Huize Holding Limited

Ladies and gentlemen, thank you for standing by and welcome to HUETA's second quarter 2025 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. And I'd like to hand the conference over to your speaker host today, Mr. Kenny Lo, who is an investor relations manager. Please go ahead, Kenny.

Thank you, operator. Hello, everyone, and welcome to our second quarter 2025 earnings conference call. Our financial and operational results were released earlier today and are currently available on both our IR website and Globe Newswire services. Before we continue, I would like to refer you to the safe harvest 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 founder and CEO, Mr. Chen Junma, COO, Mr. Li Jiang, Co-CFO, Mr. Minghan 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 up by Mr. Tam, who will go over our financial results for the second quarter 2025. Then we will open the call for questions. I will now turn the call over to Mr. Ma.

Hello, everyone. Welcome to the second quarter 2025

Hello, everyone, and thank you for joining Huize's 10.25 Earnings Commerce Call.

Huize has always adhered to the core strategy of customer-centered, deep-focusing user demand, co-operative partners, and further enriching product certification. With high-quality customer base, continuous strong security, continuity, and product certification that covers a wide range of needs, The company achieved a brilliant result in the second quarter. In the second quarter, the company achieved a total revenue of 4.4 billion yuan, creating a new high in the third quarter over the past three years. The net profit was 1088 million yuan. The total insurance fee of the second quarter was 180 million yuan, which increased by 34% in total. Among them, the first year insurance fee reached 11.3 billion yuan, which increased by 73% in total.

In the second quarter of 2025, we remained steadfast in our customer-centric approach, focusing on evolving customer needs and partnering with industry leaders to broaden our product portfolio. Our strong results were underpinned by a high-quality customer base, industry-leading persistence ratios, and a diverse suite of product offerings. During the quarter, Quida delivered a total revenue of RMB $400 million, a three-year quarterly high. With net profit reached RMB 10.9 million, growth-raising premiums facilitated on our platform grew 34% year-over-year to RMB 1.8 billion, while first-year premiums increased by 73% year-over-year to RMB 1.13 billion.

We will further create a service ecosystem for the whole life cycle, continue to accurately address high-performance customer groups. By the end of the second quarter, the platform has accumulated more than 11.4 million users, and about 400,000 new users. Among them, long-term investment users are an average age of 35.2 years old, and users in cities above the second quarter have a stable balance of more than 65%. We insist on molding high-quality customer groups and further promote the value of the business to continue to thrive. In the second quarter of the Soviet Union, the cost of building troops in the long term reached 7060 yuan, which increased by 87%. By the end of May this year, the annual accumulation of the 13th month and the 25th month in the long term continued to be higher than 95%, maintaining the leading level of the industry. We continue to strengthen our full lifecycle service ecosystem while precisely targeting high-quality young customers.

As of the end of the second quarter, Huizhi's cumulative insurance usage exceeded 11.4 million, with approximately 400,000 new clients added during the quarter. In the second quarter, our long-term insurance customers had an average age of 35.2, with more than 65% residing in first and second tier cities in China. By focusing on these high-quality customer groups, we have further supported sustainable growth in business value. In the second quarter, the average first-year premium taken size for long-term products jumped by 87% year-over-year to RMB 7,600, while our retention metrics continued to lead the industry with both the 13th and 25th month persistency ratios remaining above 95% as of the end of May. Beyond long-term products, we remain committed to delivering a diversified suite of insurance solutions. Our short-term insurance business also recorded healthy growth in the quarter, with growth-raising premiums rising 90% year-over-year to approximately RMB 140 million.

After the end of the second quarter, we will further expand our cooperation ecosystem. to maintain a stable relationship with 146 insurance companies, and continue to innovate and promote diverse customized products. In the context of the continuous improvement of the market's policy of stable financial planning and the aging of the population, we have achieved excellent progress in the front-end layout of the share market, focusing on customer wealth management needs. We have carefully customized the multi-price version of Quai Xiangfu, to provide customers with better and more sustainable wealth planning and insurance plans. In addition, we co-operated with Ping'an Inventory County to introduce No. 7, Shao'er Incident County, and co-operated with Renbao Inventory County to create No. 2, Pro-Xueping County, providing Shao'er and its student groups with multi-dimensional, comprehensive protection and insurance.

As of the end of the second quarter, we have further expanded our partner ecosystem, maintaining strong collaborations with 146 insurance companies and continuing to drive innovation in customized and diversified insurance products. Against a backdrop of preference for steady financial planning and an aging population, our early move in participating products has delivered strong progress. Centered on client wealth management needs, we introduced customized products, lease, golden edition annuity, offering superior and sustainable wealth planning solutions. We have also jointly launched Xiaoshun Hong 7.0 children's accident insurance with paying out property and casualty insurance and jointly launched Litru Scholar 2.0 pro student accident and medical insurance with PITC property and casualty, delivering multi-dimensional and comprehensive protection for children and students.

With the long-term research and deployment in the AR field, we have opened up a comprehensive AR agent in the years. We have continued to promote internal promotion and further reschedule the core operation process, and based on this, actively explore the changes in business model generation, continue to polish the new growth curve, and establish a solid foundation for long-term value growth. With the continuous landing of AR-related deployment, in the second quarter of 2025, We drew on years of AI research and investment to launch company-wide adoption of AI agents.

This has driven meaningful efficiency improvement, reshaped core operating processes, and laid the groundwork for deeper business model transformation. These efforts have helped us unlock new growth curves and reinforce the foundation for long-term value creation. With the continued roll-out of AI initiatives, our expense-to-revenue ratio improves by 16.6 percentage points year-over-year to 23.9%.

We start from the inside, fully implement the landing and application of AI tools, and develop AI native culture. to achieve the quantitative improvement of the R&D output. For example, in the R&D system, we first introduced the VB coding mode. The number of codes generated and downloaded by AI has already exceeded 200,000 accounts per month, which is equivalent to the total output output of 58 intermediate engineers, which has improved the speed of product delivery and technology revolutionization. At the same time, the company has built a comprehensive training system from entry to implementation. The goal is to create a more responsive a faster and more efficient AI generation organization. Currently, the AI used by internal employees is fully covered, and more than 300 employees are able to use low-digit platforms to create and deploy AI intelligence. More than 700 advanced Agents have been released in total, which has achieved comprehensive efficiency improvement, process optimization, and wind control control.

We accelerated the deployment of AI tools and fostered an AI native culture within our company, delivering measurable productivity improvements. In R&D, we introduced the vibe coding model, where AI now generates and contributes more than 200,000 accepted lines of code each month, significantly accelerating product iteration and technological innovation. To support this transformation, we built a comprehensive training system that deploys employees from entry-level to advanced AI practice. AI adoption is now company-wide, with more than 300 employees able to create and deploy AI agents on our local platform. Collectively, we have released over 700 productivity-enhancing AI agents, driving improvements in operational efficiency workflow improvements and risk control.

We have accumulated private data assets leading the insurance industry, covering the knowledge of customer communication materials and more than 10,000 insurance products, and can achieve accurate service for each customer's image label. We introduced AR customer service 24 hours a day. Through AR interaction, the self-serve rate of new users has increased by 50%. AR customer service application covers product recommendations at the same time, Drawing on nearly two decades of industry experience,

most extensive proprietary data access in the insurance sector, encompassing hundreds of millions of customer interaction records and a knowledge base of more than 10,000 insurance products. This foundation enables us to deliver highly personalized services tailored to individual customer profile. We rolled out 24-7 AI customer support, driving the self-service purchase rate among new users up by 50%. The AI customer support also covers product recommendations, claims assistance, and policy delivery, serving over 20,000 customers each month. These results validated AI's core value in boosting sales and efficiency. We are accelerating deployment across more touchpoints to build a high-quality closed-loop growth engine from customer-rich conversion to automated service.

In terms of international business, the international brand PolyInsurTech has successfully acquired the financial consultant and insurance economic license of the Ministry of Finance of Singapore through the local business main body. It marks an important breakthrough in the business layout of the company in Southeast Asia. On the other hand, in the second quarter, Yuelan's subsidiary GlobalCare's insurance fee and total income increased by 3% in parallel. and continued a strong growth trend. In addition, we launched the KOL platform, which is the first insurance industry in the local area. By digitalizing methods, we have boosted insurance sales and boosted the high penetration rate of social media in Vietnam, which has improved the market reach and conversion efficiency of insurance products. At the same time, we have actively cooperated with local business owners, including new online logistics platforms, JXE, and the largest retail group in Vietnam, MWG, with the technology capability of Glovocare, jointly promoted the application of in-house and micro-safety scenarios, and combined with the internationalized resource advantage of the group, we successfully provided commercial insurance services to middle-income companies in the month, and promoted the financial insurance of the company with a balance of more than RMB1 billion. It fully highlights the rich product supply and internationalized layout of our local market.

Unitec, which is an international arm, has secured a financial advisor and exempt insurance broker license from the Monetary Authority of Singapore through its local operating entity, marking a significant milestone in our Southeast Asia expansion. In addition, Vietnam's subsidiary GlobalCare recorded a 32% year-over-year increase in both GWP, and revenue. We launched Vietnam's first KOL platform for the insurance industry, digitally empowering distribution and leveraging the country's high social media penetration, enhancing product reach and conversion efficiency. In parallel, we strengthened partnerships with leading local players, including GXE, an emerging online logistics platform, and MWG, Vietnam's largest retail group. Supported by GlobalCare's technology capabilities, these collaborations are advancing embedded and micro-insurance across multiple use cases. Leveraging the group's international platform, we provided commercial insurance services to China investor enterprises in Vietnam and facilitated the placement of corporate property policies with some insured of RMB 1 billion. This fully demonstrates the depth of our product offering in the local market and the results of our internationalization strategy.

In the second half of the year, the Chinese insurance industry is facing the same situation as the demand and supply. On the one hand, with the constant rise in the demand for health, pension, and wealth management, customers have made higher requirements for precision and intelligent insurance services. On the other hand, the monitoring policy continues to guide high-quality development, will promote a more standardized and technological drive in the industry. AI is expected to be an improvement in service experience, reduce operating costs, and strengthen the important engine of control capability. In addition, the Southeast Asian market, with the rapid increase in the digitization rate and the continued growth of the middle class, the regional insurance penetration rate is entering a critical stage of accelerated improvement. This is a structural opportunity. It is also an important stage of China's insurance technology. In the future, Guizhe will use AI as the core engine to build a smart ecosystem platform that connects users, insurance companies and agents, use AI to participate in depth and drive the whole value chain, speed up the industry ecosystem and operation process, and open up new growth horizons. At the same time, we will continue to pay attention to the market potential of Southeast Asian countries and explore the output of market digital solutions. to build a broader digital insurance ecosystem with local partners.

Looking ahead to the second half of the year, China's insurance industry is experiencing strong momentum on both demand and supply sides, with rising needs in health, retirement, and wealth management driving customers to seek more intelligent services, while regulatory policies guide the market toward high-quality growth, greater standardization, and technology adoption. In this environment, AI is emerging as a core growth engine, enhancing customer experience, reducing operating costs, and strengthening risk management. At the same time, Southeast Asia's rapid digital adoption and expanding middle class are pushing insurance penetration into a critical stage of expansion, creating significant structural opportunities and positioning the region as a key platform of further globalization of China's digital tech capabilities. Against this backdrop, Quasar will continue to embed AI across the entire value chain, reshaping industry dynamics and unlocking a new growth curve. Meanwhile, we will further expand our ecosystem across Southeast Asia to capture long-term opportunities from demographic tailwinds and rising insurance penetration, and working with local partners to build a broader, smarter digital insurance ecosystem.

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 the U.S. and, sorry, in Asia, and good morning, everyone in the U.S. I think that the opening remarks have been quite detailed on the operational highlights. For my section, I'll just give some highlights on the overall financial metrics. Amid the evolving macroeconomic and geopolitical environment, the second quarter is quite remarkable in terms of gross return premiums at FYP facilitated, which has increased by 34% and 73% year over year, respectively. reaching RMB 1.8 billion and approximately RMB 1.1 billion. Total revenue hit a three-year high for a quarter of approximately RMB 400 million, which is up 40% year-over-year. We also returned to gap and non-gap net profit for the quarter of approximately RMB 11 million and RMB 8 million, respectively. Meanwhile, our financial position has continued to remain very robust with a combined balance of cash and cash equivalents of RMB 239 million is at the end of the second quarter. The remarkable operational performance was driven by our efficient omnichannel distribution network, our relentless efforts to acquire high-quality customers, and the deployment of advanced proprietary AI solutions throughout. Crucially, we are on track to execute and deliver on our international expansion strategy, which is a core new growth driver for our long-term sustainable development and shareholder value creation. Our strategic focus has remained firmly on long-term insurance products, which continue to account for over 90% of our total GWPs facilitated. FYP from a long-term savings product more than doubled year-over-year to RMB $864 million in the second quarter. Leveraging on our robust omnichannel distribution network and advanced AI solutions, we have significantly strengthened our customer acquisition and engagement capabilities. adding approximately 400,000 new customers during the second quarter. And this brings our total customer count to over 11.4 million as of the end of the second quarter. The repurchase ratio for our long-term insurance products also stood at a very decent level of 37%, underscoring our ability to continue to unlock the lifetime value of a high-quality customer base through effective upselling and cross-selling strategies. I would also like to highlight a few other key achievements over the quarter. Number one, the FYP for our IFA business increased by 13% year-over-year to a FYP of 84 million RMB, reflecting our continued efforts to empower both our internal and external international financial advisors. And number two, as of the end of the May second quarter, our 13th and 25th month persistency ratios for long-term life and health insurance remained at industry-leading levels of over 95%. And number three, the average ticket size of long-term insurance products distributed has increased 41% sequentially to RMB 7,615, partly reflecting the premium product sales in our international market segment. We have established a private AI language model and local application development platform to promote employees as in-house AI agent developers Over 200 employees in-house have created and deployed AI agents, publishing more than 500 productivity-enhancing tools. Our broad deployment of AI-driven automation has delivered cost savings and productivity gains. As such, our total operating expenses decreased 17% year-over-year to RMB 95 million, and our expense-to-income ratio improved significantly by 16.6 percentage points year-over-year to 23.9% in the second quarter. Pony Intratech, our expanding international arm, delivered another strong quarter and remains central to our long-term strategy. For example, in Vietnam, our majority-owned subsidiary, GoogleCare, achieved impressive business growth, with GWP and total revenue both rising 32% year-over-year in the second quarter. Active platform users increased by 52%, while the average ticket size on the V2A to C business line tripled sequentially. GlobalCare also onboarded new merchant partners, including names like GXE and Mobile World Group, offering embedded and micro-insurance products powered by its advanced technological capabilities. In July, GlobalCare also launched Vietnam's first insurance KOL platform, which is a replica of our China model, a proven distribution model pioneered by Huiza in China. Additionally, we obtained approval from the MAS in Singapore for a financial advisory license, further extending our presence in Southeast Asia These strategic initiatives to diversify our revenue streams and create new growth drivers to enhance long-term shareholder value creation. In conclusion, we are confident in our ability to capitalize on the opportunities arising from China's evolving industry landscape in the border Asian market. Domestically, continuous strong demand for long-term protection should drive healthy and sustainable growth across the entire value chain. Internationally, through Pony Instratech, we're extending a China-proven model and proprietary AI capabilities to high-growth Southeast Asian markets, particularly in the young and fast-growing middle-class demographics. By leveraging our advanced data analytics, fully integrated AI solutions, and disciplined market penetration, we are committed to solidifying our position as Asia's leading intertech platform for distribution and building an AI-driven intelligent ecosystem connecting consumers, insurance carriers, and distribution partners while delivering enduring value to all stakeholders. And with that comment, we will 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 and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. We'll now take our first question from the line of Tsingtao Chen from CICC. Please go ahead, Tsingtao.

Hi, thank you. This is Tsingtao from CICC Research. First of all, congratulations on the remarkable business performance on the second quarter this year. And I have two questions for the management. First, Huizhou has successfully executed its strategy shift towards participating insurance in recent years. So could you please add some color on the approaches the company has taken to enhance the team's professional capabilities in selling participating insurance? And what's the plans are in place for deeper cooperation with insurers on the development of participating products? And what's the company guidance for sales performance in the second half of the year? This is the first question. And the second question is that, uh is recognized as the first insurance service platform platform to integrate deep stick in the industry and the company's xiaoma claims has significantly improved claims handling efficiency so i want so please could you please add some color on how the twitter intend to further leverage ai technology to enhance product sales long-term customer relationship management and achieve greater efficiency and cost control. Thank you.

Thank you, Tsingtao, for your two questions. So your first question was regarding our successes in the power product distribution front. And I think that over the last two years, I think we have already been foreseeing the industry transformation or transition to selling power products as the mainstream product with the expectation of a continued declining interest rate environment in China. I think we have been vindicated with this foresight. And starting from 2023, I think the company as a whole internally have been actively promoting the training of our agents and also encouraging our channel partners and the IFAs that are connected to our platform to get up to speed on the product. I think that the foresight and the training has we have with the benefits from that early anticipation. Secondly, I think that with respect to our product supply, I think we have also been quite, you know, in anticipation of the power product being a mainstream product for this year, we have been actively seeking out cooperation with upstream insurance carriers, providers to co-develop, you know, customize savings products that would be very suitable for the clientele. And I think what we have demonstrated to the market is that we have already been rolling out customized PAR products with leading brands such as Aviva Copco, which we have repeated for the last two quarters. Fuman Jadad product is a top-selling savings product in the PAR category for the last two quarters. Also, we have been working with the Chinese joint venture between the Chinese SOE and Generali, which again has proven to be a top selling product on the online offline channels. We have also been quite innovative in terms of customizing power products in the annuity and in the retirement areas. For example, a recent product that we have launched with Boston Prime America is an example. So not only do we do endowments, we also do annuities and entire retirement plans with a par feature. So I think that this is something that we have been quite successful also on the product supply front and which also delivers a competitive mode for Quasar compared to the competition. And I think we are very proud to say that according to various sources, we are probably ranked in the top three in terms of distribution channels in the broker and agency segment in China for par products currently. So in terms of guidance for the product, I think that we are continuing to see increased interest in par products from the market, mainly as a result of the continued education of consumers of the product by online and offline channels such as ourselves, and also the traditional insurers and the traditional agencies. So consumers are increasingly aware of the relative attractiveness of the par product especially in the declining interest rate environment, whereby the product in terms of overall return profile is much superior to other forms of fixed income products, including traditional bank deposits and so forth. So we do expect that there's continued sequential growth in distribution in the par product in the Q3 and also in Q4. So your last question was on the AI front in terms of how we are going to be driving increased productivity gains in addition to just the claims processing area that you have mentioned. I think that we have already been deploying our AI strategy also in the customer acquisition perspective. Our mobile app has integrated DeepSeq and the DeepSeq powered Mobile apps facing consumers can provide very relevant and customized product recommendations based on customers' feedback and drawing upon our very robust internal knowledge base and knowledge pool, we are able to provide very much customized product recommendation experience for our customers. In another area that we think that is very relevant for AI technology to be deployed and which we're now actively investing into is the underwriting part of the value chain, whereby with AI, we are able to be much more nimble and be much more adept at managing risk for our customers in terms of finding the most suitable product according to the individual risk assessment and risk circumstances. And therefore, that will also likely lead to much improved conversion ratios downstream. That will also be relevant to the long-term customer relationship management, which you just mentioned, because the AI tool will be able to memorize all the customer interactions. And therefore, whenever the customer returns to our mobile app, it will be able to recall the relevant data points on the customer's profile. and be able to continue the dialogue on the most appropriate manner. So I think those three things are rapid examples that we are able to cite in terms of the AI deployment today. And I think we're just still only the very much beginning of the AI journey. A lot more investments need to be made. And we believe that the fruits of the investment will be harvested over the years to come.

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

Hi, this is Amy from Citi Research. Thank you for giving me this opportunity and congratulations on a profitable quarter. I have two questions. The first one, on your overseas business. You mentioned earlier that average ticket size was higher sequentially, partially due to participating sales in international markets, which I assume would be mainly Hong Kong. I'm not sure if this was partially driven by the change in the regulatory cap on Illustrated Power Product Return and how has the sales momentum been in the third quarter so far. And also on the regulatory front, from October 1st, there would be a cap on broker channel referral fee. And from the beginning of next year, there would be this requirement to spread out commissions in the broker channel. How do you think this would impact your business, particularly in Hong Kong? And the second one would be about net profit outlook. We see that after the second quarter, in the first half, Huiza has already delivered net profit. What is your earnings guidance for the full year of 2025? Thank you.

Thanks, Amy. On your two questions, the first question relating to the Hong Kong business. I think you're right in citing the regulatory changes on the illustrative returns having an impact on rush sales in the second quarter. We do see that a lot of the industry participants have witnessed and saw significant demand for Hong Kong products in the last month of the Q2, which due to the revenue recognition would likely be reflected in the Q3 results. So we do see that that has an impact on the sales of the entire industry as a whole. And on your comment on the other regulatory developments, we think that the underlying demand for offshore products it still has to do with the interest rate differential between the onshore and offshore markets. So we do believe that the underlying situation has not changed. Albeit, I think the US likely will be reducing interest rates in the next few meetings. We're likely seeing another 50 basis points by the end of this year. But still, the attractiveness of the offshore products still provide a meaningful pickup in terms of overall yield potential versus onshore. So that has not changed. So we do continue to expect that the sequential momentum to continue in this area of the business. So I think that would be my response to your first question. And then on your second question regarding net profit outlook, we are very glad that we have delivered profit in the Q2. And we do see sequential improvement in terms of our net profit outlook by the quarter, by the next quarter, although we also continue to invest in business growth. So right now, we are expecting a second half profit for the year and especially in Q3, we do expect a meaningful sequential growth in the earnings profile.

Thank you. That's very clear. May I have a quick follow-up? How much of your revenue is contributed by international business in the second quarter?

I think we would like to say that we are on track in delivering our previously given

uh outlook uh for the year so i think that will be the answer thank you thank you as a reminder before we take our next question please press star 1 1 if you wish to ask a question our next question comes from the line of kenny lim from uob cahen please go ahead kenny

Yeah, hi, Ron. First of all, congratulations on your solid results. So I have two questions from here. So my first question is regarding your margin performance. Apart from improvement in expense to income ratio, not only that your growth margin also improves sequentially, could you give us more color on this and how sustainable it is, how you balance between your channel cost growth as well as your premium growth? And my second question is regarding your product mix. Since you quoted that the demand for the PAR product is quite strong, I would like to ask, how is the performance of your demand for the health and protection products? That's all from my end.

Thank you. For your questions, Kenny, I'm very glad to hear from you. So two questions on your side. One is the gross margin outlook. Yes, we do see a stabilization of gross margin in the second quarter. I think there's a slight pickup from Q1. Q1 was around 26%. This quarter is around 27%. We do see that the stabilization gross margin should remain at this current level for the next few quarters. I think that the overall negative impact that has been seen felt by the industry on the China side with respect to the Baoxin He Yi regulatory implementation. I think that's been fully felt already. And thus, it's been reflected in the results here in the second quarter. The overall business has transitioned to the new regime. So most of the products that we are distributing and channel costs and so forth have now been mostly stabilized at the current level. So we do believe that those margins should remain relatively stable for the next few quarters in the foreseeable future. Your second question was regarding the HMP product segments. So we do see a modest improvement in demand in the second quarter over the first quarter. So in terms of actual numbers, I can cite For the H&P segment, we are looking at a 24% sequential growth in terms of first-year premiums from the first quarter to second quarter. Overall, I think that the environment, in terms of the China macroeconomic environment, we do see that there's a stabilization trend. And, you know, with improving customer confidence and, you know, improving consumer confidence outlook, we do see that the HMP segment should continue to grow steadily. So, and we also be investing in this product category, albeit the savings product definitely is now the major driver of performance, but then the health and protection product, as we all know, is typically higher margin. And then therefore, with a reviving macroeconomic and consumer confidence kind of picture, we do see that we should be investing more in this area. So that will be my answer to your questions.

Ron, just a follow-up question. I saw that your commission rate improved year-on-year. May I know what is the main driver?

Sorry, can you repeat that question?

Sorry. I noticed that your blended commission rate improves sequentially. May I know what's the main driver?

Right. I think mainly due to the improved contribution from our customized products, which typically carries a higher commission rate.

All right.

Thanks.

Yeah.

All right. Thank you. I am showing no further questions. And with that, I'll turn the conference back to Mr. Kenny Lo for his closing comments.

Thank you, operator. In closing, on behalf of Hoidah'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 concludes the program. You may now disconnect.