Noah Holdings - Earnings Call - Q1 2025

Transcript

Speaker 3

Please note this event is being recorded. I would now like to turn the conference over to Doreen. Please go ahead.

Speaker 0

Thank you, team. Good morning and welcome to Noah's 2025 First Quarter Earnings Call. Joining me today, we have Ms. Wang Jingbo, Co-founder and Chairwoman. Mr. Zhandong Yi—

Speaker 3

Ladies and gentlemen, it appears we have lost connection with our speaker line. Please wait while we reconnect. Thank you for your patience. You may begin the presentation.

Speaker 0

Thank you. Sorry for the technical interruption. Today's call will be divided into three parts. Mr. Yi will begin with an overview of our business highlights, followed by Mr. Pang, who will discuss our financial performance. After the two presentations, there will be a Q&A section. In addition, please note that the discussion today will contain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially from those in our forward-looking statements. Potential risks and uncertainties include but are not limited to those outlined in our public filings with the SEC and the Hong Kong Stock Exchange. Noah does not undertake any obligation to update any forward-looking statements except as required under applicable law. Without further ado, I shall pass the call to our CEO, Mr. Yi.

Speaker 4

好，谢谢 Doreen。诺亚的投资者和分析师们，大家早上好。我将与大家分享对于 2025 年第一季度整体市场情况和诺亚经营结果的一个总结。接着谈一谈境外和境内业务发展策略和分板块的业绩。最后汇报一下对 2025 年与下季度的一个规划。2025 年第一季度，诺亚的 CIO 报告预测，今年全球市场发生剧烈波动的概率会加大，频次也会提升。驱动因素包括特朗普重返白宫给全球贸易和地缘政治带来的不确定性，全球主要经济体的货币政策的节拍不同步，AI 大模型军备竞赛火热，并向下游应用的延伸等等。我们的建议客户的战略资产配置关注以下四个方面：第一个，严守资产配置的纪律，现阶段优先考虑资产的地域性的配置；第二个，投资不等于财富管理，财富管理追求的是总体最优；第三个，财富管理者要构建一个反脆弱的系统来管理和传承自己的财富；最后就是尽快采取战略性的行动来调整战略性的资产配置。

Speaker 0

Let me do the translation. Good morning, everyone. Today, I will share a summary of overall market conditions and our results for first quarter 2025. Then, I will walk you through our overseas and domestic performance and strategy, followed by our insights and outlook for the rest of the year. Our Q1 CIO report predicted an increased likelihood of further market volatility this year, with a higher frequency of such fluctuations. The main factors influencing this include the uncertainty that Trump's return to the presidency is having on global trade and the lack of coordination among major global economies on monetary policies and the increasingly fierce competition and downstream application of AI. With this in mind, our advice to clients is to adopt the following four approaches to their asset allocation. Firstly, maintain disciplined asset allocation and prioritize growth graphic diversification.

Secondly, remember, investing is not the same as managing wealth. Wealth management aims for the best overall results. Thirdly, wealth managers need to build robust portfolios to manage and conserve wealth. Lastly, take decisive action and adjust asset allocation when needed.

Speaker 4

在复杂的国际经济环境下，我们在一季度保持了稳健的业务表现。我们的 non-GAAP 净利润达到 RMB 169 million，同比增长 4.7%，环比增长 27.4%，得益于我们运营成本的显著下降。运营成本同比下降达到了 18.8%。在收入方面，我们人民币私募二级产品的募集量同比增长了 257.7%，同比收入增长 9.4%。境外私募投资产品募集量同比增长 27.7%，收入同比增长 20.3%。境外保险产品收入同比下降了 22.8%，集团总的净收入同比下降 5.4%。本季度，我以各个业务的 BU 为主要维度，向投资者更新各条线的业绩和运营状况。

Speaker 0

Despite the tough global economy, we had a solid quarter. Non-GAAP net income in first quarter was revenue RMB 169 million, up 4.7% from the same period last year, and 27.4% sequentially. This was due to operating costs and expenses dropped by 18.8% from last year. On the revenue side, transaction value for our RMB-denominated private secondary products grew a remarkable 2.6 times from last year. Revenue contribution from these products increased 9.4%. Transaction value for overseas private investment products also increased 27.7%, with revenue contribution growing 20.3%. Revenue from overseas insurance products fell 22.8% from last year. This resulted in total net revenue in Q1 falling 5.4% from the same period last year. I'll now dive into the performance and operations of each business unit.

Speaker 4

from 24% to 28%, mainly contributed by the increase in private equity AUA. We have continued to make good progress in international client acquisition. In the first quarter, the number of overseas registered clients exceeded 18,200, up 15.8% year-on-year, among which the number of active clients exceeded 3,300, up 23.3% year-on-year.

Speaker 0

For our overseas performance, net revenues were $304 million in Q1, up 5% from last quarter and flat from the same period last year. It made up 49.5% of the group's total revenue. Revenue from overseas investment products grew 20.3% from last year, while revenue from overseas insurance products fell 22.8%. We now have 131 overseas relationship managers, up 44% from last year. We plan to grow the team and further expand market in Singapore and Southeast Asia. We shall also build up our sales team in countries with high net worth Chinese like the US, Japan, and Canada. Overseas AUA and recurring service fees continue to grow. Our overseas commissions-only insurance agent team has already recruited 75 agents in first quarter, who have already generated about $10 million in revenue as well.

We aim to expand this team to 150 agents by the end of this year, where they will be a new growth driver for our overseas insurance business. Net revenues from overseas wealth management were $162 million in Q1, down 9.2%. This was due to strong competition in Hong Kong. Overseas AUA reached $9.05 billion, up 8.7% due to growth in private equity products. This made up 28% of total AUA, up from 24% last year. We made good progress in getting new overseas clients. As of end March, we had over 18,200 registered overseas clients, up 15.8%, with over 3,300 active overseas clients, up 23.3% compared to the same period last year.

Speaker 4

both the Hong Kong and Singapore platforms continues to increase, and we are actively exploring new marketing models. As mentioned earlier, we will continue to build a commission-only broker team to bring new blood for new client acquisition.

Speaker 0

Net revenues from overseas asset management in Q1 were $112 million, up 22.3% from last year. This was mainly due to growth in AUM and recurring service fees. Overseas AUM was $5.9 billion, up 14.2%. This made up 29% of total AUM, up from 24% during the same period last year. AUM for overseas private market products was $4.6 billion, up 16.4%. It made up 78% of overseas AUM. Our private market products are growing. They include private funds, infrastructure funds, hedge funds, and structured products. We have a strong team of over 50 people in our US product center for overseas product selection and investment. Net revenues from overseas insurance were $30 million, down 17.8%. This is due to lower distribution of overseas insurance products. The Hong Kong insurance market is very competitive. It has many new insurance agents and some who are not compliant.

We focus on large client compliance and policy safety. This helps raise average first-year premiums in Hong Kong and Singapore. We are also creating new marketing models. Our goal is to grow the team of commission-only agents to 150 people by the end of 2025. This will help us to get new clients.

Speaker 4

the direction of our products, exploring products focused on healthcare and retirement, and have restructured the sales team to further expand the scale and capacity of the commission-only agent team, returning to the traditional commission-only agent model.

Speaker 0

Net revenues from mainland China were RMB 310 million, down 9.4%. This was due to lower recurring service fees from private equity products and distributions of domestic insurance products. However, RMB-denominated private secondary products continued to grow. Transaction value and revenue from these products increased significantly. Noah Upright, Golfer, and Glory are independent now and can use their own strategies. Net revenues from domestic public securities were RMB 127 million, up 7.1%. Transaction value of RMB-denominated private secondary products in Q1 was RMB 3.3 billion, up 2.6 times. Transaction value of RMB-denominated mutual funds was RMB 4.3 billion, down 51.4%. Noah Upright currently has branches in 10 cities. Plus, we have been using online marketing and online services to improve operational efficiency. Net revenues from domestic asset management in Q1 were RMB 167 million, down 14.3%. This was due to lower recurring service fees from existing RMB-denominated private market products.

In the primary market, Gopher focused on managing exits and distribution of existing assets. In Q1, it recorded revenue CNY 1.3 billion exits from private equity market. Private equity market asset AUM was CNY 97.3 billion. It made up 91.3% of domestic AUM. In the public market, Gopher focuses on better returns from global markets. We are doing this through cross-related ETFs. This drove transaction value in Q1 to a new height of CNY 140 million. Net revenues from domestic insurance in Q1 were CNY 6.4 million, down 55.6%. This was due to lower distribution of domestic insurance products. We are adjusting product mix and focusing on more medical and elderly care insurance products. We are also restructuring sales and building a commission-only agent team.

Speaker 4

未来五年，诺亚将继续在以下几个方向努力：一、坚持自有量的一个并重，持续拓展不同国家和地区，确保当地全面的合规作业。二、在国际市场上，客户端扩大理财师队伍，加快当地的获客能力。三、在在线端投入 AI 人工智能等科技的建设，持续提升在线服务客户的能力。四、在产品端，我们首先是增加保险业务的活力，建设无底薪经纪人销售队伍，以应对市场的竞争。第二个是通过信托、迁居、出海等业务来提振综合服务客户的端到端能力。第五就是在投资端进一步建设研究和产品的团队，完善产品矩阵，提升资产配置方案构建的能力。2025年，我们看到市场风高浪急，财富管理变得越来越重要，可以说已经成为高净值客户的刚需。我们建议财富管理者的策略：一、继续拓展海外投资的渠道。二、持有抗通胀的资产。三、不要忽视地缘政治的冲突和内外政治的风险。四、保持资金的灵活，行动的敏捷。财富管理者在今天的市场中最容易犯的错，就是以为过去的经验可以指导未来。

Speaker 0

Our priorities for 2025 will be: firstly, balancing quality and quantity while expanding into new markets with full compliance. Secondly, growing our overseas teams of relationship managers to speed up local client onboarding. Thirdly, investing in technologies such as AI to improve online services. Fourthly, on product side, we shall commit to grow insurance sales by building a new team of commission-only agents to compete better. On the other side, company will also offer a wider range of products such as trust, relocation, and cross-border solutions to enhance our client services. Last but not least, strengthen research product teams and product mix. Market volatility will stay high in 2025. Wealth management is more important than ever, which has become high net worth clients' essential needs.

We therefore would advise our wealth management talents to: number one, keep expanding overseas investment channels; two, hold assets to fight against inflation; three, monitor geopolitical risk closely; and lastly, stay flexible in capital and ready to act quickly. To conclude, the biggest mistake a wealth manager can commit today is thinking past experiences can guide future decisions.

Speaker 4

好，接下来我请潘青为大家详细介绍集团整体的财务表现。谢谢大家。

Speaker 0

I will now pass over to Grant to go over our financials in more detail. Thank you.

Speaker 2

Thank you, Zhandong. Greetings to everyone joining us today. I'd like to begin my sharing with an overview of our recent share price performances. Management is fully aware that our stock has been trading with an upward pressure for the past few quarters, at only around 0.5 times PB and under cash value. Our cash reserves alone represent $11.4 per ADS, exceeding our current stock price, and our PE ratio is only around nine times, well below industry average of 12-16 times. While continuing to focus on regaining the growth after transformation of the wealth management organization, we have also in the past two quarters introduced several initiatives to enhance shareholder returns, including the $50 million share buyback program announced in August last year. As of today, we have already repurchased over 1.3 million ADSs, equivalent to over 2% of total issued shares.

Furthermore, as part of our commitment to prioritizing shareholder interests and delivering sustained returns, we plan to distribute annual and special dividends, totaling RMB 550 million in July, subject to AGM approval. This amount represents 100% of our non-GAAP net income for 2024 and offers a dividend yield of 12% based on current share price, which is much higher than the 7-9% average dividend yield range among leading international financial institutions. Notably, this makes the second consecutive year that the company would distribute 100% of its net income. Since 2022, three years in the aggregate, we have distributed a total of RMB 1.8 billion dividends to our investors, roughly equal to 40% of current market cap. The continuous sharing of high dividend payout is expected to be sustainable based on our estimate of future operations and our strong balance sheet position.

By the end of quarter one, cash and cash equivalents had increased to RMB 4.1 billion, with short-term investments of RMB 1.3 billion, which is highly liquid and has fewer than three months of maturity on average. Our current ratio improved to 4.8 times, but the debt to asset ratio remains stable at 14.5%, with no interest-bearing debt. Although we have sped up our global expansions recently, with the new opening of the Tokyo office, revisiting the reopening of Canadian markets and Australian markets, we also want to reassure the investors that our organic expansions are CapEx-like in nature. Of course, we understand that investors are also eager to see the signs of our growth. There is no denying that the transitioning of our business model has been challenging for 2024, particularly given the uncertainties in the global investment market, which have affected our financial performances.

Besides balance sheet performance, more importantly, starting in Q1, we're seeing things that are on the right track. The significant progress in building our teams and infrastructure in a more cost-effective transformation strategy ensures that our business remains profitable, with operating profits and non-GAAP net income both growing on a sequential and year-on-year basis. While we're not yet at the finish line, these strategic initiatives are steadily laying the groundwork for improved performance and future growth opportunities. Let's now dive into the details of our financials. First of all, the bottom line is we continue to implement rigorous cost control measures during the quarter, with total operating costs and expenses coming in at RMB 429 million, a decrease of 18.8% year-over-year and 16.7% sequentially. Specifically, with our great effort in simplifying our back-office structure, compensation benefits decreased by 21.8% year-over-year and 14.1% sequentially.

Setting expenses fell by 18.1% year-over-year and 35.3% sequentially, and T&A expenses also falling both year-over-year and sequentially. Operating profits surged by 53.1% year-over-year and 35.2% sequentially to RMB 186 million in the first quarter, with the operating profit margin up to 30.3% from 21% in the previous quarter. Non-GAAP net income was RMB 169 million for the first quarter, an increase of 4.7% year-over-year and 27.4% sequentially. Despite strong performances gained, especially in the USD investment products as Zhandong mentioned earlier, we'll have to see that domestic market is relatively operating weaker and also some of the slowdown in insurance revenue, causing our net revenues to RMB 615 million during the first quarter, slightly down 5.4% year-over-year and 5.7% sequentially. Notably, overseas net revenues, accounting for almost half of total revenues, were up from 44.5% in the previous quarter.

By region, net revenue from overseas were RMB 304 million in the first quarter, a slight drop year-over-year of 0.8%, yet an increase of 5% sequentially, driven by a modest improvement in insurance sales. Domestic net revenues during the first quarter decreased by 9.4% year-over-year and 14.3% sequentially to RMB 310 million, largely dragged by the sluggish performance, insurance under the low-interest environment, and decrease in management fee revenue from domestic private equity products. By revenue type, during the quarter, one-time commissions decreased by 15% year-over-year, but increased by 17% sequentially, predominantly driven by overseas insurance sales rebounded compared to last quarter.

Recurring service fees decreased by 5.3% year-over-year and 5.8% sequentially due to reduction in domestic revenue from RMB private equity products, which also affected performance-based income in a decrease of 42.1% sequentially, but did increase by 98.4% year-over-year, driven by a significant increase in overseas asset management as the overseas business became increasingly established and mature. When it comes to total transaction volume, total transaction values in the first quarter were RMB 16.1 billion, down 14.7% year-over-year and 0.9% sequentially. Transaction value of domestic private secondary products was RMB 3.3 billion during the quarter. That sees a significant increase of 257% year-over-year and 34.6% sequentially. Transaction value of RMB denominated products in the first quarter declined. However, transaction value of USD denominated products reached $1.1 billion, up 15% sequentially, but down 4.6% year-over-year, and accounting for 50% of total transaction volume compared to only 43% in the previous quarter.

Benefiting from the enhanced competitiveness of overseas alternative investment product portfolio, $201 million private equity products totaled, up 7.9% year-over-year and 17% sequentially. $112 million private secondary products, excluding cash management products, totaled, up 187.8% year-over-year and 211.8% sequentially. During the first quarter, USD denominated AUM grew by 14.2% year-over-year and 0.8% sequentially to $5.9 billion, with USD denominated AUA increased by 8.7% year-over-year and 3.6% sequentially to $9.1 billion, reflecting our ability to capture a larger share of clients' USD wallets for investment products. At the end of the first quarter, our client base remained stable in terms of core clients Diamond and Black Card clients, with 9,330. Overseas client base continued to grow to over 18,200 overseas registered clients, an increase of 15.8% year-over-year and 3.1% sequentially. The total number of overseas Diamond and Black Card clients now exceeds 1,600.

To sum up, we must admit that under the current global dynamics, with the potential tariff war and the low interest rate environment, and then in China, it weakens the investors' investing sentiment, which may be the biggest hurdle to the industry's revenue growth. However, with a developed business structure and a more mature overseas team, we're still confident that the company is well-positioned ourselves for future growth. Thank you all again for your trust and support. With that, I will now open the call to your questions.

Speaker 3

We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Helen Lee with UBS. Please go ahead.

Speaker 4

感谢管理层，请问可以听到吗？

Speaker 2

可以稍微大一点声，Helen。

Speaker 4

好的，非常感谢。我这边有两个问题。第一个问题是，最近我们看到国内有一些高净值客户，他们收到税务局的一个补税通知。我不知道这个事情会不会影响咱们这边高净值客户他们在海外的一个资产配置的一个需求。最近咱们从高净值这边有没有听到他们的一些担忧，或者是未来在资产配置方面的一些想法。然后第二个问题就是在这个季度我们看到营运费用其实有一个非常显著的下降。然后这个营运费用的下降，其中有多少它是和比如说这个季度募集量这个指标是挂钩的？然后另外就是其他的一些下降主要是来自于哪些原因？我主要是这两个问题。然后我要不翻译一下吧。 Thanks, Manager.

Speaker 3

Okay. Thank you.

Speaker 4

Helen Lee from. 我需要翻译吗？

Speaker 2

应该不需要。

Speaker 4

好的。

Speaker 2

我来回答第一个问题。我顺便翻译一下你的问题吧，Helen，好不好？这样我们不用切来切去了。

Speaker 4

好的，谢谢，Henzo。

Speaker 2

好的。谢谢，Helen。 Thank you for your first question. That's actually related to recent news of some of the probably domestic high-net-worth clients receiving notices from tax bureaus about their overseas taxation information. I'll try to take the first half of the question, and Zhandong and Nora will jump in for anything that I probably missed. Yeah, we were seeing many or hearing many of the clients or their friends receiving calls from tax bureaus, but the information about gathering high-net-worth, actually all the Chinese tax residents, taxation on overseas income has been implemented a few years ago. Obviously, I think the bureau probably now has more collected information that they'll be able to actually reach out to these individuals.

Obviously, I think it's probably the law is always there as some of the tax professionals advise our clients to be aware of, but the actual enforcement of this information or self-filing is probably something new to our clients. I don't think it necessarily affects their sentiment in terms of future investments in overseas products especially, but obviously, I think they are more aware or curious about future tax planning, if you will, how to increase the efficiency in terms of investment income. That's something new, probably some new subject for this generation of high-net-worth individuals who are probably more used to filing for tax and gains on their domestic and operational income.

Speaker 4

我稍微补充一下关于第一个问题。确实刚才潘先生讲，就是我们很多客户的话都收到了一些电话询问税务局的。这也是诺亚现在的一个，对于诺亚来说也是一个机会，因为我们在三个业务大的板块，财富管理、资产管理和 Heritage 上面。其实在产权保障上面的话，其实我们的服务其实构建的还是可以满足客户的部分这方面的需求。而且从这个角度来说，其实也拉近了我们跟客户之间的一个更深度的关系。因为如果假设讲到税收的话，其实客户他可能需要我们给他做一个整体的一个解决方案。当然毕竟是我们，我们还有很多的合作伙伴一起。所以说对我们来说的话，可能会增加我们对客户的钱包深度的一个更加的一个穿透。当然这个阶段性来说，对客户来说的投资可能会有一些些的一个放缓，因为他需要把这些事情理顺。但是从中长期来说，对客户来说，我们觉得对我们的业务发展是非常有利的一个机会。

Speaker 3

Okay. We will do a quick translation on here. What Zhandong just added, it's a challenge, but it's also an opportunity to know regarding our high-net-worth clients getting phone calls from the tax bureau. The reason behind that is because if you look at what we've been doing for our clients, the wealth management, the asset management, and the family heritage business, all of us are trying to provide solutions to our clients for how to protect their wealth. Also, when they are receiving the phone call from the tax bureau and they need to solve that issue, they will need to build a closer relationship with our relationship managers because we'll look into their wealth as a whole to plan for them for the future. That means we can have better access to clients' wealth and knowing better about their whole planning.

Yes, in short term, there may be a challenge because it affects the investment sentiment. However, in the long run, we still believe that it can bring opportunities to the company.

Speaker 2

Second question. Helen, I'll do a quick translation for you as well. Helen actually asked about we have an improved efficiency or reduction on T&A and selling expenses in this quarter, and she's actually wondering how much of that has to do with probably lower activity of marketing events as well as the reduction of probably back office headcounts. So Helen, I just wanted to clarify that some of the expense reduction does come from improvement in efficiency, especially mid-back office headcounts, probably optimized around 25% compared to the same period last year, as the continual effort to improve the efficiency and structure of mid-back office to the front office is now showing effect. We're also seeing a reduction in selling expenses, but that's partly attributed to probably fewer marketing activities this quarter in the first quarter.

We don't think that's necessarily sustainable, and that's rather not a direction we're trying to control as long as we are holding these events more efficiently. We are seeing more marketing events coming up in the second quarter, but we are obviously still trying to keep that under a reasonable range and also the effectiveness of marketing activities. Helen, does that answer your question?

Speaker 3

Yes. Crystal clear. Thank you.

Speaker 2

Thank you.

Speaker 3

As a reminder, if you would like to ask a question, please press star then one to join the question queue. The next question comes from Peter John with JP Morgan. Please go ahead.

Speaker 1

感谢管理层给我提问的机会。我是JPMorgan的Peter。我这边有两个问题。第一个是我们观察到4月份以来市场波动加剧，我们想请教一下诺亚这边客户的最新的趋势、投资情绪以及交易量的趋势。另外，我们知道诺亚的一部分客户也是企业主，我们想请问他们的业务经营和投资情绪是否有受到最近关税的影响。这是第一个问题。第二个问题我是想问一下海外业务这一块的。我想请教一下，就今年我们管理层看到海外业务的主要的驱动产品是哪些品类的产品？第二就是在海外保险这块，我们在二季度有没有看到复苏的迹象？我翻译一下。 Congratulations on the first quarter results, and thanks for giving me the opportunity to ask questions. I have two questions. First is about the recent market volatility. We noticed that there is an increase in market volatility since April, and we are wondering what's the clients' behavior in terms of investment sentiment and their purchase on the wealth-owned product. In addition, some of Noah's clients are the business owners. We are wondering whether any of their business is affected by the recent tariff introduction and how their investment sentiment changed. My second question is about the overseas business. Can management give us some guidance on what will be the key driver for your overseas business year 2025? And on the insurance front, we are wondering whether Noah sees any sign of improvement in overseas insurance in the second quarter. Thank you.

Speaker 4

谢谢，Peter。确实在一季度的话，关税的贸易的波动和影响的话，对我们的客户还是有影响的。我们客户的话很多都是私人企业家，所以他们也有很多的业务是牵涉到是跟贸易相关的。那么也要区分，也不是所有的。我们也在一季度的话跟很多的客户进行了调研和走访。那么他们如果假设是，比如说我们说有些义乌小商品的地方的企业家，虽然说订单是在关税以后的话是急剧的下降，甚至于暂停，但是他们觉得未来的话，中国的这种柔性生产制造的成本的优势是非常强的。而且他们的利润的 margin 空间，小商品的 margin 空间是很高的，所以说他们并不担心。对于一些零部件，核心零部件的一些中间件的这些厂商的话，确实他们受到这些影响，关税的影响的话还是挺担心的。客户的话也要根据他们的行业来区分的。总体来说的话，客户也逐渐反映了就是他要全球地域的一个资产的一个分布，再加上一个均衡的配置的一个理念。我觉得这是我们的一个，不可逆的一个过程。客户的话是持续的一个需求，这是关于客户这方面的一个影响。

Speaker 3

That's something that the tariff laws do create an impact to our clients. When we really talk to our different types of clients, I mean the impact could be slightly different. Yes, a lot of our clients are entrepreneurs and their business may be related to trade. However, when we talk to merchants like the EU, the small manufacturing products, those types of companies, yes, we do see some suspension in orders from overseas, or we do see some worries about the orders from overseas markets as well. However, the merchants themselves, they're very confident in their own products, and they believe that the Chinese production is very competitive in this way and could maintain a high margin. That's why the impact for those manufacturers, those clients to us, could be quite in the short term instead of a long-term impact.

For some more small products, if they are really bigger types of manufacturers, they may have a bigger concern about their future growth. We believe that our clients these days, they are getting more and more used to the concept that they need to have their assets go through the dual-politics distribution. They also are planning for their own business to grow overseas as well. Under these two beliefs, we believe that our clients are getting more mature and that the true impact should be rather limited.

Speaker 4

然后在投资上面的话，我们也看到客户在最近一段时间的投资的话更偏向于就是流动性。他比较关注流动性的一个资产。所以这也是我们在产品结构当中的话发觉结构化的产品，像 FCN 这些，还有一些的话就是比如说它有 semi-liquidity 的，就是可以定期有开放赎回的一些产品，private equity, private credit, infrastructure 这种产品的话，其实客户的话还是比较青睐的。这是客户的一个现象。那么还有一个就是客户也逐渐接受看到 AI 整个的大的趋势。所以说我们在 AI 的各行各业长期的跟 AI 主题相关的类型的产品，其实也是客户比较关注的，尤其是像我们一季度二季度市场的增长当中有一些 Hedge Fund，它是跟 AI 相关的主题的话，其实客户是非常的愿意去 pitch 的。

Speaker 3

In terms of the product side, we have seen that investors are getting more concerned about liquidity. What does that mean? It means when they are picking investment products, the product tends to be structured products like FCN or some products that are more semi-liquidity. That means that they can have a chance to do the redemption over different periods of time. We tend to see that this type of product can be more popular among our investors. On the other hand, it is about the trend of AI development, and we have also seen that any investment product that could have this AI idea behind could be rather popular among our investors as well.

Speaker 4

RMB 100,000 的话，在大客大单上面的话提升到大概 RMB 180,000-RMB 190,000 这样一个规模。所以说其实对客户来说的话，我们希望通过适度的部分的让利客户，但是整个的把建军单价的话真正回馈客户的一个保险的一个安全。其实对客户来说的话，其实我们也发觉华人客户其实在保障配置上面的话，他的总保障还是有空间和略显不足的。所以说在一个市场动荡的情况下的话，我觉得持续的跟客户进行我们说现在建立了一个金字塔的一个模型，建安全垫，稳基本盘，投增长点。那么这三个给客户的话逐渐从整体的资产配置角度，我觉得是一个比较客户越来越有粘性的一个策略。那么在海外投资方面，我们也发觉客户现在越来越关注在海外投资方面的一个产品的一个配置。过去的话因为美元的利率的话是比较高的，所以说客户出海第一站以后，他的钱的话什么都不做，放在银行存款是一个比较好的选择。但是现在的话利率这些的话都有会有波动快下降的一个预期。所以说客户的话逐渐开始寻找海外多元各种各样的多类别的资产的投资的一个需求。所以说我们也看到其实我们的产品伴随着我们产品矩阵的不断的完善，我们的客户在各种各样的产品上面的话其实都有涉足。那么最近的话从客户的沟通还是市场活动的角度来说的话，也是客户对投资性的产品的兴趣和需求是非常大的。

Speaker 3

Okay. I want to be insurance-based, as mentioned quite a few times already. The whole market is very challenging and very competitive. What we've been doing is back to basics, that is to serve our clients. What we do is we partner with insurance companies and tailor-make products for our clients. For those with a high premium, we provide discounts on a legit basis. We received good results on that, which is the premium we received for clients for the first year has been increased substantially from in the past around RMB 100,000 to currently around RMB 190,000. We have seen that this is a great opportunity for the company too because when we look at the Chinese clients, most of them are still quite insufficient about getting enough protect in their wealth.

We believe that we should keep on building the relationship and selling these insurance products to our clients. For overseas investment, that is another part of the product that we've seen clients have great interest. Because in the past, U.S. rates stayed quite high, and keeping a fixed savings is already a good return for our clients. However, under the current interest rate cut cycle, we have seen the clients moving their interest into some investment products. We believe that we are going to see some product diversification in the near future.

Speaker 1

好的，好的，好的，谢谢。

Speaker 3

All right. Can you check if there are any more questions from our audience? Otherwise, we'll close the call now.

Once again, if you would like to ask a question, please press star then one to join the question queue. Seeing as there are no questions, I'd like to turn the conference back over to the company for any closing remarks. The call is now.