Q1 2024 Noah Holdings Ltd Earnings Call

Operator: Good day, and welcome to the NOAA Holdings first quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Melo Xi, Director of IR. Please go ahead.

Good day and welcome to the Noah Holdings first quarter 2024 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key.

Speaker Change: Followed by zero after today's presentation, there will be an opportunity to ask questions to ask a question. You May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to <unk>.

Speaker Change: Hello, He director of IR. Please go ahead.

Melo Xi: Thank you, operator. Good morning, and welcome to NOAA's 2024 First Quarter Earnings Call. Joining me today on the call are Ms. Wang Jingbo, our co-founder and chairperson, Mr. Xander Yin, our co-founder, director, and CEO, and Mr. Graham Pan, our CFO. Mr. Yin will begin with an overview of our recent business highlights, followed by Mr. Pan, who will discuss our financial operational results. They will all be available to take your questions in the Q&A session that follows.

Speaker Change: Thank you operator.

Speaker Change: Welcome to Noah 'twenty 'twenty four fourth quarter earnings call. Joining me today on the call are mis wanting what article founder and Chairlady Mr.

Speaker Change: Mr. Alexander <unk>, our cofounder director and CEO.

Speaker Change: Mr Grant Pan our CFO.

Speaker Change: And we will begin with an overview of our recent business highlights followed by Mr. Pan will discuss our financial operations operational result.

Speaker Change: They will all be available to take your questions in the Q&A session that follows.

Melo Xi: Before we begin, please note that this discussion today will contain forward-looking statements that are subject to risk and uncertainty that may cause actual results to differ materially from those in our foregoing statement. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the ICC and the Hong Kong Stock Exchange. Noah does not undertake any obligation to update any forward-looking statements, except as required under applicable law.

Speaker Change: Before we begin please note that this is Hudson today will contain forward looking statements are subject to risks and uncertainties.

Speaker Change: That may cause actual results to differ materially from those in our all looking statements.

Potential risks and uncertainties include but not limited to those outlined in our public filings with the ICC in the Hong Kong stock exchange.

Speaker Change: No. It does not undertake any obligation to update any forward looking statements, except as required under applicable law.

Melo Xi: In addition, today's call will include discussions of certain non-gap financial measures. A reconciliation of non-gap measures to the most directly comparable gap measures can be found in our earnings release. Lastly, this call should not be interpreted as a solicitation to sell or purchase any interest in any Noah Affiliated Products. Please also be aware that a link to a live webcast with presentation materials is available on our Investment Relations website. With that, I would like to pass the call to Mr. Jin. Please go ahead.

Speaker Change: In addition, today's call will include discussions of certain non-GAAP financial measures.

Speaker Change: Completion of non-GAAP measures to the most directly comparable GAAP measures can be found in our earnings release.

Speaker Change: Lastly, this call should not be interpreted as a solicitation to sell or purchase any interests.

Speaker Change: An interest in any no or no affiliated products. Please also be aware that a link to a live webcast with the presentation material is available on our Investor relations website with that I'd like to pass the call to Mr. <unk>. Please go ahead.

Speaker Change: Hello.

Zhe Yin: Good morning, investors and analysts of Noah. I'm Zhe Yin. This is my first time as the CEO of Noah Holdings to share and discuss the company's performance with everyone. Thank you for your participation. Sponsored ADR Class A Sponsored ADR Class A, Sponsored ADR Class A, We can clearly feel that high-paying people are becoming more and more cautious in terms of investment. Sponsored ADR Class A, Sponsored ADR Class A, [inaudible] Sponsored ADR Class A

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Zhe Yin: Good morning, NOAA investors and analysts. I'm Zhener Yin, and this is my first time sharing and discussing a company's performance as CEO of NOAA Holdings. Thank you all for joining us today.

Speaker Change: Good morning, Noah investors and analysts and then they're in and this is my first time sharing and discussing the company's performance as CEO of Noah Holdings. Thank you all for joining us today I'd like to start today's call by sharing our views on the macro economic environment. Our performance for the first quarter of 2024 and a strategy we're deploying.

Zhe Yin: I'd like to start today's call by sharing our views on the macroeconomic environment, our performance for the first quarter of 2024, and the strategy we're deploying going forward. The domestic capital market continued to experience extreme fluctuation during the first quarter. The real estate market remains sluggish, while the primary market faces hurdles due to periodic policy restrictions, resulting in a slow exit process. It's clear that high net worth individuals are becoming increasingly cautious with their investment.

Speaker Change: Going going forward.

Speaker Change: Domestic capital market continued to experience extreme fluctuation during the first quarter the real estate market remains sluggish while the primary market based hurdle due to the periodic policy restrictions.

In a slow exit process.

Speaker Change: Cleared the high net worth individuals are becoming increasingly cautious with their investments.

Zhe Yin: Adding to the challenge, some non-compliant wealth management companies, A cap with capital pooling, have collapsed, severely affecting domestic clients and leading to a stricter regulatory environment. I'd like to reiterate that since our inception, Noah has never engaged in capital pooling, has no maturity mismatches, and does not offer high leverage financing options to clients. As of today, NOAA does not have any non-standardized private credit products or R&B residential real estate funds.

Speaker Change: Adding to the challenge some noncompliant wealth management companies.

Speaker Change: Our cap with capital pooling have collapsed severely affecting domestic lines, leading to a stricter regulatory environment I'd like to reiterate that since our inception, nor has never engaging capital cooling at no maturity mismatches and does not offer high leverage financing options to clients.

Speaker Change: As of today no one does not have any non standardized private credit products and RMB really residential real estate funds.

Zhe Yin: Overseas, persistent inflation over the past three months has cooled expectations for Federal Reserve rate cuts, indicating that a higher-to-longer-rate environment is likely to remain in place. As a result, investors will continue to allocate capital towards cash management and deposits for a longer period of time. Mandarin speaking clients are also strongly demanding global accessibility. With this trend continuing, we're expanding our international RM team and actively increasing our influence and wallet share among overseas Mandarin speaking clients.

Speaker Change: Overseas persistent inflation over the past three months, our cool <unk> expectations for federal reserve rate cuts, indicating that are higher for longer rate environment, it's likely likely to remain in place.

Speaker Change: As a result investors will continue to allocate capital towards cash management and deposit for a longer period of time.

Speaker Change: Mandarin speaking clients are also strongly demanding for global asset allocation with this trend continues we're expanding our international RM team and actively increasing our influence and wallet share among overseas Mandarin speaking clients.

Speaker Change: Okay.

Zhe Yin: Sponsored ADR Class A The total revenue of the company is 6.5 billion yuan. 19.2% Our new business strategy has achieved better results. Sponsored ADR Class A, [inaudible] Sponsored ADR Class A, Let's take a look at the board Sponsored ADR Class A, 97% Sponsored ADR Class A, $51.7 billion AUM and a 6.1% increase. [inaudible] 18.86 million Sponsored ADR Class A, 86.8% Sponsored ADR Class A. In the first quarter of 2024, Lu De's operating profit was 1.2 billion yuan, and his new profit rate was 18.9%.

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Zhe Yin: Turning to our financials for the quarter, total revenues were RMB $654 million, a decrease of 19.2% year-on-year, primarily due to the proactive restructuring of our business. Our overseas business strategy achieved solid results, contributing 77.1% of the revenue generated from new businesses and products in the first quarter, while domestic business contributed 22.9%. By region breakdown, our domestic business contributed RMB 348 million, accounting for 53.1% of the total revenue. Within the domestic business, revenues from legacy distributed products accounted for 89.6%.

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Speaker Change: Turning to our financials for the quarter total revenues were RMB $654 million a decrease of $19 two year on year, primarily due to the proactive restructuring of our business. Our overseas business strategy has achieved solid results contributing 77, 1% of the revenue generated from new businesses and products.

Speaker Change: In the first quarter, while domestic business contributed 2022, 9%.

By region breakdown, our domestic business contributed RMB 348 million accounting for 53, 1% of the total revenues within the domestic business revenues from legacy distributed products accounted for $89, 6% our overseas business generated RMB 307.

Zhe Yin: Our overseas business generated RMB 307 million, a decrease of 4.5% year-on-year, mainly due to the carried interest earned from private equity assets in the same period last year. However, if we back out the impact from the carried interest, overseas net revenue actually increased by 22.4% year-on-year.

A decrease of four 5% year on year, mainly due to the carried interest earned from private equity exits in the same period last year as we back out the impact from carried interest overseas net revenue actually increased by 22, 4% year on year.

Zhe Yin: Breaking it down by segment, our Wealth Management business generated RMB $464 million; within Wealth Management, our Domestic Business contributed RMB $235 million, while the Overseas Business contributed RMB $229 million. Our asset management business generated RMB 181 million. Within asset management, our domestic business contributed RMB 103 million, entirely composed of revenue from legacy distributed products. Our overseas business generated RMB 78 million. As we expand our portfolio of overseas private equity products, the number of active clients in U.S. dollar private equity and structured products reached 583 in the first quarter, a year-on-year increase of 97%.

Speaker Change: Taking it down by segment, our wealth management business generated RMB 464 million within wealth management, our domestic business contributed RMB $235 million, while the overseas business contributed RMB 229 million.

Speaker Change: Our asset management business generated RMB $181 million within asset management, our domestic business contributed RMB 103 million entirely composed of revenue from legacy distributed product.

Speaker Change: Our overseas business generated RMB 78 million.

Speaker Change: We expand our portfolio of overseas private equity products the number of equity.

Speaker Change: A number of active clients in U S dollar private equity and structured products reached 583 in the first quarter a year on year increase of 97% the value of capital rates for U S dollar private equity products, which generate long term recurring service fee revenue reached RMB 165.

Zhe Yin: The value of capital raised for U.S. dollar private equity products, which generate long-term recurring service fee revenue, reached RMB $165 million. This grew US dollar AUM to $5.2 billion, a year-on-year increase of 6.1%. In the comprehensive services segment, the domestic insurance brokerage business generated RMB 19 million in revenue and revenue from overseas insurance, trust, and other comprehensive services, or RMB 150 million, a year-on-year increase of 86.8%. The number of active clients in the overseas comprehensive business increased by 51.9% year-on-year. Operating profit for the first quarter was RMB 121 million, with an operating profit margin of 18.7%.

Speaker Change: Million dollar.

Speaker Change: This grew U S dollar of U M to $5 2 billion dollar a year on year increase of six 1%.

Speaker Change: And the comprehensive services segment domestic domestic insurance brokerage business generated RMB 19 million in revenues.

Speaker Change: Revenue from overseas insurance.

Speaker Change: Other comprehensive services were RMB.

Speaker Change: $150 million a year on year increase of 80 86, 8%.

Speaker Change: The number of active clients in the overseas comprehensive business increased by 51, 9% year on year.

Speaker Change: Operating profit for the first quarter was RMB 121 million with an operating profit margin of 18, 7%.

Zhe Yin: Sponsored ADR Class A In the future, we will continue to focus on about 10 core cities. Sponsored ADR Class A, 225% 2.2% Sponsored ADR Class A On the international channel, our main job is to expand our international financial team. This year, our goal is to expand the team to 200 people.

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Zhe Yin: Sponsored ADR Class A, 17.1% Sponsored ADR Class A, 89.3% A total of 873 clients have been entrusted to manage their assets in Noah. [inaudible] Sponsored ADR Class A, In the second market, we focus on QDII and QDLP products. Sponsored ADR Class A, 49.4% 33.6% Sponsored ADR Class A, USD has significantly increased the weight of the first class of private wood. During the first quarter, it reached $1.7 billion. The growth rate was 21.3%, and the return rate was 81.3%.

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Zhe Yin: Sponsored ADR Class A, 21.2% to 24.4% Sponsored ADR Class A, 5.9% Sponsored ADR Class A, Because of Noah's brand image among high-ranking clients and the professional ability of our private bankers in other asset categories, we are regarded as an ideal partner by other asset managers around the world. Our goal is, in the next three to five years, to double our number of Sponsored

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Zhe Yin: In the Wealth Management segment, our domestic business objective is to ensure full compliance and steady operation. We have proactively reduced the number of branches in domestic cities from nearly 80 to 18, with plans to further narrow it down to around 10 core cities.

Speaker Change: In the wealth management segment, our domestic business objective is to ensure full compliance steady operation, we have proactively reduced the number of branches and domestic cities, where nearly 80% to 18 with plans to further narrow it down to around 10 core cities.

Zhe Yin: We are firmly committed to reducing fixed costs and optimizing mid and back office personnel. Internationally, from Hong Kong and Singapore to the United States, our strategy is to increase the number of relationship managers and enhance our influence and wallet share among high-network Mandarin-speaking clients. As of the end of the first quarter, Hong Kong and Singapore had 91 relationship managers on board, an increase of 225% year-on-year and 2.2% sequentially. Currently, due to the small size of our overseas RMT, each overseas RM serves too many clients, and there is room for improvement in the quality and responsiveness of our client service. Internationally, our primary focus is on expanding the team of overseas RMs. This year, our goal is to grow the team to 200.

We're firmly committed to reducing fixed costs and optimize mid and back office personnel costs.

Speaker Change: Internationally from Hong Kong, and Singapore, the United States. Our strategy is to increase number of relationship managers and hence our influence and wallet share among high network Mandarin speaking clients.

Speaker Change: Is that the end of the first quarter Hong Kong, Singapore had 91 relationship managers on board at an increase of 225% year on year and two 2% sequentially.

Speaker Change: Currently due to the small size of all of our overseas our EM team each overseas RM served to many clients and there is room for improvement in the quality and responsiveness in our client service.

Speaker Change: Internationally, our primary focus is on expanding the team of overseas arent ups. This year. Our goal is to grow the team to 200.

Zhe Yin: As we continue to invest in our international infrastructure, as of the end of the quarter, we had over 15,700 overseas registered clients, an increase of 17.1% year-on-year. The number of clients who purchased our cash management products reached 4,108, an increase of 89.4% year-on-year, while the number of discretionary investment clients reached 873, an increase of 167% sequentially.

Speaker Change: As we continue to invest in our international infrastructure as of the end of the quarter. We had over 15700 overseas registered clients an increase of 17, 1% year on year the.

Speaker Change: The number of clients, who purchased our cash management products reached 4108, an increase of 89, 4% year on year.

Speaker Change: While the number of discretionary investment clients reached 873, an increase of 116, 7% sequentially.

Zhe Yin: In the asset management segment, domestically, our primary challenge is to strengthen private market exits in collaboration with GPs and portfolio companies. In public markets, we focus on QDI and QDLP products to help clients generate beta returns in the global capital markets with RMB allocation. Internationally, since 2022, we have significantly expanded the diversity and quality of our overseas products as part of our top tier GP partners and segmented flagship product strategy.

Speaker Change: Okay.

Speaker Change: In the asset management segment.

Speaker Change: Mexicali, our primary challenge is to strengthen private private market exit in collaboration with GPS and portfolio company.

Speaker Change: In public markets, we focused on QD I ask Judy all key products to help clients generate better returns in our global capital markets with RMB applications.

Speaker Change: Internationally since 2022, we have significantly expanded the diversity and quality of our overseas product as part of our top tier GP partners and segmented flagship product strategy during.

Speaker Change: During the quarter.

Zhe Yin: The transaction value for U.S. dollar cash management products increased 49.4% year-on-year and 33.6% sequentially to US dollars 840 million. At the same time, we have built a complete product matrix and launched high-yield U.S. dollar products to capitalize on high-interest-rate environments. These include private credit and infrastructure products, as well as actively managed VC fund funds and the fourth series of our U.S. real estate funds. Transaction value of our U.S. private equity products increased significantly, reaching $165 million in the first quarter, an increase of 21.3% year-on-year and 81.3% sequentially.

Speaker Change: The transaction value for U S dollar cash managing product increased 49, 4% year on year, and 33, 6% sequentially sure USD $840 million.

Speaker Change: At the same time, we have built a complete product matrix launched high yield U S dollars U S dollar products to capitalize on high interest rate environment. This includes private credit and infrastructure product as well as actively managed VC funding plans and the four tiers of our U S real estate funds.

Speaker Change: Transaction value of our U S private equity products increased significantly.

Speaker Change: In reaching 165 million dollar in the first quarter, an increase of 21, 3% year on year and 81, 3% sequentially.

Zhe Yin: As of the end of the quarter, AUM for overseas products reached US$5.2 billion, an increase of 6.1% year-on-year, accounting for 24.4% of the group's AUM, compared with 21.2% during the same period last year. AUM for overseas private equity and other primary market funds reached 3.9 billion dollars, an increase of 5.9% year-on-year. Overseas AUA, which includes third-party distributed products, $8.3 billion, a year-on-year increase of 9.2%. In recent years, top global GPs have increasingly turned to private wealth channels for capital raising and have been introducing more individual client-friendly products with liquidity features.

Speaker Change: As of the end of the quarter, our U M for overseas products reached U S dollar and $5 2 billion, an increase of six 1% year on year accounting for 24%.

Speaker Change: 4% of the group of Yuan compared with 21, 2% during the same period last year.

Speaker Change: Our U N for overseas private equity and other primary market funds reached three nine.

$3 $9 billion, an increase of five 9% year on year.

Speaker Change: Overseas are you aim which includes third party distributed products reached.

Speaker Change: $8 3 billion dollar a year on year increase of nine 2%.

Speaker Change: In recent years top global GP have increasingly turned to private wealth channels from capital raising and had been introduced more individual client friendly product with liquidity features.

Zhe Yin: Our strong brand image, a multi-network client, and RM's expertise in alternative assets make us the ideal partner for those GPs. Our goal is to increase AUA from the current 8 billion U.S. dollars to over 20 billion U.S. dollars in the next three to five years.

Our strong brand image, among our clients and our <unk> expertise in alternative assets make us the ideal partner for those GPS.

Speaker Change: Our goal is to increase U S. Dollar EUA from the current 8 billion U S dollar to over 20 billion U S. Dollar in the next three to five years.

Zhe Yin: Sponsored ADR Class A In terms of glory insurance, the domestic market is clearly in a slump. Sponsored ADR Class A, ???????????????????????? Sponsored ADR Class A, Comprehensive Solutions Sponsored ADR Class A, During the first quarter, overseas insurance revenue increased by 86.8% Sponsored ADR Class A, From C-client to B-client and A-client We can provide different solutions ??????????????????, Sponsored ADR Class C, During the first quarter of 2024, the number of active high-paying customers overseas reached 2745.

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Zhe Yin: 39.6% increase compared to last year; Sponsored ADR Class A 50.7% Among them, the number of active customers of the U.S. public fund has reached 2,327, an increase of 65.2%. Sponsored ADR Class A, Sponsored ADR Class B, 20232A Sponsored ADR Class A, So far, 17 ADR clients have been signed. Sponsored ADR Class A, Our target is to serve 300 EAMs and more than half of our clients overseas.

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Zhe Yin: On the comprehensive services side, the domestic insurance business has slowed notably, mainly due to the continuous decline in fixed interest rates for domestic insurance. Our current strategy is to focus on insurance products that help clients address their parents' retirement, well-being, and medical needs. Overseas, the Hong Kong insurance market has entered into a phase of intense competition with highly homogeneous products following the COVID reopening. To address this challenge, we have strengthened client segmentation and collaborated with leading insurance companies to develop exclusive products and customized solutions.

Speaker Change: On the comprehensive services side domestic insurance business has no noteworthy mainly due to the continued decline in fixed interest rate for domestic insurance. Our current strategy is to focus on insurance products that help clients address their parents with harman, while being and medical needs.

Overseas the Hong Kong insurance market has entered into a phase of intense competition with highly homogeneous product following the call that we're opening.

Speaker Change: To address this challenge we have strengthened strengthened clients that mutation and collaborated with leading insurance companies to develop exclusive products and customized solutions.

Zhe Yin: Furthermore, we have launched customized enterprise client solutions, such as employee benefit plans for our entrepreneur clients. This has enhanced our competitive advantage with differentiated products and professional services. During the quarter, overseas insurance revenue increased by 86.8% year-on-year.

Speaker Change: Furthermore, we have launched the customized underpriced client solutions, such as employee benefit plan for our entrepreneur clients.

Speaker Change: This has enhanced our competitive advantage with differentiated products and professional services.

Speaker Change: During the quarter overseas insurance revenue increased by 86, 8% year on year.

Zhe Yin: Serving high-level clients through both online and offline channels is a key priority for us. We continue to further expand the range and types of clients that we can service through ANOA, our Overseas Wealth Management Act. This includes offering different solutions to clients, businesses, and agents.

Speaker Change: Serving high net worth clients through both online and offline channels is a key priority for US we continue to further expand the range and types of clients that we can serve service through and Noah our overseas wealth management.

Speaker Change: This includes the offering of different solutions to client businesses and agency online wealth management is becoming our new channel for us in the overseas.

Zhe Yin: Online Wealth Management is becoming our new channel for us in overseas. The number of overseas active high-level clients reached 2,745, an increase of 39.6% year-on-year. Total transaction value during the same period reached $1.2 billion, up 50.7% year-on-year. The number of active clients for U.S. neutral funds reached 2,327, an increase of 65.2% year-on-year, with transaction value of $521 million, up 52.7% year-on-year. Overseas transaction value for corporate and institutional clients reached $85 million in the first quarter, an increase of 143% year-on-year, with AUA reaching $187 million, a year-on-year increase of 58.5%.

Speaker Change: The number of overseas active high net worth clients reached 2745, an increase of 39, 6% year on year.

Total transaction value during the same period reached $1 2 billion up 20.

27% year on year, the number of active clients for U S. Mutual funds reached 2327, an increase of 65, 2% year on year with transaction value of $521 million.

Speaker Change: 32, 7% year on year.

Speaker Change: Overseas transaction value or corporate and institutional clients reached $85 million in the first quarter, an increase of 143% year on year with a UA, reaching $187 million.

Speaker Change: Our year on year increase of 58, 5%.

Zhe Yin: For agency clients, our overseas wealth management business began trial operations in late 2023, where it is empowering EAMs and family office clients with a SaaS platform integrated with our full suite of products. To date, we have signed 70 agency clients. Our goal is to develop an overseas online wealth management platform that does not rely on our team of RMs. Once our overseas infrastructure is firmly in place, we target to serve 300 EAMs and family offices with this solution.

Speaker Change: For agency clients, our overseas wealth management business began trial operations in late 2023, where it is empowering E M and family office clients with a SaaS platform integrated with our full suite of products to date, we have signed 70 age has declined.

Speaker Change: Our goal is to develop an overseas online wealth management platform that does not rely on our team of arms.

Speaker Change: Well our overseas infrastructure is firmly in place we target to serve 300 E. A M family offices with this solution.

Speaker Change: No you're absolutely triangular.

Zhe Yin: Sponsored ADR Class A Sponsored ADR Class A During this period, we have established a long-term trust relationship with our customers. Sponsored ADR Class A, ????????????,????????????, ????????????, Sponsored ADR Class A ??????, Sponsored ADR Class A, We will also gradually establish business strongholds in the highly concentrated overseas key markets of Chinese high-level investors in the absence of a large amount of early investment in a new capital model. Sponsored ADR Class A, Next, Qing Pan will introduce the financial performance of the first quarter in detail. Thank you.

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Zhe Yin: Since inception, we have dedicated ourselves to providing high-quality asset allocation services to a large number of Mandarin-speaking investors. We have built enduring trust-based relationships with each of our clients and continuously enhanced our understanding of wealth management and investment through ongoing investor education. As Mandarin-speaking high net worth investors become more mature and globally oriented, the deep trust-based relationships we have built domestically will allow us to continue serving them as they look overseas. We are dedicated to building a personalized service for them, which when combined with our expanding global product portfolio will give us a significant advantage over local institutions going forward.

Speaker Change #107: Since inception, we have dedicated ourselves to providing high quality asset allocation services to Mandarin speaking of high net worth investors. We have built enduring trust based relationship with each of our clients and continuously enhance our understanding of wealth management and investment.

Speaker Change #107: Ongoing investor Education.

Speaker Change #107: As mentoring speaking high net worth investors become more mature and globally oriented at the deep trust based relationships. We have built domestically will allow us to continue serving them.

Speaker Change #107: Overseas.

Speaker Change #107: We are dedicated to building a personalized service for them.

Speaker Change #107: Which when combined with our expanding global product portfolio will give us a significant advantage over local institutions going forward.

Zhe Yin: Our asset line approach to expanding into key overseas markets with high concentrations of Mandarin-speaking Hainanese investors and a wide array of product services will ideally position us to serve not only our existing clients but also build a new local client base. I would now like to turn the call over to Grant to go over our financial results in more detail before opening the call to Q&A. Thank you, everyone.

Speaker Change #107: Our asset light approach to expanding into key overseas markets with high concentrations of Mandarin speaking, how networks masters and wide array of products and services will ideally position us to serve not only our existing clients, but also built new local client base.

Now I'd like to turn the call over to grant to go over our financial results in more detail before opening the call to Q&A. Thank you everyone.

Mel: Thank you Mel.

Grant Pan: And thank you, Xander. Greetings to everyone joining us today. As Zander has mentioned, the first quarter of 2024 is impacted by continued volatility in the global market. Shifting expectations around Federal Reserve interest rate cuts have created turbulent conditions in equity and bond markets around the world. As the U.S. dollar strengthened, equity and gold prices moved in tandem, reflecting the complex environment that investors continue to face.

Speaker Change #109: And thank you vendor.

Speaker Change #110: Greetings to everyone joining us today.

Speaker Change #111: <unk> mentioned the first quarter of 2024 was impacted by continued volatility in the global credit markets.

Speaker Change #111: Shifting expectations around federal reserve interest rate cuts.

Speaker Change #111: The turbulent conditions in the equity and bond markets around the world.

Speaker Change #111: The U S dollar strengthened equity in gold prices moved in tandem, reflecting the complex environment that investors continue to face.

Grant Pan: Effective risk management and a globally diversified portfolio have become crucial to successfully navigating this environment. Domestically, the age share market experienced extreme fluctuations as well, which negatively impacted investor confidence, prompting them to take a more cautious and risk-averse approach to investment and further diversify their portfolio. That has created substantial challenges and impacted the financial performance of China's wealth and asset management industry. During the first quarter, 43 listed security brokerage firms saw total revenue and net profit decline by 20% and 30% from the same period last year. Some leading private banks were also affected, with significant declines in commission income.

Speaker Change #111: Effective risk management and global diversified portfolio have become crucial to successfully navigating this environment.

Speaker Change #111: Domestically, the a share market experienced extreme fluctuations as well, which negatively impacted investor confidence per month in them to take a more cautious and risk averse approach to investment and further diversify their portfolios.

It has created substantial challenges and impacted the financial performance of China's wealth and asset management industry.

During the first quarter 43 listed security brokerage firms. So total revenue and net profit declined by 20% and 30% from same period last year.

Speaker Change #111: Some leading private banks were also affected with significant declines in commission income.

Grant Pan: In response to prevailing marketing conditions, we're strategically restructuring our well-managed operations, consolidating teams and resources from smaller cities to core cities, and pivoting operations and personnel toward global markets where demand for asset diversification is growing. Themes guiding our operations this year are transformation and transition. While this transformation may bring short-term challenges and pressures, including temporary fluctuations in financial performance, we're confident that we'll lay a solid foundation for robust and sustainable growth in line with our globalization strategy and generate enduring value for shareholders.

Speaker Change #112: In response to prevailing market conditions were strategically restructuring our wealth management operations.

Speaker Change #112: Consolidating teams and resources from smaller cities to core cities and pivoting operations and personnel towards global markets, where demand for asset diversification is growing.

Speaker Change #112: These guiding operation this year of transformation and transition while this transformation might bring short term challenges pressures, including temporary fluctuations on financials performance.

Speaker Change #112: We're confident that we will lay a solid foundation for robust growth towards our globalization strategy it generates enjoying value shareholders.

Grant Pan: With that, let's get into the details of the first quarter financial results. On the revenue side, we have seen a slight increase in net revenues from Neutron, with one-time commissions up 6% year over year. However, the decline in recurring service fees and performance-based revenue put pressure on total net revenue, which decreased 19.2% year over year and 18.8% sequentially due to seasonality to RMB.

Speaker Change #112: With that let's get into the details of first quarter financial results.

Speaker Change #112: On the revenue side.

Speaker Change #112: Slight increase in net revenues from new transactions with one time commissions up 6% year over year.

Speaker Change #112: However, the decline of recurring service fees and performance based income put pressure on total net revenues, which decreased 19, 2% year over year, and 18, 8% sequentially due to seasonality to RMB.

Grant Pan: 650 million in the first quarter. Net revenue from recurring service fees for RMB 417 million, down 12% year-over-year and 2.6% sequentially due to a decrease mostly in the onshore AUM resulting from changes in NAF and also exits from RMB-related investments. Performance-based income was RMB 14 million compared to RMB 83 million in the same period last year, primarily due to the successful exit of a private equity portfolio company last year. The bright side is that we're seeing increased interest.

Speaker Change #112: 615 million in the first quarter.

Speaker Change #112: Net revenue from recurring service fees were RMB 417 down 12% year over year, and two 6% sequentially due to a decrease mostly in the onshore.

Speaker Change #112: And from changes in NAV and also exits from RMB related events.

Speaker Change #112: Yeah.

Speaker Change #112: Performance based income was RMB 14 million compared to RMB 83 million in the same period last year, primarily due to the successful exit of a private equity portfolio company last year.

Speaker Change #112: The bright side is that we're seeing increased interest.

Grant Pan: Sourced US Dollar Investment Products, In light of the diminished expectation of a rate cut by the Federal Reserve, we're observing a strong and sustained demand from clients for U.S. dollar cash management products. It's worth also noting that the transaction value for overseas private equity and private secondary products, which could bring long-term recurring fees in the future, are also generating significant growth. Increasing by 21.3% and 70.6% year over year, respectively, demonstrating the progress we have made in expanding our high quality alternative investment products offering.

Speaker Change #112: U S dollar of investment products in.

Speaker Change #112: In light of the diminished expectation of a rate cut by the federal reserve were observing a strong and sustained demand from clients for U S. Dollar cash management products. It's worth also noting that the transaction value or overseas private equity and private secondary products, which could bring long term returns easing.

<unk> are also generating significant growth.

Speaker Change #112: Increasing 21, 3% and 17.

Speaker Change #112: 6% year over year, respectively, demonstrating the progress we have made.

Speaker Change #112: Pending our high quality alternative investment product offerings.

Grant Pan: Looking at the financials, we can seek out your girls and oversee business. On an Apple to Apple basis, taking out the impact of performance-based overseas net revenues grew meaningfully by 22.4%. And the total overseas net revenues accounted for 47.2% of total revenues, up 7.2% year over year, underscoring the growing importance of a key revenue driver. With respect to transaction values, we distributed RMB 18.9 billion of products during the quarter, up 12.4% year-over-year and 14% sequentially.

Speaker Change #112: Looking at the financials, we can seek either girls will oversee business.

Speaker Change #112: On an apple to Apple basis, taking out the impact of performance based income overseas net revenues grew meaningfully by 22, 4%.

Speaker Change #112: And the total overseas net revenues accounted for 47, 2% of total revenues up seven 2% year over year underscoring the growing importance of our key revenue driver.

Speaker Change #112: With respect to transaction values, we distributed RMB 18 9 billion.

Speaker Change #112: Products during the quarter up 12, 4% year over year and 14% sequentially.

Grant Pan: However, the immediate contribution to revenue is not yet evident, despite the high demand for U.S. dollar cash managed products, and also recurring revenue from private equity-related products will not take effect in the same quarter. But it does reflect the progress of continuing to make and getting a larger share of a client's wallet. And the long-term benefits of the increased portion of alternative investment products to future management fees are also yet to be realized in the current term.

However, the immediate contribution or revenue is not yet evident despite the high demand or U S. Dollar cash management products and also the revenue recurring revenue from private equity related products will not take effect in the quarter, but it does reflect the progress continuing making and getting in.

Speaker Change #112: Larger share of our client's wallets.

Speaker Change #112: And the long term benefits of the increased portion of alternative investment products through future management fees are also yet to be realized in the current term.

Grant Pan: By currency, transaction value for RMB products was RMB 10.5 billion, down 8.8% year-on-year, and 1.5% sequentially for transaction value for U.S. dollar products, which increased by 50.7% and 40.2% sequentially to US dollar 1.2 billion. Overseas AUM grew 6.1% to U.S. dollar 5.2 billion, accounting for 24% of total AUM, while overseas AUA grew 9.2% year-over-year to U.S. dollar 8.3 billion, accounting for 24% of total AUM, reflecting our validity to capture a large share of the client's used up wallet.

By currency transaction value for RMB products was RMB 10 5 billion.

Speaker Change #112: Eight 8% year on year at one 5% sequentially or transaction provided for U S. Dollar.

Increased by 57% and 42% sequentially to <unk>, one point to again.

Speaker Change #112: Overseas AUM grew six 1% the U S dollar $5 2 billion accounting for 24% of total AUM.

Speaker Change #112: While oversee AOA grew nine 2% year over year U S. Dollar $8 3 billion equivalent to 24% in total reflecting our ability to capture a larger share of clients used all wallets.

Grant Pan: Operating costs and expenses experienced a slight year-on-year increase of 0.7 percent, a sequential decline of 8.8 percent due to our cost control initiative. In details, compensation and benefits increased by 5% year over year and 29.3% sequentially. This was primarily due to an increase in share-based compensation to motivate and retain core talent. As I mentioned last quarter, we're continuing to consolidate our network in smaller cities and further improve human capital efficiency by reducing overhead expenses. While the financial benefits of these optimizations may not be immediately apparent, we anticipate a gradual and noticeable improvement in cost evidence in the future. Selling and general administrative expenses combined decreased 6.3% year-over-year and 47.9% sequentially.

Speaker Change #112: Operating costs and expenses experienced a slight year on year increase of 0.7% sequential decline of eight 8% due to our cost control initiatives.

Speaker Change #112: In details compensation and benefits increased by 5% year over year and 29 three sequentially. This was primarily due to an increase in share based compensation. This falls to motivate and retain core patents.

Speaker Change #112: And as I mentioned last quarter, we're continuing to consolidate their network in smaller cities and further improving human capital efficiency.

Speaker Change #112: By reducing overhead expenses while.

Speaker Change #112: While the financial benefits of these optimizations may not be immediately apparent we anticipate a gradual and noticeable impact.

Speaker Change #112: Our cost savings in the future.

Speaker Change #112: Selling and general administrative expenses combined.

Speaker Change #112: Six 3% year over year, and 47, 9% sequentially.

Grant Pan: Reflecting the progress of cost control and efficiency improvement initiatives, operating profit during the quarter was RMB121 million, a decrease of 56.4% year-over-year and 45% sequentially. Operating Profit Margin was 18.7%, during this quarter below our long-term target of 30 to 35% primarily due to the drag from domestic market revenues and pure radical organizations risk structure. Total Outer Income increased by 82.1% year-on-year to $55.3 million due to continued optimization of treasury management. Non-GAAP net income during the quarter was RMB161 million, compared with RMB239 during the same period last year.

Speaker Change #112: Reflecting the progress on cost control and efficiency improvement initiatives are already making.

Speaker Change #112: Operating profit during the quarter was RMB $121 million.

Speaker Change #112: Decrease of 56, 4% year over year, and 45% sequentially operating profit margin was 18, 7%.

Speaker Change #112: This quarter below our long term cargo volumes.

Speaker Change #112: 30% to 35% primarily due to the drag from domestic market revenue.

Speaker Change #112: And pure radical organization restructuring.

Speaker Change #112: Total other income increased by 82, 1% year on year to 55 3 million due to continued optimization Treasury management.

Speaker Change #112: non-GAAP net income during the quarter was RMB 161 million compared with RMB 239 during the same period last year.

Grant Pan: In terms of clients, As of the end of the first quarter, we had a stable total of $9,560 with diamond and black heart clients. Specifically, the number of diamond card clients decreased slightly to 7,272 and the number of black card clients increased to 2,296. As our overseas expansion accelerates, the number of overseas registered clients continues to grow, increasing 17.1% year-on-year and 5.3% sequentially to 15,725. The total number of overseas diamond and black card clients, which require a minimum investment with us of USD 2 million and USD 5 million, respectively, grew rapidly to more than 1,500. During the first quarter, the total number of active clients was 10,391, up 15% sequentially, of which overseas active clients accounted for 2,745, an increase of 9.1% sequentially.

Speaker Change #112: In terms of clients.

As of the end of the first quarter, we had a stable total of 9560 with diamond and Black card clients.

Speaker Change #112: Specifically the number of Diamond card clients decreased slightly to 7272 or the number of black card clients increase since 2296.

Speaker Change #112: As our overseas, especially accelerates the number of overseas registered clients continues to grow increasing 17, 1% year on year and five <unk>.

Speaker Change #112: So Lee to 15725.

Speaker Change #112: The total number of overseas Diamond and Black card clients would you require minimum investment with us of <unk> dollars 2 million and 5 million, respectively grew rapidly to more than 500.

Speaker Change #112: During the first quarter. The total number of active clients was 10391 up 15% sequentially of which oversees active clients accounted for 2000 and 745.

Speaker Change #112: Increase of nine 1% sequentially.

Grant Pan: Turning to our balance sheet, we have maintained a healthy liquidity position with our current ratio of 4.1 times and debt-to-asset ratio at 16.6% with zero interest bearing. Interest Bearing Debt will have RMB 5.1 billion in cash and cash equivalents, providing ample resources to support our global expansion plans and allocate to shareholder returns, which remains a priority for the board. As mentioned last quarter, Noah declared annual dividends of RMB509 million and a non-recurring special dividend of RMB509 million for 2023, subject to final approval at our AGM on June 12, 2024.

Speaker Change #112: Turning to our balance sheet, we have maintained a healthy liquidity position with our current ratio.

Speaker Change #112: One times and debt to asset ratio at 16, 6% with zero interest bearing debt.

Interest bearing debt, we have RMB, five 1 billion in cash and cash equivalents.

Speaker Change #112: Biding ample resources to support our global expansion plans and allocate to shareholder returns, which remains a priority boarding.

Speaker Change #112: As mentioned last quarter, no one's declared annual dividend of RMB 509 million and the nonrecurring special dividend of RMB 519 million for 2023 subject to final approval at our AGM on June 12 2024.

Grant Pan: We expect to pay out dividends when approved before the end of July to Hong Kong stockholders and in early August to our ADS holders. We look forward to providing stable and sustainable returns to shareholders that will drive growth across our business. Our goal is to provide clients with high quality and globalized products and services. Restructuring our wealth management channels and realigning our operations and personnel will allow us to sustainably capitalize on this growing demand.

Speaker Change #112: Expect to pay out dividend when approved before the end of July to Hong Kong stockholders in early August to our ABS holders, we look forward to providing stable and sustainable returns to shareholders that would drive growth across our business.

Speaker Change #112: Looking ahead, our goal is to provide clients with high quality and global lines of products and services.

Speaker Change #112: Restructuring our wealth management channels.

Speaker Change #112: Aligning our operations and personnel that will allow us to sustainably capitalize on this growing demand.

Grant Pan: The strategy, the strategic transition towards overseas markets, is still in the initial phase, being built out, and will take some time to mature, but we're already beginning to see the progress we have made reflected in the performance of global business. One will inevitably encounter bumps along the road, but we have confidence in our ability to overcome them, and we would like to express our sincerest gratitude through our shareholder support. And thank you for listening. I will now open the floor to questions.

Speaker Change #112: The strategy.

Speaker Change #112: Tejas transition towards overseas markets still in the initial phase.

Speaker Change #112: Being built out and we will take some time to mature, but we're already beginning to see the progress <unk> made.

Speaker Change #112: And the performance of the global business.

Speaker Change #112: We will inevitably encounter bumps along the road, we're confident in our ability overcome them and would like to express our sincerest rats.

Speaker Change #112: Shareholder support.

Speaker Change #112: Thank you for listening I will now open the floor for questions.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing. If at any time your question has been answered and you would like to withdraw your question, please press star 2. At this time, we will pause momentarily to assemble our ROD. The first question comes from Peter Zhang of J.P. Morgan. Please go ahead.

Speaker Change #113: We will now begin the question and answer session to ask the question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please.

Speaker Change #114: Chris sorry.

Speaker Change #114: At this time, we will pause momentarily to assemble our roster.

Speaker Change #115: Our first question comes from Peter Jon with J P. Morgan. Please go ahead.

Peter Zhang: Thank you for giving me the opportunity to ask questions. My first question is, since March and April, we have seen a rebound in the Hong Kong stock market. Recently, China has also introduced a policy to support real estate. I want to ask, in the past few months, has the management or Noah seen a rebound in investors' sentiment? The management has mentioned that the needs of domestic insurance products have been declining gradually.

Peter Zhang: I see okay. What do you what do you call once you're sure a different fashion.

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Speaker Change #119: <unk> made a policy that attracted a huge hold dishes.

Speaker Change #120: So I sat down with a money center.

Peter Zhang: I want to ask you, what products are our customers needing now? This is the first question. The second question is that our revenue in the first quarter has also declined. I would like to ask the management to explain the reasons behind this. What is our outlook for this year's overall revenue?,,,,,,? ,, We noticed that the first quarter revenue declined; NOAS revenue declined on a year-over-year basis. Can management explain what's the reason or drivers behind this decline and what's our expectation for NOAS revenue in 2024? My second question is about the theory for our product.

Speaker Change #119: Sure.

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Speaker Change #121: Thiago, let me share with you can.

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Speaker Change #121: What's changed.

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Speaker Change #122: Uh huh.

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Speaker Change #126: Thank you shark no no. It's always a fine E. Oh My first question is about the investment sentiment.

Speaker Change #126: Starting from March this year, we noticed that the capital market.

Speaker Change #126: Hong Kong has somewhat cover and the recently dead also Saab.

Speaker Change #126: Real estate's a party policy.

Speaker Change #127: Mainland China.

Speaker Change #128: Wondering whether no observed any pullback.

Speaker Change #128: Adults don't match that you imagine must antibody.

Speaker Change #128: And many of them have mentioned during the call that the inbounds domestic insurance has decline. We're also wondering oh well.

Speaker Change #128: What the client preference for other out there they are interesting in terms of the pro.

Speaker Change #129: My second question is about the revenue outlook and fee rates.

Speaker Change #128: Okay.

Speaker Change #128: We noticed that the first quarter of revenue decline loss driver was the decline on year over year basis.

Speaker Change #128: But.

Speaker Change #128: Yeah.

Speaker Change #130: Good for US, Okay kind of N 90 been explained.

Speaker Change #131: Really the drivers behind and whats our expectation for the Noss revenue again to solve that and plentiful My second question I asked about.

Speaker Change #132: The fee rate for our product.

Speaker Change #132: In fourth quarter last year.

Peter Zhang: In the first quarter last year, domestic bank insurance channels experienced a decline in insurance theory as requested by the regulator. Will we see potential insurance theory decline for our domestic insurance sales, and what's the potential impact? And apart from domestic insurance, will we see any other potential decline impact for other products we are currently distributing?

Speaker Change #133: Messick backup.

Speaker Change #133: Bancassurance channel.

Speaker Change #134: Yeah, but it's declining.

Speaker Change #135: Are you sure the theory Astro crashed by the regulator.

Speaker Change #136: We'll lose the potential fee rate decline for our domestic insurance sales and what's the potential impact and.

Speaker Change #137: Apart from the spill Magic me shred.

Speaker Change #138: Well, let's see.

Speaker Change #138:

Speaker Change #138: C rate declining impactful Oh Wow.

Speaker Change #138: For the quarter. We are currently distributing thank you.

Zhe Yin: Okay, thank you for the question. There are a lot of questions; I will answer them one by one. The first question is about domestic investor sentiment. Although the Hong Kong stock market rebounded in the first quarter, overall, we did not see a lot of recovery in investors' investment sentiment and confidence. Because after the market rebounded, investors' investment sentiment and views are actually long-term, not short-term. Just like our previous CIO view, Sponsored ADR Class A, and Sponsored ADR Class A Translated on the first question regarding the changes in recent sentiment among investors.

Speaker Change #138: Yeah.

Speaker Change #139: Once you reach out to either you thought you could get out of either by Courtney.

Speaker Change #139: Part of that you can see that when he see onshore congresses hub.

Speaker Change #139: So easy to use of cash.

Speaker Change #139: It's so cheap that kind of all the female cutoff, what's it called.

Speaker Change #139: The change sheet. So she can you tell me why youll have beautiful beautiful.

Speaker Change #139: And the UAE.

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Speaker Change #139: Yes.

Speaker Change #140: But how do you hold them until you towards the pension matter with Hollander. They said that they can't eat that hosted the tissue Laguardia is a sea change in position, where you've got tight shipping.

Speaker Change #141: Phil did you elements, such as Seattle bunch of young women.

Speaker Change #142: Okay. Good that's either.

Speaker Change #142: Yes.

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Speaker Change #144: It couldn't kill me out and she said I shall women do you want me to say you know what China is getting.

Speaker Change #145: Getting the tweaking how 'bout Ian.

Speaker Change #145: Quality has a bargain hunting.

Speaker Change #146: Hi, Catherine.

Speaker Change #147: Thank you. Thank you Denver and thank you Peter for the questions. So I'll translate on the first question regarding the.

Speaker Change #147: The changes in recent sentiment among investors.

Zhe Yin: So, although given that we have seen some rebound in the capital markets or H-share capital markets recently, I guess, in summary, we haven't seen a significant shift or improvement in Hanover's investors' investment sentiment because building confidence is rather a long-term process rather than short-term. So, the short-term capital market rebound will not immediately reverse the investment sentiment in that sense. Secondly, the decline in domestic insurance receipt rates also reflects the impact of the market on customers. The decline in insurance receipt rates is a long-term trend, just like the decline in domestic long-term investment rates. Sponsored ADR Class A

Speaker Change #147: So although given that we have seen.

Speaker Change #147: Some rebound in the capital markets or each Euro Asia capital markets recently, you know I.

Speaker Change #147: In summary, we haven't seen a significant shift or improvement in <unk>.

Speaker Change #147: I know most investors investments sentiment because.

Speaker Change #147: Building comfort confidence, it's rather a long term process rather than short term.

Speaker Change #147: So the short term capital market rebound.

Speaker Change #147: We will not immediately reverse the investment sentiment in that sense.

Speaker Change #148: At the other Dubai, you probably cant.

Speaker Change #149: Sabic one if I can show you today, you can check out.

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Speaker Change #149: Send me an email.

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Speaker Change #149: Yeah.

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Speaker Change #152: Type one either young entrepreneurs Ashish <unk>.

Speaker Change #153: If I'm in the future.

Zhe Yin: So, the second question regarding domestic insurance and, I guess, the slowdown in demand as well as the trending downward return or interest rate, I guess, it's largely aligned with the domestic interest rate environment, which is also trending down. And I guess the slowdown in client sentiment towards domestic insurance is also a reflection of their investment sentiment in that sense. So, right now, in terms of domestic insurance, we are more focusing on products that will satisfy the retirement, well-being, as well as the medical needs of clients and their parents. The type of product that will satisfy those demands.

Speaker Change #154: So the second question regarding the domestic insurance and.

Speaker Change #154: I guess the slowdown in demand as well as the the trending downwards.

Speaker Change #154: Return on interest rate I guess, it's largely aligned with the domestic interest rate environment, which is also trending down.

Speaker Change #154: And I guess the slowdown in the client sentiment towards domestic insurance. It's also a reflection of there.

Speaker Change #154: Investment sentiment in that sense.

Speaker Change #154: So right now in terms of domestic insurance, we are more focusing on the.

Speaker Change #154: The.

Speaker Change #154: The products that will satisfy the retirement the wide beam as well as the.

Speaker Change #154: The medical needs of clients and their parents.

Speaker Change #154:

Speaker Change #154: The type of product that will satisfy those demands.

Zhe Yin: Sponsored ADR Class A Sponsored ADR Class A Sponsored ADR Class A

Speaker Change #154: But the cycle is why he's shown will.

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Speaker Change #165: Palm Beach.

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Speaker Change #167: Good that you know.

Zhe Yin: So, the third question regarding the reasons behind the decline in first quarter revenue. I guess the first aspect is the decrease in recurring service fees or the managed mainly because of the active exit activities in our domestic portfolio and the fact that we do not really introduce new products in the domestic market, which drives down our domestic AUM, but I guess that's a rather active approach. And the second aspect is that although we have achieved great improvement or progress in our overseas business and expansion, given the current hire for longer interest rate environment and the product that fits into that environment, I guess the growth in our overseas business is still not fully reflected in our current revenue structure.

Speaker Change #167: I should be guaranteed.

Speaker Change #167: So the third question regarding the.

Speaker Change #167: The reasons behind the decline in first quarter revenue I guess the first one.

Aspect is that the decrease in recurring service fee or management fee, mainly because of the active exit activities in our domestic portfolio and the fact that you know we do not really hum.

Speaker Change #167: Produce new products in the domestic market, which drives down our domestic AUR, but I guess, that's a rather active approach.

Speaker Change #167: And the second second aspect with that.

Speaker Change #167: Although given we have achieved a great improvement on our progress in our overseas business and expansion.

Speaker Change #167: But given the current higher for longer interest rate environment.

Speaker Change #167: The product.

Speaker Change #167: That fit into that environment.

Speaker Change #167: I guess the the growth in overseas business is still not fully reflected in our current revenue structure, but we think that Ah to capture and maintain client wallet share through even through cash management and term deposit part of it's also very important because it is building for future growth.

Zhe Yin: But we think that capturing and maintaining clients' wallet share even through cash management and term deposit products is also very important because it is building for future growth when interest rates trend down, and we can translate these products into more fee-generating products like private equity and hedge fund products in the future. And thirdly, I guess it's the fact that the decrease in carried income and performance-based income because of the general exit environment compared to the previous quarter, I mean the previous year.

Speaker Change #167: When you know when interest rate trends down a that we can translate these products into more fee generating products like private equity and hedge fund products in the future.

Speaker Change #167: And thirdly, I guess, it's the fact that.

Speaker Change #167: The decrease in current income and performance based income because of the I guess the <unk>.

Speaker Change #167: General exit environment, comparing to the previous quarter in the previous.

Speaker Change #167: The previous year.

Zhe Yin: As for the overall revenue and business outlook for 2024, our strategy is very clear. In 2024, we will focus on ensuring security and documents in China. In terms of international investment, we will increase our investment. So in terms of overall business direction, we will adjust our resource configuration and focus more on overseas to make structural adjustments. In terms of overseas business, it does take time. We have been using China for 20 years to build a better business system.

Speaker Change #167: Nicholas.

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Speaker Change #170: What can you tell me about your together total, Russia, but cenci debt yield.

Speaker Change #171: I'm in my <unk>.

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Speaker Change #173: Okay pushing into account other Hawaii.

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Speaker Change #175: Austin, Yes, Jimmy the EBIT Jihad with.

Zhe Yin: We hope that in the next 3 to 5 years, we will be able to build a good business model for international business. We also have many advantages. Our customers' trust in us is very long-term.

Speaker Change #176: <unk> sure and what we like and we will send out yet, but what are you Nicole ego.

Speaker Change #177: Oh, there you go.

Speaker Change #178: She is hiding again, no one else I'd, rather use suggest a woman copel Goldman's U S unit Chalfie touch on Shadow AUM, a cohort that just cope with that hopefully tender cianci that had a huge hole. She says he said that how people anyway.

Speaker Change #178: It's just hard to make sure that you showed a chart that you put a bunch of good ones.

Speaker Change #178: The tranches two choices that a Coca Cola machine that you'll sit and negotiate negotiating you got somebody a human rights policy to cope with that.

Speaker Change #178: The highlight of that page the piece on capital you've put a lot of them are.

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Zhe Yin: So, I guess the fourth question, the fourth question regarding the outlook for 2024. I guess the strategy is rather clear, which is to ensure, you know, I guess, safety and compliance in our domestic operation while focusing on deploying more resources and expanding our overseas business. But, you know, that process will probably take some time for our overseas business to fully accelerate. We have spent the past 20 years being able to build a rather complete system in the domestic market, and we're hoping that in three to five years' time, we'll be able to, you know, complete our overseas business infrastructure.

Speaker Change #178: So I guess the fourth question first question regarding the outlook on 2024.

Speaker Change #178: I guess overall the strategy is rather clear.

Speaker Change #178: Which is to insure.

Speaker Change #178: No.

Speaker Change #178: So cute safety and compliance in our domestic operation, while focusing on deploying more resources and to expand our overseas business.

Speaker Change #178: But you know.

Speaker Change #178: That process will probably take it takes some time for our overseas business too to only accelerate.

Speaker Change #178: We have spent the past 20 years being able to build a rather complete system in the domestic market and we're hoping that in the three to five years' time, we will be able to.

Speaker Change #178: A complete our overseas business infrastructure.

Zhe Yin: And additionally, I guess client trust in us is, I guess, very long-term, and the investment demand and need of HANA World investors are also very long-term. So, you know, as clients look more towards overseas asset allocation, we will be well-positioned to provide better products and services to them in the overseas and global markets.

Speaker Change #178: And Additionally, I guess the clients.

Speaker Change #178: Trust with us.

Speaker Change #178: I guess, the spire long term and the investment demand needs.

Speaker Change #178: I know what investors. It's also very long term.

Speaker Change #178: So.

Speaker Change #178: As clients look more towards overseas asset allocation.

Speaker Change #178: We will be or will you know will be well positioned to.

Speaker Change #178: By better product and services to them in the overseas in global markets.

Zhe Yin: Sponsored ADR Class A Sponsored ADR Class A Sponsored ADR Class A

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Grant Pan: Thank you, Xander. So the question regarding the insurance commission fee, you know, decreases. So I guess the overall impact on our business is rather small, especially compared with a lot of the insurance brokerage business in the market, where most of the brokers have high commissions but a low base. You know, our RRMs are more focused on providing long-term value for our clients. And as a business, you know, our primary focus is to satisfy our clients' needs and create value for clients, and how to optimize their asset allocation and portfolio construction.

Speaker Change #188: Thank you Sandra so.

Speaker Change #188: The question regarding the insurance Commission fee.

Speaker Change #188: Decrease.

Speaker Change #189: So I guess the overall impact on our business is rather small, especially comparing with a lot of the insurance brokerage business in the market, where most of the brokers have high high commissions below base.

Speaker Change #189: Our rins are more focused on providing long term value for our clients. So.

Speaker Change #189: And as a business you know our primary focus is to.

Speaker Change #189: Satisfy our clients' needs and create value for clients and how to optimize their asset allocation and portfolio construction. So I guess, the short term or the fluctuation in the fee rate of a certain product it's not the most.

Grant Pan: So I guess the short term or the fluctuation in the fee rate of a certain product is not the most important aspect that we're worried about. In terms of other products' fee rate changes, I guess it's largely in relation to the nature of the products. For example, cash management-related products naturally have a lower fee rate, whereas in the private market, including private equity and private secondary hedge fund products, the fee rate has been rather stable.

Speaker Change #190: Uh huh.

Speaker Change #190: Aspect that we're worried about.

Speaker Change #190: In terms of other products fee rate changes I.

Speaker Change #190: I guess, it's largely in relation to the nature of the products for example.

Speaker Change #190: Cash management related products.

Speaker Change #190: Naturally have a lower fee rate, whereas the private market, including private equity and other secondary hedge fund products.

The theory has been rather stable.

Grant Pan: But that being said, you know, we are still focused on, you know, optimizing our clients' portfolios and asset allocation, and we would rather lose a certain client than to, you know, lose money. So, you know, also going back to creating long-term value for our clients. Operator, so please be noted that there are no more questions. Our chairlady Wang would like to have a closing remark as well.

Speaker Change #190: But that being said you know we are still focused on opt.

Speaker Change #190: Optimizing our clients portfolio and asset allocation and we would rather lose a certain clients then too.

Speaker Change #190: Loose money.

Speaker Change #190: So so you know also going back to creating long term value for our clients.

So operator.

Speaker Change #191: So please be noted that the.

Speaker Change #192: There is no more questions our chairlady Wang would like to have a closing remark as well.

Operator: Alright, this concludes our question and answer session. I will now turn it over to management for any closing remarks. Thank you, Wang Zhongying.

Speaker Change #193: Already this concludes our question and answer session I will now turn it over to management for any closing remarks.

Operator: Thank you. Mr. Wang, would you like to sum up?

Speaker Change #194: Thank you Amin.

Sanjay Sharma: Sanjay Sharma.

Sanjay Sharma: Hello.

No.

Jingbo Wang: Sponsored ADR Class A Oh, could you hear me? Can do, can do.

Speaker Change #196: What would you do have just thinking.

Speaker Change #196: Hmm.

Speaker Change #196: Could you hear.

Speaker Change #197: Great I paid up.

Jingbo Wang: Sponsored ADR Class A Sponsored ADR Class A, Sponsored ADR Class A, For our team, the strategy is very clear, but we need a few quarters to adjust and implement it in place. Now our biggest challenge is the management of our core management team, because we have been doing it for 20 years. We want to learn and get familiar with the operating model of the international private bank as soon as possible.

All right.

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Okay.

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Speaker Change #203: Dan will Michelle cheaper to do line counting this is Sally Chan of them, let's say that the child dancing a woman DAU question, Glenn anytime data Glenn in Guangzhou Nuomi going into last year.

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Jingbo Wang: But our core team is also very excited because we have a lot of customers. We also have some excellent R&M. We have also recruited some R&M internationally. Being able to participate in a real international competitive private bank is very meaningful to us. So we are still very confident about the future. That's all I want to say.

Speaker Change #204: That woman down pushing 10 days. Since then are you a meal stays home to handle the cohort on Ohio. He also that I think are I am let me add that of course, it sounds actually like Jan mobile Tammy you attending our call today.

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Speaker Change #206: Are you thinking now.

Speaker Change #207: What did you change out.

Speaker Change #206: Yes.

Jingbo Wang: Thank you, Chairlady. So, I'll translate for the Chairlady's closing remarks. So, we have noticed that there are a lot of, you know, not compliant so-called wealth managers in the Chinese domestic market who continue to default on their, you know, their private credit products, which, you know, has caused, you know, significant losses among their high net worth clients. So, I guess, from our perspective, in the past 10 years, China's wealth management has experienced a rather fast-growing but not so healthy growth period.

Speaker Change #208: Thank you chairlady.

Speaker Change #209: I will translate for Charlie These closing remarks, so we have noticed that there are a lot of.

Speaker Change #209: Compliance so called wealth manager.

Speaker Change #209: In the China domestic market.

Speaker Change #209: Continues to default under.

Speaker Change #209: There are private credit products.

Speaker Change #209: Which has caused.

Speaker Change #209: Significant losses amount or high net worth clients. So I guess in our perspective in the past 10 years.

Speaker Change #209: China wealth management has experienced it rather.

Speaker Change #209: Fast growing but.

Jingbo Wang: So, you know, at this time, we think that the largest or the biggest risk in the wealth management market in China is that the high net worth clients, you know, return to poverty because of the wrongly allocated assets or the wrong asset allocation devices they got. So, right now, our main advice to our existing clients is to hold on to their current wealth and portfolio so that they can preserve their wealth and, you know, which is, you know, driven for future growth when the opportunity is there.

Speaker Change #209: Not so healthy Ah you know.

Speaker Change #209: Growth.

Speaker Change #209: Growth period so.

Speaker Change #209: Standing in today's time.

Speaker Change #209: We think that the largest or the biggest risk in the wealth management market in China.

Speaker Change #209: Is that the high net worth clients.

Speaker Change #209: Returned back to poverty because of the wrong.

Speaker Change #209: Wrong wrongly allocated assets or the wrong.

Speaker Change #209: As the application devices they got.

Speaker Change #209: So right now our main advice to our existing clients is to to hold onto to their to their current wealth and portfolio.

Speaker Change #209: So that they can preserve their walls.

Speaker Change #209: And you know.

Speaker Change #209: Which is driven from future future growth when the opportunities is there.

Jingbo Wang: Internally, I guess the biggest challenge for us as we expand our overseas strategy is the... You know, I guess how fast we can get used to or be familiar with the operation of how global private banks operate. But that being said, we have a very talented core management team, and we do have some very global-minded and top-tier RM team. So we are still rather optimistic regarding our future growth, especially in the overseas market. Mr. Wang, do you have anything else to add? Sponsored ADR Class A, Okay, so turning back to you, operator.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change #209: And internally I guess, the biggest challenge for us.

Speaker Change #209: We expand our.

Speaker Change #209: Overseas strategy is the.

Operator: Thank you all.

Speaker Change #209: I guess.

Speaker Change #209: How fast we can get used to or be familiar with the operation of how global private banks operate.

Speaker Change #209: But that being said we have a very.

Speaker Change #209: Talented core management team and we do have some very.

Global minded and top tier our EM team.

Speaker Change #209: So we are.

Speaker Change #209: Still rather optimistic regarding our future growth, especially in the overseas market.

Speaker Change #210: One little help with Soma.

Speaker Change #210: Importantly.

Speaker Change #210: Hello.

Speaker Change #211: So turning back to you operator.

Speaker Change #212: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change #213: Thank you all.