Noah Holdings Limited

and welcome to NOAA Holdings Second Quarter and Half Year 2025 Earnings Conference Call. All participants will be in 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. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Doreen Chu, Senior IR Director. Please go ahead.

Thank you. Good morning and good afternoon, and welcome to NOAA's second quarter and half year 2025 earnings conference call. Joining me today, we have Ms. Wangting Bao, the co-founder and chairlady. Mr. Sander Yin, co-founder, director and CEO, and also Mr. Grant Pang, CFO. Mr. Yin will begin with an overview of our recent business highlights, followed by Mr. Pang, who will discuss our financial and operational results. They will all be available to take your questions in the Q&A section that follows. Please note that the discussion today will contain forward-looking statements that are subject to risk and uncertainties. that may cause actual results to dissolve materially from those in our forward-looking statements. Potential risks and uncertainties included but are not limited to those highlighted in our public filings with the SEC and the Hong Kong Stock Exchange, nor does not undertake any obligation to update any forward-looking statements, except as required under applicable law. With that, I would now like to pass the ball over to Sandra. Mr. Ying, please go ahead.

Okay, good morning to everyone, and thank you for joining NOAA's Second Court 2025 Earnings of Conference Call. In the second quarter of 2025, the global financial market was in a dynamic. The Trump administration introduced a new tax policy. The geopolitical risk turned from background music to the main melody. It was inspired by the pre-release of the NOAA's CIO report in the first half of the year. Noya's customers achieved better investment performance in the second quarter. As of the end of the second quarter, Noya's black card customers have a profit margin of more than 95%. After a few years of international expansion, we have completed the construction of global product governance. VCPE Fund, another modern fund,基建基金,对冲基金,全球公募基金,港美股结构化产品,以及资产传承方面的 Our net income reached 6.3 billion yuan. Our net profit increased by 20.2%. Non-GAAP net profit increased significantly by 78.2%. The net profit increased by 12%, reaching 1.9 billion yuan. In the first half of the year, the total net income was 12.4 billion yuan. Non-GAAP net profit was 3.6 billion yuan. More importantly, our income structure has been further optimized. The income of investment-related products has been further increased. The ratio of investment-related products has risen to a new high of more than 30%. In the field of inbound business, our strategy is to focus on increasing the motivation of financial investors to activate and sleep customers and expand new customers. In the field of inbound business, we focus on expanding the front desk financial team and local new customers. In the first half of the year, the number of new qualified investors was 627. We continue to make internal adjustments and optimization. Each B.U. requires to promote from products to the self-sufficiency construction of sales. At the same time, we promote cross-sales through customer service, which leads to a continuous improvement in the overall activity of customers. We insist on the investment in platform and ability construction, improve customer satisfaction through AI service finance and customers, and gradually improve the construction of various booking centers and digital platforms. In customer access, product accumulation, digital support,

In the second quarter of 2025, global financial markets experienced significant volatility, with the Trump administration's terrorist policies and geopolitical risks moving from background noise to center stage. Leveraging the forward-looking insights from NOAA's CIO report for the first half of the year, our clients achieved strong investment returns with over 95% of our Black Card clients realizing cumulative gains by the end of the quarter. After several years of developing and expanding our overseas business, we have established a comprehensive robo-product matrix, including ZZ and PE funds, private credit funds, infrastructure funds, hedge funds, robo-mutual funds. Hong Kong and U.S. equity-structured products, and wealth-inheriting solutions such as insurance, trusts, and residency planning. These diverse offerings have all been fully integrated, providing clients with one-stop allocation capabilities and investment expertise needed to solidify their asset base and enhance wealth resilience amid uncertainty. we are pleased to report that a strong operational and financial performance during the second quarter. Net revenues reached RMB 630 million with income from operations increasing by 20.2% year-over-year and non-GAAP net income surged 78.2% year-over-year and 12% sequentially to RMB 189 million. Net revenues for the first half of 2025 were RMB 1.2 billion generating non-GAAP net income of RMB $368 million. Our revenue mix continues to increase, driven by growing investment product revenue. Specifically, one-time commission from investment products have reached their highest point in recent years, making up over 30% of one-time commission's revenue.

接下来,我将以各个业务BU为主要的维度, to update the performance and operation conditions of all conditions. In the field of foreign business, in the second quarter, the net income of foreign business is 300 million yuan. In the group, the net income ratio is 47.1%. The income of investment products continues to rise. The number of foreign customers is 152, which is 34.5%. Our continuous ability to build and professional judgment helps customers to make considerable profits in the second quarter of investment.

Domestically, our strategy remains focused on enhancing relationship manager incentives, reactivating dormant clients, and acquiring new clients. Overseas, we continue to expand our relationship manager teams and grow our local client base. In the first half, we added 627 new qualified investors as clients. We continue to make progress in optimizing our internal organization, with each business unit building an end-to-end process that spans from product development to sales. In addition, we are driving cross-selling activities through enhanced client service and increasing overall client activity and engagement. we remain committed to investing in our platform and capabilities, leveraging AI to empower relationship managers and clients while boosting client satisfaction. Concurrently, we are advancing the development of our booking centers and digital platforms to enhance cross-border synergies for client outreach, product integration, digital infrastructure, and risk controls, laying a solid foundation for sustainable growth, future growth. I will now dive into the performance and operations of each business unit. Net revenues from overseas reached the remedy 297 million in the second quarter, accounting for 47.1% of total net revenue, with net revenues from overseas investment products continuing to generate solid growth. Our team of overseas relationship managers expanded to 162 by the end of the quarter, a year-on-year increase of 34.5%. The ongoing enhancement to our capacities and deepening expertise drove strong investment returns for clients during the quarter, supporting solid growth in both overseas transaction value and net revenues.

In ARK's foreign asset management block, the net income of the second quarter reached $1.3 billion, with a drop of 14.1%. This is mainly due to our continuous focus on the configuration of investment-related products and the drop in the income of insurance distribution business. The foreign AUA reached $91 billion, with a 6.6% increase. The proportion of the total AUA of the group increased to 27.6%. This is mainly due to the increase in the contribution of private equity AUA. In the first half of the U.S. dollar private equity product, foreign foreign Net revenues from overseas wealth management will remain at $129 million during the quarter,

down 14.1% year-on-year due primarily to our ongoing strategic focus on investment products, which resulted in a decline in revenue contribution from the distribution of insurance products. Overseas, AUA grew 6.6% year-over-year to US$9.1 billion and now accounts for 27.6% of total AUA, primarily driven by increase in distribution of private equity funds. Transaction value of U.S. dollar denominated private market products in the first half of the year increased by 70.3% compared to the same period last year, reaching U.S. dollar $765 million. Within U.S. dollar private secondary products, transaction value of hedge funds and structural products more than doubled year on year to U.S. dollar $424 million. we continue to expand and deepen our relationship with reputable products and investment partners globally, and have now become rapidly one of the top three distribution channels in Asia for flagship products from leading GPs such as Ares and Hamilton Link. As for the second quarter, the number of registered overseas clients now exceeds 18,900, a year-on-year increase of 13%. with the number of active clients now over 3,600, a year-on-year increase of 12.5%.

With the number of active clients now over 3,600, a year-on-year increase of 12.5%. The total AOM ratio is 28.5%. In the Glory Family Heritage comprehensive service section, the second quarter achieved a net income of 0.6 billion yuan, which is 91% higher than the previous one. The competition in the Hong Kong insurance industry continues to be fierce, but we have achieved better results for high-performance customized products for large customers through the strategy of large customers and large orders. We will also further improve the unit price of J&J.

Net revenues from overseas asset management during the second quarter were randomly 108 million, up 11.5% year-over-year, driven primarily by growth in AUM and recurring service fees. Overseas AUM was US$5.8 billion, up 7.4% year-over-year and accounting for 28.5% of total AUM. Net revenues from overseas insurance and comprehensive services during the quarter were RMB 59 million, an increase of 91% year-over-year. The Hong Kong insurance market remains highly competitive. However, our quoted big clients' large policies strategy and cost-effective customized products for major clients is delivering strong results in this environment, with average overseas insurance policy size continuing to increase. Additionally, Gory's team of commission-only brokers and external channels has already generated over RMB 20 million in revenue, injecting such fatality into new client acquisition.

In the second quarter, the net income contributed 3.3 billion yuan, which fell by 1.3% and rose by 7.2%. This year, the recovery of the A-currency market has led to an improvement in the performance of the net business. The second quarter of RMB's private equity products continued to show a strong growth trend in the second quarter. Partly due to the impact of the decline in the revenue of RMB's private equity all-terrain product management fees. It is worth mentioning that The warm-up of the A-currency market effectively improved the confidence of second-tier market investors, and further promoted the development of our overall domestic second-tier business. The NOEA-funded fund sales version achieved a net income of $1.3 billion in the second quarter, and increased by 12.8%. In the second quarter, RMB's second-tier product stock continued to maintain a good stock market. In the first half of the year, the stock market's second-tier product stock reached $61.3 billion, The share price rose by 185.3%. Among them, the activity of the A-currency market showed that RMB second-tier products provided a good market environment, allowing us to continue to make breakthroughs in second-tier business. Gefei's asset market, the second-tier achieved a net income of 1.8 billion yuan, and the share price dropped by 10.6%. The main thing is that the amount of RMB private equity all-terrain products is down, and the relevant management fees and income are down. Net revenues from mainland China during the quarter were RMB 333 million.

a year-on-year decrease of 1.3%, but a sequential increase of 7.3%. The recovery in the Asia market this year has proven a substantial improvement in the performance of our domestic business. Renminbi denominated private secondary products continued to gain strong growth momentum in the second quarter, which partially offset a decline in recurrent service fees from existing Renminbi private equity products. Notably, the rebound in the Asia market increased investor confidence in the secondary market and is fueling growth in our domestic public securities business. Net revenues from domestic public securities during the quarter were randomly $132 million, a year-over-year increase of 12.8%. transaction value of Renminbi denominated secondary products continued at strong momentum, with transaction values for private secondary products in the first half of the year reaching Renminbi's 6.1 billion, a significant year-over-year increase of 185.3%. The rebound in the Asia market provides a favorable environment for Renminbi denominated secondary products, enabling us to achieve continued breakthroughs in this business. Net revenues from domestic asset management during the quarter were RMB 177 million, down 10.6%. This was due to lower recurring service fee from existing RMB denominated private equity products. In the primary market, Gova focuses on facilitating exits and distribution of assets managed by the fund, where it records RMB 800 million in exits related to private equity products. Net revenues from domestic insurance during the quarter were randomly 716 million, a year-over-year decrease of 38.7%. This was a result of our strategic decision to reduce the promotion of domestic insurance products.

In the second half of the year, NOEA will focus on the following three strategic directions. First, focus on highly restricted customers and actively expand customer base. We are actively entering the mature financial markets such as the United States, Canada, and Japan to expand Chinese customers. In these mature markets, we plan to promote the cooperation model of business partners, attract more talent, and expand customer base. We position ourselves as a wealth management institution that focuses on serving high-end Chinese customers in the global market. Second, continue to enrich the product line of various products around the world. to meet the needs of customers. Rich product combinations can provide customers with more competitive investment solutions. In the first-tier market, we will expand the relationship of ecological circle cooperation partners, develop customized investment solutions and exclusive opportunities. In the second-tier market, we will rely on the ability of global investment, select the top management's high-quality strategy, and strengthen the co-op ability of document-based asset configuration solutions. We will also actively explore new opportunities in the field of digital assets, expand the boundaries of wealth and asset management, and provide customers with a more comprehensive and forward-looking investment experience. Today, we also announced at the same time that Olive and Coinbase have discovered the first private credit fund that invests in stable currency. In the future, we will continue to expand the product line related to digital assets and The third, while achieving business growth, we continue to improve operating efficiency. We have introduced AI, low-energy financiers, customers, and middle and high-end operators in various segments. These measures have further improved the customer experience, Looking ahead to the second half of the year, we will focus our efforts on the following three strategic priorities.

First, we will concentrate on high net worth clients and actively expand our customer base. We are proactively entering mature financial markets such as the United States, Canada, and Japan to serve global Chinese clients. In these established markets, we will adopt a business partner cooperation model to attract more talent and broaden our client base. Our positioning is clear to be a wealth management platform delegated to serving global Chinese high-net-worth investors. Second, we will continue to enrich our global product offerings across various categories to meet the diverse needs of our clients. A robust product portfolio enables us to provide more competitive investment solutions. In the primary market, we will expand our ecosystem partnership to develop customized investment solutions and exclusive opportunities. In the secondary market, leveraging our global investment research capabilities We will carefully select high-quality strategies from top-tier managers to enhance our ability to deliver robust asset allocation solutions. We will also actively explore new opportunities in digital assets, pushing the boundaries of wealth and asset management to provide clients with a more comprehensive and cutting-edge investment experience. Today, we are also pleased to announce that we have selected Coinbase Asset Management as a strategic partner to establish a stablecoin yield fund. We shall expand our digital asset-related product lines and collaborate with licensed, compliant institutions to capture opportunities in this rapidly growing emergent asset class. This initiative aims to open new growth engines for our clients. global asset allocation strategies with future expansion opportunities in compliant digit asset fund management. Third, we remain committed to enhancing operational efficiency while pursuing growth. We continue to integrate AI across our operations to empower relationship managers, clients, and middle and back office staff. These initiatives have significantly improved the client experience and reduced operational costs. Amid the vast opportunities presented by the global expansion of Chinese enterprise, we aspire to have Noah's Ark present wherever there are Chinese clients around the world. I will now pass over to our CFO, Grant, to go over our financials in more detail. Thank you all.

Thank you, Xander. So warm greetings to everyone joining us today. I'm very excited to announce our financial performance in the second quarter of 2025 that reflects steady progress and resilience across our operations. Supported by revenue growth, disciplined cost management, and investment income, we achieved non-GAAP net profit RMB 189 million. This represented 78.2% year-over-year growth and a 12% sequential increase. For the first half of 2025, non-GAAP net income totaled RMB 358 million, a 33.9% year-over-year increase. More importantly, Management is very encouraged by the structural improvements in our operations this quarter. We achieved substantial growth in revenues related to investment products, with a 92% year-over-year increase and a 30.6% sequential rise in that category. Driven by clients' more uplifting investment sentiment, it also is attributed to wider selection of quality investment solutions that we provided to our clients both onshore and offshore. In terms of transaction values, RMB denominated products recorded a 35.0% year-over-year growth and an 8.3% sequential increase, while USD denominated products grew 5.2% year-over-year and 3.8% sequentially. As a result, Our total transaction values reached RMB 17 billion, reflecting a 17.7% year-over-year increase and a 5.4% sequential rise. For the first half, commissions from investment products grew by 95.9% year-over-year, with transaction values for RMB-denominated private secondary products stood out. growing by 185.3% year-over-year to RMB 6.1 billion. Similarly, U.S. dollar private secondary products, excluding cash management products, grew by impressive 282.20% year-over-year to U.S. dollar 424 million, despite volatility in U.S. equity markets. So in this context, one-time commissions contributed RMB 155 million in the second quarter, marking a 14% year-over-year increase. Recurring service fees and performance-based income remained steady at RMB 406 million and RMB 23 million, respectively. Total net revenue reached RMB 630 million for the quarter, reflecting a 2.2% year-over-year increase and a 2.4% sequential growth. Breaking revenue down by region, overseas net revenues continues to drive growth, recorded RMB 601 million in the first half of 2025. Not only did it count for 48.3% of total net revenues in the first half of the year, but over 85% of newly generated revenue that was originated from offshore products. In the meantime, we continue to stay conscious of costs and expenses. Total operating costs and expenses for the first half were RMB 897 million, down 11.2% year-over-year. Key reductions were achieved in managing a more optimal headcount structure while maintaining investments in growth area. Total OPEX, excluding total compensation and benefits, declined by 9.3% year-over-year. This efficiency enabled us to achieve an operating profit of RMB 347 million for the first half, up 35.8% year-over-year, with an operating profit margin of 27.9% compared to 20.2% in the same period last year. For the second quarter, Operating profit was RMB 161 million with operating margin of 25.6%. Net income for the first half was RMB 322 million, representing a 39.4% year-over-year increase, despite the booking of about RMB 40 million in withholding taxes related to dividends distributed during this period. As of June 30, 2025, total AUM stood at RMB 145.1 billion, reflecting some pressure from redemptions of RMB-denominated products. However, U.S. dollar-denominated AUM grew by 7.4% year-over-year to U.S. dollar 5.8 billion, while U.S. dollar-denominated AUA increased by 6.6% year-over-year to U.S. dollar $9.1 billion, demonstrating our ability to continue to capture share of client U.S. dollar investment allocations. At the end of the second quarter, our overseas new client base continued to grow, with the number of overseas registered clients increasing by 13% year-over-year and 4.2% sequentially. The total number of overseas Diamond and Blackheart clients now exceeds 1640. Overseas active clients reached 3,650, up 12.5% year-over-year and 7.9% sequentially. Notably, we saw meaningful growth in our new golden clients, that is qualified investors, or qualified professional investors by definition, increased by 627% within the first six months of this year. Although it takes time for brand new clients to mature into the core client group, namely black and diamond clients, we're very confident that with a continuous global expanding mindset, the company is steadily gaining new market share worldwide. Our balance sheet remains sound. As of June 30, 2025, combined cash and short-term investments totaled RMB 5.4 billion, and we continue to carry zero interest-bearing liability. Additionally, net investment gains for the quarter exceeded RMB 60 million, reflecting the realization of potentials from our past strategic investments. In closing, the second quarter of 2025 represents a meaningful step forward for our business in the right direction marking an important milestone of restructuring efforts and confirming their positive impact. Enhancing shareholder returns remains our priority, and I'm pleased to share that we have returned over RMB $1.8 billion cumulatively to shareholders through dividend payments, share buybacks for the past three years, and the Board and management is committed to disciplined capital distributions to our shareholders in the long run. With a bulk value per ADR of US$18.35 per share, we believe that the current share price still remains undervalued, offering shareholders an attractive opportunity. Looking ahead, we remain focused on enhancing shareholder value, driving sustainable growth, and achieving long-term success. Thank you, shareholders, for your trust and support. We'll now open the floor for questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speaker phone, 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 for a moment to assemble our roster. Our first question today will come from Helen Lee of UBS.

Please go ahead. share with us more, for example, some considerations behind this stability fund, and then what is the management fee of this stability fund, and then what is the client's desire to buy this fund, and then in addition to this stability fund, we will have some strategic plans in terms of encrypted currency funds in the future. This is my first question. And then my second question is, because we actually see that the demand for investment products for customers in the second quarter is recovering very quickly, but at present we are from the inside, that is, from the perspective of a customer's recommendation of a product, what kind of products are currently recommended to them? And then the second is Let me translate my question. This is Helen from EBS. I've got two questions. The first is, could you please provide more details on the private credit digital yield funds, including the strategic considerations behind this move, the management fee structure, and client interest in such products? Additionally, are there any other plans in the cryptocurrency field besides the stablecoin yield fund? My second question is, what does CIO have to do regarding client asset allocation How would you describe the current client investment appetite, particularly the demand for offshore products compared to onshore products? Do you anticipate a strong growth momentum in investment product distribution to continue into the third and fourth quarters? Thank you.

Thank you for the question. Let me respond to it. For stable currency, our product is also a collaboration with Coinbase for the first time. Actually, the launch of this kind of product, first of all, is based on the point of view of the CIO Houseville's CIO report. We believe that in the future, the entire investment field, digital assets, digital currencies, now, from the past, maybe everyone is paying attention to the official website, and now, they are starting to participate. It is becoming a future, maybe a... We also see that various mainstream institutional investors have put digital currency as a part of the asset configuration. So based on this point of view, we are actually continuing to talk to customers on the CL report from last year to this year, which is to include a part of the asset of digital currency in the combination. This is also a background for us to launch a stable currency product. Of course, we help customers do wealth management, So we still need to be consistent and consistent. This is very important. So why do we choose Coinbase for cooperation? Actually, there is also a consideration in this regard. So this time, the launch of the stable currency market is also the first step of our entry into the digital currency market. Our fees are also consistent with the fees of our traditional investment products. It's not particularly high or particularly low. So, thank you, Sander.

So, this is the first corporation in the market to launch this stablecoin yield fund. And as we mentioned in our CIO report, indeed from last year to this year in our CIO report, we have been emphasizing the importance for our clients to distribute their assets in stablecoin, this new asset class for two years now. And that's why we have been proud to announce that we've been partnered with Coinbase to launch our first fund. And having said that, we still emphasize that the prudency that we needed to maintain being a wealth management company. And that's why the partner we choose at this time is Convaze. And then in terms of the free structure, we would just say it's the same as any other investment product we have been distributing to our clients. That's not much special between the different types of products.

关于投资类的产品,确实我们感觉从去年年底到今年的一季度,二季度,其实客户的投资热情也越来越高涨。 我觉得一方面的话也是因为经历过前段时间在从 In 2022, people are very unaccustomed to the geopolitical conflict in the market. People are starting to be conservative. Then gradually, in the process of adapting, after all, wealth is a long-term tool that needs to be invested and customized. It can't always be just a defense. 所以说经历一段时间以后的话, 客户也在不断的适应这个市场。 同时的话,它在资产投资上面的话, 就开始越来越表现出一个非常强的需求。 这个不仅仅是在国内和境内, 其实在境外同样也是如此。 一方面的话,我们在境内的话, 大家可以看到二级市场表现是比较好的。 当然我们也一直关注二级市场的一个风险, 因为确实国内的二级市场的 The situation of funding promotion is still relatively obvious. Indeed, in the domestic second quarter of this year, it also performed relatively brilliantly. But more importantly, we also let customers do joint investment and configuration. It is always considered a long-term, stable solution. Then in the outside, there are more choices for customers. Because many Chinese Chinese customers overseas have a fairly large asset size. 他们在海外的话,其实也没有获得很好的一个投资的一个服务, 由于他们本身国别的背景,文化习惯。 所以说在海外的话,私立银行也没有很好的服务他们。 他们再加上对于产品的信息差, 其实是相比于国内的话,其实是更大的。 所以说借助我们跟这些全球一流的资产管理公司的 we will be able to guide our customers to invest overseas and get a better cut-off point based on which asset categories they can use. In the process of setting up for our customers, we still follow the principle of the pyramid triangle, which is the basic board and the growth point of the security store. Therefore, it is a more balanced and comprehensive solution for our customers. In the CIO report that we just released this year, we specifically mentioned the theme of dual asset balance and the configuration of three pillars. When it comes to dual assets, we noticed that traditional investment is to resist inflation. But it is very important to pay attention to this kind of technology, technology-based asset, such as AI, such as digital currency, and so on. So this is also our So in this process, I think customers are also more and more accepting of our comprehensive configuration concept. Regarding your questions about the investment products that clients may have high interest,

So what we have seen in the first two quarters this year, we saw that clients are having more interest in deploying the asset and wealth into investment products. The reason behind this, we believe that in the previous years during the 2020 to 2022, because of the geopolitical situation and other noises in the market, investors become more cautious. but that they are also learning as well. So after a few years of learning and adapting to the current environment, we believe that the clients are now more confident and clear about what they should buy and they still need to deploy the asset. Because after all, wealth management should be a long-term planning instead of just a very defensive investment or a very short-term investment. So when client's incentive is going upward, domestically, mainly it's driven also by the Asian market, that being a very prudent organization, we have been also observing the secondary markets in China, if there's an overheat in the moment, because it's been driven by money flows, obviously. And then, however, overseas, we've seen more options. And particularly, we have seen the opportunity among the overseas Chinese because they got wealth in the overseas market, but they may not get as good service as they could have in the domestic market. And particularly, they may lack of information in different investment products. So what NOAA has been doing, we partner with all these prominent GPs globally, and that we've been trying to provide more information to our clients when they were trying to deploy the asset. And as we've emphasized in our CIO report, it's always about a balance between growth, return, and the risk. And we will always follow our principle as listed in CIO report. Now, this is the investment triangle that we try to use different assets to balance risk and return. And particularly the new FIM that we have introduced this round in CIO report, it's a deflation caused by technology. And that we believe that that's the major reason why we have been advising our clients to invest in AI or coin-based related investment products.

I would like to add two points. The first point is that in the world of cryptocurrency, there is still a lot of risk. So the concept of harmonization may become the most important keyword. As a financial manager of traditional finance, we insist on harmonization and innovation. These are two points. So this time, we are a private fund cooperating with Circle and Coinbase. We think it is also in line with the strategy of the CIO report we just talked about, that is, we hope that our traditional financial management customers may have 1% to 3% to 5% of assets that can be allocated to the encrypted world, and Luo Ya hopes to become a harmonious bridge. So from our chair lady,

She emphasized that Coinbase in this world, we must emphasize that the risk could still be very high. And that's why being a responsible wealth management company, we've been emphasizing in compliance while we are looking at innovation. So this round we've chosen the partner which have been worldly agreed on their compliance standard. And as mentioned in CIO report, we have been suggesting our clients to invest around 25% of their total assets to be in the Coinbase-related products. And most importantly, we believe that NOAA could be the bridge to provide compliance products in this area. And last but not least, not only this one product that we launched that I just mentioned, going forward we will continue to study and going to launch more related products. Depends on our client's needs. We believe that by time they will learn more about this asset class and they should have more demand in this area.

Helen, did we answer your question? Helen?

Very clear. Thank you.

Okay. Thank you, Helen. Next question, please.

Our next question today will come from Peter Zhao of J.P. Morgan. Please go ahead.

Hello. Thank you for giving me the opportunity to ask questions. I am Peter from Morgan. First of all, congratulations to NOA on achieving a very bright performance. I have two questions here. The first question I still want to ask is what is the trend that we have seen in the last three seasons? Because we have also observed that the investment sentiment in China has been very positive in recent weeks. We want to understand the investment enthusiasm of investors on the NOA platform and the sales of our financial products. How is the trend in the third quarter compared to the second quarter? What is the situation like? Then my second question I want to ask is that our overseas expansion management has also mentioned at the conference that we have certain expansion plans for the United States, Japan and Canada. I would like to ask how we are doing now, looking forward to the second half of the year and next year. Is there any progress in these areas that we can look forward to? The management thinks that in the future, these areas can give us more meaningful customer growth and profit contributions. In addition, I would like to ask, when we have such an overseas shopping plan, what is the impact of our operating costs thanks for giving me the opportunity to ask questions. This is Peter from J.T. Morgan. I have two questions. First is we wish to understand what's the third quarter operating trend for NOAA. We have seen there's a strong pick-up in domestic investment sentiment lately. We wish to understand what NOAA has observed about the investment sentiment on your platform and the world's main product transaction volume trend in third quarter, quarter to state, and how this is compared to second quarter. My second question is about the overseas expansion. We noticed that management has mentioned the plan to expand into the U.S., Canada, and Japan. We wish to understand how the program so far and what you expect in second half of this year and next year. And when do you expect this new market can meaningfully contribute to your current growth and revenues? And we also wish to understand how this overseas expansion plan will have impact on our operating expense trend going forward. Thank you.

Thank you, Peter. I'll answer the first question first, which is about the customer's investment mood and three-week trend. I just answered Helen's question a little bit. Let me add one more thing. We do feel that the second quarter, the first quarter, and the second quarter, including now, our customers' communication with customers, including our customers' The customer's contact with customers, holding small salons, lectures, or large events, the customer's capacity for investment products, or the degree of his learning is very, very strong. In the past, he may have focused on insurance, but recently, customers have shown a very strong curiosity for all kinds of products. 我觉得一方面的话跟这个市场有关系 但是也有另外一个就是因为美元利率的话 其实也有进入一个降息通道的预期 所以说客户的话还是觉得 你一直放在稳健的低风险的收益的也不足 所以说他还是希望能够有更多的能够投资的一个方向 At the same time, due to the construction of our overseas product center in the U.S., we are becoming more and more abundant in terms of product governance. Many customers say that in the past two years, they have clearly seen that NOEA is becoming more and more abundant in terms of the layout of overseas products, not only in terms of first-class market products. In terms of second-class market products, for example, some platform-based hedge funds overseas, . . Although the market is still very hot, we also pay great attention to the customer's final income level. It's not that the market mood is high, it's just that customers are desperately investing. At this time, on the contrary, we are constantly prompting customers. You see, we increased the configuration of customers last year. This year, in the process, it continues to balance. This balance, on the one hand, is the balance of the warehouse. Another important thing is the balance between strategy. It's not about what's hot in the market. I think this is actually a big skill of wealth management. The most important thing is to allow customers to enter into a long-term stable return through some strategic combinations. I think this is the most important part of wealth management. So we also put the profit situation of our customers as a very important focus point. I think this is long-term wealth management can continue to be a core. In general, the market supports it. But more importantly, we still need to keep a rational mind, so that customers can continue to educate, so that customers can see the differences in various strategies, and then make a more balanced combination configuration. This is our service guidance to customers.

So Peter, regarding your question about the investment sentiment moving forward to the third quarter, and yes, we have to say that during different events that we've been organizing, when we met with clients, we have seen strong interest from them. And unlike in the previous period, they would be more prudent and prefer lower risk products. We have seen that because of the Asian market and also because of the U.S. interest rate environment, they are now showing more interest in investing in different types of investment products. And also, when we talk to clients, one of the reflections that we've been collecting is that we've been able to provide more and more diversified products with different GPs and that is because we have set up the product center in the USA and that we've been able to contact and have connection with more reputable GPs from broccoli and that's why we've been able to provide a better product matrix to our clients however we must emphasize that being a wealth management company or what the core of a wealth management should be long-term return so it's not about any short-term environment changers or clients' feelings about the market or any sentiment-driven investment. So, in me internally, we emphasize on long-term return instead of just selling products according to market sentiment.

Okay, let me share our global strategy. I think after three years of operation, we can say that I think our overseas strategy is very clear. In the previous three years, we have completed the construction of global product governance. The richness of this product, I think, is a very, very important point of a wealth management institution. The next stage is our positioning. I think in the global process, there are many international wealth management private bank brands, but in many judicial areas, the Chinese provide wealth management brands. I think this is the most important position of Loya, which is to serve the Chinese people around the world. We may have 1.4 billion Chinese people in China, and 60 million Chinese people overseas. We can serve them. We have a similar culture with them, and we have some trust barriers. I think the basis of this client is very clear. For example, in Singapore, in Japan, in Canada, we have a lot of Loya clients who may have moved out. Secondly, we have deep trust in the process of interacting with them locally. Next, we have already started to provide services for them. Our operating model is also relatively clear. In Hong Kong, Singapore, and the US, we are a booking center. We can open a store for them, and they can directly receive financial management services from us. In places other than the booking center, such as Japan, Canada, and Australia, . . . . . So about our global strategy, and as mentioned by Chair Lady, we have been developing our overseas market over the last three years.

And what we've been achieving must be the product matrix. And being a work management company, this is one of the very important criteria that we have already achieved. So next step, we would say, is more about branding. When we talk about branding, what we've seen is that we serve Chinese globally. But then currently, we don't see much of other organizations being able to serve Chinese across different legal jurisdictions. and that we believe is going to be our very committed target going forward. And in terms of the strategic planning, we have three booking centres in the US, Hong Kong and Singapore, and also for the non-booking centres such as Japan, Canada, that we have already mentioned previously. It's going to be the asset management for the clients using the oldest links. So we believe that NOAA's strength is we have trust with our clients. And with this trust, we have seen that some of our clients from domestic markets are already moving to overseas markets. And that should be our strong client base when we're developing our overseas market.

Okay, so I'll take the third question on OPEX, Peter. So we basically have reached a stage of rather comfortable structure in terms of frontline and mid-back office. I think we're pretty much, after a couple of years of transition period, we're actually pretty comfortable with the front line and mid-back office. Secondly, also the balance between fixed salary and also variable costs, both onshore and offshore. We're probably looking to maintain that structure, but obviously not excluding some short-term spikes when we, as Chair Lady and CEO Xander mentioned, with international expansion, we'll probably get new talents in new markets or new business segments. But I think overall, the big picture, benefits-wise, we're pretty comfortable. In terms of selling and marketing expenses, obviously we have seasonality. We typically are a little bit slower after spring festival than summer vacation, but we have traditionally busier schedules coming up in the third quarter, obviously towards the end of the year as well. But I think on the annual basis, I'm also pretty comfortable in terms of maintaining a similar range of operating margins. Peter, does that answer your question?

No, it's not very clear. Thank you.

Okay, thanks.

And again, if you would like to ask a question, please press star and then 1. The next question will come from of CICC. Please go ahead.

Hello, everyone. I'm Shen Zhongen from Zhongxin. Thank you for giving me the opportunity to ask a question. Also, congratulations on your excellent performance. I would like to ask two questions. The first one is that the other business costs of the company have dropped significantly. More than 80% and the loss of the joint venture company has increased to more than 47 million yuan. This seems to have a relatively obvious impact on the profit and loss. What is the reason for this? I will translate my question. I have two questions. The first one is other operating expenses decrease over 80% year-over-year, and income from equity in affiliates increases to over... $47 million. These changes affect the net income. Could you please explain the reasons behind and future change? The second question is the cash balance remains high at $3.8 billion. So do you have any dividends planned? Thank you.

Sure, Ms. Chen. I'll take the question for the two fluctuations. So basically the overall impact, especially the $47 million, actually comes from some of the strategic investment portions that we have as the co-GP investment in the past. So some of the companies actually became successful listed. So the total market value in the fund actually has a markup. So that quarter actually we have a pretty positive impact. Hopefully it doesn't reflect in the future. But it seems that from the company's current performance, we're optimistic that we'll maintain a rather strong performance and obviously feedback to our balance sheet and P&L. In terms of dividend scheme, I think the only thing I can say on behalf of management board, as we have mentioned in the earnings release, that we're very committed to returning some of the obviously operational results to our shareholders, and we have cumulatively distributed a rather large amount, I think probably ranking very, very high in Chinese ADR companies that cumulatively 1.8 billion RMB to our shareholders, and obviously another full payout of 2024's net profit. So I believe that in 2025, obviously I can't, say this prematurely, but we're pretty confident that we probably will be returning or distributing our profit operational results to our shareholders on a very similar scale this year, at least in the foreseeable future.

Thank you. Very clear.

At this time, we will conclude our question and answer session, and I'd like to turn the conference back over to management for any closing remarks.

Okay. Zender, anything to add? Okay. Well, thank you very much. Thank you very much, everybody, and hope to hear from you in the subsequent calls. Thanks.

Thanks, everyone, and feel free to contact IRL team if you have any further questions, and we will be conducting NDR these few weeks, so feel free to reach out if you wanted to talk to any of us. Thank you very much for today.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.