Q4 2024 Huize Holding Ltd Earnings Call
Operator: Ladies and gentlemen, thank you for standing by and welcome to Huize's fourth quarter and full year 2024 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.
Ladies and gentlemen, thank you for standing by and welcome to wages, our fourth quarter and full year 'twenty 'twenty four earnings conference call.
Time, all participants are in a listen only mode. After the management's prepared remarks, we will have a question and answer session. Today's conference call is being recorded and a webcast replay will be available on IR website at IR adult fleets of Dot com.
Operator: Today's conference call is being recorded and a webcast replay will be available on Huize's IR website at ir.huize.com under the events and webcast section.
Kenny Lo: I'd now like to hand the conference over to your speaker host today, Mr. Kenny Lo, Huize's Investor Relations Manager. Please go ahead, Kenny. Thank you, operator.
And webcast section.
I'd like to hand, the conference over to your speaker host today, Mr. Kenny Lowe, who does Investor Relations manager. Please go ahead Kenny.
Thank you operator, Hello, everyone and welcome to our fourth quarter and for you I was wondering if earnings conference call, our financial and operational results were released earlier today.
Kenny Lo: Hello, everyone, and welcome to our fourth quarter and full year 2024 earnings conference call. Our financial and operational results were released earlier today and are currently available on both our IR website and global newswire service.
And are.
Currently available on both our IR website and global Newswire services.
Kenny Lo: Before we continue, I would 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 for a locking statement. Please also note that we will discuss non-GAP measures today, which are more thoroughly explained in our earnings release and filings with the SEC.
So we continue I would 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 also note that we will discuss non-GAAP measures today, which are more horrifically explained in our earnings release and filings with SEC.
Kenny Lo: Joining us today are our founder and CEO, Mr. Chunjun Ma, COO, Mr. Lijian, Co-CFO, Mr. Minghang Xiao, and Co-CFO, Mr. Ron Tam. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights, followed by Mr. Tam who will go over our financial results for the fourth quarter and full year of 2024.
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trend dreamer: Mr. MA we started call by providing an overview of the company's performance and operational highlights.
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Kenny Lo: Before we open up the call for questions.
trend dreamer: Before we open up the call for questions.
Cunjun Ma: I will now turn the call over to Mr. Ma. Hello everyone, welcome to Huize's 4th quarter of 2024 and annual performance conference. In 2024, the insurance industry will continue to deepen and implement the unification of insurance policies, and the second era of life insurance reserves will officially begin.
I'll now turn the call over to Mr. Ma.
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Cunjun Ma: Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Huize closely surrounds the direction of policy and market trends, actively adjust strategic direction, and continue to deepen the supply of diverse products and innovation of customized products. Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding At the same time, by accelerating the overseas market layout, we have successfully created the second growth curve, which is a strong growth door for business development. In 2024, the company's total revenue increased by 4.5% to 12.5 billion yuan. Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding In 2024, the insurance industry continues to deepen the implementation of unified commissions and fees in reporting and underwriting.
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Speaker Change: In 2020 for the insurance industry continue to depend the implementation of unified commissions and fees in recording an underwriting.
Cunjun Ma: The industry entered a 2% era.
Speaker Change: The industry entered a truly stand Euro Herta, China's State Council released a ton measures, which outlines comprehensive regulations, but high quality development of the industry.
Cunjun Ma: Further, China's State Council released 10 measures, which outlined comprehensive regulations for the high quality development of the industry. In response to these policy directions and market trends, we proactively adjusted our strategic focus and expanded our diversified and customized product offerings.
Speaker Change: In response to this policy direction and Mike It's Ryan we proactively adjusted our strategic focus and expanded our diversified and customized product offerings as generative AI accelerate the transformation of the industry, we have implemented a forward looking.
Cunjun Ma: As generative AI accelerates the transformation of the industry, we have implemented a forward looking AI plus strategy transitioning from the application of intelligent tools to a comprehensive restructuring of our surface ecosystem. This strategic shift has enhanced the product matching and service efficiency, establishing Huize as the benchmark for the intelligent transformation of the industry. Meanwhile, our accelerated international business development has built a strong second growth engine, fueling high quality, sustainable growth. As a result, in 2024, total revenue increased by 4.5% year over year to RMB 1.25 billion, and both gross revenue premiums, GWP, and first year premiums, FYP, facilitated across our platforms achieved record heights.
Speaker Change: Plus strategy transitioning from the application of intelligent choice through a comprehensive restructuring of our surface ecosystem. This strategic shift.
Speaker Change: Has the product mashing in surface efficiency, establishing <unk> as the benchmark for the intelligent transformation of the industry. Meanwhile, our salaries had international business development.
Speaker Change: Our strong second growth engine.
Speaker Change: High quality sustainable growth as a result in 2024 total revenue increased by four 5% year over year to RMB, one 5 billion and both gross written premiums G. WP and first year premiums F Y P facilitate had across our platforms that shape.
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Cunjun Ma: In 2024, the company's total insurance fee reached 6.1 billion yuan and increased by 6%. The first-year insurance fee reached 3.4 billion yuan and increased by 31%. In terms of product structure, the first-year insurance fee for long-term insurance has reached 18.4 billion yuan and increased by 76%.
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Cunjun Ma: 全联长期健康线贡献首联保费为5.2亿元,同比增长2%,此外,在预定利率下调窗口旗下, Chuxixian's business has seen a steady growth. In 2024, Huize's Chuxixian's first-year insurance costs increased by 5.5% to 68.6%. In the past year, Huize has recorded a double-digit increase in short-term business. In 2024, Chuxixian's short-term insurance costs increased by 5.5% to 68.6%. short-term save has increased by 23% to $5.5 billion significantly increasing the supply chain to employment In 2024, GWP amounted to RMB 6.16 billion, up by 6% year-over-year. Full-year FYP reached at RMB 3.42 billion, up by 31% year-over-year. In terms of our product mix measured by FYP, whole life premiums contributed RMB 1.84 billion, surging by 76% year-over-year.
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Neil: In 'twenty to 'twenty four GWG amounted to RMB, six 6 billion up 6% year over year <unk> reached at RMB, three 2 billion up by 31% year over year in terms of our product mix measured by F Y P whole lot premiums contributed RMB one.
Neil: <unk> 4 billion surging by 76% year over year, while a longtime how insurance contract contributed RMB.
Cunjun Ma: While long-term health insurance contributed RMB 520 million, up 2% year-over-year. Influenced by the downward adjustment in assumed interest rate, we registered a stable growth in savings insurance products, accounting for 68.6% of total FYP, representing a year-over-year increase of 5.5%. Meanwhile, our short-term insurance business recorded robust double-digit growth, with premiums up 23% year-over-year to approximately RMB 550 million, further strengthening the diversity of our product portfolio.
Neil: $20 million up 2% year over year influenced by the downward adjustment in assumed interest rate. When you registered a stable growth in savings insurance products accounting for 66% of total FY <unk>, representing a year over year increase of.
Neil: Five 5%. Meanwhile, our short term insurance business recorded robust double digit growth with premiums up 23% year over year to approximately RMB 550 million further strengthening the diversity of our product portfolio.
Cunjun Ma: In Shenzhen, Huize relies on the deep user observation and excellent service ability to provide high-quality users with a high-quality experience. Since the end of the fourth quarter, the number of users of the platform has increased to 10,061,000, and the number of new users has increased to 380,000. Among them, in 2024, the average age of users in Changqixian, Taobao, is 35.1 years old. Among customers in Changqixian, Taobao, the ratio of second-tier and upper-tier cities is 68.4%, maintaining high-quality customer groups, and with the first-year guarantee fee calculation, in 2024, the average age of users in Chuxixian will be about 75,000.
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Cunjun Ma: Hongbi shangshen lai bai feng zhi san zhi jiu, jie zhi shan yue di, chang qi xian di shi san ge yue, he di er shi wu ge yue, lian du lei jie, jie xi lui jun gao yu bai feng zhi jiu shi wu Weizi hung me helped us with Driven by profound customer insights and outstanding service capabilities, we remain committed to delivering a premium service experience to hybrid By the end of the fourth quarter, a cumulative number of insurance users further increased to 10.6 million, with 380,000 new users added during the quarter. The average age of customers who purchased long term insurance products in 2024 was 35.1 years old, among which 68.4% were located in higher tier cities, reflecting our high quality customer profile.
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Anthony Wang: Driven by profile customer insights and outstanding service capabilities, we remain committed to delivering a premium service experience to hybrid customers.
Anthony Wang: At the end of the fourth quarter, a cumulative number of insurance use has further increased to $10 $6 million with 380000, new users added during the quarter.
Anthony Wang: The average age of customers, who caches long term insurance product in 2024.
Anthony Wang: $35, one years old and language 68, 4% were located in higher tier cities, reflecting our high quality customer profile.
Cunjun Ma: The average FYP policy size for savings products reached approximately RMB 75,000 in 2024, up by 39% year-over-year. By the end of December 2024, 13-month and 25-month persistency ratios for long-term insurance both exceeded 95%, continuing to outperform industry average.
Anthony Wang: The average F Y K party size for savings products reached approximately RMB 75027, four up by 49% year over year.
Anthony Wang: The end of December 'twenty 'twenty four.
Anthony Wang: Months, and 25 month persistency ratios for long term insurance, both exceeded 95% continuing to outperform industry averages.
Cunjun Ma: Since the end of the 4th century, Huize has maintained a stable cooperation relationship with 139 insurance companies.
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Cunjun Ma: Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Leng Chene, Unknown Executive. I'm sure it's all in olerations. Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding As of the end of the fourth quarter, we maintained a strong partnership with 139 insurance companies, continuing to develop and launch customized products across a diverse, diverse range of insurance categories. In 2024, we partnered with Aviva Cofco to launch Fu Men Jia, a customized participating whole life insurance product that combines protection and investment features, which received widespread market recognition.
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Speaker Change: As of the end of the fourth quarter.
Speaker Change: We maintained our strong partnerships with 139 insurance companies continuing to develop and launch customized product across a diverse diverse range of insurance categories. In 'twenty 'twenty four we partnered with Aviva cough cold collage, Pune, India, a customized I respect participate.
Speaker Change: And whole life insurance product that combines protection and impersonal features which received widespread market recognition attests.
Cunjun Ma: Additionally, we partnered with Ping An to introduce the upgraded Chang Xiang An No. 2 long term medical insurance product, which has been continually optimized in three key areas, including ease of enrollment, lower deductibles, and enhanced value added services to better meet the growing public demand for high quality health care protection. In the fourth quarter of 2024, GWP contribution from our customized insurance products accounted for 53.1% of total premiums, reflecting the recognition and confidence in our product development capabilities from both customers and the broader insurance industry. In 2024, the insurance industry accelerated the development of smart and high-efficiency directions.
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Speaker Change: Tangshan and number two long term medical insurance product, which has been continually optimized in three key areas, including ease of enrollment lower deductibles and enhanced value added services to better meet the growing public demand for high quality health care protection and halt.
Speaker Change: Quarter of 'twenty 'twenty, four GW P country contribution from our customized insurance products accounted for 53, 1% of total premiums, reflecting the recognition and confidence in our product development capabilities from both customers and the broader insurance industry.
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Cunjun Ma: Through the long-term persistence of digitalization, Huize has accumulated product sales, double-digit data advantages, and industry-leading technological innovation capabilities. Over the past year, we have launched a smart customer service system and built a smart navigation and artificial service all-day response system on the customer side. Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding In 2024, the insurance industry accelerated its transformation toward greater intelligence and efficiency. Upholding a long time commitment to digitalization, we have developed substantial advantages in both product and sales data, alongside industry leading technological innovation capabilities. During the year, we launched an intelligent client services system, combining smart navigation with human assisted services to provide a 24 seven response mechanism.
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Speaker Change: In 2024.
Speaker Change: Insurance industry accelerates.
Speaker Change: Transformation towards greater intelligence and efficiency up holding a long term commitment to digitalization, we have developed substantial advantages in both product and south data alongside industry, leading technology logical innovation capabilities during the year, we launched an intelligent.
Speaker Change: Client services system, combining smart navigation with human assistance services to provide 24 seven response Mccann has them. Additionally, we have developed an intelligent assistant for our mid to high and.
Cunjun Ma: Additionally, we developed an intelligent assistant for our mid to high end medical insurance products to assist our client service personnel with product recommendations, policy interpretation, and after sales support. This system has achieved a 95% accuracy rate in and significantly accelerated the development of our intelligent service ecosystem. In this quarter, we launched the Fengtong Hebao Fengkong engine system to build a smart, automated, and digital Hebao Fengkong platform. to realize multi-scene, full-scenery risk control and further improvement. Based on Huize's 19 years of operating experience, the FengTong system integrates multi-dimensional risk data such as internal security, compensation, fraud, etc., and integrates external high-quality data sources to form a perfect bottom-up data system.
Speaker Change: Medical insurance products to assist our client service personnel where product recommendations.
Speaker Change: LSC interpretation and after sales support this system has achieved a 95% accuracy rate in responses and significantly accelerated.
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Cunjun Ma: Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding 并结合外部欺诈,信用风险,职业,常居地等数据,实现更全面的风险评估能力,有效提升了荷宝风控的精准度,同时,我们针对不同显种的产品特性,灵活配置了风控规则与模型。 Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding 通过自动化规则引擎,可保流程实现秒计处理,平均用时仅1.01秒,大幅提升了云影的效率,风控系统经过一段时间的实践,不同类型的产品风控 Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding 重点产品月度降赔7% 健康线内的产品累计减损保额超过三亿元 Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding In Q4, we launched the Fong Tong Underwriting Risk Control Engine system, establishing an intelligent, automated, and digital underwriting risk control platform to enhance risk measurement across multiple scenarios and all insurance product types.
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Speaker Change: In Q4, we launched the phone Hong underwriting risk control engine system, establishing an intelligent automated and digital underwriting risk control platform to enhance risk management across multiple scenarios in us insurance product types leveraging operators 19 years of operations.
Cunjun Ma: Leveraging Huize's 19 years of operations, our proprietary Fong Tong system integrates multi-dimensional internal risk data, including underwriting claims and fraud detection and connects to hybrid external data sources to build a robust underlying data system. We proprietary developed a disease classification system and algorithm tagging technology to accurately identify high value insured individuals and high concentration rates. By incorporating external data such as fraud indicators, credit risk, occupations and place of residence, we achieved more comprehensive risk assessment capabilities and significantly enhanced underwriting precision. Meanwhile, we customized risk control rules and modules according to the specific characteristics of different insurance products, enabling the flexible application of risk control rules and models to provide customized risk management solutions.
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Speaker Change: We have proprietary develop adcs classification system and algorithm tagging technology to accurately identify high value of insured individuals and high concentration risks.
Speaker Change: Incorporating external data such as indicators credit risk occupations and place of residence, we achieved more comprehensive risk assessment capabilities and significantly enhanced underwriting precision. Meanwhile, we customized risk control roofs and modules are crowding too.
Speaker Change: Specific characteristics of different insurance products, enabling the flexible application.
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Cunjun Ma: These have been successfully implemented in various products including Guardian Critical Care, Little B, and Xiao Xing An. Our verification engine with automated rules has reduced underwriting time to just 1.01 seconds per case on average, drastically improving operational efficiency. Since its launch, the Fung Tong system has maintained a positive controllable risk identification risk rate of between 2% and 30% across different product categories. Key products saw a monthly claims reduction of 7% and health insurance products cumulatively reduced claims exposure by over RMB 300 million. Overall, the system has achieved a claims ratio below the industry average. These outcomes have significantly strengthened business quality, ensured a seamless user experience, and created a positive cycle between risk management capabilities and business growth.
Speaker Change: This has been successfully implemented in various products, including God, you incredible care litter B and shaoxing on.
Our verification engine with automated Bruce has reduced underwriting time to just 1.1 seconds per case on average drastically improving operational efficiency.
Speaker Change: This launch the Hong Kong system has maintained a positive positive controllable risks identification risk rates of between 2% and 30% across different product categories key products saw a monthly claims reduction of 7% and health issue.
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Speaker Change: These outcomes have significantly strengthened the business quality and ensure a seamless user experience and created a positive cycle between risk management capabilities and business growth.
Cunjun Ma: Thanks to Huize's outstanding technical ability, strong business ability, and rich experience in the Chinese market, Huize has made rapid breakthroughs and new developments in international business development in 2024. We, Huize's international brand, Pony Insootech, have successfully completed the acquisition of the leading digital insurance technology platform, GlobalCare, in Vietnam. In the fourth quarter, GlobalCare's total insurance bill increased by 32% in return, and the revenue increased by 33% in return.
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Cunjun Ma: as its strategic shareholder. Pauline Insultech, global care In October of last year, we launched a new health insurance comparison brand, GlobalCare.vn, which has successfully integrated into the GCL application, bringing a more high-quality, transparent, user-friendly insurance purchase experience to local consumers.
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Cunjun Ma: 作为我们国际业务布局的关键环节 The Vietnamese market is an important milestone in our long-term strategy in Southeast Asia. In the future, we will focus on Southeast Asia, such as the AR agent model, promotion to Vietnam, etc. Huize will be launched in Chinese market to verify the successful smart service mode and further improve the efficiency of local insurance services and user experience. We look forward to successful experience and important results in the Vietnamese market in 2024.
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Cunjun Ma: to achieve 30% of overseas revenue in 2026. Back by our exceptional technological strengths, robust business capabilities and extensive expertise in the Chinese market, we made significant and rapid strides in our international expansion in 2024. Our international brand, Pony Intuitech, successfully completed the acquisition of Vietnam's leading digital Intuitech platform, GlobalCare. In Q4, GlobalCare achieved a 32% sequential increase in total policies issued. With revenue growing 33% sequentially, as a strategic shareholder, Pony Intuitech has begun to undertake a comprehensive technology and business Empowerment at GlobalCare. In October 2024, we launched GlobalCare.vn, a health insurance comparison platform integrated into the G-Cell app, offering Vietnamese consumers a high-quality, transparent, and user-friendly insurance purchasing experience.
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Speaker Change: Backed by our exceptional kind of logical strings robust business capabilities and extensive expertise in the Chinese market.
Speaker Change: We made significant and rapid strides in our international expansion in 2019 for our international <unk> successfully completed the acquisition of <unk>, leading digital insure Tech platform Global care in Q4 global care achieved a 3% sequential increase in total policies issued.
Speaker Change: Revenue growing 33% sequentially.
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Cunjun Ma: Vietnam is a pivotal component of our international strategy and represents a significant Strategic Milestone in Our Long-Term ASEAN SDN Expansion Strategy. Looking ahead, we plan to bring the AI-ASEAN model to core Southeast ASEAN markets, including Vietnam, accelerating the localization and implementation of Huize's proven Intelligence Service Model from China. This will further enhance insurance service efficiency and user experience in these markets. We believe the success and insights gained from our Vietnam operations in 2024 will strongly support our further expansion into Singapore and the Philippines in 2025 and other Southeast Asian markets in the longer term, helping us to achieve our target of 30% international business revenue contribution by 2026.
Speaker Change: Strategic milestone in our long term Asian.
Speaker Change: SDN expansion strategy looking ahead, we plan to bring the AI agent model, two core southeast Asian market, including Vietnam, accelerating their localization and implementation appraisers proven.
Speaker Change: Intelligence surface model from China. This will further enhance insurance surface efficiency and user experience in these markets. We believe the success and insights gained from our Vietnam operations in 'twenty 'twenty four will strongly support our further expansion into Singapore, and Philippines, and 23, five and out of stock.
Speaker Change: Asian markets in the long term, having us to achieve our target of <unk>.
Speaker Change: <unk> International business revenue contribution by 2026.
Cunjun Ma: In February this year, with the rapid development of our large-scale AI model technology, Huize will upgrade the AI layout to the customer end, launch a revolutionary AI-version app, and realize the full-chain application of smart dialogue technology in the insurance consumption scenario.
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Cunjun Ma: Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding 通过引入AR代理人模式 AR版APP为客户提供了7×24小时专属在线保险代理 Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Chinese. 新用户自主投保率及保费转化效率均实现了显著提升 Unknown Executive, Yuping Ma, Cunjun Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding 推动销售转化率再上台阶,同时AR模型的24小时实时的交互能力,确保了用户无论何时进行咨询都能得到及时的响应,APP上线首月,日均服务用户超过1.4万人。 Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding 展望2025年 Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding In February 2025, amid rapid advancement in China's AI large language models, we fully integrated DeepSeek into the Huize app.
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Cunjun Ma: This milestone enables seamless AI driven interactions throughout the entire insurance purchasing journey, from consolation to policy issuing. We are among the first organizations in the insurance sector to deeply embed the AI model into consumer facing services, and to establish an around the clock intelligent insurance service model. By introducing the AI agent model, our AI powered app now delivers 24 seven personalized insurance advisory support, giving customers always on intelligent service at their fingertips. This innovation significantly optimize the purchase process and holistically improves the user experience. In the first month since its launch, the AI powered Huize app achieved breakthrough results.
Speaker Change: This milestone enables seamless.
Speaker Change: And interactions throughout the entire insurance purchasing journey.
Speaker Change: Constellation to policy issuance, we are among the first organizations in the insurance sector to deeply embed.
Speaker Change: The AI model into <unk>.
Speaker Change: Consumer facing services and to establish in a round the clock intellect intelligent ensuring surface model by introducing the AI agent model. Our AI powered App now delivers 24, seven personalized insurance advisors court, giving customers always on intelligent service at.
Speaker Change: Their fingertips.
Speaker Change: Innovation significantly optimize the purchase process.
Speaker Change: Holistically improves the user experience in the first months since its launch the AI powered achieved.
Speaker Change: Achieving breakthrough results.
Cunjun Ma: Customer acquisition effectiveness significantly improved with an activation rate exceeding 40%. New users' self-purchase rates and premium conversion efficiency also show improvements. Combining power, natural language processing capabilities with the comprehensive insurance knowledge base from Huize, our intelligent recommendation system, RightPick, precisely matches customers with suitable insurance products, further improving sales conversion rates. Additionally, the AI model's real-time interaction capabilities ensure timely responses to customer inquiries. In the first month after the app's launch, the daily average number of users served exceeded 40,000, delivering a more convenient and efficient insurance service experience for our customers. Looking ahead to 2025, our focus will be on developing an intelligent needs assessment system for user needs, precisely matching user profiles with product recommendations, further enhancing conversion rates, and setting a new benchmark for high quality digital development within the industry.
Speaker Change: Customer acquisition effectiveness significantly improved with and activation rates exceeding 40 was that new users self purchase rates in premium conversion. Since we also show improvements combining power natural language processing capabilities with the comprehensive.
Speaker Change: <unk> insurance knowledge base from pointer, our intelligent recommendation system right Tech precisely matches customers with suitable insurance products further improving sales conversion rates. Additionally, the AI models real time interaction capabilities and ensure timely responses to.
Speaker Change: Customer inquiries.
In the first month after apps launch the daily average number of users surf exceeded 40000, delivering a more convenient.
Speaker Change: Patient insurance service experience for our customers looking ahead to 2025, our focus will be on developing an intelligent NIST assessment system for user needs precisely matching user profiles with product recommendations further enhancing conversion rates and setting.
Speaker Change: New benchmark for high quality digital development within the industry.
Cunjun Ma: In 2024, Huize adapted the market trend observation and product innovation to a flexible strategy to show resilience in the industry and achieve rapid and high-quality growth in international business. Looking ahead to 2025, we will deepen our cooperation with insurance companies to launch more innovative customized products around market demand.
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Cunjun Ma: Unknown Executive, Yuping Ma, Haiti, change.
Cunjun Ma: Unknown Executive, Yuping Ma, Haiti, change, all right. 增强品牌影响力 Cunjun Ma, Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding In 2024, we demonstrate a strong resilience amid industry shifts by leveraging profound market insights and product innovation to adapt our strategies with agility and achieve rapid high quality growth in our international business. Looking ahead to 2025, we will deepen collaborations with insurance partners and develop more innovative customized products tailored to evolving market demands. By harnessing cutting edge AI technologies like DeepSeek, we aim to further enhance service efficiency and elevate customers' experiences while continually pursuing breakthroughs in product design and risk management to reinforce our leading market position.
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Speaker Change: In 2024, we demonstrate a strong resilience amid industry shifts by leveraging profile market insights and product innovation to adapt our strategy with.
Speaker Change: Jealousy and achieved rapid high quality growth in our international business looking ahead to 2025.
Speaker Change: <unk> collaborations with insurance partners and develop more innovative customized products tailored to the.
Speaker Change: Evolving market demands by harnessing cutting edge AI technologies like the <unk>, we aim to further enhance.
Speaker Change: Efficiency and elevate customers' experiences while continually pursuing breakthroughs in product design and risk management to reinforce our leading rock acquisition. Meanwhile, we will capture international market opportunities and expand our footprint in service Asian markets for these initiatives.
Cunjun Ma: Meanwhile, we will capture international market opportunities and expand our footprint in Southeast Asian markets. Through these initiatives, we aim to enhance our brand influence and build a more resilient, innovation-driven international business framework.
Speaker Change: We aim to enhance our brand influence and build a more resilient innovation driven international business framework. Ultimately we are committed to reinforcing our competitive position in the international market and delivering sustainable long term value for customers shareholders and partners.
Cunjun Ma: Ultimately, we are committed to reinforcing our competitive position in the international market and delivering sustainable long-term value for customers, shareholders, and partners.
Speaker Change: Yes.
Kenny Lo: Next, our CFO Ron will give you a detailed overview of our performance and financial data.
Speaker Change: Gentlemen, who run <unk>.
Cunjun Ma: This concludes my prepared remarks for today.
Speaker Change: This concludes my prepared remarks for today I will now turn the call to our CFO, Ron <unk>, who will provide an overview of our key financial highlights for the fourth quarter.
Ron Tam: I will now turn the call to our CFO, Mr. Ron Tam, who will provide an overview of our key financial highlights for the fourth quarter. Thank you, Mr. Ma and Kenny. Good evening, everyone in Hong Kong, Asia, and good morning for those in the Americas.
Speaker Change: Thank you Mr. Mike any good evening, everyone in Hong Kong Asia, and good morning for those in the Americas.
Ron Tam: I realize it's a very long opening remarks, so I'll be brief here on the results, highlights. So despite a challenging macroeconomic and regulatory environment over all in 2024, I think we have delivered a very resilient performance with both total GWP and FYP facilitated on a platform reaching record highs of $6.2 billion and $3.4 billion, respectively. Our total revenue has increased 4.5% year-over-year and achieving our second consecutive year of non-gap profitability. We have achieved this by leveraging our efficient omni-channel distribution network, which integrates both online and offline channels, focusing on acquiring high-quality customers, offering innovative high-value products, and deploying our proprietary AI solutions throughout the ecosystem.
Speaker Change: Well, that's a very long opening remarks I'll be brief here on the results highlights.
Speaker Change: So despite a challenging macro economic and regulatory environment over all in top 24, I think we are deliberate very resilient performance with both total GWG in FY <unk> facilitated.
Speaker Change: Upon reaching record highs.
Speaker Change: $6 2 billion and $3 4 billion, respectively. Our total revenue has increased 5% year over year and achieving a second consecutive year of non-GAAP profitability.
Speaker Change: We've achieved this by leveraging our efficient Omnichannel distribution network, which integrates both online and offline channels focusing on acquiring high quality customers offering innovative hybrid products and declined proprietary AI solutions throughout the ecosystem. More importantly, we have also made significant progress in our international expansion strategy.
Ron Tam: More importantly, we have also made significant progress in our international expansion strategy, which will help us as a key growth driver for our long-term sustainable development going forward. Over the course of 2024, we continue to strategically prioritize long term insurance products in China, which have accounted for over 90% of our GWP for the past five years. Our omni-channel distribution network and sophisticated AI tools are significantly enhancing our customer acquisition and engagement capabilities. We have acquired approximately 380,000 new customers during the fourth quarter, increasing our total customer base to date of 10.6 million. Repeat purchases for our long term insurance products have increased by 3.3 percentage points to 40.2% in 2024, which underscores our ability to capitalize on the LTP potential of our high quality customer base through both upselling and cross selling.
Speaker Change: It will help as a key growth driver for long term sustainable.
Speaker Change: Government going forward.
Speaker Change: Over the course of 'twenty 'twenty four will continue to strategically prioritize long term insurance products in China, which has accounted for over 90% of our GDP for the past five years, our Omnichannel distribution network and sophisticated AI tools are significantly enhancing our customer acquisition engagement capabilities, we've acquired approximately 380000.
Speaker Change: New customers during the fourth quarter, increasing our total customer base to date.
Speaker Change: $10 6 million.
Repeat purchases.
Speaker Change: For a long term insurance products have increased by three three percentage points to 42% in 'twenty, 'twenty, four which underscores our ability to capture.
Speaker Change: Capitalize on the LTC potential of a high quality customer base through both Upselling and cross selling.
Ron Tam: Our open platform architecture continues to empower our internal financial advisors and also external independent financial advisors, IFAs, with total FYP from our 2A business increasing by 17% to RMB415 million. in 2024.
Speaker Change: Open platform architecture continues to empower national in.
Speaker Change: In our internal financial advisers, and also external independent financial advisors <unk> with total MIP from our AIA business, increasing by 17% to RMB $415 million.
Speaker Change: In 2024.
Ron Tam: I would also like to highlight several key achievements that drove our solid performance throughout the year. Our 13th and 25th month persistencies have reached a stable 95% over the year. Average ticket size for long-term savings products have surged by 39% to over 75,000 RMB. And premiums facilitated for our short-term health and PNC products also increased by 23%, to RMB 548 million in 2024.
Speaker Change: I'll also highlight several key achievements that drove our solid performance throughout the year. After in the 25th months suggests these have reached a stable 95% over a year average ticket size for long term savings products of search by 39% to over 75000 RMB and.
Speaker Change: And premiums facilitated for short term health and P&C products also increased between 3% to RMB $548 million in 2024.
Ron Tam: In terms of our liquidity position, our financial position remains very strong and robust with a combined balance of cash and cash equivalents of RMB $233 million or USD$32 million as of the end of 2024. In terms of our international expansion, Pony Instratec, our international arm, continues to serve as the cornerstone of our growth strategy and delivered exceptional results in 2024. Total revenue of our international businesses has grown to RMB 228.7 million in 2024, with international revenue contribution reaching 18% for the year ended 2024, which is on track in achieving our stated 30% target by 2026.
Speaker Change: In terms of our liquidity position, our financial position remains very strong and robust with a combined balance of cash and cash equivalents of RMB 223, 233 million or USD $32 million as of the end of 2024.
Speaker Change: It does about international expansion Pone and <unk>, our international arm continues to serve as the cornerstone of our growth strategy and delivered exceptional results in 2024.
Speaker Change: Total revenue of our international businesses has grown to RMB $228 7 million in 2024.
Speaker Change: International revenue contribution reached 18% for the year ended 224, which is on track in achieving our stated 30% target by 2026.
Ron Tam: In Vietnam, we continue to make meaningful strides in integrating the local operations with the broader expertise and capabilities of the Huize Group. Following the completion of the acquisition in Q3, our Vietnam business has achieved an impressive sequential growth, with gross return premiums increasing by 29 percent sequentially and revenue by 33 percent. GlobalCare has launched a customized family accident insurance product, which was co-developed with the Military Insurance Corporation, one of the leading PNC insurers in Vietnam. In addition, we are making steady progress toward expanding into Singapore and the Philippines markets with entry planned within the next 12 months.
Speaker Change: In Vietnam, we continue to make meaningful strides in integrating the local operations with deepwater expertise and capabilities of liquids equipped.
Speaker Change: Following the completed completion of the acquisition in Q3, our Vietnam business has achieved an impressive sequential growth with gross written premiums increasing by 29% sequentially and revenue by 33%.
<unk> has launched a customized family accident insurance products, which was co developed with the military insurance Corporation, one of the leading P&C insurers in Vietnam.
In addition, we are making steady progress towards expanding into Singapore, and the Philippines markets with entry plan within the next 12 months.
Ron Tam: This will further diversify our weaponry streams and create new growth drivers to enhance long-term shareholder value creation.
Speaker Change: This will further diversify our revenue streams and create new growth drivers to enhance long term shareholder value creation.
Ron Tam: Notably, on the AI front, we were among the earliest in China's intratech space to deeply integrate deep six model in February 2025. We deploy it inside our mobile app for Quasar. This enables us to deliver real-time, customized and data-driven recommendations to our customers, which will strengthen customer acquisition and engagement capabilities for distribution partners and IFAs going forward. This also provides a very scalable model for a technological foundation to accelerate our international experience.
Speaker Change: Notably on the AI front, we were among the earliest in tonnage in the tech space to deeply integrate deep six model in February 2025.
Speaker Change: Deploy it inside our mobile App for <unk>. This enables us to deliver real time customized and data driven recommendations to our customers, which will strengthen customer acquisition and engagement capabilities for distribution partners and is going forward.
Speaker Change: This also provides a very scalable model for technological foundation to accelerate our international expansion.
Ron Tam: In summary, we believe we are ideally positioned to capitalize on the opportunities which is created by China's evolving industry landscape, which is poised for healthy and long-term sustainable growth across the entire value chain. Through Pony Instratec, we'll leverage a proven business model we find in China and advanced proprietary AI solutions to tap into the tremendous growth opportunities across Southeast Asia and the rest of the world, particularly in the young middle class demographic. We are confident that our cutting edge technology and targeted market penetration strategy will solidify position as Asia's leading insurance technology platform, connecting consumers, carriers and distribution partners digitally and efficiently through our data-driven and AI-powered solutions.
Speaker Change: In summary, we believe we are ideally positioned to capitalize on the opportunities, which is created by China's evolving industry landscape, which is poised for healthy and long term sustainable growth across the entire value chain.
Drew Tony: Drew Tony Intertek, we'll leverage our proven business model, we find in China, and advanced proprietary AI solutions to tap into the tremendous growth opportunities across southeast Asia, and the rest of the world, particularly in the young middle class demographic.
Drew Tony: We are confident that our cutting edge technology and targeted market penetration strategy will solidify our position as Asia's leading insurance technology platform connecting consumers carriers and distribution partners digitally and efficiently through our data to provide AI powered solutions and with that we'll now open up the call to questions. Thank you very much and <unk> operator.
Operator: And with that, we'll now open up the call to questions. Thank you very much and over to you, operator. Thank you.
Operator: We will now begin the question and answer session. To ask a question, please press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
Drew Tony: Thank you.
Drew Tony: We will now begin the question and answer session to ask a question. Please press star one on your telephone keypad, you wouldn't hear an automated message advising yohan. This race to withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.
Qingqing Mao: We will now take our first question from the line of Qingqing Mao from CICC. Please ask your question. Hello, everyone. Thank you for giving me the opportunity to ask questions. I am Mao Qinqing, an analyst from China. I have two questions. The first question is about the one-off impact of last year's economic channel. I would like to ask if the one-off impact of last year's economic channel has gradually passed? And after the one-off impact, is there any improvement in the market competition of the entire economic channel? My second question is about AI.
Drew Tony: We will now take our first question from the line of changing now from C. ICC. Please ask your question Kington.
Drew Tony: I will now.
Drew Tony: Gotcha got you on the two hour show that.
Drew Tony: Jonathan finish from Argentina.
Speaker Change: Loyola Lindsay Opdivo <unk> <unk> Macquarie.
Speaker Change: Thank you Qi <unk>.
Drew Tony: Thank you Joey.
Speaker Change: Jacob Buckingham interchange Akshay Bhatia from Genco Ocean ETE Paulson <unk> co.
Speaker Change: Thank you Josh.
Doug: Doug will then tissue Guangzhou AI commvault.
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Qingqing Mao: I have two questions. My first question is about the commission caps regulation. I think it has been in place for almost one year. Has the one-off impact of this regulation already subsided? And has market competition improved since its implementation?
Doug: I have two questions. My first question is about the commission tax regulation.
Doug: It has been in place for almost a year.
Doug: The one off impact of less regulation already subsided.
Doug: And as market commutation into implementation.
Doug: Implementation.
Qingqing Mao: My second question is on AI. Could you please elaborate on the specific ways in which AI technology can improve your operations? And what can we expect in terms of the financial outcome? That's all. Okay, thank you, Tingting, for joining us again, and will continue to support over the years.
Doug: My second question is.
Doug: Hi.
Doug: Could you please elaborate on the subsea <unk> waste.
Doug: Technology can improve your operations and what can we expect in terms of no financial outcome.
Doug: Al.
Speaker Change: Okay. Thank you thinking for joining us again.
Doug: And we will continue to support over the years.
Ron Tam: So your questions on two sides, the first one on the regulatory commission caps, and the effects of that on the brokerage channels. I think the answer is, the regulations have been rolled out and officially implemented over the course of the year. And I think that the industry has now migrated into the so-called new normal. Ever since September 1st of last year, all the new products that have been launched by the insurance companies have already incorporated the new commission structure. So the short answer is yes, I think the impact has been felt, and I think it's already fully reflected in our financial results for the Q4, and also for the rest of the and our peers that are also listed in the public market.
Doug: So your question is on <unk>.
Doug: <unk> the first one on the regulatory commission caps.
And the effects of that on the brokerage.
Doug: Channels I think the answer is.
Doug: The regulations have been rolled out and.
Doug: Officially implemented over the course of the year and I think that the whole industry has now migrated into the new so called new normal.
Doug: Ever since September of last year, all the new products that have been.
Doug: Launched by the insurance companies.
Doug: Already incorporated the New Commission structure.
Doug: So.
Doug: The short answer is yes, I think the the impact has been felt and I think is already fully reflected in our financial results for Q4.
Doug: And also for the rest of the industry and our peers that are also listed.
Ron Tam: I think that similar results have been felt through across the industry. In terms of the regulatory impact itself on the brokerage channels and agencies, that's already been felt. We would like to note that for the regulatory implementation on the tied agency channel, this has not yet been implemented. And we are expecting this to be effective sometime towards the middle to later part of this year. And with that expectation, we do believe that it could be incrementally positive for the brokerage and agencies channels, including ourselves, given that right now the regulatory framework has not been fully implemented across all different channels.
Doug: In the public markets I think that similar with us have been have been sell through.
Doug: Across the industry.
Doug: In terms of the regulatory.
Doug: <unk> itself on the broker channels and agencies, that's already been dealt with.
Doug: I should note that for the regulatory implementation on the tight agency channel. This has not yet been implemented.
Doug: And we are expecting this to be effective sometime towards the middle to later part of this year.
Doug: And with that expectation, we do believe that it could be.
Doug: Incrementally positive for the brokerage agencies channels, including ourselves.
Doug: That right now the regulatory framework has not been fully implemented across all different channels.
Ron Tam: So again, the fourth quarter results have fully reflected the environment for our business models, as well as for the rest of the industry. In terms of the competitive landscape, we would like to comment that very likely with the implementation of the commission caps, market share is likely to be more consolidated among the top tier players, including ourselves, and maybe some of the listed peers. And as a result, we do believe that the competitive dynamics would become relatively more, in terms of long-term perspective, more healthy and more sustainable. And very likely that the market share will be increasingly consolidated and concentrated among the top tier players.
Doug: So again.
Doug: Fourth quarter results have fully reflect the new regulatory environment for our business models and as well as for the rest of the industry in terms of the competitive landscape, we will add a comment that.
Doug: Very likely will be implemented over the implementation of the commission caps.
Doug: Market share is likely to be more consolidated among the top tier players, including ourselves and maybe some other listed peers.
Doug: As a result, we do believe that the competitive dynamics would become.
Doug: Relatively more.
Doug: It is a long term perspective, more healthy and more sustainable.
Doug: And very likely that the market share will be increasingly consolidated and concentrated among the top tier players.
Ron Tam: So I guess that's the first question. And I think that for Huize, I think that we have a natural advantage when smaller players exit the market. And while market share is concentrated in top players, because we have a very flat hierarchy and much lower nimble cost base compared to maybe in particular the traditional brokers that's operating in the market for a long time. We do have a very natural cost structure advantage, particularly with respect of customer acquisition. They've always been rely on a platform model, the open platform model to acquire customers rather than a agent led model.
Doug: So I guess that's the.
Doug: First question and I think that for <unk> I think that we have a natural advantage when smaller players exit the market and while market share is concentrated in top players because we have a great flat hierarchy.
Doug: Lower nimble cost base compared to maybe in particular the traditional brokers are that's operating in the market for a long time.
Doug: We do have a very natural a cost structure advantage, particularly with respect of customer acquisition. They have always been done.
Doug: Rely on the platform model the open platform model to acquire customers rather than.
Doug: Agent agent led model.
Ron Tam: That's the number one.
Doug: That's the number one number one and number two I think the AI.
Ron Tam: And number two, I think the AI evolution and in the actual deployment of AI technology across our different business scenarios on the platform has also accelerated that advantage towards the online operators or digital players like ourselves. So on AI technology, I think that, you know, Mr. Ma has actually shared a lot of details on how AI tech is being implemented across our operations. I think that in terms of the financial, you know, outcome, if you will, right, so what would that translate into our financial results? I think very likely that over the course of next few years, you'll see that the biggest contribution from AI is that the fixed cost base could be much more nimble.
Doug: Evolution and in the actual deployment of AI technology across our different business scenarios on our platform has also accelerated debt advantage towards the online operators are digital players like ourselves.
Doug: So on AI technology, I think that Mr. <unk> has actually shed a lot of details on how <unk> is being implemented across our operations I think that in terms of the financial.
Doug: Outcome, if you will right so what would that translate into our financial results I think very likely that over the course of next few years Youll.
Doug: Youll see that.
Doug: The biggest contribution from the AI is that.
Doug: The fixed cost base.
Ron Tam: And I think the efficiency can be much more amplified. Basically, with less human resources investment, we can support a much scalable operations. So meaning that operating leverage will likely increase by multifold. You know, scalable business growth without the need of deploying a lot more human resources to support, for example, the conversion of customers or especially in the customer service front. I think that AI can resolve or deal with 95% of the of the customer inquiries and services that's required on a normal cost business. And I think that the AI agent would be a key anchor for us going forward in terms of further investments into, you know, improving customer journey and, you know, using and utilizing AI as a major tool, a scalable tool to acquire customers at large.
Doug: Could be much more nimble and I think the efficiency can be much more amplified.
Doug: Basically with less human.
Doug: Resources investment, we cannot support a much scalable.
Doug: Operations, so, meaning the operating leverage will likely increase by by multi food.
Doug: Scalable business growth without the need of deploying a lot more human resources to support for example, with the conversion of customers or especially in the customer service front I think that AI can resolve or deal with 95% of the of the customer inquiries in San Francisco, that's required on a normal course business.
Doug: And I think that the AI agent would be key.
Doug: <unk> going forward in terms of putting investments into.
Doug: Improving customer journey and using.
Doug: Using and utilizing AI as a major tool a scalable tool to acquire customers.
Ron Tam: So that is something that we have already launched through the DeepSea integration in February. We're seeing some initial encouraging results. And I think that over the course of the next few quarters, we'll be happily sharing additional milestones that we as we achieve. So hopefully that answers your questions, Qingqing. Thank you. Right. Thank you.
Doug: At launch so that is something that we have already launched to the deep sea integration in February we're seeing some initial encouraging result, and I think that over the course of the next two quarters will be happily sharing additional milestones that we as we achieve them.
Doug: So hopefully that answers your questions <unk>. Thank you.
Doug: Alright, thank you.
Amy Chen: We will now take a next question from the line of Amy Chen from Citi. Please ask your question, Amy.
Doug: We'll now take our next question from the line of Amy Chen from Citi. Please ask your question Amy.
Doug: Okay.
Speaker Change: Thank you Alicia go Q&A, Jim <unk> question that any churn.
Kenny Lo: Amy Chen, Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Unknown Executive, Yuping Ma, Harriet Hu, Kwok Tam, Kenny Lo, Huize Holding Thank you. Thank you, Amy, again, for joining us again and continuing to support us. Maybe I can help you translate your questions. I can translate the question. Yeah.
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Doug: Hi, guys.
Doug: Tim England kidney tissue.
Doug: Okay.
Doug: Thank you. Thank you Amy again for joining us again and continue to support us.
Doug: Maybe I can help you translate your questions.
Speaker Change: Great. Thanks, guys.
Doug: I can translate the question first.
Amy Chen: So I have two questions. The first one is regarding to the trends of operating expenses in the fourth quarter. We noted that actually, both selling expenses and G&A expenses saw significant year over year growth in the quarter last year. I wanted to ask what's the main rationale behind this trend.
Speaker Change: I have two questions. The first one is regarding to the trends of operating expense within the four corners now.
Speaker Change: Now take that journey of both selling expenses and G&A expenses.
Speaker Change: Significant year on year closing bell.
Speaker Change: Last quarter last year.
Speaker Change: Wanted to.
Speaker Change:
Speaker Change: The main rationale behind this trend and the second question is regarding to the gross profit margin.
Amy Chen: And the second question is regarding to the gross profit margin as well as the net profit guidance for the year of 2025. We noted that actually, after the rationalization of commission in the broker channel, the gross profit margin actually was compressed to around 30% in the year of 2024. I'm wondering if we would likely to see some margin improvement going ahead to the year of 2025, given our investments in AI and the potential improvement in efficiency. Thank you. Thank you, Amy. So three questions. I think the first one, let me address that first. So there are some sequential growth on some of the expense accounts.
Speaker Change: Net profit guidance for the year of 2025.
Speaker Change: We noticed that actually.
Speaker Change: After the rationalization of commission in the broker channel.
Speaker Change: The gross profit margin actually was compressed to around 30% in the year of 2024, I'm wondering if we would likely to see some margin improvement coming ahead to the year of 2025, given our investments in AI and the potential improvement in attrition. Thank you.
Amy Chen: Thank you Amy.
Speaker Change: Three questions.
Speaker Change: The first one I'll, let me address that first so there are some sequential growth on some of the expense accounts I think that one of the main reasons to do that is we actually implemented some further.
Ron Tam: I think that one of the main reasons to do that is, we actually implemented some further restructuring in Q4, in terms of our personnel headcount in the fourth quarter. So that has led to some one-off costs associated with that exercise. And we do have made some further AI investments in Q4, so that has led to some modest increase in the expense items. So I think over the course of 2025, I think one of the key focus was obviously to further utilize and deploy AI throughout the whole business operations on all fronts, on the front end, on the mid office and back office.
Speaker Change: Restructuring in Q4 in terms of our.
Speaker Change: Personal account.
Speaker Change: Because now head count.
Speaker Change: The fourth quarter. So that has led to some one time.
Speaker Change: One off.
Speaker Change: Cost.
Speaker Change: Associated with that exercise.
Speaker Change: <unk>.
We do have based on AI investments in Q4, so that has led to some.
Speaker Change: In a modest increase in the expense items. So I think over the course of 2025.
Speaker Change: One of the key focus for us obviously to further utilize and deploy AI throughout the whole.
Speaker Change: Business operations on offense on the front end on the mid office and back office I think there's a lot of room for us to further drive cost savings and efficiency in the mid to back office.
Ron Tam: I think there's a lot of room for us to further drive cost savings and efficiency in the mid to back office, in the tunes of double digit percentage. So AI definitely would be leveraged and deployed at large, in terms of not just customer acquisition and customer service, but also on the normal cost business operations. So I would note that in Q4, those are relatively one-off trends. So in 2025, I think that we are still targeting to drive a year-over-year decrease in the operating expense ratios across the three key line items there. In terms of gross margin trends, I think, yes, you do know that, correct me that there has been some depression in gross margins over the course of the last few quarters.
Speaker Change: In the tunes of double digit percentage. So so yeah definitely would be leveraged and decline at large in terms of.
Speaker Change: Not just customer acquisition and customer service, but also on the <unk>.
Speaker Change: Cause business operations.
Speaker Change: So I would note that in Q4 those are relatively one off trends.
Speaker Change: So in 2021 I think that we are still targeting two to drive a year over year decrease in the operating expense ratios.
Speaker Change: Across the three key line items there.
Speaker Change: In terms of gross margin trends I think yes, we do note that correct me that I'm not answering some depression in gross margins over the over the course of the last few quarters, but I do know that in Q.
Ron Tam: But I do know that in Q4 of this year, 2024, our gross margin has actually recovered to around 34.7%. So I think that our outlook for 2025 is definitely to maintain at least that, you know, the kind of the low to mid 30 range, gross margins. And ideally, the investments that we're making on the AI front will drive further gross margin improvement and expansion, particularly on the customer acquisition front, because that hopefully would drive more scalable, direct to see customer acquisitions at low cost. So I think hopefully the gross margin line can improve further. And in terms of the guidance for 2025, we do guide towards a profitable full year of 2025.
Speaker Change: In Q4.
Speaker Change: In Q4 this year also in 2024.
Speaker Change: Group gross margin assets, we recovered to around 34, 7%, So I think thats all.
Speaker Change: Outlook for 225 is definitely to maintain at least.
Speaker Change: <unk>.
Speaker Change: So it's kind of a low to mid <unk> range gross margins and <unk>.
Speaker Change: Ideally the investments that we're making on the AI front would try further gross margin improvement and expansion.
Speaker Change: Particularly on the customer acquisition front, because that hopefully will drive.
Speaker Change: More scalable direct through C customer acquisitions at low cost. So I think hopefully the gross margin line.
Speaker Change: Can improve put up and in terms of the guidance for 2025, we do cut towards a profitable full year of 295.
Ron Tam: And we are targeting mid single digit kind of net profit margin for now. I think that the earnings growth will also be driven by our continued business momentum in the international revenue front. Obviously, I'm referring to the large competition, but not right now from our Hong Kong business. And also, we will be further, you know, deploying investments into the two new sub-Asian markets that we've mentioned just now in the call. And also, you know, invest will be made in AI. So overall, I think 2025, we're looking at a profitable year and, you know, looking at a reasonable mid single digit type of profit margin, net profit margin.
Speaker Change: And we are targeting mid single digit kind of that product margin for.
Speaker Change: For now I think that.
Speaker Change: The earnings growth.
Speaker Change: We will also be driven by our continued business momentum in the international revenue front.
Speaker Change: Obviously, I'm, referring to the large one pressure right now from our from our Hong Kong business, So and also.
Speaker Change: We would be for the.
Speaker Change: Deploying our investments into the two new southeast Asian market that we mentioned just now in the call and also.
Speaker Change: Interest will be made in AI. So overall, I think <unk> 25 billion a profitable year.
Speaker Change: And.
Speaker Change: Looking at.
Speaker Change: Reasonable.
Speaker Change: Mid single digit type of a margin and profit margin.
Okay.
Ron Tam: Very, very clear. Thank you.
Speaker Change: Okay very clear thank.
Speaker Change: Thank you.
Kenny Lo: We have reached the end of the question and answer session. And with that, I'll now turn the conference back to Mr. Kenny Lo for closing comments. Thank you, operator. In closing, on behalf of Huize's 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. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Thank you very much. Thanks for watching!
Speaker Change: Thank you.
Speaker Change: Have reached the end of the question and answer session and with that I'll now turn the conference back to Mr. <unk> for closing comments.
Speaker Change: Thank you operator in closing on behalf of avoid this 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. 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: Thank you very much.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].