized since its introduction. Building on our deep market insights and operational capabilities, we continue to iterate and upgrade our existing products. In July, we partnered with China Merchants Life Insurance to introduce Xiaotiaoqi No.3, a child critical illness insurance product. While maintaining the IP's cost effectiveness, we focused on addressing users' refined needs by further optimizing coverage details. In September, we launched the customized Darwin Critical Care Number 10, marking the 14th iteration of our Darwin Critical Illness Insurance Series. This latest version expands coverage to 185 major critical illness and provides more option coverage plans and additional payment scenarios to address customers' evolving needs. As of the end of the second quarter, customized product accounted for 41.2% of the total FYP, representing a year-over-year increase of 16.9 percentage points and a quarter increase of 18.1 percentage points. This fully demonstrates Huijie's leading product innovation capabilities as well as users' recognition of Hoidest's customized products.

The company has been constantly receiving encouraging news in the international business. Due to the company's strategy of actively landing international business in the past year, in the second quarter, the international business's contribution to total revenue has been further increased to 11%, achieving the initial goal of double-digit contribution. In addition, we achieved another milestone in international expansion in the second quarter, Polyinsurtech, an international brand under Huize, has successfully acquired the leading digital insurance platform, Globcare, in Vietnam. This not only marks the official entry of Huize into the second international market, but also the important component of our long-term strategy in Southeast Asia, which has accelerated our mission to build a digital insurance technology platform in Asia. Vietnam, as a new insurance market, has a large, young, The high-end digitalized population base shows a huge market potential. We believe that Huize will use its excellent technical strength, strong business ability, and rich experience accumulated in the Chinese market to bring unparalleled competitive advantages to bilateral cooperation. On the one hand, Huize will attract rich people to global care and lead the digital transformation of the Vietnamese insurance market. On the other hand, global care will expand diversified market income for Huize, The company has seen encouraging progress in its international business. Thanks to the implementation of our international strategy over the past year, international business contributed 11% of total revenue in the second quarter.

hitting our initial double-digit target. Additionally, Hoyge's international brand, Pony InsurTech, successfully acquired Vietnam's leading digital insurtech platform, GlobalCare. Marking another milestone in our overseas expansion, this marks not only Hoyge's official entry into its second international market, but also forms a key part of our mid- to long-term strategy in Southeast Asia. accelerating our mission to build a pan-Asia insurtech platform. Vietnam, as an emerging insurance market, is experiencing robust economic growth and boasts a large, young, and highly digitalized population base, demonstrating tremendous market potential. We firmly believe that with Huizhi's outstanding technological capabilities, strong business expertise, and extensive experience in the Chinese market, we will create unparalleled competitive advantages for both parties. On one hand, Huize will empower global care, driving the digital transformation of the Vietnamese insurance market. On the other hand, global care will help Huize expand diversified market revenue and contribute to building a global recognized brand.

2024 is a year of rapid change in the market environment. But Huize, through deep understanding of the market, continue to make appropriate business adjustments. We remain flexible and resilient in a market full of challenges. At the same time, the initial results are also shown in the international business layout. In the future, with the official arrival of the second generation of insurance policy, the spring and red line insurance products are expected to meet the strong demand for return, and become mainstream products in the market. We will closely cooperate with insurance companies to fully play out our own resource advantages, to launch and promote risk-free products that are more in line with market needs to ensure the stable development of business under a new policy environment.

2024 has been a year of rapid changes in the market environment. However, leveraging on Huizi's unique market insight and continuous operational adjustments, we have remained flexible and resilient in this challenging market. At the same time, our international business expansion has begun to show promising results. Looking ahead, with the official arrival of the 2% era for guaranteed interest rates on insurance, participating insurance products are expected to experience a strong rebound in demand, becoming the mainstream products in the market. We will work closely with insurance companies, leveraging each other's resources and strengths to launch and promote participating products that better align with market needs, ensuring sustainable growth under the new regulatory environment. This concludes my prepared remarks for today. I will now turn the call to our CFO, Mr. Ron Tam, who will provide an overview of our key financial highlights for the second quarter.

Thank you, Mr. Ma and Kenny, and good evening everyone in Hong Kong, Asia time zone, and good morning everyone in New York, US time zone. I guess to open the discussion here, I guess the challenging industry landscape is quite well known to the market for the second quarter, and I guess considering the high base effects for year-over-year comparisons, We have delivered a pretty resilient set of results for the second quarter, with total GWP facilitated on our platform essentially flat on a year-over-year basis at RMB 1.34 billion. Our relative outperformance against the overall intermediary industry's average was largely attributable to the differentiated omnichannel distribution capabilities of our platform model, which covers both online and offline channels, our continued acquisition or the ability to acquire high-quality customers, our industry-leading product innovation capabilities, and an increase in revenue contribution from our international market. From a product strategy perspective, we continue to strategically focus on long-term insurance products, which account for over 90% of our GWP during the second quarter. Our open platform model continues to empower our internal financial advisors, our distribution channel partners, and also the IFAs, in the market is an omnichannel distribution network, diversified product matrix, and our proprietary AI productivity tools. We further deepened customer engagement across our direct-to-customer segment with the repurchase ratio for our long-term insurance products during the second quarter increasing by 6.5 percentage points year-over-year to 40.5%. This metric actually Therapy underscores our ability to upsell and also cross-sell our customer set and capitalize on the LTP potential of a high-quality customer base. We continue to leverage on our proprietary AI solutions that we developed in-house to streamline operations and to enhance operating leverage and efficiency. In the second quarter, our GWP productivity per employee has improved by 10% year-over-year, reaching RMB 1.4 million per employee. As we look at our operational results, I want to highlight several key achievements that drove our solid performance in the second quarter. Number one, renewal premiums increased by 42.8% year-over-year to approximately RMB 685 million. As of the end of June, our 13th and 25th month persistency ratios for long-term life and health insurance policies remain at industry high levels of over 95%. And thirdly, Average ticket size for our long-term savings products have reached a record high of over RMB 77,000 in the second quarter of 2024, which is up by 23% year-over-year, reflecting increased contribution from premium product sales in our international market segment. We continue to pursue a balanced mix between long-term health and savings products categories. The FYP from our long-term health products increased by 29% sequentially to RMB 124 million, primarily driven by our customized products with top insurers, including Ping An Health Insurance and CPIC. At the same time, contribution from short-term health and P&C products maintain a stable growth momentum, with FYP from this segment increasing by 33% year-over-year to 116 million RMB. FYP from international business also grew by 34% on a sequential basis, Thanks to the improvement in overall take rate of the product mix, as well as our strategies in controlling channel distribution costs and the increase in repurchase rate from a direct-to-consumer segment, our overall gross product margin has improved by 2.3 percentage points, sequentially to 31.3% in the second quarter of 2024. Our financial position remains very robust, with a combined balance of cash and cash equivalents of RMB $236 million or US dollar equivalent $33 million as of the end of the second quarter. Our omni-channel distribution platform and proprietary AI productivity tools are strengthening our customer acquisition and engagement capabilities and streamlining operations. We've added about 240,000 new customers to our platform in the second quarter, increasing the total customer count to 9.8 million as of the end of the June quarter. We currently expect our platform to reach an important milestone of 10 million customers by the end of this current quarter, quarter three. Moving forward, we will leverage on unique customer insights and our AI capabilities to further enhance product innovation and create additional upselling and cross-selling opportunities. We'll continue to empower insurance agents, IFP partners, and distribution partners with an optimized omnichannel platform, rich product offerings, and advanced AI tools to support customer acquisition and engagement. We'll continue to capitalize on the long-term growth opportunities in Asia's insurance industry We further expanded our overseas presence by adding headcount to our international sales force and drove the promotion of premium products to satisfy robust demand for high-value customers. Again, total international revenue contribution has accounted for 11% of total group revenues in the second quarter, which is up from 7% in the first quarter. Looking overseas, we'll continue and further allocate adequate resources to strengthen our international brand, Pony InsurTech. Following the acquisition of GlobalCare, our priority is to replicate a proven insurance technology ecosystem model in the local Vietnamese market. We have already begun to work closely with the local team to accelerate growth by innovating customized insurance products, distribution partnerships, innovating technological advancements to the platform, and deployment of our AI capabilities. In parallel, we are actively exploring under-penetrated markets across Southeast Asia to further expand our footprint. This initiative is expected to drive new growth, diversify revenue streams, and enhance long-term value for our shareholders. We are targeting to enter two additional markets in the next 12 months and to drive international revenue to contribute 30% of group revenues by 2026. In summary, the shifting industry landscape in our home market of China is driving the healthy and sustainable growth of the entire insurance value chain. In the medium term, we anticipate industry consolidation opportunities would emerge, which would benefit leading players such as ourselves. We are confident that our strategies will solidify our position as a leading insurtech platform in Asia, connecting consumers, insurers, and distribution partners digitally and efficiently via our data-driven and AI-powered solutions. And with that, we will now open up the call to Q&A. Thank you very much to the operators.

Thank you, Manish. We will now begin the question and answer session. To ask questions on the phone, please press star 11 and wait for a name to be announced. To cancel your request, please press star 11 again. There'll be a short silence while questions are being collected.

One moment for the first question.

Our first question comes from the line of Amy Chen from City. Please go ahead.

Hi, I have three questions. The first one being the guidance, management guidance on earnings and expenses. We see that in the second quarter this year, actually, there has been some year-over-year increase in the G&A expenses, as well as share-based compensation. Full year-wise, how should we think about expenses, as well as net profit? The second question is on socio-premium trends. We see that in the second quarter this year, there has been some deceleration. And this is similar to the industry-wide And we also understand there has been some disruption from the regulatory side due to the rationalization of the commission rates in the broker channel. However, is there any reason behind muted FYP growth? And looking ahead to the third quarter, how is the FYP growth trend? The third question is also related to the regulatory trend. On the rationalization of brokerage channel commission, how has the product changed for Huizi after the regulatory change? Thank you.

Thank you. Thank you, Amy, for joining us again. So to address your first question on the guidance for earnings and sub-expense items, I think you have rightly noted that in Q2, we have some reversals or upticks in certain expense categories as it relates to a share-based compensation. And the primary reason is that we have issued a new round of options to our ESOP plans in the first quarter. And in the second quarter, our share price has rallied, you know, quarter on quarter. And due to accounting, you know, policies for the calculation of the SPC, the expense item has increased in a sequential basis. So we do expect that to be – first of all, the SPC is a non-cash item. It does not affect cash flows. And second, I think overall the expense ratios should revert to more at the Q1 level of this year going forward. So that's the answer to your first question, Seth. Your second question on FYP trends. I think in Q2 we have obviously been impacted by the rationalization of public commissions, the regulatory policy. And that's not just the only reason. And the other reason that has an impact on overall customer demand is due to the pricing rate. Expected pricing rate change in the third quarter of this year, which has just happened in August 31st, whereby the mainstream products that was priced based on a 3.0% interest rate is going to be reduced to 2.5% from September 1st. So what that means is that a lot of the customer demand has been shifted or pushed back to Q3 from Q2 as people expect that policy to be in effect by August. So that has resulted in a depressed FYP environment in Q2. And based on that and on the back of that explanation, in Q3, we are expecting an uptrend on FYP. especially in the savings product category due to the pushback demand and the overall industry's push for distribution in the month of August particularly. So that will be the answer to your second question. With regards to the third question on the regulatory impact on product mix, I think that overall right now in this current economic climate in China, consumers are still relatively more, you know, the propensity to purchase savings products is still very keen due to the declining interest rates environment. The attractiveness of par products, for example, is becoming increasingly attractive from a yield differential comparison perspective. And the lack of good fixed income alternatives or investment product alternatives in the local domestic market should drive the further popularization of power products going forward. So in terms of product mix, what we would expect in the coming quarters is the increasing contribution from participating products, you know, as people are more educated about the product. And, you know, we are actually one of the first online or digital brokers to customize a power product with a leading insurance carrier actually in the second quarter. We have partnered up with Aviva COFCO, which we just mentioned in the opening remarks by Mr. Ma, that we have come up with a customized PAR product, which would meet the current market requirements for better returns, and at the same time, helping insurers manage the asset liability exposure in the longer run. So we do believe that the PAR product will become mainstream as we move forward in the next one, two, three years. And as the market increasingly gets more educated about this product, and also with offline agents or tight agents promoting this product, this will become the mainstream. In quarter two, we also managed to increase our product mix as it relates to production products. That's on the back of our customized products you know, partnerships with two leading insurers. One is Ping An Health and the other is CPIC. And these two customized products have also helped us deliver a good improvement in the protection category. So overall, that has contributed to, again, a better take rate and to mitigate against, you know, the negative impact on commissions as it is brought by the regulatory train on the rationalization of brokerage commissions. So that will be my answer to your questions, Amy. Thank you.

Thank you, Ron. That's very clear.

Thank you for the questions. Once again, to ask questions, please press star 11 and wait for our name to be announced.

One moment for the next question.

Next question comes from the line on Michelle Ma from City. Please go ahead.

Thank you. This is Michelle from Citi. I just have one question on the business strategy because Ron just mentioned I think the company target to enter into two new markets in the near future. Can we have some, you know, could you shed some light on the new business initiatives, and also I am trying to understand why we would like to enter into multiple overseas markets in a very short time. In a very short time, given each market they have very different regulatory environment And why not just delve into one market and develop some business and then enter into another one? So could you share some life on this? And I also want to ask, because insurance is a security industry, why don't we choose to do it in a foreign market that we are not familiar with, and then go into other markets one by one, instead of doing it in different places at the same time, Thank you, Michelle.

Great questions on the strategy on the international front. I guess my answer to your question would be, we have been quite encouraged by our initial results, obviously, in our first international market, which obviously is Hong Kong, and our business in Hong Kong has been tracking quite well, and that has encouraged us to further pursue other markets. Vietnam is something that actually has been in the works for almost one year. Actually, when we closed the transaction two weeks ago, it's almost the first year anniversary of our first contact with the target. And the reason for Vietnam, I think it's quite obvious. It's basically very much a parallel to the Chinese market perhaps maybe 10 years ago. And I think we have seen and we have grown from 18 years ago in China to where we are today. And we can kind of envisage the kind of growth trajectory and the business development that would likely to take place in that market because it shares a lot of parallels with the Chinese market. We take a very flexible approach as to our international strategy. You know, in Vietnam, obviously, it's a buy and build. It's not a greenfield expansion. It's a M&A transaction where the target is very much similar to our crazy business model. It's very much like a Vietnam version of us. And we believe that the chemistry is very, very aligned and with our existing and proven product stack and technology platform, we can quickly replicate our business over there. And the transition size obviously is also quite small. And from a financial and risk perspective, it's very much managed. And we have a lot of confidence that M&A, the integration and the synergies would be very positive for the group. As for the two new markets, obviously we are looking across RCI markets, and likely these will be the growth markets in the form of Philippines, Indonesia, and Singapore. These markets are our target markets right now, and I guess Singapore would be a similar story to the Hong Kong expansion. We believe that some high-value customers will be attracted and the product connectivity and the products that Singapore can offer will provide a lot of potential for existing customer base. And then for Philippines, I think the analogy is with Vietnam, albeit Philippines might be even a little bit more frontier in some ways. But in that market, or in all markets that we talked about just now, in the growth markets category like Vietnam, our strategy would be to find a strong local partner with existing resources. So in markets like Indonesia and Philippines, what we'll be likely to do is to form a joint venture with an established local group, whereby the local partner will take care of the regulatory and the local resources. And from our perspective, we will do what we are very best at, which is to empower the business with our technology and our product know-how. So that is really the overall business strategy around the internationalization part of the business plan. We will always start with what we're really good at in our domestic market. We will try to replicate the proven successful formula and to localize it with respect to each local market's culture, each local market's best practices and local regulatory regimes. And in all these growth markets, we will seek a local partner who are very well-versed and very well-experienced in the local market business dealings. So I guess that would be my answer to your question, Michelle. Thank you for the question.

Thank you.

One moment for the next question. Next question comes from the line of Ray Kuo from CICC. Please go ahead.

Okay, thank you. And my question, I only have one question, but a larger company to develop more customized products since the industry might go into tend to sell more participation products and introduce more or introduce some new participating customized products in order to to reverse the product mix to the participating product.

Thank you. I couldn't really catch your question, just how the line has been a bit unstable. Could you kind of repeat?

Yes, can you hear me now? Yes, my question is, does the company then choose introduce some more customized products, especially participating products.

Okay, got it. Thank you. I guess over the past six, seven, eight years, I guess one of the key differentiating competitive strengths that our group has is in the area of co-developing products with our insurer partners. I think, you know, if you look back at 2020, when we just IPO'd our company, back in those days, we're mainly doing protection products. You know, we're mainly focusing on critical illness products customization. And then as we move forward to 2021, 2022, the market has evolved into an era of savings products. And we have very much quickly adapted to the changing market environment and customer preferences and we have rolled out you know endowment insurance customized products annuities and so forth and also for different demographic groups you know we have subcategories for you know the children and for the young adults and even for the elderly so optimal health groups so as we move into you know the new interest rate regime in China What we can envisage is that, drawing from the experience from Japan in a similar context, we are very confident that the power products will become the mainstream products here. And again, we have already come up with the first customized product in the second quarter with Afevo Copco, which is very much a leading a brand in the China market. It's a joint venture between the SOE, COFCO, and Aviva Group, which is a UK insurer, and with purchase capital of 2.9 billion RMB. So the strategy right now for us is to always innovate and come up with customized products which help address the requirements on the three main stakeholders involved, which is the consumer at the end, and also the insurers, and also the intermediary, which is ourselves. With all three stakeholders' interests taken care of, the product can, only that the product you know, can distribute well. So we have, you know, obviously accumulated very strong experience in this product customization expertise. And, you know, in Q2, we have already come up with the first version of the power product, and we will continue to come up with more and more products to address, you know, changing market environment and consumer preference. And so that we can make sure that all the stakeholders would come out and win in terms of the product distribution.

Thank you for the questions.

With that, I'd like to turn the call back to Mr. Loo for closing remarks.

Thank you, operator. In closing, on behalf of Hoi Da's management team, we would like to thank you for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call.

That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.