Huize Holding Limited

Ladies and gentlemen, thank you for standing by and welcome to HUETA's fourth quarter and full year 2024 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 on HUETA's IR website at ir.huita.com under the events and webcast section. I'd now like to hand the conference over to your speaker host today, Mr. Kenny Lo, Huizhi's investor relations manager. Please go ahead, Kenny.

Thank you, operator. Hello, everyone, and welcome to our fourth quarter and full year 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 horribly explained in our earnings release and filings with the SEC. Joining us today are our founder and CEO, Mr. Chen Junma, COO, Mr. Li Jian, Co-CFO, Mr. Ming-Han Xiao, 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 fourth quarter and full year of 2024. Before we open up the call for questions, I will now turn the call over to Mr. Ma.

Hello, everyone. Welcome to participate in Huize's fourth quarter of 2024 and the launch conference of annual performance. In 2024, the insurance industry will continue to deepen its implementation, and the human rights line will be officially opened in the second generation. The new national code of the State Council has further proposed comprehensive planning and deployment for the high-quality development of the industry. Huize closely surrounds policy orientation and market trend, actively adjusts the strategic direction, to continue deepening multi-product supply and customized product innovation. With the creation of AR technology to accelerate the ecological recovery of the insurance industry, we landed a preemptive AR plus strategy, completed the cross-disciplinary development from smart tool applications to service ecological recovery, further optimized product matching and service efficiency, and established a new benchmark for industry smart transformation. At the same time, by accelerating the layout of overseas markets, In 2024, the insurance industry continues to deepen the implementation of unified commissions and fees in reporting and underwriting.

the industry entered a 2% era. Further, China's State Council released its 10 measures which outlined comprehensive regulations for the high-quality development of the industry. In response to these policy directions and market trends, we proactively adjusted our strategic focus and expanded our diversified and customized product offerings. As generative AI accelerates the transformation of the industry, we have implemented a forward-looking, AI plus strategy, transitioning from the application of intelligent tools to a comprehensive restructuring of our surface ecosystem. This strategic shift has enhanced the product matching and service efficiency, establishing Huida as the benchmark for the intelligent transformation of the industry. Meanwhile, our accelerated international business development has built a strong second growth engine. filling high-quality sustainable growth. As a result, in 2024, total revenue increased by 4.5% year-over-year to RMB 1.25 billion, and both growth-raising premiums, GWP, and first-year premiums, FYP, facilitated across our platforms achieved record highs.

In 2024, the company's total insurance fee reached 61.6 billion yuan, which increased by 6%. The first-tier insurance fee reached 34.2 billion yuan, which increased by 31% in the same year. From the product structure, the long-term insurance first-tier insurance fee reached 18.4 billion yuan, which increased by 76% in the same year. The long-term health insurance has contributed to the first-tier insurance fee of 5.2 billion yuan, which increased by 2% in the same year. In addition, under the pre-set green-green downward window period, the stock market industry has gained steady growth. In 2024, the stock market industry In 2024, GWP amounted to RMB 6.16 billion,

up by 6% year-over-year. Full-year FYP reached RMB 3.42 billion, up by 31% year-over-year. In terms of our product mix measured by FYP, whole life premiums contributed RMB 1.84 billion, surging by 76% year-over-year. While long-term health insurance contributed RMB 520 million, up 2% year-over-year, influenced by the downward adjustment in assumed interest rate, we registered a stable growth in savings insurance products, accounting for 68.6% of total FYP, representing a year-over-year increase of 5.5%. Meanwhile, our short-term insurance business recorded robust double-digit growth, with premiums up 23% year-over-year to approximately RMB 550 million. further strengthening the diversity of our product portfolio.

Shenzhen, with its deep user insight and outstanding service capabilities, is committed to providing high-quality users with high-quality experience. Since the end of the fourth quarter, the number of users who have accumulated in the platform has increased further to 10610,000, and the number of new users has increased to 380,000. The average age of long-term insurance users is 35.1 years old The average age of long-term insurance customers in A County and the above cities is 68.4% Maintain high-quality customer group image Calculated by the first year insurance fee In the year 2024, the total amount of money made in Chuxu County was about 750,000 yuan The same amount rose by 39% Until the end of December, the 13th month of the long-term insurance and the 25th month The annual accumulated demand rate is more than 95%, maintaining the industry's higher standards.

Driven by profound customer insights and outstanding service capabilities, we remain committed to delivering a premium service experience to high-quality customers. By the end of the fourth quarter, our cumulative number of insurance users further increased to 10.6 million, with 380,000 new users added during the quarter. The average age of customers who purchase long-term insurance products in 2024 was 35.1 years old, among which 68.4% were located in higher tier cities, reflecting our high quality customer profile. The average FYP policy size for savings products reached approximately RMB 75,000 in 2024, up by 39% year-over-year. By the end of December 2024, 13-month and 25-month persistency ratios for long-term insurance both exceeded 95%, continuing to outperform industry averages.

At the end of the fourth quarter, Huize maintained a stable cooperation relationship with 139 insurance companies, and continued to launch diversified limited-edition products. In 2024, we, with the help of Chinese and English people, launched a limited-edition premium life insurance, Tumangjia. provide users with a customized insurance product that combines insurance and investment functions, and gain wide market recognition. In addition, our joint security and health insurance upgrade has introduced the long-term medical insurance of Changxiang-an No. 2, which continues to optimize the three dimensions of insurance convenience, low compensation, and increased service, and further satisfies the high quality needs of the public's daily growth in medical insurance. In the fourth quarter of 2024,

As of the end of the fourth quarter, we maintained a strong partnership with 139 insurance companies, continuing to develop and launch customized products across a diverse range of insurance categories. In 2024, We partnered with Aviva-Covco to launch Fu Menjia, a customized participating whole life insurance product that combines protection and investment features, which received widespread market recognition. Additionally, we partnered with Ping An to introduce the upgraded Chang Xiang An No. 2 long-term medical insurance product. which has been continually optimized in three key areas, including ease of enrollment, lower deductibles, and enhanced value added services to better meet the growing public demand for high quality healthcare protection. In the fourth quarter of 2024, GWP contribution from our customized insurance products accounted for 53.1% of total premiums reflecting the recognition and confidence in our product development capabilities from both customers and the broader insurance industry.

In 2024, the insurance industry will accelerate its intelligent and efficient development. By long-term adherence to the digitalization route, we will accumulate product sales, dual data advantages, and industry-leading technology innovation capabilities. Within the year, we will launch an intelligent customer service system, In 2024,

the insurance industry accelerated its transformation towards greater intelligence and efficiency. Upholding a long-term commitment to digitalization, we have developed substantial advantages in both product and sales data, alongside industry-leading technological innovation capabilities. During the year, we launched an intelligent client services system, combining smart navigation with human-assisted services to provide a 24-7 response mechanism. Additionally, we developed an intelligent assistant for our mid to high-end medical insurance products to assist our client service personnel with product recommendations, policy interpretation, and after-sales support. This system has achieved a 95% accuracy rate in responses and significantly accelerated the development of our Intelligent Surface Ecosystem.

In the fourth quarter, we launched a wind and wind control engine system to build a smart, automated, and digital wind control platform, realizing a multi-spectrum, full-scale risk control to further promote efficiency. Based on the accumulation of 19 years of operation, the wind and wind system integrated the risk data of internal wind and wind protection, dams, and other multidirectional risks, and included external high-quality data sources, to form a perfect bottom-level data system. We have independently developed disease systems and algorithmic label technology to accurately identify high-priced and high-intensity risks, and combine data such as external fraud, credit risk, occupation, long-distance location, etc. to achieve a more comprehensive risk assessment ability, effectively increasing the accuracy of Hebao's wind control. At the same time, we have developed a system flexible configuration of wind control rules and models to realize customized wind control solution solutions and successfully applied to many products such as the guard, the little bee, and the filigree. Through the automation of the rules of the engine, it is possible to ensure that the process is carried out in seconds, and the average use time is only 1.01 seconds, which greatly improves the efficiency of cloud printing. The wind control system has undergone a period of practice for a while. Different types of product wind control In Q4,

We launched the Fontong Underwriting Risk Control Engine System, establishing an intelligent, automated, and digital underwriting risk control platform to enhance risk management across multiple scenarios and all insurance product types. Leveraging Huizhi's 19 years of operations, our proprietary Fontong system integrates multi-dimensional internal risk data, including underwriting claims and fraud detection, and connects to high quality external data sources to build a robust underlying data system. We've proprietary developed a disease classification system and algorithm tagging technology to accurately identify high value insured individuals and high concentration rates. By incorporating external data such as fraud indicators, credit risk, occupations and place of residence, we achieved more comprehensive risk assessment capabilities and significantly enhanced analyzing precision. Meanwhile, we customized risk control rules and modules according to the specific characteristics of different insurance products, enabling the flexible application of risk control rules and models to provide customized risk management solutions. These have been successfully implemented in various products, including Guardian Critical Care, Little Bee, and Xiao Xin An. Our verification engine with automated rules has reduced underwriting time to just 1.01 seconds per case on average, drastically improving operational efficiency. Since its launch, the Fengtong system has maintained a positive controllable risk identification rates of between 2% and 30% across different product categories. Key products saw a monthly claims reduction of 7% and health insurance products cumulatively reduced claims exposure by over RMB 300 million. Overall, the system has achieved a claims ratio below the industry average. These outcomes have significantly strengthened business quality, ensured a seamless user experience, and created a positive cycle between risk management capabilities and business growth.

Thanks to Huize's outstanding technical skills, strong business ability, and rich experience in the Chinese market, in 2024, Huize has made rapid breakthroughs and new developments in international business expansion. Huize's international brand, PolyInsurTech, has successfully completed the acquisition of the leading digital insurance technology platform, Globacare, in Vietnam. The total insurance of the four groups, Globacare, has increased by 32% in terms of revenue and 33% in terms of revenue. As its strategic shareholder, PolyInsurTech GlobalCare's comprehensive technology and business performance. In October of last year, we launched a new health insurance comparison brand, GlobalCare.vn, which has successfully integrated into the GCL application, bringing a more high-quality, transparent, user-friendly insurance purchase experience for local consumers. As a key part of our international business layout, The Vietnamese market is a milestone and an important part of our long-term strategy in Southeast Asia. In the future, we will expand the ER agent model to Vietnamese and other Southeast Asian key markets. We will speed up the verification of successful intelligent service models in the Chinese market, and further enhance local insurance service efficiency and user experience. We look forward to achieving successful experience and important results in the Vietnamese market in 2024. Back by our exceptional technological strengths, robust business capabilities, and extensive expertise in the Chinese market, we made significant and rapid strides

in our international expansion in 2024. Our international brand, Honey IntuTech, successfully completed the acquisition of Vietnam's leading digital IntuTech platform, GlobalCare. In Q4, GlobalCare achieved a 32% sequential increase in total policies issued, with revenue growing 33% sequentially. As a strategic shareholder, Honey IntuTech has begun to undertake a comprehensive technology and business empowerment at GlobalCare. In October 2024, we launched GlobalCare.bn, a health insurance comparison platform integrated into the G-Cell app, offering Vietnamese consumers the high-quality, transparent, and user-friendly insurance purchasing experience. Vietnam is a pivotal component of our international strategy and representing a significant strategic milestone in our long-term ASEAN expansion strategy. Looking ahead, we plan to bring the AI agent model to core Southeast Asian markets, including Vietnam, accelerating the localization and implementation of Quasar's proven intelligent surface model from China. This will further enhance insurance service efficiency and user experience in these markets. We believe the success and insights gained from our Vietnam operations in 2024 will strongly support our further expansion into Singapore and the Philippines in 2025. and other Southeast Asian markets in the long term, helping us to achieve our target of 30% international business revenue contribution by 2026.

In February this year, with the rapid development of our AR model technology, HuiZhe will fully upgrade the AR layout to the customer's end, launch a revolutionary AR version of the app, realize the full network application of smart dialogue technology in the insurance consumer environment, We first used DeepSeq in the industry to directly serve the insurance consumer and build a new mode of smart insurance service all day long. By introducing the AR agent mode, the AR version of the app provides customers with 24 hours of exclusive online insurance agent support, not only allowing users to get professional insurance information at any time and at any place, but also greatly optimizing the Tobao process and completely improving the user experience. In the first month of the online application, we have achieved breakthrough results. The customer efficiency has increased significantly. The active registration rate has broken through 40%. New users' self-report rate and fee transfer efficiency have increased significantly. Combined with the strong natural language processing capabilities of artificial intelligence, as well as the insurance knowledge map accumulated by Huize, through intelligent navigation, we accurately recommend insurance products that meet the needs of users, The sales transfer rate is on the rise. At the same time, the 24-hour real-time interaction capability of the AR model ensures that users can receive timely response at any time, regardless of when the consultation is carried out. The application is online for the first time. The number of Japanese service users is more than 140,000, which brings a more convenient and efficient insurance service experience for customers. Looking forward to 2025, we will focus on developing a smart demand diagnosis system to combine user images with product charts,

In February 2025, amid rapid advancements in China's AI large language models, we fully integrated DeepSeq into the Huize app. This milestone enables seamless AI-driven interactions throughout the entire insurance purchasing journey, from consolation to policy issuance. We are among the first organizations in the insurance sector to deeply embed the AI model into consumer-facing services and to establish an around-the-clock intelligent insurance service model. By introducing the AI agent model, our AI-powered app now delivers 24-7 personalized insurance advisory support, giving customers always-on intelligent service at their fingertips. This innovation significantly optimizes the purchase process and holistically improves the user experience. In the first month since its launch, the AI part at Hoidab achieved breakthrough results. Customer acquisition effectiveness significantly improved with an activation rate exceeding 40%. New users' self-purchase rates and premium conversion efficiency also show improvements. Combining our natural language processing capabilities with the comprehensive insurance knowledge base from Pfizer, our intelligent recommendation system, RightPick, precisely matches customers with suitable insurance products, further improving sales conversion rates. Additionally, The AI model's real-time interaction capabilities ensure timely responses to customer inquiries. In the first month after the app's launch, the daily average number of users served exceeded 40,000, delivering a more convenient and efficient insurance service experience for our customers. Looking ahead to 2025, our focus will be on developing an intelligent needs assessment system for user needs precisely matching user profiles with product recommendations, further enhancing conversion rates, and setting a new benchmark for high-quality digital development within the industry.

In 2024, Huize, based on a profound market trend and product innovation, flexibly adjusted the strategy, showed resilience in the industry, and achieved rapid and high-quality growth in international business. In 2025, We will deepen our cooperation with insurance companies and launch more innovative customized products around the market to accurately meet the needs of users. By using deep-seq and other AI technologies, we will improve the service efficiency and customer experience. We will continue to work hard on product design and risk management and seek breakthroughs to consolidate our leading position. At the same time, we will seize the opportunity of the global market In 2024, we demonstrated strong resilience amid industry shifts by leveraging profound market insights and product innovation to adapt our strategies with

agility and achieve rapid high-quality growth in our international business. Looking ahead to 2025, we will deepen collaborations with insurance partners and develop more innovative customized products tailored to evolving market demands. By harnessing cutting-edge AI technologies like DiffSeq, we aim to further enhance service efficiency and elevate customers' experiences while continually pursuing breakthroughs in product design and risk management to reinforce our leading market position. Meanwhile, we will capture international market opportunities and expand our footprint in Southeast Asian markets. Through these initiatives, we aim to enhance our brand influence and build a more resilient, innovation-driven international business framework. Ultimately, we are committed to reinforcing our competitive position in the international market and delivering sustainable long-term value for customers, shareholders, and partners.

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 fourth quarter.

Thank you, Mr. Ma and Kenny. Good evening, everyone in Hong Kong. and good morning for those in the Americas. I realize there's been a very long opening remarks, so I'll be brief here on the results highlights. So despite the challenging macroeconomic and regulatory environment over all in 2024, I think we have delivered a very resilient performance with both total GWP and FYP facilitated on a platform reaching record highs. of $6.2 billion and $3.4 billion respectively. Our total revenue has increased 4.5% year-over-year and achieving our second consecutive year of non-GAAP profitability. We have achieved this by leveraging our efficient omni-channel distribution network, which integrates both online and offline channels, focusing on acquiring high-quality customers, offering innovative high-value products, and deploying our proprietary AI solutions throughout the ecosystem. More importantly, we have also made significant progress in our international expansion strategy, which will help act as a key growth driver for long-term sustainable development going forward. Over the course of 2024, we continue to strategically prioritize long-term insurance products in China, which have accounted for over 90% of our GDP for the past five years. Our omni-channel distribution network and sophisticated AI tools are significantly enhancing our customer acquisition and engagement capabilities. We've acquired approximately 380,000 new customers during the fourth quarter, increasing our total customer base to date 10.6 million repeat purchases for our long-term insurance products have increased by 3.3 percentage points to 40.2 in 2024 which underscores our ability to capture and capitalize on the ltp potential of a high quality customer base through both upselling and cross-selling Our open platform architecture continues to empower our internal financial advisors and also external independent financial advisors, IFAs, with total FYP from our 2A business increasing by 17% to RMB $415 million in 2024. I will also highlight several key achievements that drove our solid performance throughout the year. Our 13th and 25th month presidencies have reached a stable 95% over the year. Average ticket size for long-term savings products have surged by 39% to over 75,000 RMB, and premiums facilitated by short-term health and P&C products also increased by 23%, to RMB 548 million in 2024. In terms of our liquidity position, our financial position remains very strong and robust, with a combined balance of cash and cash equivalents of RMB 233 million or US dollars 32 million as of the end of 2024. In terms of our international expansion, Pony Introtech, our international arm, continues to serve as the cornerstone of our growth strategy and delivered exceptional results in 2024. Total revenue of our international businesses has grown to RMB 228.7 million in 2024, with international revenue contribution reaching 18% for the year ended 2024, which is on track in achieving our stated 30% target by 2026. In Vietnam, we continue to make meaningful strides in integrating the local operations with the broader expertise and capabilities of the Huizhou Group. Following the completion of the acquisition in Q3, our Vietnam business has achieved an impressive sequential growth, with growth within premiums increasing by 29% sequentially and revenue by 33%. GlobalCare has launched a customized family accident insurance product, which was co-developed with the Military Insurance Corporation, one of the leading P&C insurers in Vietnam. In addition, we are making steady progress toward expanding into Singapore and the Philippines markets, with entry planned within the next 12 months. This will further diversify our revenue streams and create new growth drivers to enhance long-term shareholder value creation. Notably, on the AI front, we were among the earliest in China's initial tech space to deeply integrate DeepSeq's model in February 2025. Deployed inside our mobile app for Quasar, this enables us to deliver real-time customized and data-driven recommendations to our customers, which will strengthen customer acquisition and engagement capabilities for distribution partners and IFAs going forward. This also provides a very scalable model for technological foundation to accelerate our international expansion. In summary, we believe we are ideally positioned to capitalize on the opportunities which is created by China's evolving industry landscape, which is poised for healthy and long-term sustainable growth across the entire value chain. Through Pony Intratech, we will leverage a proven business model we find in China and advance proprietary AI solutions to tap into the tremendous growth opportunities across Southeast Asia and the rest of the world, particularly in the young middle-class demographic. We are confident that our cutting-edge technology and targeted market penetration strategy will solidify our position as Asia's leading insurance technology platform, connecting consumers, carriers, and distribution partners digitally, and efficiently through our data-driven and AI-powered solutions. And with that, we'll now open up the call to questions. Thank you very much and over to you, operator.

Thank you. We will now begin the question and answer session. To ask a question, please press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To resolve your question, please press star 11 again. Please stand by while we compile the Q&A roster. We will now take our first question from the line of Qingqing Mao from CICC. Please ask your question, Qingqing.

Hello, Mr. Wang. Thank you for giving me the opportunity to ask a question. I am Mao Qingqing, an analyst from China. I have two questions. The first question is about the economic channel's one-to-one report last year. I would like to ask if the one-to-one impact of the one-to-one report has gradually passed. And after the one-to-one report, whether the market competition in the entire economic channel has improved. My second question is about AI. I mentioned some in the previous management introduction, but I don't know if the management can give us a more detailed introduction on which aspects of AI can provide support to the company's business and improve the company's business, and whether there is a positive impact that we can expect in terms of finance. I have two questions. My first question is about the commission caps regulation. I think it has been in place for almost one year. Has the one-off impact of this regulation already subsided? And has market computation improved since its implementation? My second question is on AI. Could you please elaborate on the specific ways in which AI technology can improve your operations? And what can we expect in terms of the financial outcome? That's all.

Okay. Thank you, Qingqing, for joining us again. And we'll continue to support over the years. So your questions on two sides. The first one on the regulatory commission caps and the effects of that on the brokerage channels. I think the answer is the regulations have been rolled out and officially implemented over the course of the year. And I think that the whole industry has now migrated into the so-called new normal. Ever since September 1st of last year, all the new products that have been launched by the insurance companies have already incorporated the new commission structure. So the short answer is yes, I think the the impact has been felt and I think it's already fully reflected in our financial results for the Q4 and also for the rest of the industry and our peers that are also listed in the public markets. I think that similar results have been felt through across the industry. In terms of the regulatory impact itself on the focus channels and agencies that's already been felt, we would like to note that for the regulatory implementation on the tied agency channel. This has not yet been implemented, and we are expecting this to be effective sometime towards the middle to later part of this year. And with that expectation, we do believe that it could be incrementally positive for the brokerage and agencies channels, including ourselves, given that right now the regulatory framework has not been fully implemented across all different channels. So again, the fourth quarter results have fully reflected the new regulatory environment for our business models, as well as for the rest of the industry. In terms of the competitive landscape, we would like to comment that very likely with the implementation of the commission caps, market share is likely to be more consolidated among the top tier players, including ourselves, and maybe some of the listed peers. And as a result, we do believe that the competitive dynamics would become relatively more, you know, in terms of long-term perspective, more healthy and more sustainable. And very likely that the market share will be increasingly consolidated and concentrated among the top tier players. So I guess that's the first question. And I think that for Crayta, I think that we have a natural advantage when smaller players exit the market and while market share is concentrated in top players, because we have a very flat hierarchy and much lower nimble cost base compared to maybe in particular the traditional brokers that's operating in the market for a long time, we do have a very natural cost structure advantage, particularly with respect of customer acquisition. We've always been relying on the platform model, the open platform model to acquire customers rather than a an agent-led model. That's number one. And number two, I think the AI evolution and the actual deployment of AI technology across our different business scenarios on the platform has also accelerated that advantage towards the online operators or digital players like ourselves. So on AI technology, I think that Mr. Ma has actually shared a lot of details on how AI tech is being implemented across our operations. I think that in terms of the financial outcome, if you will, right? So what would that translate into our financial results? I think very likely that over the course of next few years, you'll see that the biggest contribution from AI is that the fixed cost base could be much more nimble. And I think the efficiency can be much more amplified. Basically, with less human resources investment, we can support a much scalable operations. Meaning that operating leverage would likely increase by multifold. Scalable business growth without the need of deploying a lot more human resources to support, for example, the conversion of customers or especially in the customer service front. I think that AI can resolve or deal with 95% of the of the customer inquiries and services that's required on a normal cost business. And I think that the AI agent would be a key anchor for us going forward in terms of further investments into improving customer journey and using and utilizing AI as a major tool, a scalable tool to acquire customers at large. So that is something that we have already launched through the deep-sea integration in February. We're seeing some initial encouraging results, and I think over the course of the next few quarters, we'll be happily sharing additional milestones as we achieve them. So hopefully that answers the questions, Xinxin. Thank you.

All right. Thank you. We will now take our next question from the line of Amy Chin from Citi. Please ask your question, Amy.

Thank you for the opportunity to ask me this question. My name is Amy Chen. I have two questions. The first one is about the growth in terms of the cost of the private sector. Because I see that the cost of sales and G&A have increased significantly. I would like to ask what these investments are mainly about. And then the second question is, just now the management actually mentioned that the impact of the insurance policy on the financial channel has basically been fully reflected. We also see that the entire growth margin in 2024 is suppressed to about 30%. I would like to ask, in 2025, Thank you. Thank you, Amy, again, for joining us again and continuing to support us.

Maybe I can help you translate your questions.

Sorry. I can translate the question. So I have two questions. The first one is regarding the trend of operating expenses in the fourth quarter. We noted that actually both selling expenses and G&A expenses saw significant year-over-year growth in the fourth quarter last year. I wanted to ask what's the main rationale behind this trend. And the second question is regarding to the gross profit margin as well as net profit guidance for the year of 2025. We noted that actually after the rationalization of commission in the broker channel, the gross profit margin actually was compressed to around 30% in the year of 2024. Wondering if we would likely to see some margin improvement going ahead to the year of 2025. given our investment in AI and the potential improvement in efficiency? Thank you.

Thank you, Amy. So three questions. I think the first one, let me address that first. So there are some sequential growth on some of the expense accounts. I think that one of the main reasons to do that is we actually implemented some further restructuring in Q4 in terms of our... personal headcount, personnel headcount in the fourth quarter. So that has led to some one-off costs associated with that exercise. And we do have made some further AI investments in Q4, so that has led to some modest increase in the expense items. So I think over the course of 2025, I think one of the key focus was obviously to further utilize and deploy AI throughout the whole business operations on all fronts, on the front end, on the mid-office and back-office. I think there's a lot of room for us to further drive cost savings and efficiency in the mid-to-back office in the tunes of double-digit percentage. So AI definitely would be leveraged and deployed at large in terms of not just customer acquisition and customer service, but also on the normal cost business operations. So I would note that in Q4, those are relatively one-off trends. So in 2025, I think that we are still targeting to drive a year-over-year decrease in the operating expense ratios across the three key line items there. In terms of gross margin trends, I think, yes, you do note that correctly that there has been some depression in gross margins over the course of the last few quarters. But I do note that in Q4 of this year, or 2024, our group gross margin has actually recovered to around 34.7%. So I think that our outlook for 2025 is definitely to maintain at least um that uh you know the kind of the low to mid 30 range growth margins and uh um ideally uh the investments that we're making on the ai front would drive further gross margin improvement and expansion uh particularly on the customer acquisition front because that hopefully would drive um more scalable uh direct to see customer acquisitions at low cost so i think hopefully the gross margin line can improve further And in terms of the guidance for 2025, we do guide towards a profitable full year of 2025, and we are targeting mid-single-digit kind of net profit margin for now. I think that the earnings growth will also be driven by our continued business momentum in the international revenue front. Obviously, I'm referring to the large competition right now from our from a Hong Kong business. And also, we will be further deploying investments into the two new subdivision markets that we've mentioned just now in the call. And also, invest will be made in AI. So overall, I think 2025, we're looking at a profitable year and looking at a reasonable mid-single digit type of profit margin, net profit margin.

That is very clear.

Thank you.

Thank you. We have reached the end of the question and answer session. And with that, I'll now turn the conference back to Mr. Kenny Lo for closing comments.

Thank you, operator. In closing, on behalf of Hoiz'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.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.