Noah Holdings Limited

If not, this event is being recorded. I would now like to turn the conference over to Doreen Iyer.

Please go ahead. Thank you, Tim. Good morning and welcome to NOAA's 2025 First Quarter Earnings Call. Joining me today, we have Ms. Fong-Ting Vo, co-founder and chairlady, Mr. Sander Yin, co-founder

Ladies and gentlemen, it appears we've lost connection with our speaker line. Please wait while we reconnect. Thank you. ¶¶ Thank you for your patience. You may begin the presentation. Thank you.

Sorry for the technical interruption. Today's call will be divided into three parts. Mr. Yin will begin with an overview of our business highlights, followed by Mr. Pang, who will discuss our financial performance. After the two presentations, there will be a Q&A session. In addition, please note that the discussion today will contain forward-looking statements that are subject to risks and uncertainties, that may cause actual results to differ materially from those in our forward-looking statements. Potential risks and uncertainties improved are not limited to those outlined in our public filings with the SEC and the Hong Kong Stock Exchange, nor does it undertake any obligation to update any forward-looking statements except as required under applicable law. Without further ado, I shall pass the call to our CEO, Mr. Yin.

Thank you, Doreen. Good morning, investors and analysts of NOEA. I will share with you the summary of the overall market situation for the first quarter of 2025 and the results of NOEA. Then, I will talk about the performance of foreign and今年业务发展策略和分板块的业绩. Finally, I will report a plan for the following quarter of 2025. In the first quarter of 2025, NOEA's CLO forecast predicted that the global market this year the probability of severe fluctuations will increase, and the frequency will also increase. The driving factors include the uncertainty brought by Trump's return to the White House to global trade and geopolitics, the synchronization of global major economic and monetary policies, the warm-up of the AR model military competition, and the extension of downstream applications, etc. We recommend that customers pay attention to the following four aspects of strategic asset configuration. The first is to follow the discipline of asset configuration. The second is investment is not equal to wealth management. Wealth management pursues the overall best. The third is that wealth managers must build an anti-fraud system to manage and pass on their wealth. Finally, it is to take strategic action as soon as possible to adjust the strategic asset configuration.

Let me do the translation. Good morning, everyone. Today I will share a summary of overall market conditions and our results for first quarter 2025. Then I will walk you through our overseas and domestic performance and strategy, followed by our insights and outlook for the rest of the year. Our Q1 CIO report predicted an increased likelihood of server market volatility this year. With a higher frequency of such fluctuation, the main factors influencing this include the uncertainty that Trump's return to the presidency is having on global trade and geopolitics, the lack of coordination among major global economies on monetary policies, and the increasingly serious competition and downstream application of AI. With this in mind, our advice to clients is to adopt the following four approaches to their asset allocation. Firstly, maintain disciplined asset allocation and prioritize geographic diversification. Secondly, remember, investing is not the same as managing wealth. Wealth management aims for the best overall results. Thirdly, wealth managers need to build robust portfolios to manage and preserve wealth. And lastly, take decisive action and adjust asset allocation when needed.

In a complex international economic environment, we have maintained a stable business performance in the first quarter. Our non-GAAP, The net profit reached 1.69 billion yuan. The net profit increased by 4.7%. The net return increased by 27.4%. This is due to the decrease in operating costs. The operating costs decreased by 18.8%. In terms of income, the net profit of our RMB private equity products increased by 257.7%. The net profit increased by 9.4%. The net profit of foreign private equity products increased by 27.7%. Despite the tough global economy, we have a solid quarter. Non-GAAP net income in the first quarter was around 169 million.

up 4.7% from the same period last year, and 27.4% sequentially. This was due to operating costs and expenses dropped by 18.8% from last year. On the revenue side, transaction value for our Remedy denominated private secondary products grew a remarkable 2.6 times from last year. Revenue contributions from these products increased 9.4%, Transaction value for overseas private investment products also increased to 27.7%, with revenue contributing growing 20.3%. Revenue from overseas insurance products fell 22.8% from last year. This results in total net revenue in Q1 falling 5.4% from the same period last year. I'll now dive into the performance and operations of each business unit.

In terms of foreign business, in the first quarter, the net income of foreign businesses was 3.04 billion yuan, which is a 5% increase. In the group net income ratio, it has risen to 49.5%. Among them, the net foreign investment product income has risen by 20.3%. The net foreign insurance income has dropped by 22.8%. The net foreign total income is the same as last year's basic balance. We have 131 foreign client managers. We will continue to expand our financial team to accelerate the development of Singapore and other Southeast Asian markets, and in the United States, Japan, Canada, etc. Highly qualified Chinese people gather in the foreign market to build local sales teams. Our foreign AUA, AUM, and management fee income will continue to grow, and we will continue to expand our unbiased insurance agent team. In the first quarter, a team of 75 people has already been formed and contributed about 10 million yuan of income. The goal is to build a team of 150 people in 2025, and it will be a new growth point for foreign insurance businesses. ARK, the international wealth management platform, achieved an income of 1.62 billion yuan in the first quarter, down by 9.2%. Mainly because the Hong Kong insurance market is competitive. Hong Kong insurance business sales and income decline, The AUA has reached US$90.5 billion and has increased by 8.7%. The total AUA has increased from 24% to 28%. This is mainly due to the increase in private equity AUA. We have made good progress in international investment. In the first quarter, the number of registered customers exceeded 18,200, which increased by 15.8%.

For our overseas performance, net revenues were RMB 304 million in Q1, up 5% from last quarter and flat from the same period last year. It made up 49.5% of the group's total revenue. Revenue from overseas investment products grew 20.3% from last year, while revenue from overseas interest products fell 22.8%. we now have 131 overseas relationship managers, up 44% from last year. We plan to grow the team and further expand market in Singapore and Southeast Asia. We shall also build up our staff team in countries with high network Chinese, like the US, Japan, and Canada. Overseas AUM and recurrent service fees continue to grow. Our overseas commissions-only insurance agent team have already recruited 75 agents in third quarter, Home have already generated about RMB 10 million in revenue as well. We aim to expand this team to 150 agents by end of this year, where they will be a new growth driver for our overseas insurance business. Net revenues from overseas wealth management were RMB 162 million in Q1, down 92%. This was due to strong competition in Hong Kong. Overseas AUA reached US dollar 9.05 billion, up 8.7% due to growth in private equity products. This made up 28% of total AUA, up from 24% last year. We made good progress in getting new overseas clients. As of end March, we have over 18,200 registered overseas clients, up 15.8%. With over 3,300 active overseas clients, up 23.3% compared to the same period last year.

OLLIU is an international asset management platform. In the first quarter, the net income of 1.12 billion yuan increased by 22.3%. This is mainly due to the contribution of our AUM increase to drive the growth of the corresponding management fee. The net AUM reached 5.9 billion US dollars, which increased by 14.2%. The total AUM ratio increased from 24% to 29%. Among them, the net AUM ratio of the private equity fund is 78%. with a scale of $4.6 billion, with a growth of 16.4%. Our private fund products are getting better and better. Private credit funds, infrastructure funds, hedge funds, and structural vouchers and other products are welcomed by customers. We have also strengthened the construction of the global personnel layout and the U.S. Product Center. Currently, we have developed a professional international product selection and investment team of more than 50 people. In the Glory Family Heritage comprehensive service version, the net income of the first quarter is 0.3 billion yuan, which is 17.8% lower than before. This is mainly due to the decrease in the income of Hong Kong insurance business sales. The insurance market in Hong Kong is competitive. The number of entrepreneurs in the insurance industry in Hong Kong has increased significantly in the past year. There is a lot of competition in the market. We focus on expanding large customers and large orders. Net revenues from overseas asset management in Q1 were around $112 million.

up 22.3% from last year. This was mainly due to growth in AUM and recurring service fee. Overseas AUM was $5.9 billion, up 14.2%. This makes 29% of total AUM up from 24% during the same period last year. AUM for overseas private market products was $4.6 billion, up 16.4%. It made up 78% of overseas AUM. Our private market products are growing. They include private credit funds, infrastructure funds, cash funds, and structural products. We have a strong team of over 50 people in our U.S. product center for overseas product selection and investment. Net revenues from overseas insurance were randomly 30 million, down 17.8%. This is due to lower distribution of overseas insurance products. The Hong Kong insurance market is very competitive. It has many new insurance agents and some who are not compliant. We focus on large clients, compliance, and policy safety. This helps raise average first-year premiums in Hong Kong and Singapore. We are also creating new marketing models. Our goal is to grow the team of commission-only agents to 150 people by the end of 2025. This will help us to get new clients.

In terms of domestic business, in the first quarter, domestic business net income contribution is 3.1 billion yuan, with a drop of 9.4% from the bottom. This is mainly due to the management fee income of products that store RMB private property rights and the drop in domestic insurance product sales income. However, RMB private property second-tier products have continued to grow in the previous quarter, and the net profit and income have been greatly increased. to continue to promote the operation of the main body of each company in the market, and to promote the development of Gefei and Rongya Insurance respectively. In the first quarter, the sales of Noya Formation Funds achieved a net income of 12.7 billion yuan, which increased by 7.1% in the same period. In the first quarter, RMB private equity second-tier product revenue reached 3.3 billion yuan, which increased by 257.7% in the same period. RMB public fund revenue was 43 billion yuan, which decreased by 51.4% in the same period. Currently, 10 cities in China have offline network points. We are also promoting online marketing and online services to enhance the efficiency of business. Gefei's asset protection currency. In the first quarter, it achieved a net income of 1.67 billion yuan, with a 14.3% decline. The main reason is that the production of private equity-based products in the amount of RMB is down, and the management fee income is down. In the first quarter market, Gefei continues to promote the withdrawal and distribution of the amount of assets. In the first quarter, Gefei achieved the withdrawal of 1.3 billion yuan of private equity assets. Currently, the AOM of private equity assets is 97.3 billion yuan, which accounts for 91.3% of the AOM in the market. In the second quarter, Gefei continues to focus on the development and establishment of RMB assets through cross-border ETFs in the market to acquire the scale of the global market's beta revenue products. In this quarter, Gefei also achieved a new high of 140 million yuan. China's net revenue from mainland China will remedy 310 million.

down 94%. This was due to lower recurring service fees from private equity products and distributions of domestic insurance products. However, Renminbi denominated private secondary products continue to grow. Transaction value and revenue from these products increased significantly. NOAA, Upright, Gova, and Glory are independent now and can use their own strategies. Net revenues from domestic public securities were Renminbi 127 million, Up 7.1%, transaction value of Renminbi denominated private secondary products in Q1 was Renminbi 3.3 billion, up 2.6 times. Transaction value of Renminbi denominated mutual funds was Renminbi 4.3 billion, down 51.4%. NOAA Upright currently has branches in 10 cities. Plus, we have been using online marketing and online services to improve operational efficiency. Net revenues from domestic asset management in Q1 were RMB 167 million, down 14.3%. This was due to lower recurrent service fees from existing RMB denominated private market products. In the primary market, growth are focused on managing exits and distribution of existing assets. In Q1, it records RMB 1.3 billion exit from private equity market. equity market asset, AUM was RMB 97.3 billion. It made up 91.3% of domestic AUM. In the public market, Gold Boss focuses on data returns from global markets. We are doing this through cross-border ETFs. This drove transaction value in Q1 to a new height of RMB 140 million. Net revenues from domestic insurance in Q1 were 1B6.4 million, down 55.6%. This was due to lower distribution of domestic insurance products. We are adjusting product mix and focusing on more medical and elderly care insurance products. We are also restructuring sales and building a commission-only agent team.

In 2025, Luoya will continue to work in the following directions. First, to maintain the number of patients. continue to expand to different countries and regions to ensure full-fledged joint work in the local area. Second, on the international market, the customer side expands the financial team to accelerate the ability of local customers. Third, on the online side, the construction of AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, AI, to build an unrivaled business team to compete with the market. The second is to promote comprehensive service to customers through the business of taking the sky out of the sea. The fifth is to further build research and product groups in the investment sector to complete product verification and improve the infrastructure of the asset configuration project. In 2025, we will see the market rise and fall financial management has become more and more important. It can be said that it has become a high-profile customer's high demand. We suggest the strategy of financial managers. One, continue to expand the channels of overseas investment. Two, use anti-inflation assets. Three, do not ignore the conflict of geopolitical politics and the risks of internal and external politics. Four, keep the funds flexible and the action concise. Financial managers are most likely to make mistakes in today's market.

Our priorities for 2025 will be, firstly, balancing quality and quantity while expanding into new markets with full compliance. Secondly, growing our overseas teams of relationship managers to speed up local client onboarding. Thirdly, investing in technologies such as AI to improve online services. Fourthly, on the product side, we shall commit to grow insurance sales by building a new team of commission-only agents to compete better. On the other side, companies will also offer a wide range of products such as trust, relocation, and cross-border solutions to enhance our client services. Last but not least, strengthen research, product teams, and product mix. Market volatility will stay high in 2025. wealth management is more important than alpha, which has become high net worth science essential needs. We therefore would advise our wealth management talent to, number one, keep expanding overseas investment channels. Two, hold assets that fight against inflation. Three, monitor geopolitical risk closely. And lastly, stay flexible in capital and ready to act correctly. To conclude, The biggest mistake a wealth manager can commit today is thinking past experiences can guide future decisions.

I will now pass over to Brent to go over our financials in more detail.

Thank you.

Thank you, Xander. And greetings to everyone joining us today. I'd like to begin my sharing with an overview of our recent share price performances. Management is fully aware that our stock has been trading with an upward pressure for the past few quarters, and only around 0.5 times PB, and under cash value. Our cash reserves alone represent US dollar $11.4 per ADA, exceeding our current stock price, and our PE ratio is only around nine times. well below industry average of 12 to 16 times. While continuing to focus on regaining the growth after the transformation of the wealth management organization, we have also in the past two quarters introduced several initiatives to enhance shareholder returns, including the US dollar 15 million share buyback program announced in August last year. As of today, we have already repurchased over 1.3 million ADSs, equivalent to over 2% of total issued shares. Furthermore, as part of our commitment to prioritizing shareholder interests and delivering sustained returns, we plan to distribute annual and special dividends, totaling the RMB 550 million in July, subject to AGM approval. This amount represents 100% of our non-GAAP net income for 2024 and offers a dividend yield of 12% based on current share price, which is much higher than a 7% to 9% average dividend yield range among leading international financial institutions. Notably, this makes the second consecutive year that the company will distribute 100% of its net income Since 2022, three years in the aggregate, we have distributed a total of RMB 1.8 billion dividends to our investors, roughly equal to 40% of current market cap. The continuous sharing of high dividend payout is expected to be sustainable based on our estimate of future operations and our strong balance sheet position. By the end of quarter one, cash, cash equivalent, that increased to RMB 4.1 billion with short-term investments of RMB 1.3 billion, which is highly liquidity and has fewer than three months of maturity on average. Our current ratio improves to 4.8 times, but the debt-to-asset ratio remains stable at 14.5% with no interest-bearing debt. Although we have sped up our global expansions recently with a new opening up of TOKI Office revisiting the reopening of Canadian markets and Australian markets, we also want to reassure the investors that our organic expansions are CapEx light in nature. Of course, we understand that the investors are also eager to see the signs of our growth. There's no denying that the transitioning of our business model has been challenging for 2024. particularly given the uncertainties in the global investment market, which have affected our financial performances. But besides balance sheet performance, more importantly, starting in Q1, we're seeing things that are on the right track. The significant progress in building our teams and infrastructure in a more cost-effective transformation strategy ensures that our business remains profitable with operating profits and non-GAAP net income both growing on a sequential and year-on-year basis. While we're not yet at the finish line, these strategic initiatives are steadily laying the groundwork for improved performance and future growth opportunities. Let's now dive into the details of our financials. First of all, the bottom line has continued to implement rigorous cost control measures during the quarter with total operating costs and expenses coming in at RMB $429 million, a decrease of 18.8% year-over-year and 16.7% sequentially. Specifically, with our great effort in simplifying our back-office structure, compensation benefits decreased by 21.8% year-over-year and 14.1% sequentially. Sending expenses fell by 18.1% year-over-year, and 35.3% sequentially, and T&A expenses also falling both year-over-year and sequentially. Operating profit surged by 53.1% year-over-year and 35.2% sequentially to RMB $186 million in the first quarter, with the operating profit margin up to 30.3% from 21% in the previous quarter. Nungap net income was 169 million for the first quarter, an increase of 4.7% year-over-year, and 27.4% sequentially. Despite strong performances gained, especially in the U.S. on investment products advantage mentioned earlier, we'll have to see that domestic market is relatively operating weaker, and also some of the slowdown in interest revenue causing our net revenues to RMB 615 million during the first quarter, slightly down 5.4% year-over-year and 5.7% sequentially. But notably, overseas net revenues, accounting for almost half of total revenues, were up from 44.5% in the previous quarter. By region, net revenue from overseas were RMB 304 million in the first quarter, a slight drop year-over-year of 0.8%, yet an increase of 5% sequentially, driven by a modest improvement in insurance debt. Domestic net revenues during the first quarter decreased by 9.4% year-over-year and 14.3% sequentially to RMB $310 million, largely dragged by the sluggish performance in insurance under the low-interest environment and decreased in management fee revenue from domestic private equity products. By revenue type, during the quarter, one-time commissions decreased by 15% year-over-year, but increased by 17% sequentially, strongly driven by oversea insurance sales rebounded compared to last quarter. Recurring service fees decreased by 5.3% year-over-year and 5.8% sequentially, due to reduction in domestic revenue from RMB private equity products, which also affected performance-based income in a decrease of 42.1% sequentially, but did increase by 98.4% year-over-year, driven by a significant increase in overseas asset management as the overseas business become increasingly established and mature. When it comes to total transaction volume, Total transaction values in the first quarter were RMB 16.1 billion, down 14.7% year-over-year, and 0.9% sequentially. Transaction value of domestic products, secondary products, was RMB 3.3 billion during the quarter. That sees a significant increase of 257% year-over-year and 34.6% sequentially. Transaction value of RMB denominated products in the first quarter declined. However, transaction value of U.S. dollar denominated products reached U.S. dollar 1.1 billion, up 15% sequentially, but down 4.6% year-over-year, and accounting for 15% of total transaction volume compared to only 43% in the previous quarter. Benefiting from the enhanced competitiveness of the overseas alternative investment product portfolio, U.S. dollar private equity products totaled U.S. dollar 201 million, up 7.9% year-over-year, and 17% sequentially. And U.S.D. private secondary products, excluding cash management products, totaled U.S. dollar 112 million, up 187.8% year-over-year. and 211.8% sequentially. During the first quarter, U.S. dollar denominated AUM grew by 14.2% year-over-year and 0.8% sequentially to U.S. dollar 5.9 billion, with U.S. dollar denominated AUA increased by 8.7% year-over-year and 3.6% sequentially to U.S. dollar 9.1 billion. reflecting our ability to capture a larger share of clients' US dollar wallets or investment products. At the end of the first quarter, our client base remained stable in terms of core clients, Diamond and Blackheart clients, with 9,330. The overseas client base continued to grow to over 18,200 overseas registered clients, an increase of 15.8% year-over-year and 3.1% sequentially. The total number of overseas diamond and black heart mines now exceeds 1,600. To sum up, we must admit that under the current global dynamics with the potential tariff war and the low interest rate environment in mainland China, it weakens the investors' investment sentiment, which may be the biggest huddle to the industry's revenue growth. However, with a developed business structure and a more mature overseas team, we're still confident that companies will position themselves for future growth. Thank you all again for your trust and support. With that, I will now open the call to your questions.

We will now begin the question and answer session. To ask a question, you may press star and one on your touchtone phones. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Helen Lee with UBS. Please go ahead.

Thank you for your attention. Can you hear me?

Can you speak a little louder, Helen?

Okay, okay. Thank you very much. I have two questions here. The first question is, recently we have seen some high-end customers in China receive a tax return notification from the Tax Administration. I don't know if this will affect the high-end customers here, their demand for an overseas asset configuration. Recently, Did we hear any concerns from high-end companies or any thoughts on asset configuration in the future? The second question is, in this quarter, we saw a very significant drop in operating costs. How much of this drop in operating costs is linked to the volume of wood in this quarter? And then there are some other drops, mainly from which I mainly have these two questions. Do you want me to translate them? Thanks, man. This is Helen Lee from... Do I need to translate them?

You don't need to. I'll answer the first question. I'll translate your question by the way, Helen. We don't need to cut it out.

Okay, thank you.

Thank you for your first question. That's actually related to recent news of some of the probably domestic high net worth clients receiving notices from tax bureaus about their overseas taxation information. So I'll try to take the first half of the question and Xander and Nora will jump in for anything that I probably missed. Yeah, we're seeing many or hearing many of the clients or their friends receiving calls from tax bureaus, but the information about gathering high net worth, actually all the Chinese tax residents' taxation or overseas income has been implemented a few years ago. But obviously I think the Bureau probably now has more collected information that they'll be able to actually reach out to these individuals. Obviously, I think it's probably, the law is always there, as some of the tax professionals, advisor clients, to be aware of, but the actual enforcement of these information or, you know, self-filing is probably something new to our clients. I don't think it necessarily affects their sentiment in terms of future investments in overseas products especially, but obviously I think they are more aware or curious about future tax planning, if you will, how to increase the efficiency in terms of investment. That's something new, probably some new subject. for this generation of high net worth individuals who are probably more used to filing for tax and gains on the domestic and operating operational income.

I would like to add a little bit about the first question. Indeed, as I mentioned earlier, many of our customers have received some phone calls and phone payments. This is also a chance for NOEA, because we are in the three major areas of business, wealth management, asset management, and heritage. In fact, in terms of inheritance protection, our service is actually built to meet the needs of most customers. And from this point of view, it actually brings us closer to a deeper relationship with customers. Because if we talk about tax, Actually, customers may need us to make a comprehensive solution for them. Not only us, but we also have a lot of partners. So, for us, it may increase the depth of our customers' wallets. Of course, for customers, We'll do a quick translation on here.

What Cindy just said, it's a challenge, but it's also an opportunity to know regarding our high-level clients getting phone calls from the tax bureau. The reason behind that is because if you look at what we've been doing for our clients, the wealth management, the asset management, and the family heritage business, all of that are trying to provide solutions to our clients on how to protect their wealth. And also, when they are receiving information the phone call from tax bureau and they need to solve that issue, they will need to build a closer relationship with our relationship manager because we will go into their wealth as a whole to plan for them for future. And that means we can have a better access to client's wealth and knowing better about their whole planning. So, yes, in short term, there may be a challenge because it affects the investment sentiment. However, in the long run, we still believe that it can bring opportunities to the company.

Okay. Second question. Helen, I'll do a quick translation for you as well. Helen actually asked about, you know, we have an improved efficiency or reduction on T&A in selling expenses. this quarter, and she's actually wondering how much of that has to do with probably lower activity of marketing events as well as the reduction of probably back office accounts. So, Hannah, I just wanted to clarify that some of the expense reduction does come from improvement in efficiency, especially in mid-back office accounts, probably optimized around 25% compared to the same period last year, as the continued effort to improve the efficiency and structure of mid-back office to the front office is now showing effect. We're also seeing a reduction in selling expenses, but that's partly attributed to probably fewer marketing activities this quarter, in the first quarter. We don't think that's necessarily sustainable, and that's rather not a direction we're trying to control, as long as we are holding this event more efficiently. So we're seeing more marketing events coming up in the second quarter, but we're obviously still trying to keep that under a reasonable range and also the effectiveness of marketing activities. And does that answer your question?

Yes, crystal clear. Thank you.

Thank you.

As a reminder, if you would like to ask a question, please press star then 1 to join the question queue. The next question comes from Peter John with JP Morgan. Please go ahead.

Thank you for giving me the opportunity to ask a question. I am Peter from Mogollonagong. I have two questions here. The first is that since April, the market has been fluctuating. We would like to ask about the latest trend of investment sentiment and trend of trading in Noya. In addition, we know that part of Noya's customers are also entrepreneurs. Q&A Congratulations on the first quarter results, and thanks for giving me the opportunity to ask questions. I have two questions. First is about the recent market volatility. We noticed that there's an increasing market volatility since April, and we are wondering what's the current behavior in terms of the investment sentiment and their approaches on the wealth management product. In addition, some of North's clients are business owners. We are wondering whether any of their business is affected by the recent Paris introduction and how their investment sentiment goes on. sentiment change. My second question is about the overseas business. Commendment gave us some guidance on what will be the key driver for your overseas business via 25. And on the insurance front, we are wondering whether you know or see any sign of improvement in overseas insurance in second quarter. Thank you.

Thank you, Peter. Indeed, in the first quarter, the wave of the trade in the official business still has an impact on our customers. Many of our customers are private entrepreneurs. So they also have a lot of business related to trade. But it's not all of them. We also conducted research with a lot of customers in the first quarter. If they assume that there are some small business owners, although the order is extremely low after the tariffs are lifted, but they think that in the future, the cost advantage of China's soft production is very strong. And their profit margin space, the margin space of small businesses is very high. So they are not worried. . . . . . We just submitted that deterrent rule to create an impact to our clients.

When we talk to our different types of clients, the impact could be slightly different. So yes, a lot of our clients are entrepreneurs and their business may be related to trade. However, when we talk to a merchant, like the EU, the loan manufacturing products, those types of companies, yes, we do see some suspension in orders from overseas, or we do see some worries about the orders from overseas as well. However, the merchants themselves are pretty confident in their own products. and they believe that the China production is very competitive in this way, and could maintain a high margin. And that's why the impact for those in manufacturing or those clients to us could be quite in a short-term instead of a long-run impact. But then, for some, more like small products, if they are really, I think, bigger types of manufacturer, they may have a bigger concern about their future growth. We believe that our clients these days are getting more and more used to the concept that they need to have their assets go through the geopolitics distribution. And they also are planning for their own business to grow overseas as well. And under these two beliefs, we believe that our clients are getting more mature and that the impact should be rather limited.

Then in terms of investment, we also see that customers are more inclined to liquidity in recent investment. They are more concerned about liquidity. So this is also a product that we have developed in the product structure. For example, there are some products like CN, for example, it has semi-liquidity, semi-liquidity, which means that it can have some private infrastructure, customers are actually more friendly. This is a phenomenon of customers. Another thing is that customers are also accepting and seeing the big trend of AI. So we have long-term and AI-related products in AI industries. And in terms of the product side, we have seen that investors are getting more concerned about liquidity.

So what does that mean? It means when they are picking the investment product, the product must tend to be structural products like SDNs. or some product that is not sending with liquidity, that means they can have a chance to do the redemption over a different period of time. So we tend to see that this type of product can be more popular among our investors. And on the other hand, it's about the trend of AI development. And we have also seen that any investment product that could have this AI idea behind,

could be rather popular among our investors as well. and give them a discount. The customers can use the legal way to save their first year or fourth year insurance. This way, the whole insurance is safe. In terms of the actual effect, under the first year of the first quarter of the first quarter of the first quarter of the first quarter of the first quarter of the first quarter of the first quarter of the first quarter, . . . . . . . there is still a lack of space and space. So from such a market turmoil, I think to continue to carry out with customers, we say that a model of a gold card is now established, building a safe store, our basic plate, and growth points. These three, for customers, gradually from the perspective of the overall product configuration, I think it is a more and more customer-friendly strategy. We have overseas investment. We are developing for customers to pay more and more attention to the configuration of overseas investment. In the past, because the US dollar interest rate was relatively high, so after the customer left the sea for the first time, he would do nothing but deposit money in the bank. It is a relatively good choice. But now, interest rates and so on, there will be fluctuations and a downward trend. So when customers start Okay, on the insurance side,

As I mentioned quite a few times already, the household market is very challenging and very competitive. So what we've been doing is back to basics, that is to serve our clients. What we do is we partner with insurance companies and tailor-made products for our clients. And for those with a high premium, we provide discounts on a legit basis. And we received a good result on that, which is the premium we received for clients for the first year has been increased substantially from in the past around $100,000 to currently around $190,000. So we've seen that this is a great opportunity for the company to do because when we look at the Chinese clients, most of them are still quite insufficient about getting enough of pro-tech. in their wealth. So we believe that we should keep on building the relationship and selling these insurance products to our clients. For overseas investment, that is another part of the product that we've seen clients have great interest. Because in the past, U.S. rates stayed quite high and keeping a fixed spacing is already a good return for our clients. However, under the current interest rate cut cycle, We have seen that clients are moving their interest into some investment products. So we believe that we are going to see some product diversification in the near future. Operator, can you check if there is any more questions from our audience? Otherwise, we'll close the call now.

Once again, if you would like to ask a question, please press star then 1 to join the question queue. Seeing as there are no questions, I'd like to turn the conference back over to the company for any closing remarks.