Noah Holdings Limited

Hello dear investors and analysts and welcome to the NOAA Holdings Third Quarter 2022 Earnings Conference Call. Please note, your line has been automatically muted and this event is being recorded. The company management team will first give a quarterly update presentation. After today's presentation, there will be an opportunity to ask questions. Please use the raise hand function in Zoom during the Q&A session. When selected, you can then turn on the microphone to ask a question, and please mute yourself after the question. Thank you. I would now like to turn the conference over to Miss Jingbo Wang, Chairperson and CEO of NOAA Holdings. Please go ahead.

Weiguo Wu, Hong Li, Wing Shan Ng, Melo Xi But Loya has also completely resolved the risk of the Chinese stock market retreating. The third quarter of 2022 is a relatively difficult quarter for us. The United States, the Fed, and the global second-tier markets continue to fluctuate. China's epidemic prevention and control policies continue to cause different cities all over the country to enter lockdown. It has brought huge challenges to the commercial industry. Customer investment sentiment continues to decline, accompanied by increasingly intense Sino-US competition and Russian-Ukrainian war. Investors' willingness to invest has dropped to the peak in the last three seasons. The safety and liquidity of the investment assets to protect themselves and their families is the most urgent demand of current customers. The increase in uncertainty around the world has added many external risks. The opportunity to feel peaceful has turned into a temporary state. In times of crisis, how can we increase the frequency of contact with customers? Weiguo Wu, Hong Li, Wing Shan Ng, Melo Xi China's high-profile customers will become a major trend in the future. The end of industrialization and industrial globalization is just the beginning of China's capital globalization. Foreign Chinese customers' demand for wealth is ignored or not fully satisfied. They need financial institutions that are familiar with them to serve. The change in customer demand is the core driving the development of Luo Ya internationalization, and it is also the key development direction of Luo Ya now and in the future.

The agenda of today's teleconference, I will first share my views on the micro market, and then introduce NOAA's overall performance in the third quarter of 2022, the development of several business sectors, and our overall strategy. Next. does invite Pan Qing to introduce quarterly financial information, then conclude with an interactive Q&A. First of all, I would like to report to you that we have received the acknowledgement from the Hong Kong Stock Exchange regarding our voluntary application for conversion to do primary listing in Hong Kong. We thank the recognition from the Stock Exchange. Before the new year of 2023, NOA would become a dual primary listed company, both in the United States and Hong Kong. Although the compliance requirements for the two jurisdictions are stricter, NOAA has also completely removed the ADR delisting risk. The third quarter of 2022 is a difficult quarter we have experienced, with the Federal Reserve raising interest rates significantly and the global secondary market continuing to fluctuate. The prevention and control policy of COVID in China has continued to cause lockdowns in different cities across the country. bring huge challenges to business operations, and our clients' investment sentiment continues to be low. With the increasingly fierce competition between China and the United States, as well as the Russia-Ukraine war, investors' willingness to invest fell to the freezing point in the third quarter. The most urgent demand of clients is to protect the security and liquidity of the investable assets of their own and families. The increase of global uncertainty superimposed many external risks, making us feel that the period of strategic opportunities for peaceful development has turned into a wartime stage. In times of crisis, how to increase the frequency of contact with clients, increase the client's wallet share under management, and protect client assets are the key points of our thinking and action. At such a moment, NOAA's management needs to be aware of the market situation and make decisions decisively. The execution team needs to implement efficiently, respond quickly, and reconfigure resources quickly to ensure NOAA's future survival and development and keep it in a healthy state. We believe the current micro-situation presents not only challenges but also opportunities.

The global exaltation of China's high-net-worth clients will become a major trend in the future.

The end of industrial globalization is exactly the beginning of China's tactile globalization. The wealth management needs of overseas Chinese-speaking client groups are ignored, or at least have not been fully matched, and need to be served by financial institutions familiar with their needs. The change of climate demand is the core driving force for NOAA's international development, and also the key development direction of NOAA, now and for the future.

In the third quarter of 2022, NOAA achieved a sales income of 6.8 billion yuan, and the net profit of non-commercial accounting of shareholders was 1.9 billion yuan, which is the same as the net profit. By September 30, 2022, the total profit of the year was 8.6 billion yuan, have completed 59.3% of annual profit guidance, lagging behind in time. In terms of core business data, the three-year increase in revenue was 179.7 billion yuan, down 25.3% at the same rate, down 7% at the same rate. In such a difficult environment, to achieve such an increase in scale, we still deeply feel the trust of our customers. We are grateful that our customers are still willing to put their wallet funds in Luoya. In this quarter, the revenue of KOMO Funds increased by 30.3% at the same rate, down 4.4% at the same rate. Weiguo Wu, Hong Li, Wing Shan Ng, Melo Xi Weiguo Wu, Hong Li, Wing Shan Ng, Melo Xi Diamond and black card customers have been steadily growing. As of September 30, 2022, the number of diamond customers in Luoya reached 7,653, which is 17.4% of the total growth. The number of black card customers reached 2,129, which is 39.4% of the total growth. Luoya continues to increase the frequency of customer contact and recover the lost customers in the process of flying and real estate clearing. As of November 17, this year, a total of 1014 lost customers have been recovered. It is worth mentioning that in December 2021, we launched a self-developed micro-currency platform focusing on corporate cash management. As of the third quarter of 2022, the number of corporate customers who opened and traded through micro-currency has reached 3,237, with a growth of 224.3%. The past of physical economy, small and medium-sized enterprises' cash management has not been systematized. We strive to strengthen the balance and scalability of financial management products in institutions. We will continue to deepen and expand this field. We believe that we can continuously expand the actual economy and small and medium-sized enterprises to gain a sense of happiness and sense of security. In the third quarter of 2022, Luoya accelerated the international business expansion to adapt to the needs of customers' global asset allocation. In Hong Kong and Singapore, Luoya's international asset management and sales team was established. I believe that in the near future, Luoya International Business will contribute more revenue to the group.

Third quarter of 2022, NOA realized the net revenues of RMB 618 million and the non-GAAP net income attributable to shareholders of RMB 119 million. Both decreased both the young year and quarter on quarter. As of September 30th, the accumulated non-GAAP net income of 2022 has reached the RMB 816 million, reaching 59.3% of the annual guidance, which is behind the schedule. In terms of core business data, Transaction level in the third quarter was RMB17.97 billion, down 25.3% year-on-year and 7% port-on-quarter. To achieve such a result in this difficult environment makes us feel that the trust of our clients has not come easily. Thank clients for their willingness to continue to put their awarded shares in NOAA. In this quarter, the transaction value of mutual funds increased by 30.3% year-on-year, down 4.4% quarter-on-quarter. The transaction value of private secondary funds also picked up slightly, to RMB $3.33 billion, up 38.9% quarter-on-quarter. The transaction value of private equity was RMB $2.5 billion, down both year-on-year and quarter-on-quarter. In the third quarter, NOAA's total number of active clients reached 22,641, up 6.5% year-on-year and 76% quarter-on-quarter. Among them, the number of overseas active clients was close to 1,400, an increase of 84% quarter-on-quarter. High-net-worth and ultra-high-net-worth clients are NOAA's core client base, and diamond and black-hot clients have been growing steadily. By September 2022, NOAA had 7,653 diamond clients, up 17.4% year-on-year. The number of black card clients reached 2,129, up 39.4% year-on-year. NOAA continues to increase the frequency of contact with clients, as well as to recover those lost clients in the process of exiting private credit bonds and real estate bonds. As of November 17th, 1,014 lost clients have been recovered this year. It is worth mentioning that our independently developed small treasury platform focusing on institutional cash flow management was launched in December 2021. By the end of the third quarter, the number of institutional clients who opened accounts and transacted with small treasuries had reached 3,220. 37, an increase of 224.3% quarter-on-quarter. The cash flow management of the real economy, micro-businesses, and small to medium-sized enterprises has not been systematically served in the past. We focus on enhancing the balance and accessibility of wealth management products and services at institutional level, providing dedicated and optimized asset allocation solutions, as well as building a full lifecycle and full spectrum wealth management product services system. We will continue to deepen and expand in this field and believe that we can continuously improve the sense of gain, happiness, and security of the vast real economy as Small and micro enterprises. In the third quarter of 2022, NOAA accelerated the pace of international business development to adapt to clients' global asset allocation needs. In Hong Kong and Singapore, we set up a direct sales team for international wealth management. The international business revenue in the third quarter rose 21.5% quarter-on-quarter, and its share in net revenues rose to 28.3% from 21.6% Presenting the previous quarter, I believe that NOAA's international operations will contribute more revenues to the group in the near future.

截止2022年9月30日,哥菲资产管理的规模为1562亿元人民币,较上季度末增长0.5% 其中四目股权的管理规模增长至1328亿元人民币 公开市场产品的管理规模受禁止波动影响,从上季度的107亿下降到102亿 In terms of real estate funds, the active management of the U.S. rental apartment real estate fund has grown by 6.2 billion in the last quarter to 6.7 billion. In terms of the first-class market, Gefei S fund management has also achieved certain results, with a growth of 13.3 billion. Currently, the debt management is more than 80 yuan. Gefei's overseas asset management is 7.1% higher than before, and 3.1% higher than before, reaching 30.5 billion yuan. The real estate market has maintained a growth trend. have achieved 4.5% and 30.3% of return growth. We have maintained a good growth ratio for Gefei's international AUM. Gefei's financial support target strategy products, document balance, and three types of strategies, in the third quarter, continued to run a lot, with a net profit of $800 and a net profit of $300. As of November 11, this year's revenue is divided into negative 1.19, and Zhe Yin.

As of September 30th, 2022, Gopal's AOM was RMB 156.2 billion, an increase of 0.5% over the end of the second quarter, among which private equity increased to RMB 132.8 billion. Public securities were affected by the fluctuation of NAV, falling from RMB 10.7 billion in the previous quarter to 10.2 billion. In terms of real estate funds, our actively managed U.S. rental apartment real estate fund increased from RMB 6.2 billion in the last quarter to 6.7 billion in the primary market. The AOM of Gunfei Atom has also made achievements, with a year-on-year growth of RMB1.33 billion to exceed RMB8 billion. Bofors Overseas AOM rose 7.1% year-on-year and 3.1% quarter-on-quarter and reached RMB 30.5 billion. Private equity, public securities and real estate all maintained the growth trend and achieved a quarter-on-quarter growth of 1%, 4.5% and 30.3% respectively. We maintain good growth expectations on our overseas AOM. Gota's wealth stabilizer product target strategy continues to outperform China's securities index 800 and Shanghai Shenzhen CSI 300 significantly in the third quarter across all stable, balanced and positive strategies. As of November 11th, 2022, returns were minus 1.19%, minus 6.69% and minus 9.33% respectively in 2022. while those of CSI 300 and CSI 800 in the same period were minus 23.32% and minus 21.66% respectively. The maximum drawdowns of the three strategies since their establishment were minus 3.24%, minus 10.57%, and minus 1.3%. are minus 1.3.74% respectively, compared with minus 33.45% of CSI 300 and minus 29.1% of CSI 800 in the same period. It shows that target strategy has continuously played a role in stabilizing clients' portfolio amid market fluctuation.

In the beginning of 2022, Luo Ya established a new flow of high-quality services and corporate law clients. In the view of the CIO office's macro asset allocation, the CISO office's central customer management strategy and cross-product line solution is the basis. Combined with IPS office's flexible and flexible adjustment of the selection, including the top priority, guarantee inheritance, base warehouse documents, mobile management, growth and growth, etc. Four levels of customer asset allocation solution. In 2022, this extremely uncertain market should be said to have achieved better results and received customer recognition. We believe excellent wealth management and management companies will be preparing for the next bull market in Xiong City. After the success of the Hong Kong listed stock in Royal Kongu, it is necessary to meet the requirements of the Chinese and U.S. Stock Exchange Commission and the Hong Kong Exchange Office at the same time. With TCFD framework to define the carbon neutral strategy of the group, we started the relevant planning to improve the group's climate risk management policy, plan to seal and set up TCFD group, have completed the related climate information disclosure report. The Group's Sustainable Development Committee has included the climate risk in the flow of investment management, and will report the data report to the Board of Directors. At the same time, we will gradually advance the assessment of the climate factors in the investment process, and combine the calculation model of the large-scale investment group of the Science and Technology Team with the technology team. Sustainable development is our goal. Thank you.

At the beginning of 2022, NOAA established a new process to serve high net worth and corporate clients. Based on the macro asset allocation house view of the chief investment office, the client strategy and cost product line solutions of the chief strategy office, combined with the investment products and services office, NOVA provides flexible adjustments and springs out four levels of client allocation solutions, including the high-risk priority protection and adherence solution, stabilization solution, liquidity management solution, and growth solution. In this extremely uncertain market in 2022, we could say that we have achieved good results and have been recognized by clients. We believe that excellent wealth management and asset management companies will make full preparations for the next bull market in a bear market. After the successful listing of NOA holdings in Hong Kong, it needs to meet the requirements of both the Securities and Exchange Commission of the United States and the Hong Kong Stock Exchange, and specify the carbon mutual strategy of the group in the TCSD framework, aka the guideline recommendations of the task force on climate-related financial disclosures. We have launched a relevant plan to improve the group's climate risk management policy, a plan to set up a TCFD team for risk control, and completed the relevant climate information disclosure report. The Sustainable Development Committee of the group incorporates climate risk into their investments in management process framework and regularly submits reports to the Board of Directors. At the same time, we're gradually promoting the inclusion of climate factor assessment in the investment process and working with the technology team to build a calculation model for the carbon footprint and investment portfolio. Sustainable development is our challenge.

虽然宏观遭遇了较大的挑战,但诺亚坚持以客户为中心,生存为底线的核心价值观。 have maintained a healthy state of life. The change in the organization in the past three years has also highlighted the value this year. Because of the optimization of the financial service service model from a single RM to a iron triangle model, the development of international financial institutions has become possible. The development of the customer base has been changed through L2C. In the difficult situation of the market this year, in the business management of small and medium-sized legal entities, both the number of customers and the size of assets have achieved unprecedented results. The economist Maslow once said, In any moment, we all have two choices, to move forward towards growth, and to move backward towards safety. The fate of the world may be too great, but we must stand up for ourselves. For the market itself and for the individual, even if we are trapped, we still believe that the strength of every Russian can be gathered together, and can seize the opportunity in the challenge, to make the international business bigger and stronger, to maintain the top position in the country, and to achieve the heart of love with professionalism. Sonia.

Although we have encountered great challenges in a micro perspective, NOAA adheres to the core values of client-centric and survival as the bottom line, and the company has maintained a healthy state of existence. The organizational change promoted by NOAA in the past three years has also highlighted values this year. The optimization of the client service model of the relationship manager end, from a single relationship manager to the NOAA Triangle Service Model, makes the development of our international wealth management possible. On the client development side, through the reform of Lease-to-Cash, under the difficult market situation this year, we have made hard-won achievements in the treasury management business of small to medium-sized enterprises, both in terms of the number of clients and AUA. Psychologist Abraham Naskor once said, in any given moment, we have two choices, step forward into growth or step backward into safety. It may be too grand to think about the destiny of the country, but based on ourselves, for market participants and individuals, even in difficult situations, we still believe that to gather together the power of each new employee, we can seize the opportunity in the challenge, expand and strengthen our international business, maintain the leading position in China and achieve other value of professionalism and empathy. Now, let's invite the CFO, Pan Qing, to introduce the costly data in detail. Thank you.

Thanks, Sonia, and thank you, Chairlady. Good morning to investors and analysts online. As Chairlady has mentioned, following our successful secondary listing in Hong Kong in July, October we received acknowledgement from Hong Kong Stock Exchange in respect to the application of voluntary conversion to dual primary listing in Hong Kong. The effective date on which of the primary conversion is expected to be before December 31st, 2022. With the successful conversion, we'll be dual primary listed on both the Hong Kong Stock Exchange as well as the New York Stock Exchange, which removes our ADR delisting risk because Hong Kong shares and ADS shares are fully fungible. We also hope to be able to join the Stock Connect link in the future, which will allow investors from the Chinese stock market to be our shareholders. We're mindful that following the impact from continuous geopolitical conflicts in the second quarter, the macro environment in the third quarter continues to be highly challenging. The United States Federal Reserve raised rates in the third quarter, each time by 75 beats, following its raised heights in March, May, and June, followed by another 75 beats on November 3rd. That means accumulated 375 beats in 2022, the highest level in 14 years. And in China, lockdown measures that came with COVID zero policy was not alleviated, as many had originally anticipated and hoped. further affected investor sentiment, especially towards making investment decisions in large sums and in equity market products. This is evidenced by the swap of mutual fund net asset value in the third quarter and also the declining of revenue from fund distributions across the industry. Now, please let me walk you through more detailed results for the third quarter. As a result of the challenging market environment dampened investment sentiment, total transaction value decreased to RMB 18 billion, down 25.3% year-over-year and 7% quarter-over-quarter. The transaction value of private equity declined by 34% year-over-year and 36% quarter-over-quarter to RMB 2.5 billion. Noticeably, the transaction value of private secondary products saw a significant increase of 38.9% quarter over quarter to RMB 3.3 billion, representing a short rebound, but still down 68.5% year over year. Moreover, the transaction value of mutual funds was RMB 11.7 billion, up 30% year over year, and down 4% slightly quarter over quarter. and the total number of active clients for the quarter was 22,641, a 6.5% increase year over year and a 76% increase quarter over quarter. Benefiting from continued strategic investments in our core client group, diamond and black card clients grew to 9,782, up 14.3% quarter-over-quarter and 21.6% year-over-year, among which the number of black card clients and diamond card clients increased by respectively 39% and 17% year-over-year. Thanks to the operational enhancements of a more targeted client segmentation strategy program and resumed client events, our client-centric philosophy will continue to be a key strategy in the long run. It is also worth mentioning that through our self-developed customized treasury platform, Smile Treasury, which was launched in December 2021, The number of institutional clients boomed to 2,522 as of the end of third quarter, more than doubled from the end of last quarter. We believe there remains a large treasury management market potential for these underserved small to medium-sized enterprises, and we'll keep developing the segment with our comprehensive product line and well-established service network. As a result of slower placement in equity market products, we have seen perhaps the slowest quarter in recent years. Non-GAAP net income was RMB 190.9 million for the quarter, down 32% year-over-year and 46% quarter-over-quarter. As of September 30th, 2022, it was RMB 860 million, representing 59% of full-year non-GAAP net income guidance score. Income from operations for the quarter was RMB 231.8 million, a 1.3% growth year-over-year due to our tightened expense control policy, but a 28.3% decrease quarter-over-quarter due to a 7.3% decrease in net revenue and also an 8% increase in operating costs and expenses, as less expenses were incurred in the second quarter of 2022 due to the unprecedented COVID lockdown in Shanghai. Consequently, the operating margin was 33.9% of 8.7% year-over-year and down 9.9% quarter-over-quarter. We expect to see continued challenges from the Fed rate hikes, sporadic lockdowns in China due to its prolonged COVID-0 policy, as well as very volatile public market. Considering the impact of these factors on clients' investment sentiments especially, the company revised its estimated non-GAAP net income attributable to NOAA shareholders for the full year 2022 from a range of RMB 1.45 billion to RMB 1.55 billion as previously published to a range of RMB 1 billion to RMB 1.1 billion. In addition, to comply with the applicable requirements under the Hong Kong listing rules and be in line with the general market practice for companies with primary listing in both the United States and Hong Kong, we no longer publish its annual forecast after the conversion to a dual primary listing in Hong Kong, starting from our results announcement next quarter. As a result of lower transaction value, Net revenues for the third quarter was RMB 684.5 million, down 25% year-over-year and 7.3% quarter-over-quarter. One-time commissions fell to RMB 99.9 million, down 53% and 51% quarter-over-quarter. Recurring service fees were fairly stable with RMB 489.6 million, up 6.7% quarter-of-quarter, but still down 13% year-over-year, affected by NAV movements of private secondary products. Performance-based income grew to RMB 27.6 million, up 6.8% quarter-of-quarter, but down 66.4% year-over-year, while net revenues from other subsidies continued to grow to RMB 67.3 million, a 50% increase year-over-year, and a 45% increase quarter-over-quarter, mainly due to more value-added services NOAA offers to our high-net-worth clients. As for segmented results, net revenues from the wealth management segments were RMB 465.9 million, down 28.7% year-over-year, and 8.4 quarter-over-quarter. due to a decrease in transaction value during the quarter. Net revenues from the asset management segment, YMD 200 million, down 17% year-over-year and down 4.8% quarter-over-quarter. Gold First AUM stayed relatively stable has RMB 156.2 billion as of September 30th, 2022, slightly higher than RMB 155.4 billion at the end of the second quarter. Moving on to the balance sheet, we remain very healthy liquidity position as our current ratio stood at 3.7 times. The debt to asset ratio was 17.9%, still with no interest bearing debt on our book. By the end of third quarter, we had RMB 4.3 billion in cash, supported by a strong balance sheet, which starts to announce our dividend payout ratio in the second quarter of 2023. In light of the current volatilities in the public market, no CIO office reiterated the House view of domestic international dual circulation, and it suggests our clients will balance their portfolio accordingly We have implemented stricter cost control measures internally while committing to further develop our international operations. NOAA will for the first time host a global black card gala event for our clients in Singapore next month, together with dialing client events in various cities in China that's ongoing right now, hoping to better understand clients' domestic and international asset allocation needs. Again, we thank all shareholders and analysts for ongoing trust and support, especially during this difficult time. And thank you, everyone, for listening. I will open the floor for questions.

Thank you, Grant. Dear investors and analysts, you can now use the raise hand function in Zoom during the Q&A session. When selected, you can then turn on the microphone to ask a question. And please mute yourself after the question. Thank you. Now the first question comes from Shi Yao.

I would like to ask what the main driving factors behind this are. The second is about an overseas strategy. I would like to ask if our company has analyzed the cash flow of some of our customers' domestic and foreign assets. What is the proportion of the cash flow that we have now? How much do we think the potential can be achieved? In the future, if we want to continue to increase the cash flow of overseas assets, what kind of driving force do we need? Thank you. So maybe I'll briefly translate. So the first question is on the strong growth in the diamond and the van car clients in the third quarter. I was just wondering what's the key drivers behind. The second question is on the wallet share of the clients, AOM, both in and onshore and offshore, and what's our current wallet share and how do we see the potential there, and especially to raise the wallet share for clients' overseas assets and what kind of drivers should we be looking at, thanks.

Great. I'll take the first question and the lady will comment on your second question. First question, we actually installed the Diamond Black Card Calling Strategic Program with actually strategic budget set aside. That program has been running for over two years. And this is the third year actually the group that's running this project has obviously gained more experiences. and also the programs we have increased more client-centric, especially incentives for our arm to actually bring in potential, high potential clients with more accurate KYC programs, as well as more importantly that supported by the budget, they're able to host those mini Diamond Firecard client conferences, if you will, locally and be able to increase the interaction frequency with the potential clients. And another measurement that has been very effective is the MGM program that we have installed in place that basically encourages our black card and diamond clients to bring in their circle of friends to participate. Actually, most of them are non-marketing events that's to help them getting more familiar with NOAA as well as the trust towards the brand name, which also is one of the strategic program investments this year for the branding. So I guess it's a comprehensive set of factors, but I think more importantly is that the culture of the organization have improved greatly over the last three years when we are implementing client-centric policy. So from top to, you know, the front line, everybody is more client-service oriented. I think that's probably one of the very important reasons. Mr. Wang, would you like to answer the question about the overseas asset page? Okay.

First of all, I would like to add that I think first of all, this year, From the end of last year to the beginning of this year, our CIO's report proposed that customers should be protected first before they grow. In fact, this year you can see that the private banks around the world, especially those with Chinese customers who speak Mandarin, have suffered very serious debt losses in real estate. But in the past few years, because of the market environment we have encountered, we have almost zero debt in Chinese dollars and real estate. So in the past two years, our customer satisfaction has been very high. There are also a lot of past lost customers coming back. I think one is that our CIO's view is more correct. Protect first and then grow. One is because we are from last year to this year. Customers are actually benefited. So they reawakened their trust. I also talked about the other cases just now. Then in the overseas strategy, the driving factor overseas One is that the office was established in Hong Kong in 2012 in the past. Then our customers are using this are mainly small and medium-sized enterprises, especially the foreign trade industry. So in the past 10 years, we have also laid down some foundations. In overseas Chinese, we serve about 10,000 people. And in the past, we did relatively long-term private products. have invested in the U.S. in a relatively large scale. These clients have enjoyed our services in general, and they think it is very stable. Our overseas insurance client size is also close to $2 billion. We have also established a trust service a long time ago, which actually manages more than 400 core large families. I think the first core driving factor is that in the past, Loya did not have a direct sales team overseas. We are more of a product expert and IC. Since the beginning of this year, we have established a direct sales team in Hong Kong and Singapore. Then we come to separate these customers that we already have. I think the effect is more obvious. Of course, there is also a point, because this year is the New Year's Eve of the United States. So, like custom, like this relatively simple product, in fact, Chinese customers like it more. I'll do a brief translation. I think Kelly has mentioned that as the majority of respond basis.

are, you know, entrepreneurs, especially in the manufacturing and exporting businesses. So, they do have quite a bit of demand in terms of allocation of their overseas assets. We probably serve around roughly 100,000 fund accumulators that have overseas asset allocation. And we have about $2 billion U.S. dollar about overseas insurance cumulatively and also serving 400 plus families in our trust services. and we're significantly strengthening the direct service teams in Hong Kong and Singapore since the last two quarters and hoping to be able to more closely serve these clients or maybe even including some local clients in this type of situation. And also, obviously, with the rate hikes, the simple deposit products overseas are more attractive to our clients. We don't have the exact ratio between our clients' wallet share in terms of domestic and overseas assets, but probably by estimate of how our own AUM is allocated, probably about 30% to 70% in terms of overseas versus domestically, that we think that the ratio and also the asset and that's already overseas for our clients, probably a little bit higher than what we have seen. So, we believe that's actually ample room for growth, especially in the need of allocating their overseas assets. Trieu, hopefully that covered your question. Thank you very much. That's very helpful. Okay, thank you. We'll take another question.

The second question comes from Hanyu from CRTC.

Hello everyone, thank you for giving me this opportunity. I am Yu Han from Zhe Yin. I have two questions here. The first question is about the growth of our financial system. Thank you. I see that the financial system is improving. I would like to ask the management about the financial system expansion plan. I will briefly translate my question. And my first question is regarding to relationship managers. And the number of relationship manager has achieved slightly growth quarter on quarter. I just wondering the future recruitment plan of relationship managers. and my second question is regarding to overseas business. In the third quarter of 2022, overseas revenue contribution increased to 28% and management please introduce to us overseas business expansion strategy. Thanks.

I think in the financial sector, in the domestic financial sector, I think we are mainly the dragon and the bird. When the market is not good, there are a lot of talents. We hope to improve the quality. In the financial expansion, we will pay more attention to the expansion of RM overseas. We also set some plans, including in Hong Kong, Singapore, and the United States. We want to build RM's production team. I think this is an important core point that overseas business can develop. In terms of overseas business, I think it is similar to what we do in China. First, we must expand Gefei Management. Our asset management scale is also from the head to the toe, and expand our product line. The second point is that we also launched a platform for Hong Kong and U.S. stocks. I think some analysts may have already seen it. We mainly focus on making our customers have more products on our platform and be able to make full online orders. We will expand the overseas public fund business. In addition, we just talked about the development of small institutions in the private sector. This year, we actually have more than 3,000 customers. We also did some statistics. Many of our customers have US dollars because they are all in the foreign trade industry. are very outstanding. We hope that we can also help them manage their dollar deposits at a higher dollar interest rate in the current market overseas. The third is that we are very concerned about the direction of insurance and financial services. We think that customers now have very strong needs for insurance, trust planning, and identity planning. Thank you Henry for your question. I think in terms of the

Thank you very much. Thank you very much. as we do have quite a bit of talent supply probably increasing due to difficult times from banks and security brokers. So actually have the luxury to be more selective on the domestic side. In terms of overseas side, we are putting significant investment and budget to grow the teams, you know, both based in Hong Kong and Singapore. And we believe that actually going to be a strategic differentiating factor in the next step strategy, especially facing competition from similar institutions. So that's the side of RM. In terms of oversea business, obviously we are continuing to invest significantly to beef up the product supplies, both from the Gopher side, direct investment in Silicon Valley, as well as the real estate products in New York. We also have been beefing up the selected product suppliers on the pipeline to provide that to our clients. and also on the Inowa side, we're continuing to developing that and now have the capability of actually helping our clients to transact both Hong Kong and US stocks on our online platform. And also on the Smile Treasury platform that we have seen very strong growth in this year, actually a very successful strategy this year that we have grown basically from less than 100 institutional clients to now over 2,500 accounts online. And we have been noticing that even the small to medium enterprises, especially when they're exporting oriented, they do have quite a bit of US dollars waiting to be managed. And we actually noticed that some of the treasury teams they don't usually have a large team that would be able to help them to talk to overseas banks or institutions. They just basically lack the capability or visibility of what's available to them and what they could actually subscribe to. So we, with the small treasury function, that will be to easily have more access to the U.S. dollar-based products. and also the fourth one is obviously continuing to build on the insurance, oversea insurance, trust services and heritage services, especially when the clients are now more seriously looking at how to make sure that they have meaningful presence in their oversea operations. So there are quite a abundance of opportunities on the oversea side. Can you hopefully that cover your question?

Thank you, very clear.

Thank you.

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