Q3 2024 Huize Holding Ltd Earnings Call
Renewal premiums reached approximately RMB $706 million.
A 10% year over year from a product mix perspective savings products were among the most popular insurance offerings prior to the downward adjustment of the assumed interest rate.
In the third quarter FY peer from savings products. So one five fold increase in year over year, notably FY people a whole large issuance reached approximately RMB $765 million of 150% year over year. Meanwhile, our short term insurance business recorded double digit growth.
With gross written premiums climbing, 40% year over year to approximately <unk>.
$129 million. This further enhances our ability to provide diversified product offerings.
I can tell you now you won't go away.
<unk> all I need.
Speaker Change: <unk> due to the GM JJ.
Can you just hang it on more team held a deep cobalt.
Speaker Change: <unk>.
Speaker Change: So you can't tell me how that need to be if you don't think it will have to about <unk> <unk>.
Speaker Change: Huntington cobalt cohort.
Speaker Change: On the tissue 20 per dollar euro body sheet and under the ore body and cheap.
Speaker Change: We took out around the cohorts Kimco Pie chart, you showed an buffet tsi.
Speaker Change: Thank you to transition Tianjin sendoff.
Speaker Change: Yes.
Speaker Change: So we tend to have essentially that one b T cell against debate cohesion, Tianjin <unk>, She Daniel Wang <unk>.
Speaker Change: Poverty.
Speaker Change: <unk> Andrea <unk>.
Speaker Change: We are the Lady drink all your patented Jojo.
Speaker Change: Hong edge of UBS.
On a current customer insights and surface capabilities, we remain committed to serving high quality customers and delivering superior service experience.
Speaker Change: The end of the third quarter, the cumulative number of insurance clients served surpassed a significant milestone of $10 million. The average age of customers, who purchase long term insurance products in the third quarter was 35.
Speaker Change: Language 60 concern understand were located in Hangzhou cities, reflecting our high quality customer profile.
Speaker Change: The average IP of the size of a longtime insurance products growth nearly 140% to approximately RMB 9600 <unk>.
Speaker Change: The average ticket size of savings product reached approximately RMB 79000 up 15% year over year. After year end of August 13th month, and 25 month persistency ratios for long term insurance, both exceeded 95% remaining at <unk> and <unk>.
Industry high level.
Speaker Change: JJ, Thank you to Mark <unk>.
Speaker Change: You bet, thank jaap I'll hand going through <unk>.
Speaker Change: <unk> chiffon feature there shouldn't cutoff time contingent of neat.
Speaker Change: How much if you kept putting into bucket.
Speaker Change: And part of it.
Speaker Change: Naphtha Teva take him into his role as shelter at home she adhesion with aviation two GB.
Speaker Change: And our Guangxi Nanning <unk> go into blackout, osha or maturity of the <unk> Juliette <unk> CFO <unk> <unk>.
Speaker Change: Paul.
Paul: Function and in Belgium.
Paul: Tumbler champion crunching tissue product is answered all young <unk> find out.
Paul: And so at the end of the third quarter, we maintained stable kind of ships with 123 insurance companies.
Paul: Going on deep insight into customer needs and leveraging on our product development capabilities, we continue to introduce new tailored issuance over.
Paul: And reaching our product matrix in August.
We partnered with CPI P&C to launch legal scholar accident and health insurance covering two critical areas of protection for students. Meanwhile, we continue to iterate and upgrade our existing products in September we presented with new China life insurance to launch the upgrade at least two zero.
Paul: Lifetime annuity insurance leveraging product innovation to support the high quality development of the national pillar pension system.
Okay.
Paul: And long term and therefore, the Asia consistent Tricia shelter Diana <unk>.
Paul: In the current year campaign to date Schenkel with labor shortage, a web product.
Paul: <unk> why don't we go out and hemp oil Canada, we're not.
Shipping later on.
Speaker Change: It didn't drop through the Finjan classroom attention Gordon on the Ingalls will attack. She answered Y'all may teed up one one book to ship accurate on the tissue.
Paul: Okay.
Paul: Web steadied.
Paul: Steady cohort had Friday, she won't call held a bulge in switching to ship.
Paul: So we're going to give him yet <unk> HIFU.
Paul: <unk> you Bob.
Bob: We showed you at <unk>.
Bob: Several crucial Twingo EV.
Bob: Shows you that July and Jetblue bundled sandeep can contribute 10 days in AR Goldman 38 facilities.
Bob: Yeah, Charles Liang Tang out setting indeed <unk> evolution.
Bob: <unk> of all I mean, we're concerned we'll add assured huntingdon pools tend not only.
Bob: Empowered by AI, we have been driving the digital upgrade of our sales operations and develop a suite of AI.
Bob: Tools that can improve internal efficiency and business development chemical as.
Bob: Since the beginning of this year.
Leverage at AIG swiftly generate high quality marketing materials, including articles intra quarter.
Bob: <unk> radios and customized digital advertisers, enabling widespread content content distribution.
Bob: Social media, Meanwhile, AI powered knowledge basis and customer service tools.
Bob: The efficient ensuring support for external reduces agents and back office teams streamlining access to information and solutions in terms of sales tools.
Bob: <unk> enables the intelligent generation and optimization of proposals and underwriting tools, providing precise upon two sales team put them more reintroduced nai <unk> assist.
Bob: That can contact semantic analysis and evaluate the stage to help formulate more tankage combination communication strategies.
Bob: By year end. These initiatives are expected to drive a 50% improvement in contact content production.
Bob: Further enhancing the surface capabilities of our teams.
Speaker Change: Yeah, you bet.
Speaker Change: Great.
Speaker Change: For the year with what <unk> achieved that Kinder sandal.
Speaker Change: What are your challenges and none are paid in cash.
Speaker Change: Or did some usual Comcast cingal Darla pad <unk>, Dr. Sean <unk> <unk> audio call downtime in a challenging season.
Speaker Change: This year, we have made encouraging and continuous progress in expanding our international business.
Speaker Change: Third quarter of 293.
Speaker Change: Even with strong performance in our domestic business.
Speaker Change: Our international business contribution to total revenue reached a new record high DAU 19, 19% uptick percentage points compared to the previous quarter.
Speaker Change: Mainly driven by the strong demand for premium products.
Speaker Change: National business.
Speaker Change: <unk> will be outbid on mute here.
Speaker Change: User cohort products <unk> and <unk>.
Speaker Change: Yes.
Arthur: Arthur <unk> seen that analysis, yet Piedmont, Teton County, clerks issues and find out what.
Speaker Change: What are you guys seeing apolo cellular highway team had plenty in shortage that's helpful. Joe.
Speaker Change: I yelled at Tanger Julio on the tumor.
Speaker Change: What I mean.
Speaker Change: So those are the puncture you sounded a little downward of animals, all canceled for anthem niosh at home when the yellow Moshe <unk> had achieved because of that.
Speaker Change: Shanghai Singapore.
John: John we've got each of the <unk> cohort.
John: He won't routine biogen for.
John: The Vietnam, Indonesia, the Philippines, Gordon non channel it if.
John: Sure.
John: While majority going to challenge the Biogen CAGR, five Nike golf shoes of Ikea, and Thats simply tomorrow, but I won't go digital clustered Humphrey.
John: Our international growth.
John: First to diversify revenue streams by expanding into overseas markets and second to establish new growth trajectories and foster the group's long term sustainable development to this end we have established the headquarters of our overseas Brent Puneet <unk> in Singapore.
John: Positioning it as the strategic hub for our international operations.
Through mergers and acquisitions and joint ventures.
John: We are working with local partners to accelerate our expansion into southeast Asia with clear regional business model Hong Kong in Singapore will cater to the inbound insurance needs of high net worth and mass affluent clients in the region.
John: P market.
John: Indonesia, and the Philippines, we will focus on high growth potential of this market enhancing digital insurance penetration by over Ambac insurance solutions further expanding user coverage and market share.
John: Jimmy and you'll get one by 190 <unk> entire global Canada. So go against the changing and I sure sure yet while material global Cathay realized on payroll a bulkhead in ABB.
John: Global Cat.
<unk>, Bahia and Tushar does that way that shareholders Ivanka yogurt and Tony.
John: <unk> had about MTN comex, yet Joe did a woman that audio high yield that should be somewhat.
John: On the <unk>.
Speaker Change: Putting controller, whether that audio by Paolo <unk>.
We hosted a shutdown products truly built that in.
In September we have successfully entered that market with the acquisition of a leading issue tech platform global care.
Speaker Change: Progress with Johnny launched global Cat up again with global carriers in Vietnam, and insurance comparison platform positioned.
Speaker Change: When stock issuance to the market to provide consumers with a superior transparent and user friendly insurance shopping periods.
This milestone.
Speaker Change: The continued deepening of our international expansion the successful expansion into the written down markets has not only reinforced our leadership in the international expansion journey, but also set a benchmark for future margin expansion.
Tom.
Tom: While material that Wally in EMEA.
Tom: General.
Tom: <unk> also seen a bulk of ABB separately or my <unk> gains of <unk> <unk>.
Tom: She also quick could you could the tissue.
Local vendor, but diesel again wait punkish alveda paywall should apologize for taking up or May April gamma GM from product R&D.
Tom: Third quarter assemble <unk> head up cable financial you called on by handful Saad Al Queda Highway Yoda.
Tom: Neve coming out while we have portfolio.
Tom: Hello again.
Speaker Change: Okay, Yes, sure Tammy you jumped up at sanction, which at one time, so a handful of boiling water not only product tanker gotcha.
Speaker Change: Looking forward, we plan to enter two additional overseas market within the next 12 months, Singapore and the Philippines in the Philippines, We have identified a wireless tablet electronic service provider and plan to form a joint venture combining greater China, and then logical capabilities with our partners local resources to promote digital.
Speaker Change: Our insurance services for local consumers in Singapore, we have formed an experienced team and are in the process of applying for an insurance brokerage license with clients to further develop a high end insurance services in the region and establish and our key insurance service hub and our international expansion journey by 'twenty.
Speaker Change: Sex with pocket, our international business will account for 20% of our total revenue driving diversified growth and creating long term value to the group.
Speaker Change: <unk> NAND.
You can get the shelf added a Chevrolet Audi deploy at that time hitting the knee <unk>.
Speaker Change: <unk> got it Sir.
Speaker Change: <unk> got a handful that churned out there hunting.
Speaker Change: For the year would you don't content for a chunk in there then ship downward on Alabama, Commvault bulking of Chicago.
Speaker Change: Renewed upon for the fraud activity.
Speaker Change: We bought him also <unk> 12.
Speaker Change: <unk> perfectly clear that that's true.
Speaker Change: Youll ship.
Speaker Change: I'll start on the <unk> future.
Speaker Change: It was probably somewhat intertwined.
Speaker Change: <unk>.
Speaker Change: While many of them teed up our audio should I apologize on the future.
Thank you tangela changing sit on our products.
Speaker Change: Table 10 calculator that highway sit on it and then.
Speaker Change: Tricia will answer the total machine that not only.
Speaker Change: So don't tell anyway.
Speaker Change: We of course don't condone off label.
Speaker Change: <unk> hundred 24 has been a year or two.
Speaker Change: And opportunities leveraging our deep understanding of consumer needs and exceptional product capabilities, we have demonstrated remarkable resilience.
Speaker Change: By paying our business strategies.
Speaker Change: <unk>.
Speaker Change: Industry transformation, while also experiencing.
Speaker Change: Second growth in our international business looking ahead to 2025, the Chinese insurance market continues to present opportunities for development.
Speaker Change: We will continue to collaborate closely with insurance companies to maximize and leverage our combined resources and strengths, while launching a diverse range of innovative customized products tailored to the market needs and trends. Moreover, we will proactively capitalize on op.
Speaker Change: Trinity's in the international markets, particularly in the emerging Southeast Asian markets.
Speaker Change: And Sweden.
Speaker Change: Competitive in this with this effort, we aim to inject new growth momentum into the company and remain committed to delivering greater value for our shareholders.
Speaker Change: Hey, Jim woman in Fayetteville wrong, Okay Didact Sanjay.
Speaker Change: Yes, that's helpful.
Speaker Change: This concludes my prepared remarks for today I will now turn the call to our CFO, Mr. Ron <unk>, who will provide an overview of our key financial highlights for the first quarter.
Thank you Mr Mind, Ken.
Mr. Ron: Good morning to our friends in the U S and good evening, everyone from Asia.
Mr. Ron: So just to quickly recap the third quarter results I think we have delivered a very strong set of.
Resulting in terms of GWB.
Facility on our platform amidst the challenging macro environment in the industry landscape.
Mr. Ron: Towards uwp, which a record quarterly high of RMB 2 billion, while our FY <unk> also more than doubled to RMB 135 billion. We also recorded a non-GAAP.
Mr. Ron: GAAP net profit of RMB, 81, 8 million per quarter.
Our ability to meet evolving consumer demand for long term insurance products.
Mr. Ron: <unk> regulatory reforms can be attributed to our efficient omnichannel distribution network.
Mr. Ron: Coupling online and offline channels, our relentless efforts to attract high quality customers.
Mr. Ron: So Mr Kato product innovation capabilities, and our proprietary AI solutions more importantly, we are the pioneer in the industry to initiate international expansion a strategic move that is set to become a new growth driver for our long term sustainable developments.
Mr. Ron: Our strategic focus has still remained on long term insurance products, which have accounted for over 90% of our premiums associated for five years.
Mr. Ron: Meanwhile, Omnichannel distribution ecosystem and proprietary AI tools further strengthen our customer acquisition and engagement capabilities.
Mr. Ron: In the third quarter, we added about 287.287 million new customers to our ecosystem, bringing our total number of customers to a milestone of $10 million.
Mr. Ron: Mark.
Mark: The third quarter.
Mark: The repurchase ratio for our long term insurance products stood at a very high 42% during the quarter as well, which highlights our ability to continuously upsell cross sell and capitalized on the lifetime value potential of our high quality customer base.
Mark: Our open platform architecture continues to empower both our internal financial advisers and also external independent financial advisors or <unk>.
Mark: Total FY people <unk> business surged by 102% year over year to RMB, one $181 million in the third quarter.
Mark: We also leveraged on our self developed AI solutions to streamline operations and further enhance operational efficiency in the third quarter, our expense to revenue ratio improved by five percentage points year over year to 24%.
Mark: I will also highlight our key achievements over the quarter, which includes the following number one renewal premiums increased by 18% year over year to approximately RMB $706 million, which again is underpinned by our emphasis by high persistency ratios for long term life and health insurance, which as of the <unk>.
End of August we made at our industry, leading high level of over 95% for both the 26 months.
Mark: The average ticket size of our long term savings products, which are record high of over 78000 RMB in the third quarter, which is up by 55% year over year, partly reflecting an increased contribution from premium product sales.
Mark: National market segment, which is predominantly Hong Kong.
Mark: We continue to pursue a balanced mix between long term health and savings products.
Mark: People are long term health products search by 67% year over year to approximately RMB $173 million, primarily driven by a customized products with CPI.
Mark: Meanwhile, <unk> from short term health and P&C products sustained steady growth of 40% year over year to approximately RMB $129 million.
Mark: In terms of our liquidity position, our financial position remains favorable.
With a combined balance of cash and cash equivalents of RMB $243 million or <unk> $35 million as of the end of September.
Mark: Going forward, we will continue to empower our insurance agents, our distribution partners and the partners with an optimized omnichannel distribution ecosystem.
Mark: Which put our offerings and advance AI tools to support customer acquisition and engagement.
Mark: In parallel we continue to leverage on our successful China proven business model to capitalize on the tremendous untapped market opportunities across southeast Asia through our international arm Tony <unk>.
Mark: Our total international revenue contribution for this quarter rose to 19% of total group revenues, which is up from 11% in the last quarter, which is mainly driven by our ongoing expansion of the business in Hong Kong segments.
Mark: Alongside our expansion in Hong Kong in September we completed the acquisition of a controlling stake up.
Mark: Global care.
Mark: Our tenant base, our subsidiary where since enhanced global care type of its innovative customized insurance products distribution partnerships and comprehensive AI solutions, which is aiming to accelerate business growth. So it's mainly.
Mark: Embedded.
Insurance model.
Mark: We are confident that we can achieve a more prominent revenue contribution from our Vietnam are pushes in the new year 225.
Mark: Moreover, as we have alluded to earlier in the opening remarks, we plan to enter two further markets in southeast Asia, which is mainly Singapore and the Philippines.
Mark: Next 12 months.
Mark: We believe that these initiatives further.
Mark: Diversify our revenue streams and surface new growth drivers to enhance long term shareholder value.
We're now presently on track to achieve our international revenue contribution target of 30% of group revenues by 2026.
Mark: In summary, we are very well positioned to benefit from China's evolving industry landscape.
Mark: Which is expected to foster healthy and sustainable sustainable growth across the entire insurance value chain. We will also capitalize on growing economies lodging downturn graphics, urbanizing middle class populations and an increase in demand for digital insurance solutions in southeast Asia to expand our international footprint.
Mark: We are confident that our strategies will further solidify our position as Asia, leading insurance technology platform.
Connecting consumers insurance carriers and distribution partners digitally and efficiently through our data driven and AI powered solutions.
And my final remark on our recent.
Mark: Type of market development.
Mark: Yesterday December 9th our Aes, we saw change has become effective which and if that has a 5% to one with us but its effect on our <unk>.
Mark: Shares outstanding at share price and this has been reflected in the market trading.
Mark: As of yesterday.
Speaker Change: And with that closing remark, we'll now open up the call to questions. Thank you and <unk> operator.
Thank you.
Speaker Change: We will now begin the question and answer session to ask a question. Please press star one on your telephone keypad.
Speaker Change: You had an automated message advising yohan this race to win.
Speaker Change: All your question. Please press star one again.
Speaker Change: There may be a short pause as questions I'll call later.
Speaker Change: Once again Thats star one one for questions.
Speaker Change: We'll now take our first question from the line of Amy Chen from Citi. Please ask your question Amy.
Speaker Change: Hi, Thank you very much John Congrats.
Speaker Change: Congratulations on a very decent quarter, especially a very strong January peak wells.
Speaker Change: First question would be on your full year guidance for net profit.
Speaker Change: Good to see that.
Speaker Change: With that ill turn profitable again in the third quarter.
Speaker Change: What would be our outlook for the fourth quarter and also for the next year I would tell you on that.
Speaker Change: Five.
Speaker Change: The second question is mainly on.
Speaker Change: Expense wise.
That's first I noticed that actually the gross margin has been a little bit of pressure and that's why I've called out this year.
Speaker Change: Do you think that the impact of steam.
Speaker Change: Rationalization and as broker channel has been carnival yield or or do you think that gross margin could be further pressure going on.
Speaker Change: Secondly, we noticed that the G&A expenses at Chile.
Speaker Change: That's significant.
Speaker Change: Hi.
Speaker Change: Hi, Ashwin actually attributed to increase in rental and Intel.
Speaker Change: <unk> expenses when.
Speaker Change: When do you mind elaborating more on this thank you very much.
Speaker Change: Okay.
Speaker Change: Alright, thank you.
Speaker Change: Thanks for joining us again as always.
Speaker Change: So with regards to you a few questions I will just address one by one.
Speaker Change: In terms of the first question on our full year guidance for 2024.
Speaker Change: I think we would like to say that Q3 has been a very strong quarter.
Speaker Change: Mainly due to a couple of reasons and I think the most prevalent one has to do with.
Speaker Change: The so called.
Speaker Change: <unk>.
Speaker Change: Adjustments.
Speaker Change: The interest rate in the China mainland China products relating to the savings products category.
Speaker Change: Stripping a lot of upfront demand.
Speaker Change: Customers or the open market into the months of July and August and particularly in August. So some of the demand has been front loaded into Q3, and so we start with in Q4, but we envisage is somewhat lukewarm.
Speaker Change: Recovery in this particular product categories on the savings side.
Speaker Change: But we do have an offsetting will continuously.
Speaker Change: Offshore market, which is predominantly a Hong Kong segment is still seeing strong momentum.
Speaker Change: In the months, leading up to the December month. So there was there would be some offsetting.
Speaker Change: In fact on that part.
Speaker Change: But overall, we think that's still keeping to our mainland China business consists of the predominant share of our overall.
Speaker Change: <unk> and revenue as a result, and therefore, we think that the.
The Q4 quarter would likely be less strong.
Speaker Change: As compared to Q3.
Speaker Change: And the other the other factor that we have to deal with right now is the the overall product transition into the new.
Speaker Change: Jim of the power products, which is not being promoted mostly by the intermediaries in particular brokerages like ourselves.
Speaker Change: And therefore the.
The change of the mind share and the mindset of the consumers from traditional savings products into the power product.
Speaker Change: It still takes time.
Speaker Change: Two two mature we think that is probably is a process for the next two to three quarters and therefore, we think that as a result as well Q.
Speaker Change: Q4 on the savings category.
Speaker Change: We do see that the demand.
Speaker Change: Demand will be definitely not Australia.
In Q3.
Speaker Change: So at this point in time, we think that.
Speaker Change: Fourth quarter wood would be would be less.
Speaker Change: Our strong Q3.
Speaker Change: So that's the first question.
Speaker Change: The second question on gross margins you correctly noted that the gross margin has declined to around 27% in the third quarter, which is.
Speaker Change: Which is a slight drop from the levels in Q2, we do think that this level of gross margin has fully reflected the effect of the.
Speaker Change: The so-called expense rationalization on the brokerage channel or about <unk> <unk>.
Speaker Change: The Russians the Deregulatory.
Speaker Change: Regulatory is that also has to do with a decline in the overall commission rates.
Speaker Change: Therefore, as a result of because a lot of our business also is in partnership with other.
Speaker Change: Distribution channels partners and therefore as a result of that.
Speaker Change: The channel economics needs to be adjusted to compensate for the decline in commission rates Headlight Commission rates will take.
Speaker Change: Great.
Speaker Change: Therefore, the gross margin has been compressed a bit as.
As a result of the.
Speaker Change: The cost structure and economic structure for for the value chain, we do see that this level should more or less be we think that at least on the on the mainland China business aside should remain relatively steady.
Speaker Change: Steady going going forward in the next few quarters.
Speaker Change: The full effects of the rationalization has been felt in.
Speaker Change: In Q2 and Q3.
Speaker Change: And on your third question on G&A expenses, we do note that on a quarter on quarter basis. It has trended down.
Speaker Change: From Q2.
And we do not expect that G&A expense too materially.
Speaker Change: Increase from this point onwards, because we are.
Speaker Change: We are highly focused on further optimization of our overall cost structure across our selling expenses.
G&A and R&D, especially with the fixed cost base, we have a very strong.
Speaker Change: In Korea target to improve our cost to revenue ratio in this in this particular part of the of the cost structure of the company.
Paul: Thank you very much Paul.
Amy Chen: Thank you Amy.
Paul: Thank you.
Speaker Change: As a reminder to ask a question. Please press star one again. Your next question comes from the line of Ray <unk> from C. ICC. Please ask your question Ray.
Speaker Change: Alright, thank you.
Speaker Change: I had one question for the management and.
Speaker Change: That's the company.
Speaker Change: Further management industry, because the commercial insurance companies are actually it here, perhaps access to medical dental for hospitals.
Speaker Change: Quaker has any further plan on our own.
Speaker Change: Has management industry and.
Ah.
Speaker Change: Another one.
Speaker Change: <unk>.
FY at Chicago.
Speaker Change: Do we have any guidance on the amount of tons to the right.
Thank you.
Speaker Change: Alright. Thank you. Thank you.
Speaker Change: For joining the call.
For the first question I think the question was about whether we have plans to enter the healthcare services segment.
Speaker Change: Or the health care industry, because we have a very strong focus on <unk>.
Speaker Change: And health insurance as a whole.
Do have plans actually we do have.
Speaker Change: <unk> already established our own.
Speaker Change: Internet.
Speaker Change: Health care platform, although the <unk> business model and business go has been still a startup stage.
Speaker Change: I think our focus going forward will still continue to be coming up with the white customized products too.
Speaker Change: To tackle market pinpoint, especially on the consumer side.
Speaker Change: Because what we see that going forward is the trends that we're seeing in the health care industry for example, the DRG.
Speaker Change: Reforms, which will lead to we believe is very strong.
Speaker Change: And necessity amount consumers to upgrade their healthcare coverage with respect to pursue appropriate pursuing commercial insurance.
Speaker Change: <unk>.
Speaker Change: Complements to what they have already on our social security level.
Speaker Change: So we are setting our focus on the mid to high end medical health product going going forward in next.
Two to three years.
Speaker Change: Our plan is already we have solid plans to come up with a customized products in the near future probably in the next two quarters.
Speaker Change: That would provide.
Speaker Change: Coverage.
Speaker Change: Two our tire customers in respect of this overall healthcare reforms.
Speaker Change: Yet we are seeing in the industry.
Speaker Change: So that's the first question.
Speaker Change: Question on guidance for full year 2025.
Speaker Change: We do think that right now is a little bit early.
Speaker Change: We provided guidance to the market when we reach our Q4 results.
Speaker Change: Which will be scheduled for a fee.
Speaker Change: Humans down the road.
Ray: Thank you Ray.
Ray: Yes.
Ray: Do you have any follow up question Ray.
Ray: Okay.
Speaker Change: Alright. Thank you so as a reminder to ask a question. Please press star one one on your telephone keypad.
Speaker Change: Okay.
Speaker Change: And im showing no further questions and with that I will turn the conference back to Mr. Kenny Lam for closing comments.
Speaker Change: Thank you operator.
Speaker Change: In closing on behalf of wage as a management team we would like to thank you for your participation in today's call. If you require any further information feel free to reach out to us. Thank you for joining US today. This concludes the call.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Uh huh.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: [music].
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to equate this third quarter 'twenty 'twenty four earnings conference call. At this time all participants are in a listen only mode. After the management's prepared remarks, we will have a question and answer session.
Speaker Change: Today's conference call is being recorded and a webcast replay will be available on wages IR website at IR adult fleets that dot com under the events and webcast section.
Speaker Change: I'd now like to hand, the conference over to your speaker host today, Mr. Kenny low wages Investor Relations manager. Please go ahead Kenny.
Kenny: Thank you operator.
Kenny: Hello, everyone and welcome to our first quarter 'twenty earnings Conference call.
Kenny: Our financial and operational results were released earlier today and are currently available on both our website and global Newswire services.
Kenny: Before we continue I'd like to refer you to the Safe Harbor statement in our earnings press release, which also applies to this call as we will be making forward looking statements. Please note that we will discuss non-GAAP measures today, which are more thoroughly explained in our earnings release and filings with the SEC.
Speaker Change: Joining us today are founder and CEO, Mr. <unk> Ma.
Speaker Change: Based on the yes.
Speaker Change: Oh, CFO Yu sung hun.
Speaker Change: Mr owned him.
Speaker Change: I will start our call by providing an overview of the company's performance and operational highlights followed by Mr. <unk>, who will go over our financial results for the quarter before we open up the call for questions I would.
Mr. Mark: Now I'll turn the call over to Mr. Mark.
Speaker Change: Idaho wind divestment Yao please.
Awesome. Thank you do that you probably can't wait.
Speaker Change: Thank you Cedric Tim Boddy of that change.
Speaker Change: Sure Tom <unk> Dan.
Speaker Change: Well go <unk>, Google someone Julien.
Speaker Change: So we have an OEM Pablo is symbolic in Portugal, we bought him yeah, Gordon our patent Jimmy and I'll find out.
Doesn't mean rhythm.
Speaker Change: Talking about TD taught in timing.
Speaker Change: Russia continued to ship <unk>.
Speaker Change: Danielle.
I sit on the <unk>.
Speaker Change: The answer is yes.
Speaker Change: Yes.
Speaker Change: Thank you though.
Champion has cooled handsome buffet adoption, but I'll ask you didn't do in.
Speaker Change: <unk> gone through tangible jumbo pay cingal.
Speaker Change: Unusual Todd.
Speaker Change: Sandy ATM since year end.
Speaker Change: And Bob I T, Romania chart would've even Dr Young and 29.
Speaker Change: Q3 2024.
Speaker Change: The effects of the government support index began to materialize in market confidence improved.
China's macro economy show signs of steady recovery.
Speaker Change: Timber the state Council issued the opinions on strengthening supervision, preventing risks and promoting high quality development of the insurance industry chat staying the course for the high quality of development of the insurance sector in response to industry trends, who they refine these price strategy capitalized on market.
Charities and international.
Speaker Change: International expansion efforts over the past two years as a result, the company achieved strong performance this quarter in Q3 gross written premiums or GW.
Speaker Change: So similar to that across all platforms reached RMB, two 6 billion setting a new quarterly record.
Speaker Change: Revenue amounted to RMB $370 million.
Speaker Change: And our net profit and net profit reached RMB 18, 7 million delivering solid and comment about yourself.
Speaker Change: Thank you though.
Speaker Change: Impactful cannot showed ample pay a sustained downward.
Speaker Change: I Wonder you buy issue <unk> at <unk> <unk>.
Speaker Change: Can you tell me how my account.
Speaker Change: Due to the shut help their tranquility.
Speaker Change: Appreciate him with a buildup bargain hunting shutdown to golf San Diego that Wuxi has showed MLP it can be a sunshine media weight.
Speaker Change: Tom do you show again that showed <unk> new either.
Speaker Change: <unk>.
Speaker Change: Thank you.
Speaker Change: So I cant youll see a lot of strong ways will win in Atlanta San.
Thank you to bank and above it can be done not by vendors.
Speaker Change: Not all of it yet Indian signing them cable thing kind of going through the timing and whether or not you let me.
Speaker Change: In the third quarter total first year premiums, while FY <unk> facilitated on the platform Montana to approximately RMB, one 5 billion.
Speaker Change: And 10% year over year.
Speaker Change: Renewal premiums reached approximately RMB $706 million.
Speaker Change: A 10% year over year from a product mix perspective savings products were among the most popular insurance offerings prior to the downward adjustment of the assumed interest rate.
Speaker Change: In the third quarter FY peer from savings products. So one five fold increase in year over year, notably FY people whole large issuance reached approximately RMB $765 million of 150% year over year.
Speaker Change: While our short term insurance business recorded double digit growth with gross written premiums climbing 40% year over year to approximately RMB $129 million. This further enhances our ability to provide diversified product offerings.
Speaker Change: I can tell you <unk> you won't go away.
Speaker Change: <unk> important hockey fall in need.
Speaker Change: You don't go to the Tms.
Speaker Change: Thank you the mall team held a deep cobalt.
Speaker Change: <unk>.
Speaker Change: So you can tell me how that need to be.
Speaker Change: You don't think it will have to about <unk> <unk>.
Speaker Change: Huntington cobalt cohort.
Speaker Change: On the tissue $25 newer body sheet by vendor dealer body and cheap.
Speaker Change: We took out around the cohort Kimco Pie chart, you showed an buffet tsi. Thank you, though transition in Tianjin Zaandam.
Speaker Change: Yeah Joe.
Speaker Change: Can do have essentially that one P T cells against the debate <unk> Tianjin, Dr. Daniel Wang <unk> <unk> <unk> sangria cut the arrow via the Lady <unk> patented Jojo.
Speaker Change: <unk>.
Speaker Change: Building on our profile and customer insights and surface capabilities, we remain committed to serving high quality customers and delivering superior service experience.
By the end of the third corner, the cumulative number of insurance clients.
Speaker Change: Passed a significant milestone of $10 million the average age of customers, who purchased long term insurance products in the first quarter was five among which 60 concern understand well located and high tier cities.
Speaker Change: Reflecting our high quality customer profile.
Speaker Change: The average IP for the size of longtime insurance products growth nearly 140% to approximately.
9600 <unk>.
Speaker Change: The average ticket size of savings product reached approximately RMB 79000 up 15% year over year. That's off the end of August 13th month, and 25 month persistency ratios for long term insurance, both exceeded 95% remaining at an industry high level.
JJ: JJ. Thank you, though more broadly, though your EBIT <unk> E <unk>.
Speaker Change: Yes.
Speaker Change: Shifting feature with the <unk>.
Speaker Change: Time contingent.
Speaker Change: While material Interbody and.
Speaker Change: <unk>, who is our Napa tables hate him into his role as shelter at home she adhesion with aviation to you at GBT.
Speaker Change: Guangxi Nanning, <unk> gone up or down.
Speaker Change: Osha or maturity of the <unk>.
Speaker Change: Sandeep Juliet women's CSO assume hardball, yet Shenzhen, what Apple junction and in Belgium.
Speaker Change: <unk> Yano, but I cannot go to them on that.
Speaker Change: And so at the end of the third quarter, we maintained stable kind of ships with 123 insurance companies drawing on deep insights into customer needs and leveraging on our product development capabilities, we continued to introduce new tailored issuance over it.
Speaker Change: And reaching our product matrix in August.
Speaker Change: We partnered with CPI P&C to launch legal scholar accident and health insurance covering two critical areas of protection for students. Meanwhile, we are continuing to iterate and upgrade our existing products. In September we are presented with new China life insurance to launch the upgrade at least two zero.
Speaker Change: Lifetime annuity insurance.
Speaker Change: Aging product innovation to support the high quality development of the national pillar pension system.
Speaker Change: Sure.
Speaker Change: So again long term enough for Asia, coincident Tricia shelves with Diana <unk>.
Speaker Change: In the current year campaign treated schenkel adhesive label Charlotte's Web will put on G&A you lap why don't we go out and hemp oil, Canada whatnot plus shipping later on Egypt didn't drop through the Xinjiang plasma attention Cardona in charge with that.
Speaker Change: Yeah sure John May Teed up one one book to ship actually donor tissue.
Speaker Change: Okay.
Speaker Change: Web we owned steadied at Hooker <unk>, he won't call held a bulge in switching to ship.
<unk> hernia Astrogeology HIFU.
Speaker Change: 100 <unk> your.
Speaker Change: We showed real time data to continue to engage so at ash I'll throw a crucial twingo EV.
Speaker Change: Shows you that you haven't yet bundle.
Speaker Change: Going to your 10 days in AR Goldman 38 facilities Hook, Jujo Uzi juncture, Leon setting Andy <unk>.
Speaker Change: <unk> will also will add assured huntingdon pools tend not only.
Speaker Change: And powered by AI, and we have been driving the digital upgrade of our sales operations and developed a suite of AI powered tools that can improve internal efficiency and business development capabilities.
Since the beginning of this year.
Speaker Change: AI to swiftly generate high quality marketing materials, including articles info graphics videos and customized digital advocates enabling widespread content content distribution on.
Speaker Change: Social media. Meanwhile, AI powered knowledge basis, and customer service tools provide efficient insurance support flagstone reduces agents and back office teams streamlining access to information and solutions in terms of sales tools.
Speaker Change: The intelligent generation and optimization of proposals and underwriting tools, providing precise upon sales team put them or we introduced NII.
Is that can contact symmetric and assess and evaluate the stage to help formulate more packaged combination communication strategies.
Speaker Change: Year and these initiatives are expected to drive a 50% improvement in contact with content production further enhancing the surface capabilities of our teams.
Speaker Change: Yes.
Speaker Change: I appreciate that well get yield toward that hunt <unk> agenda. Thank you though.
Speaker Change: What are your chunky intend on the bidding jobs, what do you need some usual Comcast and point out that Cingal Zavala <unk>, Dr. Sean <unk>.
Rajiv audio Goldarn campaign, a transient issue.
Speaker Change: This year, we have made an encouraging and continuous progress in expanding our international business in the first quarter of 2023.
Speaker Change: Even with strong performance in our domestic business.
Speaker Change: International business contribution to total revenue reached a new record hydro 19, 19%.
Speaker Change: <unk> percentage points compared to the previous quarter.
Mainly driven by the strong demand for premium products.
Speaker Change: National business Okay.
Speaker Change: What do you harm will be outbid on me and Kevin user cohort put out how astronauts they can't Shaw and boy a lot.
Speaker Change: <unk> seen that analysis, yet Paydown Teton county, clerks issues and find out which one senior Apolo showed Isla <unk> <unk> that's helpful.
Speaker Change: I yelled at Canada, Australia, Washington lobbying.
Speaker Change: Sure.
Speaker Change: Those are the puncture you sounded a little rebounded off of Apple's law jostled for anthem Niosh at home when they get when Moshe Geo MEO achieved because of that.
Speaker Change: Shandong Cushing Apple, while Mcdonnell will get you to the Guardian fully retired one cohort.
Speaker Change: He won't routine bogged down for a day.
Speaker Change: Indonesia, the Philippines Gordon non champion at Chicago.
Speaker Change: Clearly you're going to challenge the Biogen Tioga, five Nike golf shoes of Ikea and Thats simply.
Speaker Change: But our yogurt usual clustered <unk>.
Speaker Change: Our international growth.
Speaker Change: To diversify revenue streams by expanding into overseas markets.
Speaker Change: Second to establish new growth trajectories and foster the group's long term sustainable development to this end we have established the headquarters of our overseas brand <unk> in Singapore.
Speaker Change: Positioning it as the strategic hub for our international operations <unk>.
Speaker Change: Through mergers and acquisitions and joint ventures.
Speaker Change: We are working with local partners to accelerate our expansion into southeast Asia with clear regional business model, Hong Kong, and Singapore will cater to the inbound insurance needs of high net worth and mass affluent clients in the region well in.
Speaker Change: Okay.
Speaker Change: In Indonesia in the Philippines, we will focus on high growth potential of this market enhancing digital insurance penetrations by over Ambac insurance solutions for an expanding user coverage and market share.
Speaker Change: Jimmy and you'll get all my 100 day 90 agenda. So they will have all campaign global cat. So go.
Speaker Change: Sure sure Yeah, while material global Cathay realized on payroll a bug in ABB.
Speaker Change: Global Cat M D.
<unk> you guys have that Bosnia and Tushar does that wave that shelf heater, ivanka yogurt and Tony.
Speaker Change: You'll know who you heard about MTN comb ATM gilderdale warmed up audio high yield that should be somewhat.
Speaker Change: On the <unk>.
Speaker Change: But income rollout whether that audio by Paolo <unk>.
Speaker Change: Who should I shutdown products truly yoga.
Speaker Change: In September we have successfully entered the Vietnam market with the acquisition of a leading issue tech platform global care.
Speaker Change: Progress with Johnny launched global Cat up again.
Speaker Change: Global care in Vietnam, and insurance comparison platform positioned.
Speaker Change: <unk> insurance to the market to provide consumers weakness superior transparent and user friendly insurance shopping periods.
Speaker Change: This milestone.
Speaker Change: The continued deepening of our international expansion the successful expansion into the Reno market has not only reinforced our leadership in the international expansion journey, but also set a benchmark for future margin expansion.
Speaker Change: Okay.
Speaker Change: While material that Wally.
Speaker Change: General younger Schindler <unk>, Oh boy, she now part of ABB.
Speaker Change: Well I mean, <unk> Johan <unk>.
Speaker Change: She also equally that it could you could you as usual.
Speaker Change: <unk> wait on the shelf at the paywall should the Biogen for setting up a <unk> 10 quarterly Shambaugh <unk> head up Tibor financial you called on by a handful.
Either way you of that.
Speaker Change: Neve coming out <unk> portfolio.
Speaker Change: Our new name <unk>.
<unk> sure kind of jumped up Atlanta sanction, we achieved one times of handful of boiling water not only fund our turnkey gotcha.
Speaker Change: Looking forward we.
Speaker Change: Plan to enter two additional overseas markets within the next 12 months, Singapore and pins.
Speaker Change: We have identified a wireless tablet electronic service provider and plan to form a joint venture combining where you're just panic and then logical capabilities with our partners local resources to promote digital insurance services for local consumers in Singapore, We have formed an experienced team and are in the process of the claw.
Speaker Change: Other income and insurance brokerage license with plans to further develop a high end insurance services in the region.
Speaker Change: And the key insurance service hub.
Speaker Change: The national expansion during 2020 with pocket, our international business will account for 20% of our total revenue driving diversified growth and creating long term value to the group.
<unk> been making in <unk>, albeit at a general delegate the IPO at the time given the need.
Speaker Change: <unk> SaaS.
Speaker Change: Got it.
Handful H&R venting.
Speaker Change: Is that what the yield would you don't die a handful a chunk in there then ship downward on the O&M Commvault boggy in Chicago.
Speaker Change: Renewed upon for the product.
Speaker Change: John when you buy an ultra <unk>.
Speaker Change: <unk>, partly because of that through anti Youll ship <unk>.
Speaker Change: I'll start on the future.
Speaker Change: Sure, it's capable of going out into 2019.
Speaker Change: While many of them teed up our audio sitcom podcast lithography tool.
Speaker Change: Tangela changing sit on our products.
Speaker Change: Well, thanks Al Queda that highway exit on the team.
Speaker Change: <unk> also seen that the naphthalene.
Don't tell me, we surely don't kind of gamble that we bought.
Speaker Change: 224 has been a year.
Speaker Change: Challenges and opportunities.
Speaker Change: Bridging our deep understanding of consumer needs and exception and product capabilities, we have demonstrated remarkable resilience.
Speaker Change: Tanger business strategies.
Speaker Change: Industry transformation, while also experiencing significant growth in our international business looking ahead to 2025, the Chinese insurance market continues to present opportunities for development.
Speaker Change: We will continue to collaborate closely with insurance companies to maximize and leverage.
Speaker Change: Find it resources and strengths.
Speaker Change: Launching a diverse range of innovative customized products tailored to the market needs and trends. Moreover, we will proactively capitalize on opportunities in the international markets, particularly in the emerging southeast Asian markets to enhance <unk> competitive.
Speaker Change: With this effort, we aim to inject new growth momentum into the company and remain committed to delivering greater value for our shareholders.
I'll, let Jim woman that Fayetteville wrong, Okay, Didact Yankee candle.
Speaker Change: I was looking at this.
Speaker Change: This concludes my prepared remarks for today I will now turn the call of our trials.
Speaker Change: Ron <unk>, who will provide an overview of our key financial highlights for the fourth quarter.
Thank you Mr Mine.
Speaker Change: Good morning to our friends in the U S and good evening, everyone from Asia.
Speaker Change: So let me recap the third quarter results I think we have delivered a very strong set of cut resulting in terms of GW.
Speaker Change: Facilities on our platform.
Speaker Change: Amidst the challenging macro environment in the industry landscape.
Speaker Change: Approach AWP, which a record quarterly high of RMB 2 billion, while our FY <unk> also more than doubled to RMB. Three 5 billion. We also recorded a non-GAAP and GAAP net profit of RMB 83 million for the quarter.
Our ability to meet evolving consumer demand for long term insurance products.
Speaker Change: Ongoing regulatory reforms can be attributed to our efficient omnichannel distribution network.
Speaker Change: Online and offline channels, our relentless efforts to attract high quality customers.
Speaker Change: So it does Takeda product innovation capabilities, and our proprietary AI solutions more importantly, we are the pioneer in the industry to initiate international expansion a strategic move that is set to become a new growth driver for our long term sustainable developments.
Our strategic focus has still remained on long term insurance products, which have accounted for over 90% of our premiums associated for five years.
Speaker Change: Meanwhile, Omnichannel distribution ecosystem and proprietary AI tools further strengthen our customer acquisition and engagement capabilities.
Speaker Change: In the third quarter, we added about $287 million at 287000, new customers to our ecosystem, bringing our total number of customers to a milestone of $10 million.
Speaker Change: Mark.
Mark: The third quarter.
Mark: That we purchase ratio for our long term insurance products stood at a very high 42% during the quarter as well, which highlights our ability to continuously upsell cross sell and capitalized on the lifetime value potential of our high quality customer base.
Mark: Our open platform architecture continues to empower both our internal financial advisers and also external independent financial advisors or Ifa's.
Total FY people are to a business surged by 102% year over year to RMB, one $181 million in the third quarter.
Mark: We also leveraged on our self developed AI solutions to streamline operations and further enhance operational efficiency in the third quarter, our expense to revenue ratio improved by five percentage points year over year to 24%.
Mark: I'll also highlight other key achievements over the quarter, which includes the following number one renewal premiums increased by 18% year over year to approximately RMB $706 million, which again is underpinned by our.
Mark: By high persistency ratios for long term life, and health insurance, which as of the <unk>, we made at our industry, leading high level of over 95%.
Mark: The 13th month that 26 months.
Mark: The average ticket size of our long term savings products, which are record high of over 78000, RMB in third quarter, which is up by 55% year over year, partly reflecting an increased contribution from premium product sales.
Mark: National market segment, which is predominantly Hong Kong.
Mark: We continue to pursue a balanced mix between long term health and savings products.
Mark: Our long term health products search by 67% year over year to approximately RMB $173 million, primarily driven by a customized products with CPI.
Mark: Meanwhile, <unk> from short term health and P&C products sustained steady growth of 14% year over year to approximately RMB $129 million.
Mark: In terms of our liquidity position, our financial position remains favorable with a combined balance of cash and cash equivalents of RMB $243 million or <unk> $35 million as of the end of September.
Mark: Going forward, we will continue to empower our insurance agents, our distribution partners and <unk> partners with an optimized omnichannel distribution ecosystem.
Mark: Which put our offerings and advance AI tools to support customer acquisition and engagement.
Mark: In parallel we continue to leverage on our successful China proven business model to capitalize on the tremendous untapped market opportunities across southeast Asia through our international arm Tony <unk>.
Mark: Our total international revenue contribution for this quarter rose to 19% of total group revenues, which is up from 11% in the last quarter, which is mainly driven by our ongoing expansion of the business in Hong Kong segments.
Mark: Alongside our expansion in Hong Kong in September we completed the acquisition of a controlling stake in <unk>.
Mark: Global care.
Mark: Based on our subsidiary we have since enhanced global camp back on with innovative customized insurance products.
Mark: Submission partnerships and comprehensive AI solutions, which is aiming to accelerate business growth. So it's mainly.
Mark: <unk>.
Mark: Insurance model.
Mark: We are confident that we can achieve a more prominent revenue contribution from our Vietnam are pushes in the new year 295.
Mark: Moreover, as we have alluded to earlier in the opening remarks, we plan to enter two foot buckets in southeast Asia, which is mainly Singapore and the Philippines.
Mark: 12 months.
Mark: We believe that these initiatives will further diversify our revenue streams and surface new growth drivers to enhance long term shareholder value. We're now presently on track to achieve our international revenue contribution target of 30% of group revenues by 2026.
Mark: In summary, we are very well positioned to benefit from China's evolving industry landscape.
Mark: Which is expected to foster healthy and sustainable sustainable growth across the entire insurance value chain.
Mark: We will also capitalize on growing economies lodging downturn book graphics.
Mark: <unk> Middle class populations and an increase in demand for digital insurance solutions in southeast Asia to expand our international footprint. We are confident that our strategies will further solidify our position as Asia is a leading insurance technology platform.
Mark: Letting consumers insurance carriers and distribution partners digitally and efficiently through our data driven and AI powered solutions.
Mark: And my final remark on our recent.
Mark: Type of market development.
Yesterday it is on the ninth our Aes, we saw change has become effective which in effect has a 5% to one with us but its effect on our <unk>.
Mark: This outstanding in share price and this has been reflected in the market trading.
Mark: As of yesterday.
Speaker Change: And with that closing remark, we'll now open up the call to questions. Thank you and the <unk> operator.
Speaker Change: Thank you we will now begin the question and answer session to ask a question. Please press star one on your telephone keypad.
Speaker Change #100: Automated message advising yohan this race.
Speaker Change #100: To withdraw your question. Please press star one again.
Speaker Change #101: There may be a short pause as questions I'll go later.
Speaker Change #101: Once again Thats star 114 questions.
Speaker Change #102: We'll now take our first question from the line of Amy Chen from Citi. Please ask your question Amy.
Amy Chen: Hi, Thank you very much and congratulations on a very decent quarter, especially a very strong peak.
Speaker Change #103: My first question would be on your full year guidance for net profit.
Speaker Change #103: Good to see that.
Speaker Change #104: With that ill turn profitable again in the third quarter.
Speaker Change #105: What would be our outlook for the fourth quarter and also for the next.
Five.
Speaker Change #105: The second question is mainly on.
Speaker Change #105: Expense wise.
Speaker Change #106: That's first I noticed that actually the gross margin has seen a little bit of pressure in the third quarter. This year.
Speaker Change #107: Do you think that the impact of steam.
Speaker Change #108: Spence rationalization in the broker channel has been all in yield or or do you think that gross margin could be further pressure going on.
Speaker Change #108: Secondly, we notice that the G&A expenses actually.
Speaker Change #109: Well, it's quite significant.
Speaker Change #109: Alright.
Management actually attributed to increase in rental and utility expenses.
Speaker Change #110: Would you mind elaborating more on this thank you very much.
Speaker Change #110: Okay.
Speaker Change #111: Alright, thank you.
Thanks for joining us again as always.
Speaker Change #112: So with regards to you a few questions I would just address one by one.
Speaker Change #113: In terms of the first question on our full year guidance for 2024.
Speaker Change #113: I think we would like to say that Q3 has been a very strong quarter.
Speaker Change #113: Mainly due to a couple of reasons and I think that most prevalent one has to do with.
Speaker Change #114: The so called.
Speaker Change #114: <unk>.
Speaker Change #114: Adjustment of the interest rate in the China mainland China products relating to the savings product category.
Speaker Change #114: And that has driven a lot of upfront demand.
Speaker Change #114: Our customers or the open market into the month of July and August and particularly in August. So some of the demand has been front loaded into Q3 and so we felt we think Q4, what we envisage is somewhat lukewarm.
Speaker Change #114: Recovery in this particular product categories on the savings side.
Speaker Change #114: But we do have an offsetting will continuously in <unk>.
Speaker Change #114: Offshore market, which is predominantly a Hong Kong segment is still seeing strong momentum.
Speaker Change #114: And in the months leading up to December.
Speaker Change #114: December month, so there was there would be some offsetting.
Speaker Change #114: On that part.
Speaker Change #114: But overall, we think thats still given to our mainland China business consists of the predominant share of our overall.
Speaker Change #114: <unk> and revenue as a result, and therefore, we think that.
Speaker Change #114: The Q4 quarter would likely be less strong.
Speaker Change #114: As compared to Q3.
Speaker Change #114: And the other the other fact that we have to deal with right now is the the overall product transition into that new.
Speaker Change #114: Jim of the power products, which is not being promoted mostly by the intermediaries in particular brokerages like ourselves.
Speaker Change #114: And therefore the.
Speaker Change #114: The change of the mind share and the mindset of the consumers from the traditional savings products into the power products.
Speaker Change #114: Still takes time.
Speaker Change #114: Two two mature we think that display is a process for the next two to three quarters and therefore, we think that what we saw as well.
Speaker Change #114: Q4 on the savings category.
Speaker Change #114: We do see that.
Speaker Change #114: Demand will be definitely not Australia.
We've seen in Q3.
Speaker Change #114: So at this point in time, we think that.
Speaker Change #114: Fourth quarter wood would be would be less.
Speaker Change #114: That's strong as Q3.
Speaker Change #115: So that's the first question.
Speaker Change #115: The second question on gross margins you correctly noted that the gross margin has declined to around 27% in the fourth quarter, which is <unk>.
Speaker Change #115: As a slight drop from the levels in Q2, we do think that this level of gross margin has fully reflected the effect of.
Speaker Change #115: The so-called expense rationalization on the brokerage channel or about <unk> <unk>.
Speaker Change #115: The Russians the Deregulatory if that also has to do with a decline in the overall commission rates.
Speaker Change #115: And therefore as a result of because a lot of our business also is in partnership with other.
Speaker Change #115: Distribution channels partners.
Speaker Change #115: And therefore as a result of that.
Speaker Change #115: The channel economics needs to be adjusted to compensate for the decline in commission rates, the headlight Commission rates, our take rate and.
Therefore, the gross margin has been compressed a bit as.
Speaker Change #115: As a result of the cost structure of an economic structure for for the value chain. We do see that this level should more or less be we think that at least on the mainland China business aside should remain relatively steady.
Speaker Change #115: Steady going up going forward in the next few quarters.
Speaker Change #115: The full effects of the rationalization has been felt.
Speaker Change #115: In Q2 and Q3.
Speaker Change #115: Sure.
Speaker Change #115: And on your third question on G&A expenses, we do note that on a quarter on quarter basis.
Speaker Change #115: That's down.
Speaker Change #115: From Q2.
Speaker Change #115: And we do not expect that G&A expense too materially.
The increase from this point onwards, because we are.
Speaker Change #115: We are highly focused on further optimization of our overall cost structure across our selling expenses.
Speaker Change #115: G&A and R&D, especially with the fixed cost base, we have a very strong in.
Speaker Change #115: A clear target to improve our cost to revenue ratio in this in this particular part of the of the cost structure of the company.
Speaker Change #116: Thank you very much Paul.
Speaker Change #117: Thank you Amy.
Speaker Change #117: Thank you.
Speaker Change #118: As a reminder to ask a question. Please press star one again. Your next question comes from the line of rate Guar Fancy ICC. Please ask your question Ray.
Speaker Change #119: Alright, thank you.
Speaker Change #119: I had one question for the management and.
Speaker Change #119:
Speaker Change #119: We will have that return further.
Speaker Change #119: Further on the health management industry because.
Speaker Change #119: Commercial insurance companies are likely to hear perhaps access to medical data hauls for hospitals.
Speaker Change #119: Quaker.
Speaker Change #119: Has any turns up and on and on.
Speaker Change #119: The Hess mentioned.
Speaker Change #119: Industry and.
Speaker Change #119: Sure.
Speaker Change #119: Another one.
The 20th century, Fox FY <unk> guidance.
Speaker Change #119: Do we have any guidance on the amount of tons.
Speaker Change #120: Thank you.
Speaker Change #121: Alright. Thank you. Thank you Ray.
Speaker Change #120: Joining the call.
Speaker Change #122: For the first question I think the question was about whether we have plans to enter the healthcare services segment or the health care industry, because we have a very strong focus on.
Speaker Change #122: Life and health insurance as a whole.
Speaker Change #122: We do have plans actually we do have.
Speaker Change #122: Already established our own.
Speaker Change #122: Internet.
Speaker Change #122: Health care.
Speaker Change #122: Platform, although the <unk> business model and business go has been still.
Speaker Change #122: Stage.
Speaker Change #122: I think I'll focus going forward will still continue to be coming up with the right customized products too.
Speaker Change #122: To tackle market pinpoint, especially on the consumer side.
Speaker Change #122: Because what we see going forward is the trends that we're seeing in the healthcare industry for example, the DRG.
Speaker Change #122: Reforms, which will lead to we believe is very strong.
Speaker Change #122: Necessity amount consumers too.
Speaker Change #122: Upgrade their healthcare coverage with respect to pursue appropriate pursuing commercial insurance too.
Speaker Change #122: Complements to what they have already on our social security level.
Speaker Change #122: So we are setting our focus on the mid to high end met.
Speaker Change #122: Medical health products going.
Speaker Change #122: Going forward in the next two to three years.
Our plant is already we have solid plans to come up with a customized product in the near future probably in the next two quarters that.
Speaker Change #122: That will provide.
Speaker Change #122: Coverage.
Speaker Change #122: To our customers in respect of this overall healthcare reforms.
Speaker Change #122: We are seeing in the industry.
Speaker Change #123: So that's the first question.
Speaker Change #124: Question on guidance for full year 2025.
Speaker Change #124: We do think that right now is a little bit early.
Speaker Change #124: We are providing guidance to the market when we reach our Q4 results.
Speaker Change #124: Which will be scheduled for a.
Speaker Change #124: A few months down the road.
Ray: Thank you Ray.
Ray: Okay.
Yes.
Ray: Do you have any follow up question Ray.
Ray: Okay.
Ray: Alright. Thank you so as a reminder to ask a question. Please press star one one on your telephone keypad.
Ray: Okay.
Ray: Yes.
Speaker Change #125: Alright, I am showing no further questions and with that I will turn the conference back to Mr. Kenny Lam for closing comments.
Kenny Lam: Thank you operator.
Kenny Lam: In closing on behalf of <unk> management team, we would like to thank you for your participation in today's call. If you are a client you heard inflammation transformations to us. Thank you for joining US today. This concludes the call.
Speaker Change #127: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.