Zhongan Online P&C Ord

Good afternoon. Welcome, everyone, to attend this 2023 annual announcements of China Online. Please be noted that you are all on mute session. And also before the end, there will be Q&A. And if you would like to ask question in the Chinese line, please press star 11. Now I'll give the floor to the first speaker, Changlin. Distinguished investors, analysts, and media friends, good afternoon. Welcome everyone to attend this 2023 Annual Announcement of China Online. I am the Director of IR, Zhang Ming. First of all, I'll be introducing the management from China Online, General Manager and CEO, Mr. Jiang Xing from China Online, CFO, and Chief Investment Officer, Mr. Li Kaofeng. and Executive Vice General Manager and Secretary of the Board, Wang Ming, and also Xu Rui, the Director and President of Jongwon International. Now I'll give the floor to the first speaker, Jiang Xin. So good afternoon, dear friends. and media friends and investors and analysts. My name is Jiang Xin, the general manager of ZhongWan Online. Welcome everyone to attend this 2023 annual announcement of ZhongWan Online and thank you very much for your support and also attention to ZhongWan. The year 2023 holds a special significance for ZhongWan as it marks the 10th anniversary of the company. There's a nation in China saying that it takes 10 years to sharpen the sword. Over the past decade, we have transformed from the child learning how to walk and gradually explored to become the ninth largest P&C insurance company in terms of premium volume in China. Throughout these 10 years, Joanna has consistently adhered to the mission of empowering the finance with technologies and providing insurance service with a caring hand, continues to deepen our understanding and application of technology in finance. We adhere to the dual engine strategy of insurance plus technology, deeply integrating technology with insurance throughout the entire process, while at the same time also driving the digital transformation of the global insurance industry. Over the past 10 years, we have issued over 64 billion policies and served over 500 million users. Last year, we were listed for the first time in the Fortune China 500 ranking for 2023, becoming the only thanks to a tech company to be selected. Next, I'll be sharing with you the specific achievements of the company in 2023. In 2023, amidst a complex international environment, the overall Chinese economy showed signs of recovery and improvement. Despite the ever-changing economic landscape, we boldly moved forward in 2023 we achieved a total P&C GWP of 29.501 billion RMB representing a year-on-year increase of 24.7% almost 25% already and also You can see that securing the top market positioning in internet P&C insurance sector. Starting from January 2023, we adapted to the new insurance contract accounting standard date KFRA 17. On this new standard, the revenue from P&C insurance service amounted to 27.521 billion RMB, a year-on-year increase of 24.2%. Upholding our co-operational philosophy centered around users and effective branding, our proprietary channels achieved a total premium of 7.6 billion RMB with a year-on-year growth rate of 31%, surpassing the overall company's GDP growth rate. In 2023, we continue to implement our strategy of sustainable growth with quality, maintaining a combined ratio of 95.2% and achieving the underwriting profit for three consecutive years, surpassing the industry average. Our overall investment income significantly improved compared with the previous year. As a result, the insurance business segment achieved a net profit of 554 million RMB, successfully turning losses into profits. and at the group level, we achieved a net profit attributable to the parent company of 4.078 billion RMB in 2023, including approximately 3.784 billion RMB of one-time investment income. So, the adjustment was made because Dongwan International ceased to be a subsidiary of the company from August 14th of 2023 and was no longer accounted as the equity method investor. So we actually this one time investment in common and we adjusted net profit to the parent company was 2.94 billion RMB. Also turned around into profit compared to the previous year. Meanwhile, the overall asset quality remains solid and our solvency was robust. Earning us a rating of Moody's BAA1 with a positive outlook and also AMBEST A- with a stable outlook from the international rating agencies. As one of the joint strategic engines, our technology business also made breakthroughs last year, benefiting from recovery of domestic economy, and the ongoing digital transformation of the global financial industry. Our total revenue from the technology export business reached 829 million RMB, a year-on-year increase of 40%. So our virtual bank in Hong Kong, ZA Bank, also continued its rapid growth momentum, achieving a net income of HK$366 million in 2023, a year-on-year increase of 2.9%. Over the past 10 years, we have been providing users with various types of insurance covering scenarios such as e-commerce and travel starting from internet platforms. And through this high-frequency products and services, we have gained consumer recognition and trust in ZhongHuan Brand In recent years, we have increased the investment in building the ZhongHuan brand while vigorously developing the proprietary channels. So the aim is to deliver the caring hand and service of ZhongHuan directly to our users through our app and nearly 30 proprietary channels and also private domains. So we are here a long term philosophy of managing and developing Joann's proprietary channels and we strive to provide users with convenient and affordable comprehensive protection for their lives. In 2023, the GWP of our provider channels reached 7.614 billion RMB while the total premium contributed further increasing to 25.8%. The number of paying users grew by 47.6% to 11.36 million, with an average premium per capita of 670 RMB. And we have enriched the product matrix of our proprietary channels, upgrading services around the four major ecosystems, including the medical health, family and pets, and to better provide the value to users. The proportion of repeated users premiums in the proprietary channels premium reached 39% with an average policy per person of 1.6. Moreover, the overall rate increased by 3.3 percentage points to 88.3%. In the future, we will continue to upgrade the products and services of our proprietary channels Online P&C Ord Online P&C Ord Online P&C Ord Online P&C Ord Online P&C Ord Online P&C Ord Online P&C Ord Online P&C Our flagship health insurance product personal clinic policy has contributed and continued to iterate and innovate since its launch, meeting the user's constantly upgrading and personalized health needs, demonstrating a strong vitality. So in 2023, So you can see that the total premium of the million renminbi medical insurance represented by personal clinical policy increased by 14.4% year-on-year, reaching 6.515 billion renminbi in total premium. Among them, the zero deductible version personal clinic policy provides users with practical protection through more flexible product combinations and has been well recognized. So while the personal clinic policy continues to penetrate into the mass market, we have observed the specific needs of the segmented consumer targets and the high end version and medium to high end version of personal clinic policies launched last year focusing on people with medical upgraded needs. So achieving a rapid premium growth also upon its launch. So apart from this flagship product, in 2023, our short-term critical illness insurance product has also become popular for meeting the consumer's insurance protection needs. And also, it became another blockbuster product with an annual GWP breaking 1 billion RMB reaching 1.34, 1 billion RMB in the GWP, and a year-on-year growth of 130.6%. Additionally, our outpatient insurance products, which inevitably integrate online consultation, medication purchase, and offline medical services through internet hospitals, experience in 2023 total premium growth of 157.3% in 2023, reaching 327 million RMB. In the health ecosystem, the number of paying users reached 19.96 million in 2023, a year-on-year growth of 23.6%. Upholding our initial aspiration of providing health insurance for 1 million people by the end of 2023, we have provided the health protection to over 125 million insureds. Next, to the total lifestyle ecosystem. In 2023, we had a breakthrough of 10 billion RMB threshold achieving a GWP of 12.563 billion RMB with a strong year-on-year growth rate of 41.6%. We actively embrace the evolution and development of e-commerce formats, providing products covering various types of e-commerce scenarios such as platform-based or live streaming, short videos, and private domains. Leveraging our technology capabilities and product development expertise, we introduced the products covering the entire e-commerce value training, including return shipping insurance, product quality assurance, security, and also logistics guarantees, for instance. In 2023, the total premium growth rate of our e-commerce business reached 25.3%, reaching 6.593 billion RMB. Also, at the same time, last year, with the rapid recovery of domestic tourism industry, the aviation and travel business sector also benefited from the industrial's revival. Our aviation and travel business achieved a total premium of 3.242 billion RMB, a year-on-year growth of 89%. and we cover the major OTA platforms as well as the other specialized apps of airlines providing travel protection for over 70 million travelers. So, apart from the e-commerce and travel, in the ecosystem we also have an innovative business achieving a GWP of 2.728 billion RMB representing a year-on-year growth of 43.8% and increasing their proportion to 22% of the total premium against the digital lifestyle ecosystem as a whole. So one of the important products is the pet insurance. and last year we had 500 million RMB in terms of the total transaction volume with the growth rate of exceeding 150%. And also in total we have served over 4.65 million pet owners mainly driven by an increasing level of pet femorization leading to a higher average spending per pet. In terms of the product offerings, in addition to pet, medical, and accidental coverage, we have collaborated with the ecosystem partners to launch various innovative insurance products such as the chronic pet disease and pet food safety for instance. This expansion has broken the boundary to both our company and industry. Also, we have been partnering with nearly 14,000 offline pet hospitals and service institutions. In our innovative business endeavors, we, apart from the patent insurance, are closely following the development trends of the new consumption patterns, exploring new growth trajectories within the digital lifestyle ecosystem. We have achieved breakthroughs in accidental insurance, like volumes for lifestyle and fashion, as well as sports and other scenarios. We have provided various services including liability insurance and quality insurance to over 1.5 million drone owners. And additionally, our service-oriented home insurance also has serviced over 500,000 households. Also, we have joined the Shanghai Family Insurance Alliance, a customized and inclusive home insurance initiative in Shanghai to better meet the practical needs of Shanghai residents. and Newcomers, thus promoting the inclusive insurance practice. Next, take a look at the consumer finance ecosystem. And we focus on quality customers in small and dispersed internet scenarios. In 2023, our total premium, or GDP, of our consumer finance ecosystem reached 5.551 billion RMB, a year-on-year increase of 22.5%, and we constantly and consistently adhere to a strategy of prudent and steady development and strictly enforce the rigorous risk control standards and also dynamically adjust our risk reserves based on the macroeconomic conditions. This approach has sustained the underwriting profitability in our business and additionally, we offer insurance products from other ecosystems to users within the consumer finance ecosystem and meeting their comprehensive protection needs. So last but not least, we are talking about the auto insurance ecosystem and that we achieved the GWP of 1.58 billion RMB for the year, with a year-on-year growth of 24.7%. And we actively embrace the opportunities and policy dividends of new energy vehicle insurance, providing insurance products and services for new energy vehicle owners from over 100 brands. And also, this has injected a new momentum into the overall growth of automotive insurance. In 2023, the GWP of New Energy Vehicle Insurance grew by over 196% compared to the previous year. And also, we are providing comprehensive services to vehicle owners, including the coverage for driving accidents and aftermarket service. and also videos claims, etc., offering them with more comprehensive and integrated services. Although, you know, we already talked to you about the four ecosystems. And next, I would like to share with you our practice in ESG. So although a property insurance product provides a short-term protection within a year, our business philosophy and interaction with users are focusing on a long-term fashion. So we also integrate the ESG principles and the United Nations Sustainable Development Goals into Taiwan's business development and practice in environment protection and social responsibility. Specifically, we have launched over 50 green insurance products covering different areas such as New Energy, Environment Protection, and Photovoltaics with a risk coverage amounted to 20 billion RMB. And in terms of the protection provided to micro and small enterprises, we offer 95 products covering various potential risks in our operations. And our blockbuster product, Dian Dian Bao, has insured over 14,000 micro and small enterprises and spanning multiple industries. In the inclusive insurance field, we have developed more production products covering groups such as the chronic illness of patients and women and elderly and children. Our online operation model in the insurance technology enables us to conduct the business with lower carbon emissions contributing to carbon neutrality. And our ESG rating has also steadily improved in recent years. In the future, we will further implement the joint sustainable development strategy to create more value for users Shareholders and also the society as a whole Now I like to invite this is the end of my talk and I will invite one thing to introduce the progress of our technology segment Thank you very much Simon for your sharing and next I'll be delve into the progress of our group in technology research and development as well as technology export. We are strategically positioned ourselves in a cutting-edge technology such as artificial intelligence reshaping various aspects of insurance value chain through technology. Leveraging our solid foundation in AI accumulatively over the past decade in 2023, we released the first AI in general insurance AIGC application and white paper in domestic insurance industry. This white paper billionates over 30 specific application scenarios and points of AIGC application in the insurance field. Also, at the same time, we have a producer that don't want the capabilities and launch the AIGC middle platform, Lingxi, as well as the operational analysis platform featuring dialogue generation AI and DevPilot, which enhances the code export efficiency. AI has improved efficiency across various aspects with our organization, including product development, marketing risk control, and management and daily operations. In terms of customer service, we utilize AIGC to construct intelligent customer service system based on the customer intent. Personalized services are provided, resulting in faster and more customized responses. By embedding AIGC into our online customer service, we have been an average time saving of over 10 seconds per person and session, while also assisting in identifying the high-risk customers and reducing complaints rate. And on the marketing front, AIGC enables the rapid generation of promotional videos, enhancing the video production efficiency and reducing the cost. With the assistance of AI code helpers and assistants, the development efficiency within the group has increased by over 20% within six months. And we firmly believe that through this continuous investment in AI, ZhongHuan will definitely maintain our leading positioning in this area. In 2023, our technology export business experienced a remarkable growth with an overall revenue growth rate of region 40%. and also the total revenue of the technology export within the group reaching 829 million yuan. We signed the contracts with 101 domestic and foreign clients along the industrial chain and are successfully assisting them in achieving digital transformation by the end of last year. Our technology business had a cumulative service of 848 clients from various industries. Additionally, we broke through industrial barriers, signing contracts with 12 clients from the banking and securities industry throughout the year. We are actively expanding into non-financial industries, providing China's general software and solutions. So we deeply understand that the digital transformation is an inevitable trend of the industry and a key factor in housing our competitiveness. So at the beginning of 2023, also we hope that we are going to comprehensively create more values with our users. And in the beginning of 2023, with the entrance of the overall layout plan of building Digital China by the State Council, the construction of Digital China was proposed as an important engine for promoting Chinese-style modernization in the digital era. By 2025, a horizontally interconnected and vertically integrated and well-coordinated integrated development pattern will be formed and making significant progress in the construction of Digital China. Our technology export business focuses on the exploration and also research on this cutting edge technologies such as artificial intelligence, big data, cloud computing, et cetera. Leveraging the advantages of our J1 SQL system and validated through practical business operations. We have established a value delivery system based on the technology and service. So in 2023, our domestic technology export business grew by over 70% compared to the previous year. And also we signed contracts with 91 clients along the industrial chain with over 30 clients have contracted amounts exceeding 1 million yuan, 4 clients exceeding 10 million in terms of the value of contracts. So these achievements are really remarkable and are truly the best against our history. So we do have three series for our products. This is production series, business growth series, and digital infrastructure series covering the entire business process of the insurance industry comprehensively. In 2023, our next generation property insurance core system has been successfully launched and used by multiple P&C companies in China. In the field of data, we have collaborated with several life insurance companies to develop data platforms and intelligent data solutions providing services such as data planning, data governance, and data platform construction. Starting from 2023, the insurance industry began implementing the new insurance contract standard IFRS 17 integrated platform. And our independently developed system has been successfully operational for two years. And in 2023, we prioritize this IFRS 17 integrated platform for external output and assisting many insurance companies, including the Mitsubishi Insurance and other general insurance and KB Insurance, etc. So, in the future, we are going to continuously leverage the technology power of ZhongWan to contribute to the development of digital economy and construction of digital China. This is pretty much my part, and next, I'll hand over to Wayne of introducing the development of ZhongWan International. Please. Thank you very much, Wang Ming, for your introduction about the ZhongWan technology. So, next, I'll be introducing to you the business of the International Technology Export through the ZA Tech. We were founded in 2018 and headquartered in Singapore. ZA Tech focuses on exporting the advanced insurance core systems and digital insurance technology expertise to overseas insurance companies and intermediaries. And also, it is committed to setting new standards for global digital insurance technology. Currently, ZA Tech business footprint expands across Japan, Southeast Asia, Hong Kong, and Europe. and ZiaTech has built a global digital operating system for insurance industry, servicing clients categorized into insurers and internet platforms. And through this unique cloud-native and modularized and low-code or low-code digital solutions, including the insurance core systems, distribution systems, customer data platforms, and AI solutions, it provides digital infrastructure support for various insurance business models all insurance product lines, and every aspect of the end-to-end insurance business value chain. For the insurance company's clients, our next generation distributed insurance core system, Graphene, can assist them in locally connecting various ecosystem partners to launch the fragmented and scenario-based insurance products tailored to the local environment. So for the internet platform and clients, we provide the low-code insurance distribution solution, Fusion, which helps the Internet platforms offering more value-added services to their end users and improve the traffic monetization efficiency. In 2023, July, our core system, Product Graphene, successfully entered the track of the traditional core business systems and was deployed for one of the leading insurance companies in Central and Eastern Europe and the system in achieving full coverage of traditional car insurance end-to-end functionalities seamlessly, supporting five countries in Europe market and we're going to have a very rapid replication and development deployment. Not only it is about this, but also we would like to establish an ecosystem based on insurance operation systems for mutual benefits. For instance, in 2023, through the strategic collaboration with leading traffic channels in Japan, we generated positive network effects by establishing a strategic partnership with the major traffic channels in Japan through our insurance distribution platform, Fusion, targeting the insurance intermediaries and also similar senior and top-tier insurance companies in Japan to launch the product on leading e-commerce platforms like Yahoo Japan and leading the e-wallets like PayPay through their four-stack core system product, Graphene. So this arrangement not only attracted the new insurance company clients through the broad traffic channels, but also helped to expand the client base of insurance intermediaries and agencies continuously. So this synergetic growth between the insurance companies and also other agencies contributed to the collaborative expansion of both segments. In 2023, our international export revenue reached 325 million yuan, with sustainable revenue accounting for 51%, driving the gross profit margin to increase by six percentage points to 46%. In addition to our overseas technology export business, in Hong Kong, our virtual bank, VA Bank, has been committed to building all in one digital financial services platform since its establishment in 2020, providing rich, convenient, and inclusive financial services to retail users and small and medium-sized enterprises. In 2023, ZA Bank achieved a hit for improvements in our business matrix. As of December 31, 2023, ZA Bank has approximately 11.7 billion Hong Kong dollars in deposit balances representing year-on-year growth of 27.5%. Total loan balance was approximately 5.4 billion Hong Kong dollars with a year-on-year growth of 10%. Additionally, benefiting from the interest rate hike cycle and continuous enrichment of loan products, ZA Bank's net interest margin increased from 1.84 billion percent in the same period of 2022 to 1.94%. and during the reporting period with the launch of new products, Zia Bank recorded a net income of HK$366 million, a year-on-year increase of 40% and non-interest income accounting for approximately 43% of the total. At the same time, Zia Bank focuses on the business quality and operational efficiency improvement resulting in an improvement of 85.6 basis points in the net loss ratio. At current stage, ZA Bank has become one of the most feature-rich virtual banks in Hong Kong market with a highly quality customer base. Our retail banking side, ZA Bank, in addition to traditional banking products and services, enhancing user engagement through the continuous development of innovative gamified experience while also facilitating the online account opening for visitors to Hong Kong resulting in a very good and also strong user growth of those visitor users. Currently speaking, one out of every 10 adults in Hong Kong is a ZA Bank user. As the Hong Kong's first virtual bank of exceeding 10 billion Hong Kong dollars in customer deposits, ZA Bank is honored to be recognized as the best mobile banking app in Asia by ZA Partners, 2023 International Mobile Banking Benchmark, and ranks the 6th globally. And also, at the same time, in February of 2024, ZA Bank officially launched its US stock trading service to Hong Kong users. By entering into the world's largest stock market, ZA Bank users can seize the growth potential of the most valuable and influential companies globally. And this marks another milestone for Z8 Bank on its journey to create an all-in-one digital financial platform. On the corporate banking side, to further promote the concept of inclusive finance in Hong Kong and support of financial technology transformation of the banking industry, Z8 Bank officially launched its enterprise client e-onboarding service in April of 2023. This service provides the local small and medium-sized enterprises with a rapid account opening experience and address the pain points such as the difficulty of slowness of account opening for SMEs, thereby seizing market opportunities. Through this rapid account opening function, corporate clients can complete an account opening application in as little as six minutes, an account opening process completed in as fast as two hours, enabling them to enjoy the one-stop banking service. Looking ahead, VA International will continue to leverage the synergetic effect of various brands Enhance user experience and create more values for users in their future digital financial experiences. We will continue to support the development of financial technology in Hong Kong, contributing to the establishment of a global financial financial center and promote financial inclusion. Now, I would like to invite Gautam to share the financial performance in 2023. Thank you. for the three presenters for the summarization and reviewing of our business performance last year. Now providing an overview of growth, including the overall financial, like insurance service revenue, profits and investments and balance sheet. Now I would like to introduce to you the situation of our insurance service revenue under the new standard. In 2023, our domestic P&C business achieved insurance service revenue of 27.521 billion yuan, an increasing of 24.2% year-on-year, with rapid evidence across all the major four ecosystems. In the health ecosystem, we adhere to our original aspiration of providing national medical insurance for 100 million people in 2023 while maintaining sustainable growth in our product, core product, personal credit policy. We witness the remarkable growth in new products such as outpatient insurance and critical illness insurance. At the same time, We enhance our service capabilities to meet the rapid growing healthcare needs of our users and establish long-term competitive edges. And the revenue from health ecosystem reached 8.599 billion yuan in 2023 with a year-on-year growth of 7.9%. In digital life ecosystem, we see the opportunity arising from the growth and new e-commerce formats and recovery of the aviation and travel industry last year. Leveraging our insights into our users' behavior and data analytics capabilities, we witness rapid growth in innovative products such as plan insurance. In 2023, the revenue from digital lifestyle ecosystem insurance services reached 12.446 billion yuan, surpassing 10 billion mark with a year-on-year growth of 39.9%. In the customer finance ecosystem, we adhere to risk control guidance and develop business prudently. In 2023, the revenue service reached 5.04 billion yuan with a year-on-year increase of 19.8% in automotive ecosystem. The revenue from auto insurance ecosystem services reached 1.434 billion yuan and a year-on-year growth of 30.9% outperforming this average. In 2023, Benefited from our hearings the strategy of sustainable growth equality the company achieved the combined ratio of 95.2% under the new standard and marking three consecutive years of underwriting profit and surpassing this rare bridge next I'll present The loss ratio and expense ratio for each ecosystem in 2023 the Combined ratio of the health ecosystem was 87.2%, maintaining underlying profitability and improving by 1.4 percentage points. And comprehensive loss ratio was 34.2%, decrease of 14.8 percentage points year on year, mainly due to optimization of product structure and increasing the proportion of new policies and improved risk control. The comprehensive expense ratio for the healthcare ecosystem in 2023 was 53%, rising 13.4% points, primarily due to increasing investment in user growth and retention during the reporting period. In 2023, benefiting the strategy of sustainable growth by quality, we have reached a comprehensive underwriting combined ratio of 95.2% and also realizing a very good and stable growth. And also, while we are increasing the volume, the total profitability of underwriting has reached a very good growth. And in 2023, the comprehensive, also, the particular consumer finance commodity ratio 96.4%, increasing by 6.8 percentage points, and the loss ratio 68.4%, primarily due to the rising of the risk. Expense ratio 20%, reducing by 13.4 percentage points. This is primarily due to the increasing of our users of proprietary channels. For the auto insurance, the profitability improving. The combined ratio of this ecosystem, 95.4%, and improving by 2 percentage points. and they're impacted by the mobility and the loss ratio increasing by 5.5 percentage points to 65.1%. But due to the cost reduction and lean management, the expense ratio reduced by 7.5 percentage points to 30.3%. And next, I would like to give a recap of our investment performance from last year. In 2023, our total investment income from domestic insurance funds amounted to 720 million yuan, a total investment yield of 1.9%, shows significant improvement compared to the previous year. This improvement was primarily attributed to a strong performance of domestic bond market and a steady fast commitment to prudent investment principles. We have thus strengthened the risk control measures and leading to value appreciation of insurance funds, As of December 31st of 2023, the total investment assets of our domestic insurance investment amounted to 38.2 billion yuan. Among these fixed income investments amounted to 75% made in domestic bonds and bond funds, representing 65% of our total investment assets. Among the bonds that we hold, those with external credit rating of AA or higher accounted for 99%. with those rated AAA or higher are counted to 77%. Regarding equity investments, considering the volatility in the H&M market last year, we proactively reduced the equity positionings. And at the end of 2023, we combined the proportion of stock and credit funds that was 6.7% decreasing by 4.1 percentage points compared to the end of 2022 when it was 10.8%. In 2023, financial indicators of various segments within the group shows improvements in the interest division achieved a stable and rising underlying profits Significant improvement in investment income and a certain degree of improvement in foreign exchange gains and losses. As a result, the insurance division successfully turned losses into profits, achieving a net profit of 554 million yuan and technology export sector, despite achieving 40% increase in revenue, further narrowed the net loss ratio. Also, ZA Bank, with a revenue growth rate of exceeding 40%, we have improvement in both amount and ratio of losses. Starting from August 14th of 2023, ZA International is no longer recognized as an associate company and is a little longer accounted for under the equity method. Instead, a one-time investment income of 3.784 billion yuan is recognized. Overall speaking, we achieved a net profit of 3.845 billion yuan in 2023 with a net profit attributable to share equity holders or parent company of 4.078 billion yuan. Excluding the impact of one-time investment income, we achieved net profit attributable to share equity holders of 294 million yuan marking a turnaround from losses in 2023. At the end of 2023, the total assets of the group amounted to 42.9 billion yuan, a decrease of 4.7 billion yuan compared to the end of 2022. The amount affected by the exclusion of Zee International from financial statements decreased by 10.5 billion yuan, excluding this impact, so the asset increased by 5.7 billion yuan. At the end of 2023, the group's attributable net assets was 20.1 billion yuan, an increase of 4.3 billion yuan compared to the end of 2022. The amount affected by the exclusion of Zee International from financial statements increased by 3.8 billion yuan. At the end of 2023, the company-companied services ratio was 240%, A decrease of approximately 59 percentage points compared to the end of 2022. Approximately 42 percentage points of the decrease was attributable to exclusion of ZA International from financial statements. The company's core service ratio of 229%, a decrease of 56 percentage points compared to the end of 2022. Approximately 38 percentage points of decrease was attributable to this exclusion of ZA International. 2004 marks the new beginning of the next decade for Gen 1. We would like to express our gratitude to our users for choosing products and services. We also extend our thanks to our investors and managers in the capital market from our continuous trust on Gen1. We remain committed to our original aspiration, empowering the financial business with technologies and providing insurance services with a caring hand. Thank you. And now we're going to have Q&A. Please do not have more than two questions at a time. And please identify yourself with four questions. Thank you. We'd like to remind you that if you'd like to ask questions through the telephone, please press star 11. And the first question from online is Michael Lee from Bank of America, please. So thank you for having this opportunity. I'm from Bank of America. I have two questions. The first question is that how do we balance the growth rate and profit margin of the business? In the past years, our growth rate was maintained at around 20 to 25%. In the future, while we have expanded our business volume, do you think that this profit margin could be maintained? And also, at the same time, you're going to sacrifice the profit. And could you give us some guidance that in the next two to three years of time, how that we're going to maintain the growth rate and also What is the situation for the net profit? And also, how or what is the level of the combined ratio that we would like to keep? The second question is about the Z-Ed Bank in Hong Kong. In Hong Kong, we've been actually seeing a very good and rapid growth in Hong Kong. So you're taking a lot of deposits also from the Hong Kong users. In 2024, you're going to actually break even, right? Start to making profit in 2024. Do you still maintain that target? And when you start to make profit, what kind of strategic changes that you're going to have? Also, we have noticed that some of your stock, US stock exchange, and what is the thinking behind? Thank you very much, Matthew, for this question. So for the first question, with regards to the balance of the growth rate and also the profit margin, We know that 2024 is the 11th year of our foundation. So together with our expectations of the macro economy and also the overall situation, in the future, we're going to adhere to the long-term and stable sustainable growth. Instead of just driving the growth of GWP, but also paying attention to the underwriting profit, the quality of our product, and also the profitability of non-insurance products. Renewal rate and also the additional cross and upselling rate are something that we are going to focus. So, in terms of the overall growth, We are also going to have four ecosystems. So starting from the value of the users and starting to protect the comprehensively more to the users and also to have across and upsetting more also using proprietary channels and private domains to improve the conversion rate. So in the interim result announcement of this year we're going to share with you more and also we are confident that on top of that we are going to maintain a very robust growth on the underwriting profitability and to provide more inclusive and more value for money products so for Z8 Bank please as for your second question you have already noticed that for the Z8 Bank we have already started to do transaction on the US stock market and also what kind of next moves that we are going to have. In the annual announcement just now, we already said that in 2023, in terms of retailing and corporate banking of ZA Bank, we made a lot of achievements. And this year, we are going to focus on these two areas and providing more excellent services. Also, as for the Hong Kong users and also the US stock market transaction service, we have launched this year successfully. So we hope that we can provide a one-stop solution for our users, and this is going to satisfy the need of diversifying the asset portfolio of our users. So at the current stage, not only are we providing service to the existing users, but also attracting more U.S. stock investors into Hong Kong and finding differentiated advantages. and also the Z8 Bank app is going to be a very important platform for us to attract new users. The existing products were really welcoming. By the end of 2023, you can see that we had in total the volume of HK$1 billion. Apart from providing the equity and stocks and shares, we're also providing more choices to our users. Also, the Z8 Bank is going to be optimizing ourselves continuously and getting satisfactory results. In the long run, the digital bank of Z8 Bank is also going to improve our hearings and user stickiness, and hopefully that the operational efficiency could be improved. Thank you. Thank you very much for this question. Now we are going to have the next question. The next question is Simple 10 from Nomura. thank you for this opportunity I have two questions so the first question is that we would like to ask the management that how do you think about the cooperation and competitive competition among the three shareholders one is Alibaba and Tencent and Ping An So how do you think about the collaboration and competition with them? And second question is about the healthcare insurance. So by having the regulation change, if we look into the future, how do you think about the perspectives and how do you think about the profitability? Seems that the profitability improvement is pretty big. Thank you. Thank you for your question. So let me have the first question, which is about the business of our shareholders. So we had actually over 430 different customers from the internet industry, and we spoke with them and talking about the possibilities of the insurance industry. Also, we adhere to the mindset of inclusive but wing-wing, and also collaborating with our partners. In terms of the channel collaborations, we are actually paying attention to, for instance, DayAnd and also Alibaba in terms of the collaboration on the healthcare insurance. So, pretty, we have a very thorough collaboration with them. And also, together with Ping An, we are having the co-insurance together with them for the years for auto insurance. And also on the WeChat platform, We're also positioning ourselves in the Tencent videos in those private domains with Tencent. So I do believe that this is an open and win-win collaboration. So as for the joint business, we do have hundreds of different partners from different ecosystems. So you can see that We are having a very good performance and also our total performance is more robust. Also at the same time, in our report we have already said that we are exploring the establishments of more proprietary channels and reaching to more end users at the current stage. Now we have over 30% of our users from the proprietary channels. Second question about the health ecosystem and health care insurance and some of the aspects on the future. So, you know, the health ecosystem is actually the ecosystem that we focus for years. In 2024, we are going to maintain the momentum of robust growth. And in 2023, we had a steady user growth. So we are in favor of this market for a very long time. Now the total market potential is 1 trillion and still there are diverse demands and needs and we need to innovate and integrate more to satisfy the needs of our users. So in the past we have seized the opportunities and we believe that in the future there will be more opportunities for innovations. So the Health Ecosystem, we have several parts. The first is the personal clinic policy, which is going to be continuously growing. So also last year we had a version of zero deductible to actually lower down the threshold of purchase so that we're going to cover more people and also insured. Also, we have medium to high-end products available, catering to more customized users from the corporations. Also, at the same time, apart from the million yuan healthcare insurance, we're also focusing on the health management. So by having more inclusive pricing, and also very enriched product items. We also are going to launch new products like the critical illness products, which experience hundreds of percentage of growth. And also another breakthrough is that by integrating with internet healthcare and online hospitals, our outpatient and emergent insurance was really welcoming. So by having more innovations on our product and business models, I do believe that this is going to be offering more potentials to our future. On the overall basis, for the healthcare industry in China, we are continuously paying attention to it, and we hope that we can cover the diversified needs in a very enriched way, And also, we firmly believe that Zhonghan will have more market potential and opportunities to seize from. Thank you. Thank you very much. Let's wait for another question. The next question is from CICC, Qingqing Mao. You may have the opportunity, please. Thank you for this opportunity. I am Jingjing Mao from CICC. I have two questions. The first one is that I would like to have a follow-up question on the expectations of the GWP growth. I would like to understand what is the driver in the future from which ecosystem and which products. Also, in terms of innovative products, which kind of products are really potential in becoming the long-term driver force? And the second question is about the credit insurance. So you can see that you had the on-riding profitability in 2023 for the credit insurance. By the current stage, I think that people are concerning about this. So we would like to understand your countermeasures over this, whether you have confidence, and how do you think about the long-term growth strategy, whether you have adjusted this. Thank you very much for your questions. Innovation is the gene of Joann and also in our announcements, you have already seen that in different ecosystems, we have actually a very good innovation. Also, I would like to give you a brief summary. First one is that on a digital lifestyle ecosystem, in the e-commerce business, we are actively embracing the new areas like live stream and short videos and vertically integrated E-Commerce. Also, we are having innovations a lot by embracing them and like the pet and drone insurance, etc. Also, focusing on those less than popular areas and we have our advantages in terms of pricing and designing of our products. Also, at the same time, We are focusing on some of the green economy area. So, for instance, the PVs and, I mean, affordable tech and renewable energies. And also, in terms of our healthcare ecosystem, we also have a lot of, you know, innovations and also a lot of, you know, incremental growth. And announcements. We have iterations of personal clinic policy in covering more users. In recent years, The critical illness insurance has the growth of over 100% because we have, you know, we have a digging into the deeper demands of our users and also critical illness and emergent insurance are also developing very well. So in the future, we have to really focus on this and making this as a sustainable growth engine Another one is for the auto ecosystem, auto insurance ecosystem. You know that for the last years, the GWP growth was very rapid, but because still the base number was small. But I believe that while we are having more writings and transactions finished online for the auto insurance and the habits of transactions is going to change, I do believe that the auto insurance segment will be exploded very soon. So I think that we fully believe in ourselves and we are more than capable to seize the opportunity of this round. In the future, we are going to adhere to our original aspiration and focusing on the long-term strategy. So by leveraging new technologies, we're going to create new customer experience and create more products with more added values. So we are confident over our long-term growth in the future. And in terms of the consumer finance, I'd like to hand over the call to Wanming to answer this question. thank you very much for this question actually we have prudent operational mindset and risk control methods so at the current stage we maintain a very good robustness so for the consumer finance the online assets have been keeping a very good positioning so of course considering the overall macroeconomic pressure which is quite big and the industry is shifting and experiencing the shifts and adjustments. So in the second half of last year, we have identified those risks and also made some countermeasures. So the kind of premium growth was shrinking for this business. In the second half of last year, the GDP growth of consumer finance sector was only increasing by about 2% only in the second half whereas in the first half of last year we had 52% of the growth of GDP for the consumer finance segment so you know that there was a big change on it and also from the figures and statistics we see that still the consumer finance segment is profitable and also better performing than the average so as we have already mentioned that We are providing the other product insurance and also tailoring to the needs of different users. Also, as for the value contribution, year-on-year-wise, we had an increase. Actually, towards the future, of course, we are going to be confronted with many different external challenges, uncertainties about economic growth, but still, I think that the consumers are still going to have very rational consumption needs. We're going to be precautious and prudent, and also we are going to focus on the risk control fashions. So we are able to provide differentiated services to those users, and also at the same time, we're going to maintain very robust risk control measures and to realize a high-quality-based growth for all the businesses. Thank you very much. Next question is from the Citibank, Michelle Ma. Thank you very much for accepting this question. I am from Citibank. My name is Michel. So just now, we have already mentioned something about the operational channels. And in 2023, we had around 30% growth. And also in the annual announcements, you already said that $7.6 billion of the total return premium. So this was already big enough. And also, accounting for 26% of our GWP as a whole. So how are you going to focus on the proprietary journals and also the private domains and any methods and any strategies that you are able to be sharing with us? Second question is that just now we have mentioned that for the banking segments, you have sort of measures. Also, you had a plan of having a break even for this segment by 2024. So I would like to understand more details about this. Thank you. Thank you very much, Michelle, for your questions. I would like to answer the first question, which is about the establishment of our proprietary channels. So for the proprietary channels, we have two focuses. the first one is that we are going to continue the focus on the traffic marketing and short video live streaming and also some of the public videos you know traffic and to attract more users and usually on the show home show the Red Book we have been achieving a lot also we're going to leverage some of the new technologies for instance artificial intelligence to improve the marketing efficiency and and also establishing the branding continuously and increasing the brand recognition among the users. Also, in the past several years, by establishing the proprietary channels, we have already the apps and also the corporate WeChat accumulating many users already. So how that we're going to benefit the users with more choices among the matrix and to have cross and upselling and cross service provision so that we are going to create more values for our users. This is something that we're going to thinking about. Also, how do we leverage the AIGC at this round and to use AI and to have high efficient artificial intelligence to better retain the users and renew the users and also provide the better conversion rate. So with regards to the loss reduction of our technology segment, I would like to hand over to Wanming to answer this question. Thank you very much, Michelle, for this question. For the technology segment in 2023, still we maintain a very rapid growth. And especially in China, the technology export revenue was very robust even though the operational environment as a whole for some of the customers had the impact on the revenue but on the overall basis in terms of digital transformation and also the technology investment based on this digital transformation actually this is something that has been enhanced continuously so this is the industrial background and the contract signing and also the revenue all grew a lot. So as for the technology output and technology export business, we have a confidence in having a long-term and high-quality growth. Also, as we have already mentioned that, for instance, The MATE, the new generation of core systems, have been launched in many different P&C insurers and by iterating the products in the future, based on this MATE as a core, we are going to further optimize the insurer tax matrix and also to further boost our user stickiness and also the user coverage of our existing products. And also the repeated purchase rate is going to be improved And more products could be optional so that the more efficient and high intelligent products could be provided to the users. Actually, for this MATE core system, this is actually a revolutionary product that we have. also based on a better product R&D and also based on the more investments that we have conducted to the product development you know now we have a better product and the better operational cost and also a better matching of our products with the users needs and demands so during this whole approach the gross margin of our product is going to be improved also in other areas in terms of data for instance we are already operating the collaborations with many different data companies in terms of the provision of services of data governance and data platforms and others. So by leveraging our experience, we are also going to provide the AI services to our users like the AI modeling and data modeling, for instance, to help them with their digital transformation. So in the past, we have already had a very good product and investments also some of the digital products are available this year I believe continuously so for this technology segment we will have more business profit margins and also it is worth mentioning that in 2023 the Hong Kong IFRS I mean the China version IFRS 17 is going to be implemented so we are having R&D focusing on this standard and we were involved quite early that's why you can see that I know when the product is launching into the market is already a very mature product which has already been testified by the different scenarios so I believe that this is going to be more matching the people's needs and also a very good and tailor-made solution also will be welcomed by the users and this segmented market we're going to have a far leading market share also by having this particular kind of situation on one hand we're going to have more continuous revenue and also at the same time we are going to have more products and better business with higher profit margin Of course, while we are diversifying the business of technology export, at the same time, we're also increasing the efficiency of management and also the human resource efficiency. We firmly believe that in the future, by leveraging this experience in the past and also by having the same momentum kept in the future, we will definitely Give a very satisfactory result. Thank you. So, next question is the Richter from Morgan Stanley. Thank you very much. This is the Richter from Morgan Stanley. I have two questions. The first question is about the investment. So, now while the interest rate is reducing and also there is a fluctuation, But how do we think about the equity and also fixed income investment proportion? Second question is that we would like to have a follow-up that I know throughout this year, you know, the overall premium is growing and breakdown by ecosystems. I'd like to understand that which ecosystems are having a better growth and the reasons behind. So thank you very much for this question. With regards to the investment, the overall investment, is always, you know, fixed on the fixed income investment. And also, you know, that as of the end of last year, in total 38.2 billion of those assets and also a lot of them are fixed income. And comparing with the level of 2022, we had actually an increase. Also, you know, that AA and above accounted for 92.4% and 77% of them are having AAA and above. So, while talking about this overall market, while we had the new standard implemented, the investment strategy is optimized. We are emphasizing more on the comprehensive yield of investment, also in terms of equity. We have also more kinds of assets with a higher dividend. so that we are going to see a lowering of the risk of investment and also now we are going to enjoy the long-term development benefit. And in 2024, in terms of the overall premium growth, in 2024, the overall drivers of our premium is on two areas. The first one is digital lifestyle. The other is the healthcare ecosystem. So these two ecosystems are something that we're going to focus on the premium growth. Throughout the whole year of 2024, we are also going to actually pay not only the attention to the growth premium, but also the quality of the premium and also underlying quality as well. Also, the user satisfaction also is going to be paid attention to. Hopefully, that we're going to sustainably grow ourselves. Also, throughout the whole year, we are going to really realize a robust development as a whole. Thank you. Due to the limit of time, this is the end of this annual announcement. So on behalf of the management, I would like to thank you all for your participation. Thank you. Ladies and gentlemen, this is the end, and you may disconnect now. Thank you very much for your participation again.