Q2 2021 Yiren Digital Ltd Earnings Call
[music].
Good day, and thank you for standing by.
Come to the U N Digital's second quarter 2021 earnings conference call. At this time all participants are in listen only mode. Now so the speaker's presentation. There will be a question answer session to ask a question Gena session you need the best Star one on your telephone and please be advised that today's conference is being recorded if you require.
Food assistance. Please press Star Zero I would now like to hand, the conference over to your first speaker for today Ms. Liz Yeah Helix. Please go ahead ma'am.
Sure.
Thank you today's coffee here.
And by the founder Chairman and C O N E.
Our team has made.
Before beginning we want.
This call contains forward looking statements made under that.
Private Securities Litigation reform.
95.
But.
I'm, sorry to ease and factors that could cause actual.
Our results to differ materially.
Any such statements.
And that's what makes them accordingly and progress.
Are you sort of factor IX is included in the company's filings the U S Securities and Exchange Commission.
We do not undertake any obligation.
These statements.
Well quite under applicable law.
We will be referring to several non-GAAP financial measures as supplemental measures to review and assess our app.
These non-GAAP financial measures are not intended to be considered isolation or as a substitute for financial information prepared and presented in accordance with U S. GAAP.
The nice thing about these measures and.
Reconciliations to GAAP measures. Please refer to our earnings press release I'll now pass it onto Ning for opening remarks.
Thank you all for joining us today.
We are very pleased to deliver another solid quarter.
With continued improvement in profitability and increasingly that once it by revenue mix.
We further navigate you didnt digital to become a leading user centric personal financial management platform.
As we continue to strengthen our competitive edge and drive up our business scale.
We have developed sophisticated strategies for both our wealth management and credit businesses.
For wealth management.
We are further differentiating ourselves by upgrading our services and in reaching our product offerings.
For example in the second quarter, we started to offer retirement plans and services partnering with a leading global investment management company principle.
We received immediate popularity since launch.
And as we further dive into the retirement financial market.
New products and services will help enhance our customers' L. T V.
Moreover, we are enhancing our capabilities to serve our customers with the higher investable assets under.
I know the number of users who invested more than half a million.
RMB in one single transaction on our platform this quarter.
But by 126% comparable to last quarter.
Meanwhile, for our credit business we.
We are focusing on high quality growth and continue to take a proactive approach.
To transition our target borrower segment into a higher credit quality borrowers pay.
Paving the way for the launch of our increasingly diversified product in the future.
Secondly, we are deepening our deployment in small business markets in the second half of 2021 and it will further diversify our product mix by increasing SME loans.
Last but not least as a user centric financial management platform. We are making continued efforts to integrate our different business lines and service scenarios.
Dressing the comprehensive financial needs of each customer.
For example, we are offering suitable insurance products to our borrowers to better protect them and their families.
Which may will talk about later.
Through their strategies and moves mentioned above we believe that using digital is well positioned to expand its business as the leading personal financial management platform.
Now I will provide a business update.
Our wealth management side before passing over to me to give an update on our credit business.
Although wealth management business continues to see visible growth this quarter.
Client assets for investment products reached RMB 14, 7 billion as of June 30th 2021.
Representing an increase of 37% quarter over quarter.
Total number of active investors stood at 386000 as of June 30, 2021.
Presenting an increase of 26% from last quarter.
Meanwhile, the average client asset play investor.
Other increased by 17% quarter over quarter to close to RMB 100 K.
And then the number of investors, who have more than two asset classes, our wealth platform grew by 420% from prior year.
Reflecting our come quick improvement you know our customers overall LTV.
Investor acquisition, we continued to invest in our brand to increase recognition and customer engagement.
On May 28, our lives anniversary program was growing by 20% of our active investors.
Which is a reflection of our high customer engagement and loyalty.
It's worth mentioning that our fund product became one of the key growth drivers this quarter.
But typically our retirement fund of funds products enjoyed and immediate success right. After its launch in June.
Which contributed RMB 23 million transaction volume seems just in just 23 days.
Moreover, our recently launched a new version of.
Yeah more billion fund portfolio of products that offer more flexible target returns where AUM.
Also well received among investors.
With sales volume, increasing by 80% compared with last quarter.
Next to our insurance business.
Young insurance brokers.
The business growth remained strong.
In the second quarter of 2021 total premiums were approximately RMB 517 million.
More than 130% quarter over quarter.
For <unk>, we are focused on growing through our close loop to B to C strategy.
In which post of serving our corporate clients and fully fulfilling their insurance needs.
We then leverage our insurance tech capabilities and provide a customized targeted insurance products to their clients and customers.
<unk>, our corporate customers into a partner channels helped.
Helping them unlock a completely new revenue stream and at the same time, finding new customers with unmatched insurance needs.
Lastly, our digital stock brokerage platform, China Gloria Securities was officially launched in this quarter.
Which is a meaningful milestone for us to establish a full spectrum wealth management product mix and then to bring strong synergies into our wealth management ecosystem.
The platform targets, both mass affluent and high net worth customer segment.
And importantly, we offer both Hong Kong and the U S stocks Etfs and the rates with more services and products to hit the shelf soon.
While we believe that investing in Investor education is core to drive business growth.
Why we have created a variety of educational content with something suitable for your investors at each stage of their investing journey incur.
Including daily on a weekly live stream sessions.
To review market performance as was.
Funding costs and the daily financial news.
On customer acquisition. In addition to strong support from our wealth management ecosystem. We're also focusing on to B to C strategy with over 10 partner channels already in our pipeline.
With that I will now turn the call over to me, who will highlight key updates for our credit business this quarter.
Thanks Me. This is our main job Hello, everyone now before I go through the operational highlights for our credit business I would like to share our response to the rates in our records.
Let me just mention about our initiative in.
Credit business challenges.
I thought that your line window guidance, Ken came out from the local financial regulatory or.
Requiring a financial institution to cap the APR after customer loans at 24%.
We think that's just a potential new a new requirement to beneficial for the interchange as it's completely eliminates the markets alone. They currently not concern over a P R and the pricing in response.
Last year, we have transitioned our targeted customer segment to higher credit quality borrowers. So.
Or are implementing a target for credit products, including E P. Our 18% to 24% as well as the interest free loan products. In addition to alcohol government's focus on supporting its the more and the micro business.
Starting from the second half this year, we were at Sudbury expand our SME segment to better promote inclusive finance.
Historically, we have been serving some more business the owner for a year and half accumulated REIT experience and expertise in product design customer acquisition and servicing.
[noise] copco or to raise with our strong technology capabilities and fishing to channel partners.
Expect to see the meaningful growth in this segment.
Now I will provide an update on our credit business for this quarter.
We saw a stable business grows in the second quarter as we are making strategic transition aim that regulatory change.
No volume Andrew Lo for satellite type model in the second quarter produced at RMB 513 billion.
Representing an increase of 7% from the last quarter of the 245% from the same period last year.
Telephone number off the borrowers curve in the second quarter reached more than 434, K and increase off of 25% quarter after quarter and 300.
Or five or 4% year on year.
Meanwhile, our proxy unit economics continue to improve as we enhance all of our printing our efficiency.
We continue to see decline trends in our acquisition costs as our repeat borrowing rates increase.
And that's our product and service offering bargains. Moreover, we have seen the visible progress in cross selling insurance product to our borrower base.
Total premiums are contributed by borrowers in the second quarter saw a 55% increase compared with the last quarter and the demand to remain strong.
We'll limit to our positioning as a user centric or personal financial management platform. We provide the customer my services by user not by loan which means that we value in each of our customers comprehensive demand for financial services and dramatically.
Or are there different than knees and to serve them accordingly, enhancing our customers our T V.
On the funding side, we continue to focus on expanding our funding partners and we receive additional RMB 10 billion in credit line. This quarter with another 20 financial institution in our pipeline.
Lastly.
On risk the performance, we have seen a stable and improving access to quality.
I would say end of the joined in 'twenty.
I think they're doing that.
Delinquency rates for long our engineers that are past due for 15 to 29 days.
30 to 59 days and 16 to 18.90 days' worth.
155, 5%.
Pardon.
0.8% and 0.7% respectively.
Remaining at our historical lowest level as.
We continue to upgrade our customer settlement will expand our asset quality continued to improve throughout the year.
With that I will now pass it to RCI for now who will provide this quarter's financial update.
Okay. Thank you Tony Hello, everyone. So financially I think our focus country items of business operation under financial performers Oni, you'll kind of look forward to the third child pornography. As all you know annually I think that has been posted on Lifesize first Bernie.
Oh My God.
So our wealth management business I thought was a sudden 20th century, one little how can we alert to the minutes of a mountain to climb to climb even less tariff as of now.
I'm actually less purpose called her continued to grow to 305500 under certain SEC.
526% on that Conor Glenn I think wisely put us constantly pushing seven meeting I felt we couldn't find who country one representing over smoker.
So last quarter.
On the classified total loan facility with a second call at her.
The five 5%.
Meeting showing us that include culture over counter remember all sponsored with content suite and 404100 under 53.
Chris on the 25% for last quarter.
Now onto our financial telephone calls or total revenue increased by 49.
Yeah, Oh, yeah.
Put it won't be one plant one, beating all clicks plenty for them to sign to pay for all wealth management business.
Uh-huh Congress at Comscore and operational efficiency total nights in Congress I can call. It her group icon Cassandra counter over the counter.
Ill health net income margin of 18%.
Total operating costs decreased by 17% year on year for them to be true.
Quantum HDD sales and marketing expense decreased by 40%, So I'm, probably a year or two of them would be 400 under 50 style and driving them back into our customer acquisition efficiency. All of those are not understood tons increased 11% from probably a year or two of them would be 100, and the agency meeting.
Maybe they didn't hear to the continual expansion of our insurance business.
Allowance for contract assets with silver on either what's there won't be 19 through innovative culture equivalent to one 8% of our little royall as compared to two plus 9% last quarter.
With lots of them claims on food quality and the change I'll put on me.
On the balance sheet side, all categorization strong way for them to be to constitute beating of consciousness hockey Crisman as of June 30th 'twenty or 'twenty, one our strong balance sheet positions us well in the kind of operating income.
And properly.
Williams to continually find new nation.
No opportunity and can meet and no capital requirement that may come.
This concludes our closing remarks, operator, well waiting for Purion H.
Thank you.
As a reminder to ask a question you need the best Star one on your telephone to withdraw your question. Please first how the hash key.
Please standby, while we compile the Q&A roster.
Once again these best Taiwan for your questions.
First question is from the line of Cindy Wang of D. B S. Please go ahead. Your line is open.
Oh, Hi, Hi, Hi management I'm glad you brought up glad quota.
I have three questions. My first question is related to wealth management.
Sales volume of investment pot hours side, any slowing down from first quarter of this year can we know what's the reasoning behind it is that because of seasonal effect or listing product adjustment on the platform.
Besides that fee rate for wealth management product is also down sequentially.
Is that because the Bachelor or subscribe more dollar fee rate of products on the platform or any other reasons behind it.
So entering our second half of this year, how do we expect the trend of sales volume and the fee rate.
And my second question is related to insurers things lately regulators has issued an announcement related to the inspection of selling insurance products online.
Any process that you'll have to take on and is that going to impact our insurance sales in second half of this year.
And the last question is related to consumer credit.
Can we have the breakdown of them, Oh told him and small revolving loan ratio.
Since you highlight that value will expand to the SME segment to better promote inclusive financing second half of this year. So do you have any.
Pocket that you could share to us amount, Oh telephone SME loans, and our small revolving at all and.
Besides that.
Things that take rate for consumer crafted a circle came down in the second quarter. So I think as many because you acquire better quality borrowers, which a T. I S. At all or are things window guidance has been capped our APR at 24% how do we say take rate in second half of this year our ethical.
Going forward I think.
Yeah.
Thank you for your questions Oh, a half hour Oh are now answered.
First a question regarding a wealth management.
Business our fee rate.
So long and then our our wealth management business had a shell is also online who can cover the second question regarding your insurance, a regulatory update and Oh.
So she may come in and our wealth management and then the third question will be covered by a major.
Please.
Yeah.
Oh, okay.
Oh, Okay. So I'm going to mean for the first to the question. Okay. I will answer the why they'll say wait for all one thing last night, you don't confine it to the last quarter is mainly due to some mix off the paradox.
They need to go through the whole it sounds voucher in the fourth quarter and the last lots of first culture to me pronounce auto insurance it sounds a lot.
Laughing front for the people of life and so the China commercial it sounds like insurance companies to hire about to.
Then there are 17 or 18% in the second quarter of this year.
So that's the paradox.
I think so so as I said.
There's plenty of supply, while it's lower than the life and the generally TV panel.
Out of 14% to 15% of funding for our company.
That is the reason why our sell through rates it sounds like Oh, Wow, a wealth management.
That is mainly due until it does put us on mute.
Thank you and this show you will talk about the insurance policy.
Change.
Hello.
Okay.
Okay.
Is it going to I don't know I would answer this question I'm done for this for the regulation of all the insurance before that I would comfortably all internal and I'll turn on our guidance.
Our insurance.
Violence online for instance by the phone of course, it's also maybe offline so from our mechanisms, possibly the only thing is I have a I mean.
Leg or two hour you from me.
Yeah.
Yes, I I called out and we don't see any negative impact at all.
How we do our insurance book.
Business.
And May can you please.
And so the third question.
Yeah.
I know this is my I think of the crowded those months I think for the SME.
We have been involving the auto loan business for a quite a year.
And some of the classroom are they do you know actually there just as a media owner. So I think before our eyes on me if we have a lot of Oh.
Well with the customer which is a trade down as you know a different a product that doesn't need to learn the product from the better customer performance. So I think of the.
The percentages are 22 of the 30%.
Uh huh.
I think that as we continue to expand our Oh, the customer segment I think of as a percentage of income.
Two 6%.
Think of that but that's why our asset quality is a better and better I think.
Thank you.
Thank you.
Once again for those who wish to ask a question. Please press star and the number one and wait we need to be announced.
Your questions. Please.
Power one.
On your telephone keypad.
As there are no further questions at this time management discontinuous.
Thank you everyone for joining our call. This does this concludes our call for today. Thank you.
Thank you.
Ladies and gentlemen, this concludes today's conference call and thank you for participating.
You may now disconnect.
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Good day and thank for standing by welcome to the U N Digital's second quarter of 2021 earnings conference call. At this time all participants are in listen only mode. Now so the speaker's presentation. There will be a question answer session to ask a question Gena session that you need the best Taiwan, when they tell us.
Phone and please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I.
I would now like to hand, the conference over to your first speaker for today Ms. Lydia Yu.
Dan.
Thank you today's call features a presentation by the founder Chairman of C. O N E C O N E.
Our team has made so all in all this money.
But again, we want to remind you that this call.
Paul.
But would it be statements made under the Safe Harbor provisions, but do you Wanna Private Securities Litigation Reform Act.
95.
Risks uncertainties and factors that can cause actual results to differ materially those containers.
Contained in any such statements.
It makes them accordingly, and progress when do you start or factors is included in the company's filings the U S Securities and Exchange Commission.
We do not undertake any obligation.
We're looking statements what quiet under applicable law during the call we will be referring to several non-GAAP financial measures as supplemental measures to review and assess our NIM.
These non-GAAP financial measures are not intended to be considered isolation or as a substitute for financial information prepared and presented in accordance with U S. GAAP.
More information about these measures and reconciliations to GAAP measures. Please refer to our earnings press release I'll now pass it onto Ning for opening remarks.
Thank you all for joining us today.
We are very pleased to deliver another solid quarter.
With continued improvement in profitability and increasingly that once if I'd revenue mix.
As we further navigate you didnt digital to become a leading U S centric personal financial management platform.
As we continue to strengthen our competitive edge.
The drive up our business scale.
Have developed sophisticated strategies for both our wealth management and credit businesses.
For wealth management.
We are further differentiating ourselves by upgrading all the services and in reaching our product offerings.
For example in the second quarter, we started to offer retirement plans and services package.
Leading global investment management company principle.
We received immediate popularity since launch.
And as we further dive into the retirement financial market of a new product and services will help enhance our customers' L. T V.
Moreover, we are enhancing our capabilities to serve our customers with the higher investable assets.
I know the number of users who invested more than half a million.
RMB in one single transaction on our platform this quarter.
But by 126% comparable to last quarter.
Meanwhile, for our credit business we.
We are focusing on high quality growth and continue to take a proactive approach.
To transition our target borrower segment into a higher credit quality borrowers pay.
Paving the way for the launch of our increasingly diversified product in the future.
Secondly, we are deepening our deployment in small business market in the second half of 2021 and it will further diversify our product mix by increasing asking to be launched.
Last but not least as a user centric financial management platform. We are making continued efforts to integrate all the different business lines and service scenarios.
Dressing the comprehensive financial needs of each customer.
For example, we are offering suitable insurance products to our borrowers to better protect them and their families.
Which may will talk about later.
So all the strategies and moves mentioned above would be D. That you didn't did you toe is well positioned to expand its business as the lead in person no financial my husband platform.
Now I will provide a business update.
Our wealth management side before passing it over to me to give an update on our credit business.
Although wealth management business continues to see visible growth this quarter.
Client assets for.
That's been products reached RMB 14.7 billion as of June 30, 2021.
Representing an increase of 37% quarter over quarter.
Total number of active investors stood at 386000 as of June 30, plenty plenty, one representing an increase of 26% from last quarter.
Meanwhile, the average current asset play Investor further increased by 17% quarter over quarter to close to RMB 100 K.
And then the number of investors who have more than two asset classes. All right you Didnt wealth platform grew by 420% from prior year.
Reflecting our continued improvement in our customers' overall LTV.
Investor acquisition, we continued to invest in our bread to increase recognition and customer engagement.
On May 28, our lives anniversary program was joined by 20% of our active baskets.
Which is a reflection of our high customer engagement and loyalty.
It's worth mentioning that our fun product became one of the key growth drivers this quarter.
But typically aren't retirement fund of funds products enjoyed and immediate success right. After its launch in June.
Which contributed RMB 23 million transaction volume things, Josh that in just 23 days.
Moreover, our recently launched a new version of.
Yeah.
You can find the portfolio of products that offer more flexible target returns were also well received among investors.
With sales volume, increasing by 80% compared with last quarter.
Next to our insurance business.
Young insurance brokers.
The business growth remained strong.
In the second quarter of 2021 total premiums were approximately RMB 517 million.
More than 130% quarter over quarter.
For clothes, Yeah, we are focused on growing through our closed loop to b to C strategy.
In which post of serving our corporate clients and fully fulfilling their insurance needs.
Leverage our insurance tech capabilities and provide a customized targeted insurance products to their clients and customers.
Transitioning our corporate customers into a partner channels.
Helping them unlock a completely new revenue stream and at the same time, finding new customers with a much insurance needs.
Lastly, our digital stock brokerage platform, China uncle already Securities was officially launched in this quarter.
Which is a meaningful milestone for us.
Stablish their full spectrum wealth management product mix.
To bring strong synergies into our wealth management ecosystem.
The platform targets, both mass affluent and high net worth customers that COVID-19.
And importantly, we offer both Hong Kong and the U S stocks Etfs and the reach with more services and products to hit the shelf soon.
Meanwhile, we believe that investing in Investor education is core to drive business growth.
That's why we have created a variety of educational content.
With something suitable for your investors.
Each stage of their investing journey.
Including daily on a weekly live stream sessions.
To review market performance as was.
Trending topics and the daily financial news.
On customer acquisition. In addition to strong support from our wealth management ecosystem.
We're also focusing on to B to C strategy with over 10 partner channels already in our pipeline.
With that I will now turn the call over to me, who will highlight key updates for our credit business this quarter.
That's me this is a major hello, everyone now before I go through the operational highlights for our credit business I would like to share. Our response to the recent regulatory give album and to Echo what Naeem just mentioned about our initiative in credit business strategies.
As of the July a window guidance came from Tim out from the local financial regulatory.
Requiring a financial institution to cap the APR after customer loans at 24%.
We think that's just a potential new or a new requirement to beneficial for the industry as its completely eliminates the markets alone. They currently not concern over a P R and the pricing in response.
Last year, we have transitioned our targeted customer segment to higher credit quality borrowers. So.
There are implementing a target so crowded products, including E P. Our 18% to 24% as well as the interest the three loan products. In addition to alcohol government's focus on supporting the more and the micro business.
Starting from the second half of this year, we were at Sudbury expand our SME segment to better promote inclusive finance.
Historically, we have been serving some more business the owner for years and have accumulated reach experience and expertise in product design customer acquisition and servicing.
Cough cold ways with our strong technology capabilities and the fishing the channel partners, we expect to see the meaningful growth in this segment.
Now I will provide an update on our credit business for this quarter.
We saw a stable business grows in the second quarter as we are making strategic transition aim that regulatory change.
Volume and are low for satellites model in the second quarter should do at RMB five 1 billion.
Presenting an increase off of 7% from the last quarter of the 245% from the same period last year.
Children number off the borrowers served in the second quarter reached more than 434, K and increase off of 25% quarter after quarter and 300.
Or five or 4% year on year.
Meanwhile, our proxy unit economics continue to improve as we enhance all of our printing our efficiency.
We continue to see declining trends in our acquisition cost as our repeat borrowing rates increase.
That's our product and services offering broadens. Moreover, we have seen the visible progress in cross selling insurance product to our borrower base.
Total premiums are contributed by borrowers in the second quarter saw a 55% increase compared with the last quarter and the demand to remain strong.
We'll limit to our positioning as a user centric or personal financial management platform. We provide the customer my services by user not by loan which means that we value in each of our customers comprehensive demand for financial services and dramatically.
Or are there different than knees and to serve them accordingly, enhancing our customers our T V.
On the funding side, we continue to focus on expanding our funding partners and we receive additional RMB 10 billion in credit line. This quarter with another 20 financial institution in our pipeline lots.
Lastly.
Our risk of performance, we have seen a stable and improving access to quality.
At the end of the joined in 'twenty.
I'd say, Adam the join the delinquency rate for loan our engine Nate that pass could do for 15 to 29 days.
30 to 59 days and 16 to 18.90 days' worth.
155 points, 5%.
Pardon.
0.8% and 0.7% respectively.
Remaining at our historical lowers the level as we continue to upgrade our customer sentiment will expand our asset quality continued to improve throughout the year.
With that I will now pass it to our CFO <unk>, who will provide this quarter's financial update.
<unk>.
Okay. Thank you Tony Hello, everyone for financial update I will focus on key items of business operation under financial performers Omi, you'll kind of refer to the detailed financial results and how unusual is that thought has been close to all of my socks. Firstly.
All critical hard well wealth management business, that's all of a sudden 20 countries one well how can we alert the remodels in two kind of fun. He left her as a number of activities.
Its purpose called her continued to grow to 385005 I'm good at under certain states increased by 26% from last call. Her climb I thought was no put us cleanse wouldn't be putting pumps seven meeting I saw the 221, representing always spoke growth.
37% from last quarter.
Classified totals on facility the second call her it's gonna be fine processing, beating showing us that include culture or counter the number of followers. So let's just call. It a suit and 400 I'm just looking for 1153.
With an increase of 25 per ton for last quarter.
Now onto our financial guidance in college or total revenue increased by 49% year on year two of them. The one plant one beating all clicks plenty for them to find the people Oh well maintenance season.
What you have caused the cultural and operational efficiency total NIE in Congress doesn't called her group icon Cassandra counter over the counter.
Renting a house not income margin of 18%.
Total operating costs decreased by 17% year on year to them be it through a pond plants, a feeling in the market because the by 40% from probably a year or two of them before hundred under 50000 meeting driving button to a customer acquisition efficiency. All all of those are not understood.
<unk> increased 11% from probably a year or two of them would be 100, and the agency meeting maybe maybe easier to continue expansion of our insurance business.
For contract I suppose the silver on either what's that won't be 19th straight dealing with it.
Culture equivalent to one 8% of our little royall as compared to 2.9% last quarter, particularly with lots of them playing button throughout the call.
Okay, and the change I'll put on me.
On the balance sheet SEC, all categorization remains strong with a and b to constitute beating of Koch on Kashi equivalent as of June 30th 'twenty or 'twenty, one our strong balance sheet positions us well he's the kind of operating income.
And on the profit with sufficient resilient to continually find new nation, and a new opportunity and.
To me I didn't know Pepco inclement that may come.
This concludes our personal remarks, operator, while waiting for Q&A.
Thank you.
As a reminder to ask a question you will need the best Star one on your telephone to withdraw your question. Please spreads how the hash key.
Please standby, while we compile the Q&A roster.
Once again these best Taiwan for your questions.
First question is from the line of Cindy Wang of D. B S Visco.
Go ahead your line is open.
Oh, Hi, Hi, Hi management I'm glad you brought up glad quota.
I have three questions. If I may my first question is related to wealth management, a sales volume of investment pot hours side any slowing down from first quarter of this year can we know what's the reasoning behind it is that because of seasonal effect or listing product adjustment of the pie.
Besides that fee rate for wealth management product is also down sequentially.
Is that because the Bachelor or subscribe more dollar fee rate of products on the platform or any other reasons behind it.
So entering our second half of this year, how do we expect the trend of sales volume and the fee rate.
And my second question is related to insurance things lately. Originally tours has issued an announcement related to the inspection of selling insurance products online.
Any process that you'll have to take them and is that going to impact our insurance sales in second half of this year.
And the last question is related to kind of somewhat crowded.
Can we have the breakdown of them Oh told him and small revolving loan ratio since.
You highlight that value will expand out to the SME segment to better promote inclusive financing second half of this year. So do you have any target that you could share to us about the auto loan SME and small revolving along and besides that.
Things that take rate for kind of somewhat crowded Osaka camped out in the second quarter. So I think as many because you acquire better quality borrowers, which ATI asheville or things window guidance has been capped our APR at 24% how do we see take rates in second half.
Well, if they see our end up going forward.
Thank you.
Thank you for your questions Oh, a half hour of Stifel.
Our first question regarding our wealth management.
Business, our fee rate and so on and then our our wealth management business I had the Ah shall is also online.
You can cover the second question regarding your insurance Ruckle luxury.
And also she may a comment on our wealth management and then the third question will be powered by a major.
Please.
Okay. Thank you.
Oh, Okay thinking so as opposed to the price just okay. I will answer the why they'll say wait till four all lousy last night is down compared to the last quarter.
Due to the mix of off the paradox are mainly due to the horizontal wells here in the first quarter in the last Ah Ah Alaska, So forth called her so they pulled out of insurance it sounds a lot like a life insurance for the people of life and so the channel come mutual funds and insurance companies are high.
About a <unk> 10, or 17 or 18% in the second quarter up 50 or so.
So that's the paradox.
As I said.
So so as I said.
I'm sure there's plenty of supply while it's lower than the lives and those are generally the TV panel.
Out of 14% to 15% of the funding for our company.
So that is the reason why it's a few write downs like Oh, Wow, a wealth management.
It's mainly due to the.
Put us on mute.
Thank you and this show you all talk about the insurance policy.
Change.
Hello.
Yes.
Okay. Oh. This is this is not.
Okay, Oh, it's going to I don't know I will answer this question and Oh. So there's also the recreation of other insurers, but before that I would comfortably all internal and all 10 of our and it was things like meaning our insurance really like what I was meaning a thousand online for facilities.
Oh, Yeah. It's also maybe offline so phone our mechanism is probably the only thing is I have a I mean.
Let's turn to our insurance excuse me.
Yeah.
Yes, I I called out and we don't see any yeah.
The impact of Oh, we do all our insurance.
Yeah.
And May can you please.
So the third question.
Yeah.
Hi, This is Matt I think of the credit business I think for the SME.
We haven't been involving the auto loan business for one year.
And some of the classroom are they do you know actually there just as a media owner. So I think for our I send me a we have a lot of Oh, what's the customer which is you know a trade down as you know a different a proud of attracting new members to learn the product from there.
The better customer performance.
Think of the.
Yeah.
The percentages.
Two of the 30%.
Uh huh.
As we continue to expand our Oh, the customer segment I think of as a percentage of us, including two 6%. So I think of that.
That's why our asset quality as a better and better I think.
Thank you.
Yeah.
Thank you.
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Thank you Judy.
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