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spk02: Good evening and welcome to the NOAA Holdings 1Q21 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Ms. Jinbo Wang. Please go ahead.
spk05: Thank you, Mr. Hua. Today, on the agenda of our telephone meeting, I will first report on the overall performance of Luoya in the first quarter of 2021, the development situation and the strategy of the group, and then talk about Luoya's change and promotion of management thinking from product drive to customer-centered management. After that, we will go to Luoya Project to buy the headquarters building in the core area of Shanghai Hongqiao to give you a report. Then, please introduce the financial information of the quarter to Pan Qingwei. The last is the interactive Q&A. For the teleconference agenda today, I will first introduce the overall performance of NOAA in the first quarter of 2021.
spk04: the development of our major business segments and the strategy of the group, then talk about the changes and progress of NOAA's management thinking from product-driven to client-oriented. We will then brief you on NOAA's planning to purchase the headquarter premises located in the courtroom of Hongqiao CBD in Shanghai. After that, please welcome Panqing to introduce the financial results of the quarter, followed by the Q&A. Looking back to 2020, It's a year full of challenges and uncertainty. However, all staff of NOAA faced with such uncertainty, continued the transition and reform, and made some achievements. I'm very pleased that we lived up to the expectations of our shareholders and investors, and NOAA delivered a very successful quarter. 2021年一季度,洛牙实现销售净收入12.2亿元人民币,同比增长64.1%,
spk05: Among them, the total revenue of 3.2 billion yuan increased by 53.2%. The management fee of 4.7 billion yuan increased by 5.6%. The revenue of 4.4 billion yuan increased by nearly 20 times. The net profit of 4.6 billion yuan, which belongs to the shareholder, increased by 79.7%. This is a new high since the start of the industry. In terms of core business data, The net worth of financial products in the wealth management segment is 270.9 billion RMB, with a growth of 16.8 billion. The net worth of standardized products reached 215.1 billion RMB, with a growth of 12.5 billion. The net worth of private securities in standardized products reached 1.12 billion RMB, with a growth of 23.4 billion RMB, and set a new record. The net worth of public funds has increased by 1.1 billion RMB, with a growth of 8.6%. The overseas version has a net income of 3.3 billion RMB, which is the same as the growth of 62.5 billion RMB. The overseas asset management scale is 259.2 billion RMB, which is 3.9% higher than at the end of 2020. It accounts for 16.8% of the total AUM of the group. In March, we successfully held an insurance summit in Macau. Through big data, accurate matching and inviting customers, the number of meeting customers was 77% of Macau's insurance summit in 2019. But this time, the total amount of signing was twice as much as the summit last time. It reflects the results of our highly promoted KYC, KYP, and KYA system accuracy matching. In addition to financial data, it is even more encouraging that our new management culture is gradually penetrating from product drive to customer-centered management thinking of survival as the bottom line. It reflects on the customer side, the talent side, and the business side. As we further deepen our transformation and transformation, we will have to walk on a continuous organizational ability. From the green-leaf train to the correct road of the moving car group, First of all, our core number of customers continues to rise. In the first quarter of 2021, the high-profile customer group in Asia, the number of active customers, which is more than 2.7 million people after the withdrawal of the public fund, increased by 65.4%. As of March 31st, the number of registered customers exceeded 380,000, which increased by 6.5% at the end of 2020. The number of black card customers reached 992, which increased by 12.7%. to understand the needs of our clients in depth. This is the core guidance for us to advance the change in the first line. The implementation of the new Basic Law is to build from a single financial advisor to an iron triangle service model, to strengthen the process management with the Superstition Plan, and to fully advance the 3K and other changes to get the client's and financial advisor's approval. In addition, our core first-line talent has experienced the advantage of internal talent and replenishing fresh blood, and has also risen steadily. With the opening of the new Basic Law, the production capacity of the team has begun to release. I would like to make a point. The revenue from the profit-making is 4.0 billion yuan.
spk04: In the first quarter of 2021, NOAA reported net revenues of RMB 1.22 billion, with a year-on-year growth of 64.1%, in which one-time commissions were RMB 323.2 million, a 53.3% year-on-year growth. Recurring service fees were RMB 474.9 million, a year-on-year growth of 5.6%. Performance-based income was RMB 403.1 million, which grew nearly 20 times year-on-year. Non-GAAP net income attributable to shareholders amounted to a historical high of RMB 461.9 million, representing a year-on-year growth of 79.7%. In terms of our main business segment, the transaction value of financial products in the wealth management segment reached RMB 27.1 billion, with a year-on-year growth of 16.8%. The transaction value of standardized products was RMB 21.5 billion with a year-on-year growth of 12.5%, among which secondary market equity funds grew 23.4% a year-on-year to RMB 11.2 billion, setting a new record for a single quarter. Mutual funds grew 8.6% a year-on-year to RMB 10 billion. The net revenues of overseas business reached RMB 337.5 million with a year-on-year growth of 62.5%. The overseas assets under management was RMB 25.92 billion as of March 31, 2021, a 3.9% increase compared with the end of 2020, accounting for 16.8% of the group's total AUM. In March, we successfully held an insurance summit in Macau and invited targeted clients based on big data. The number of attendees was 77% of the 2019 insurance summit in Macau. However, the total transaction value more than doubled, reflecting the accurate matching results of our KYC, KYP, and KYA systems, which we put great effort into. Aside from the financial data, the management is more encouraged by the gradual infiltration of our new management culture. The management idea from product-driven to client-centric survival first is reflected on the client, talent, and business side. With the further deepening of our transformation and reform, NOAA is on a continuous journey of building organizational capacity, which is the right way from the green train to the EMU, electric multiple units. First, our core clients' activity continued to rebound. In the first quarter of 2021, NOAA's high net worth clients, the number of active clients, including mutual funds-only clients, exceeded 27,000, an increase of 65.4% year-on-year. As of March 31st, the number of registered clients exceeded 380,000, sorry, 380,000, yeah, up 6.5% from the end of 2020. The number of Black Heart clients were 992, an increase of 12.7% year-on-year. Client-oriented and pursuing in-depth understanding of client needs is the core guiding ideology for our reform on the front lines. The implementation of the new Relationship Managers Compensation Scheme from a single Relationship Manager to the establishment of the NOAA Triangle Service Model, our strengthened process management with the Supernova Quantitative Client Communications Plan, as well as the comprehensive promotion of KYC, KYP, and KYA, received the approval of clients and Relationship Managers. Secondly, our core frontline talents, after experiencing the survival of the fittest, and replenishment of fresh blood have stabilized and recovered. With the pilot of the new Relationship Managers Compensation Scheme, the production capacity of the team began to release. After seven quarters of transformation, the number of elite Relationship Managers was 598 in the first quarter of 2021, 241 more than that at the end of 2020, and the turnover rate of elite Relationship Managers was only 0.28%. Now we will continue to improve our incentive system, vigorously promote employee training and team building, continuously empower relationship managers, screen qualified investors, and provide better services for high net worth and ultra high net worth clients.
spk05: Other active fund management conditions have shown a different growth. The public market management scale is 105.4 billion yuan, with a growth of 14.5 billion yuan. The management scale of private equity is 1,218.7 billion yuan, with a growth of 10.4 percent. In February 2021, the world's top 20 best S-funds were selected by the World Mutual Fund Association. Gefei's China Stock Exchange Fund has been ranked No. 1 in the world for its global revenue of less than US$2.5 billion for three consecutive years. Gefei continues to promote changes and product upgrades in the asset management products provided for customers. From product drive to customer demand drive is the core concept of change. Gefei's most important product this year began to implement the strategy of targeting as a target. The target strategy product is Gefei's main product in 2021. In product development, investment management, human resource density, and other aspects, a major investment is introduced into the process of IPD to fully improve Gefei's investment management and operation capability. Gefei's new journey, new strategy, and the same as Loya, from product drive to customer demand drive, continue to change. By the end of March 2021, Gefei's large cheese mall and Gefei's top 30 second-tier market multi-strategic investment products have been upgraded to two categories of Gefei's target strategy, positive and balanced, and re-launched into the market. The historical performance of this series of products is 7 years and 4 years respectively. Since the establishment of the target strategic positive product, the annual profit has been 15.24% and 10% before the return of the ranking in the same product. Since the establishment of the target strategic balanced product, the annual profit has been 12.76% and 2% before the return of the ranking in the same product. Gefei's target strategic flagship product has gained the recognition of high-quality customers at the beginning of the market.
spk04: As of March 31, 2021, the AUM of GOSA reached the remaining $154.1 billion, among which the continued redemption of non-standardized single counterparty private credit products from zero launch to zero inventory, and the scale of non-performing assets were dropped too. The other funds under active management realized different degrees of growth. among which the AUM of public securities reached RMB 10.5 billion, up 14.5% a year. The AUM of private equity was RMB 121.9 billion, up 10.4% a year. In February 2021, Gopher was selected as one of the top 20 secondary funds in the world by Global Fourth Association. Gopher China Equity Selection Fund, REN, the number one force in the world. In terms of compound annual return for three years ending December 2020, Barclay hedges Forbes with AUM under US$250 million. Among the asset management products provided by Gopher for our clients, Gopher continues to promote the reform and product upgrades. From product-driven to client-oriented is the core concept of the reform. The most important product of Gopher in 2021 is the target strategy product, which implements a target-oriented strategy. We invested more time and effort into product research and development, investment management, and talent density, as well as introduced the IPD, integrated product development process, to fully elevate Gopher's capacity in investment management and operation. Like NOAA, Gopher's new journey and strategy experience a constant change from product-driven to client-oriented. At the end of March 2021, Gopher's Megatrends MOM and top 30 secondary market multi-strategy investment products have track records of 7 and 4 years, were upgraded to Gopher growth target strategy and balance target strategy, respectively. Now back on the market again. The growth target strategy products realized an annualized return of 15.24% since launch, ranking top 10% in terms of return among comparable products. The balance for target strategy products reported an annualized return of 12.76% since launch, ranking top 2% by return among comparable products. Once launched, Gover's flagship target strategy products have been winning the recognition of high net worth clients.
spk05: In terms of efficiency, due to the expansion of personnel and market, the first quarter of 2021 was 7.2 billion yuan, which increased by 47.5%. Loya continues to commercialize, digitalize, and digitalize transformation and efforts, helping to continue to stabilize and improve operating efficiency. Long gap net profit increased from 34.2% in 2020 to 37.7%. Business profit increased from 38.1% in 2020 to 41%. Loya will begin the expansion and deepening of the financial iron triangle team and the core city of business. Our market share for the core city The increase and coverage of high-end and ultra-high-end customer groups has set new goals. In 2020, Luoya fully launched organizational change. From personal leadership to organizational capability, it is our core direction. First, we upgraded from business department to administrative management, and landed the right-of-way system and human rights match. We started to promote and implement the standardization of the right-of-way and the standardization of the right-of-way and the right-of-way. The promotion of the right-of-way system has optimized our core structure. which makes us more competitive in absorbing high-level talent from the market. At the same time, in terms of strategy and key tasks, we have determined that the company's annual strategic project budget for key projects, key cities, and key positions will be more flexible and focused on achieving the goals. 2021 is the first year of the change in Luo Ya. We have built a process organization from cultural processes, organization and IT, to strengthen strategic quality control and process management, and to make the customer service and product end work specifications quality. In the brand management and construction section, we integrated sales planning. In the financial section, we carried out full-scale business management based on strategy. In the legal and control section, we promoted a risk-free internal control management system to prevent corruption and control risks. In the human resources section, we used the qualification to attract cadres to support growth. We actively implemented IPD and integrated product development project management. In the product channel, we established different IPD projects. In terms of operating efficiency, due to the expansion of employees and marketing activities, the operating income of the first quarter reached presuming to be $722.3 million,
spk04: Up 47.5% year-on-year, NOAA's continuous online, physical, and intelligent transformation and efforts have contributed to the continuous and stable improvement of operating efficiency. The non-GAAP net profit margin increased from 34.2% in 2020 to 37.7% in the quarter. The operating profit margin increased from 38.1% in 2020 to 41% in the quarter. This year, NOAA will start to expand the capacity of the NOAA Triangle Relationship Managers Team and deepen operations in the core cities. We have set new targets for our market shares in core cities and the increase in coverage of high net worth and ultra high net worth clients. In 2020, NOAA fully initiated its organization reform with a core direction from individual leadership to organizational capacity. First, we upgraded from divisional structure to matrix management, implemented qualification system and person-poster matching, and started to define and arrange internal personal levels by positions, salaries by levels, as well as link the change of salaries with positions changes. The implementation of the new qualification system optimized our compensation structure, making us more competitive when recruiting senior talents in the market. Meanwhile, we determined the company's annual budget of strategy projects in the aspects of strategy and key tasks, and became more flexible to focus on our targets in key projects, cities, and positions. 2021 is the initial year of NOAA's transformation. We aim to build an organization of processes from the aspects of culture, process, organization, and IT, strengthen strategic quality control and process management to make client service and product and operation standardized and of high quality, to integrate marketing planning into brand management, to carry out comprehensive strategy-based budget management, and to promote the internal control management system to help operations. prevent corruption, and control risks, as well as to use the qualification system to lead the growth of management team members on human resources front. NOAA is actively practicing IPD, integrated product development project management, and has established the different IPD projects on product, channel, and international operations. For example, the KYC, KYP, and KYA digitalization project we mentioned is to realize in-depth collaborations among the three through project operation standardization and the appointment of project teams and its responsible persons. Finally, everything falls into the core management idea of client-centric and survival-first.
spk05: to meet the growing demand for office in Asia. More importantly, to serve China's high-end and ultra-high-end customers as the main business of the national private banking brand, it reflects the upgrade of the core culture and concept in the process from a product-driven startup company to a hundred-year enterprise that serves three generations of customers. The position of Hongqiao Shunyou allows us to cover our customers in Jiangzhe and all over the country more conveniently, and build the concept of customer as the center. and provided us with a customer interface with quality and convenience at the same time. This building was designed by Apple's new headquarters. It was designed by a well-known construction company, such as London, Swiss Insurance, Hong Kong HSBC, Beijing Capital Airport, and other famous construction companies. One of the buildings in the construction group is the only one in Shanghai. It is the only one in Shanghai. It is the only one in Shanghai. It is the only one in Shanghai. It is the only one in Shanghai. In the structure of the round-shaped basic building, the round-shaped main body has a gap in the middle, and the building's light and space utilization rate has reached its peak. The total area of the project building is 72,000 square meters, and the rent area is 63,000 square meters. It is located in the core business area of Shanghai Hongqiao, near Hongqiao Airport and the train station, and is convenient for transportation. It is a customer-centered facility, which includes the best experience for the customer, and authorizes the customer's closest first-line manager to make decisions. provide all kinds of services and many types of products to meet the customer's needs. Through the onlineization of the business, the digital transformation is advanced, and the digitalization is gradually realized. Data and analysis are the basis for us to improve the service efficiency and more accurately understand the customer's needs, and thus surround the customer's needs to establish our service ecosystem. It can also be said that the structure of this Luoya Headquarters is a new management concept of Luoya's second startup to upgrade the company. It is a symbolic event with the customer as the center and survival as the bottom line. Last but not least, I'd like to brief you.
spk04: NOAA has been running businesses in Shanghai for 16 years and being listed for nearly 11 years without our own headquarter buildings. In this quarter, we have finally found a satisfying headquarter premises in the core zone of the Hongqiao Comprehensive Transportation Hub, to meet the increasing office usage demands of NOAA. More importantly, as a trending Chinese private banking brand, in line with the surge of favoring Chinese brands in the consumption market over the past few years, we primarily serve China's high net worth and ultra high net worth clients. The new promises demonstrate an upgrade of our core culture and philosophy on the journey from a product-driven startup to a century-old enterprise of serving three generations of clients. The location of the Hongqiao Hub enables us to connect with our clients from around China, especially from Jiangsu, Zhejiang provinces and Shanghai, in a swifter and more convenient way to practice client-centric theory, providing us with a client interface with both quality and convenience. The premises is designed by Forster and Partners. The firm also designed renowned buildings such as Apple's headquarter, the Apple Park, the Swiss Re building in London, the HSBC headquarters in Hong Kong, and the Beijing Capital International Airport. One of the buildings in this project is the only office building with an outer core cylinder in Shanghai with LED letters arranged throughout. After several rounds of adjustments and improvements by Foster & Partners, under the basic cylinder structure, the cylinder body is hollowed out in the middle, and the lighting and space utilization rates of the building are all to the maximum. The project has a total construction area of 72,000 square meters, and the leasable area is 63,000 square meters. It is located in the core business zone of Hongqiao, Shanghai, adjacent to Hongqiao Airport and railway station, with convenient transportation. Client-centric includes creating the best experience for clients, authorizing the frontline managers who are the closest to clients to make decisions, providing various services, meeting clients' needs with various products, promoting digital transformation, and gradually realizing intellectualization through online business. Data and analysis are the basis for us to improve service efficiency and more accurately understand client needs, so as to build our service ecosystem around their needs. We may say that the purchase of NOAA's headquarters is a milestone of NOAA's second venture and upgrading the company's new management concept of client-centric and survival first. We look forward to welcoming all shareholders and investors to visit the new NOAA headquarters. Next, let's invite our CFO, Mr. Panqing, to introduce the quarterly data in detail. Thank you.
spk00: Thank you, Sonia. Thank you, Chairlady. And dear investors and analysts, good morning. Very excited to share with you another record-setting quarter in which we have accomplished new heights across various financial and operational metrics, including revenues, profits, client activities, transaction value, and elite RM retention rate. As our client investment passion and confidence in economic outlook continues recovering and overall team morale continues growing, benefiting from implementation of various new organizational improvements and the upgraded client service model as part of overall strategic transformation so far. I'm also happy to share with you that we're ahead of the schedule to meet the full year non-GAAP net income guidance of RMB 1.2 to 1.3 billion as we concluded this quarter with a record high non-GAAP net income of RMB 461.9 million. mainly due to also record high performance-based income of RMB 403.1 million, accompanied with growth across other revenue segments. Now, please let me walk you through more detailed results of the first quarter. We recorded net revenues of RMB 1.2 billion, which was unprecedented for a single quarter since listing. This was mainly contributed by performance-based income of RMB 403.1 million, also record high, a result of the strong performances of the public securities products we have placed for our clients in the past, accounting for over 60% of the total performance-based income during the quarter. Just to give you a rough idea of what this means for our clients, for every million of performance-based income we earn, based on our average sharing with the GPs, our clients would have made RMB 20 million of investment return above the hurdle rate of the return. after accounting for the performance-based fee charged by the GPs. One-time commissions in the first quarter was RMB $323.2 million, up 53.2% year-over-year and 19% quarter-over-quarter, driven by strong transaction value during the quarter, while maintaining a very healthy fee rate of 1.2% on the products we place for our clients. This demonstrates our successful efforts in the optimization of product mix, Recurring service fee was RMB 474.9 million, up 5.6% year-over-year and 8.9% quarter-over-quarter as we harvest on the recovery of transaction value replaced for our clients. As Chairlady has mentioned, one of our strategic objectives for 2021 is to achieve core client growth, especially in the tier of diamond and black card clients. We're happy to see the number of black card clients has grown 12.7% year-over-year to 992. We have also recorded unparalleled client activities as close to 28,000 active clients, up 65.4% year-over-year and 42.8% quarter-over-quarter. The number of active conventional clients was 6,300. also up 54.6% year-over-year and close to 20% quarter-over-quarter. The robust client activity is a clear indication of the successful implementation of several of our key strategic initiatives, including the NOAA Triangle Service Model, which helps our IMs utilize their full client engagement potentials with the help of product experts. During the first quarter, a record-setting close to 600 of RMs were qualified as elite RMs, up 68% from the previous quarter, and we have managed to keep our most valuable sales force intact with a record low elite RM turnover rate of only 0.28%. As a result, total transaction value was RMB 27.1 billion during the quarter, up 16.8% year-over-year and 27.1% quarter-over-quarter. We placed an unmatched level of RMB 21.5 billion of public market products for our clients, consisting of RMB 11.2 billion of private hedge funds, which doubled from the previous quarter, and RMB 10 billion of mutual fund products, also increased 21.8% quarter-over-quarter. So for private equity products, the total transaction value was RMB 4.8 billion, a 62.5% increase year over year, and 7.9% decrease quarter over quarter. Operating income was RMB 502.4 million during the quarter, up 96% year over year, and almost 50% quarter over quarter. The operating margin was 41%. an improvement from 35.2 from the previous quarter. Comp-related expenses were RMB 582.1 million, up close to 60% year-over-year and 30% quarter-over-quarter, a reflection of increasing efforts in recruiting new talents. Non-GAAP net income was RMB 461.9 million, also a historical high, Just for the purpose of getting a sense at a normalized number by adjusting the carry to the same level as last quarter, we would still have recorded a 41% year-over-year growth and 38% quarter-over-quarter growth for non-GAAP net income. As for segmented results, net revenues from wealth management segment was RMB 946.5 million, up 71.3% year-over-year and 47% quarter-over-quarter, accounting for 77% of total net revenues for the quarter. The strong results in a wealth business segment was driven by robust client transaction activities while maintaining a high overall fee rate. Net revenues from asset management segment was RMB 270 million, up 63% year-over-year and down 11.8% quarter-over-quarter, Total AUM has grown 0.8% since the end of last year to RMB 154.1 billion, mostly driven by growth in private equity and public security products with effect of exiting of credit products. So moving on to balance sheet, we remain in healthy liquidity position as our current ratio stood at 3.2 times. The debt to asset ratio was 24.8% and continue to have no interest bearing debt on our books. By the end of first quarter, we had RMD close to $5 billion in cash. We're on track to deploy the budgeted spending with relation to RMD investments and other growth initiatives. As is mentioned by Chair Lady Wang, we have entered into definitive agreements to acquire a Class A office property located in the Shanghai Hongqiao Central Business District. with a gross floor area of 72,000 square meters and a gross leaseable area of 63,000 square meters. The total consideration is approximately RMB 2.2 billion, which is equivalent to RMB 35,000 per square meter based on the GLA. And that's a good deal when compared to the average of RMB 40,000 to 50,000 trading price of adjacent comparable properties in that area in the past few years. We plan to finance the transaction with cash on balance sheet, but it will also look for opportunities to refinance when the cost of financing and timing is right. This is the first time in NOAA history to have our own headquarters that will be able to support the growth of business and the need for additional office space in the next five to six years in Shanghai. And because of its close proximity to one of the nation's busiest transportation hubs, The facility is also an ideal premise to house various kind of conferences for the Yangtze River Delta region, including Shanghai, Zhejiang, and Jiangsu provinces, which is our most important geographic segment and in total contributes to more than half of our business. The deal is expected to close within the next couple of months upon the satisfaction of further closing conditions and government approval. Moreover, I would like to note that we have published our seventh ESG report for the year 2020, outlining our long-term commitments to ESG and responsible investments, and it's available on the ESG section of our website. Overall, we're very pleased with our first quarter results and the strong growth in client activities as well as in the key sales force. We also hosted our annual Macau conference in March and received very nice attendance. That is showing that our clients are still very eager to learn about the overseas asset allocation as well as insurance products. I'm confident with our business development outlook as we'll continue to improve our client service experience and optimize our product offerings. So thank you, everyone. And I will now open the floor for questions. Operator?
spk02: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch tone phone. If you are using a speaker phone, please pick up the handset before pressing the keys. To withdraw your question, please press star then 0. At this time, we will pause momentarily to assemble our roster. Your first question comes from Emma Zhu with Bank of America. Please go ahead.
spk03: First of all, congratulations to NOEA for a very bright 1st quarter performance. And I would like to ask why after such a bright performance, we did not raise the whole year's guidance on non-GAAP. Because our non-GAAP has reached 1st quarter. 461, 462 million, and then the whole year is 1.2 to 1.3 billion. This seems to indicate that the non-GAAP income in the next three seasons seems to be a 4% to 15% decline. I don't know what kind of factors make you not willing to apply for the non-GAAP position at the moment. So congratulations on NOAA for the very good first quarter result. But my question is, why don't you revise up your non-GAAP net income guidance for the four years? Because according to the current guidance, it seems that it implies for the In the next three quarters, the non-GAAP net income will decline 4% to 15% in your year. So what factors hold you back from revising up the non-GAAP net income guidance? Thank you.
spk00: Thank you, Emma. That's a very fair question. First off, obviously very happy to see the results in the first quarter. But at the same time, we're also conscious about the volatility, especially in the Asian market in China for the outlook of the rest of the year. So for that, as much we're confident with our top line, I guess we'll be pretty reasonably conservative in terms for the expectation of the super overperformance for the rest of the year for the market, which in turn obviously will impact on the transaction values or clients' investment passion. And two, as we have mentioned, we'll continue to invest in our strategic initiatives, especially in this year. It's a very critical year to open up our transformation. And some of the investments actually are in talent and some of them are in technology. So the full year impact has not shown in the first quarter. and expect that the investment continues to ramp up for the rest of the year. So from that standpoint, we're pretty confident in offline growth, but at the same time, we want to also make sure that we have enough room for the investment in strategic initiatives.
spk05: We are still confident in the growth of revenue, but we haven't set a profit goal. I think it's because we can see that Yeah, so Charity has also supplemented, you know, in the last few quarters when we're going through our transformation strategy,
spk00: especially the upgrade, our management and also organization capabilities. We're trying to, I guess, transform from a so-called startup company into a really mid-size level type of modern corporation and organization, which actually requires heavier investments on the management and organizational resources.
spk03: Okay, thank you very much. I would like to ask another question. I don't know if it is convenient for the management team to introduce the management situation since the second quarter. And then there is another question, that is, the entire wealth management industry is also a blue sea market that everyone is looking forward to. And then many banks have also mentioned that they want to focus on So thank you so much for answering my previous question. And I have actually two follow-up questions. Could you please introduce the latest progress in the second quarter, including the major business metrics? And thirdly, many domestic Chinese banks are paying more attention to the wealth management sector because this is a very promising sector. So do you feel increasing competition from the Chinese banks and how will you respond to them? Thank you.
spk05: In the past few years, because of the change in policy and regulation, the change in risk control, we are now facing more and more securities companies and banks. But I think Luo Ya has experienced 15 years of wealth management. We should say that we are in a 2.0 state. Most banks have just started product-driven wealth management. But Luo Ya has entered the next stage, which is completely So yeah, to address your second question first, Emma, that as you know, we're always in a very highly competitive market.
spk00: And because it seems that the transformation or the shift really in the regulatory and policy environment seems we're facing more and more security brokerage firms as well as banks in this particular market space. But from a standpoint, NOAA has already moved on to stage 2.0 in terms of wealth management industry that it seems that the banks are just starting their stage in terms of, you know, designing the right products and product-driven type strategy in wealth management, while NOAA has moved on to really trying our best to match our clients' need with the right products and services as well as, you know, the agent and sales network that serve them. So we're really moving on to the right direction and moving to the right stage. Obviously, initial part will be tough. and difficult, but we're very confident that we're actually walking on the right track.
spk05: But then the function could work out that they you could work with that you could wait until you know how we're going to be going to get them to come up to someone else. I have a little bit of time to get a little bit of time to get a little bit of time to get a little bit of time to get a little bit of time to get a little bit of time Yes, so to add a little more color onto that, especially to elaborate what we mean about our bottom line is for commercial survival or commercial success,
spk00: is that we always try to ensure that we have a higher standard in terms of compliance than what the regulators have put out for the industry. For example, we're being very selective in terms of acceptance. We're screening the clients' profiles, and we actually will take on some clients, and at the same time, we'll give up on some clients. Just want to make sure that we always try our best to... place the right products for the right clients at the right place. But it seems that our competitors are, you know, as the new arising competitors, you mentioned, Emma, is still trying to copy probably our older sort of compensation scheme, for example, in their sales force, when we have actually moved on several generations, several upgrades on the compensation schemes for the sales force. So we believe that, you know, we're ahead of the curve. But we want to make sure also we understand initial part will be tough, but we're ready for the challenge. And to your first question, in terms of the operational situation for the second quarter, obviously I can't tell you too much about the numbers, but we'll continue to market Gopher's target return products, which is met with pretty good acceptance by the clients. We're pretty confident that the numbers will show up in the second quarter. And also, you know, we continue to host actually a little smaller conferences in Macau for the overseeing insurance products, and I'm pretty happy to see the results, especially the positive results on the top line and the profits.
spk02: Thank you. Once again, if you wish to ask a question, please press star 1. This concludes our question and answer session. I would like to turn the conference back to Mr. Pan for closing remarks.
spk00: The conference has now concluded. Thank you for attending today's presentation.
spk02: You may now disconnect.
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