AIX Inc (AIFU) 2023 Q4 法說會逐字稿

Thank you for standing by for Fanhua's Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. (Operator Instructions) After management's prepared remarks, there will be a question-and-answer session. (Operator Instructions) For your information, this conference call is now being broadcasted live over the Internet. Webcast replay will be available within 3 hours after the conference is finished. Please visit Fanhua's IR website at ir.fanhgroup.com, under the Events and Webcast section. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

感謝您出席泛華第四季及 2023 財年獲利電話會議。 （操作員指示）管理階層準備好發言後，將進行問答環節。 （操作員說明）僅供參考，本次電話會議現透過網路進行現場直播。會議結束後3小時內可進行網路直播重播。請造訪泛華的投資者關係網站 ir.fanhgroup.com，在「活動和網路廣播」部分。今天的會議正在錄製中。如果您有任何異議，您可以此時斷開連接。

I would now like to turn the meeting over to your host for today's conference, Ms. Oasis Qiu, Fanhua's Investor Relations Manager.

現在我想把會議交給今天的會議主持人，泛華投資者關係經理邱綠洲女士。

Thank you, Andrew. Good morning and good evening, everyone. Welcome to Fanhua's fourth quarter and fiscal 2023 earnings call. A replay will be available on our IR website after today's call.

謝謝你，安德魯。大家早安，晚上好。歡迎參加泛華第四季及 2023 財年財報電話會議。今天的電話會議結束後，我們的投資者關係網站上將提供重播。

Please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are made based on management's current expectations and beliefs concerning future events impacting the company and therefore, may be impacted by a number of business risks and uncertainties that could cause our actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, are not limited to those online in our filings with the SEC, including our registration statement on Form 20-F. We do not undertake any obligation to update this forward-looking information, except as required under applicable rules.

請注意，今天的討論將包含根據1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。因此，可能受到許多業務風險和不確定性的影響，這些風險和不確定性可能導致我們的實際結果與預期或預期的結果有重大差異。此類風險和不確定性包括但不限於我們向 SEC 提交的線上文件中的風險和不確定性，包括我們在 20-F 表上的註冊聲明。除非適用規則要求，否則我們不承擔更新此前瞻性資訊的任何義務。

Joining us today are our Vice Chairman and Chief Executive Officer, Mr. Yinan Hu; Chief Financial Officer, Mr. Peng Ge; Chief Strategy Officer, Mr. Ben Lin; and Chief Operating Officer, Mr. Liu Lichong. Mr. Hu will start the call by sharing his view on recent market trends and our strategy -- strategy development, followed by Mr. Ben Lin, who will provide a review of financial and operational highlights and discuss our business outlook going forward. There will be a Q&A session after the prepared remarks. Please note that you can find our presentation material relevant to this call from our official website.

今天加入我們的是我們的副主席兼執行長胡一南先生；財務長葛鵬先生；首席策略長林奔先生；營運長劉力衝先生。胡先生將首先分享他對近期市場趨勢和我們策略（策略發展）的看法，隨後林本先生將回顧財務和營運亮點，並討論我們未來的業務前景。準備好的發言後將有問答環節。請注意，您可以從我們的官方網站找到與本次電話會議相關的簡報資料。

With that, I will turn the call over to Mr. Hu. Mr. Hu, you may begin.

說完，我就把電話轉給胡先生。胡先生，您可以開始了。

(foreign language)

（外語）

I will translate for Mr. Hu.

我來為胡先生做翻譯。

[Interpreted] Good morning and good evening. Thank you for joining us on our fourth quarter and full year 2023 earnings call. Reflecting on the past year, 2023 proved to be a year of challenges and transformation for the entire life insurance industry in China. The performed changes in regulatory policies, particularly the downward adjustment of the pricing rate and implementation of fire and actual fee consistency requirement in the bancassurance channel presented unprecedented test for the industry. Fanhua was no exception. However, it was precisely within this challenging landscape that we showcase resilience and achieved stable growth.

[翻譯]早安，晚上好。感謝您參加我們的 2023 年第四季和全年財報電話會議。回顧過去的一年，2023年對中國整個壽險產業來說是挑戰與轉型的一年。監管政策的變化，尤其是銀保通路定價費率的下調以及取消實際費用一致性要求的實施，為業界帶來了前所未有的考驗。繁華也不例外。然而，正是在這種充滿挑戰的環境中，我們展現了韌性並實現了穩定成長。

In the full year of 2023, we achieved a total insurance premiums of RMB 16.4 billion, representing a 28.7% year-on-year growth, continues to outpace the overall industry growth. First year premiums reached RMB 3.8 billion, marking a 30.3% year-on-year growth. Leveraging the efficiency gains from digitalization and robust cost control measures, we realized an operating income of RMB 195.8 million, up 16.1% year-on-year. Net income attributable to shareholders reached RMB 280.4 million, reflecting a growth of 179.7% year-on-year. This solid performance demonstrates the successful execution of our strategy.

2023年全年，我們實現保費總額164億元，年增28.7%，持續跑贏業界整體成長速度。首年保費達38億元，較去年成長30.3%。憑藉數位化帶來的效率提升和強有力的成本控制措施，我們實現營業收入人民幣1.958億元，年增16.1%。歸屬於股東的淨利達人民幣2.804億元，較去年成長179.7%。這一穩健的業績證明了我們策略的成功執行。

Over the past year, we have continually strengthened our strategy of driving growth through professionalization, specialization, digitalization and open platform, using a series of pivotal [treatment]. For instance, we have consistently bolstered our pool of top-tier agents, enhancing their professional capabilities with the contribution from top-performing agents and increased productivity of our sales team at all levels, serving as a pivotal driver of growth. Our digital platforms have continued to deliver efficiency gains, empowering our insurance advisers while also providing our customers with superior service experiences. The diversified service ecosystem that we have built has established a solid foundation for our company's differentiation and long-term developments. Furthermore, our open platform and M&A model have also emerged as a key driver of our company's growth.

一年來，我們不斷強化專業化、專業化、數位化、開放平台驅動成長策略，採取了一系列關鍵措施。例如，我們持續壯大頂級代理商隊伍，透過優秀代理商的貢獻提升代理商的專業能力，提升各級銷售團隊的生產力，成為成長的關鍵動力。我們的數位平台不斷提高效率，為我們的保險顧問提供支持，同時也為我們的客戶提供卓越的服務體驗。我們建構的多元化服務生態系統，為公司的差異化和長遠發展奠定了堅實的基礎。此外，我們的開放平台和併購模式也成為公司發展的關鍵驅動力。

The forthcoming de-consistency requirements and the commission cap, although may inevitably pose significant challenges to the industry, will also present enormous opportunities. We believe that amidst this phase of deregulatory from accelerating industry transformation, scale-driven leading players, companies able to offer diversified services and digitally intelligent platform companies will find themselves in a more advantageous position. Leveraging our strategic achievements in specialization, digitalization and open platform and service-orient initiatives over the past 2 years, we are confident that Fanhua will emerge as the biggest beneficiary.

即將到來的去一致性要求和佣金上限雖然可能不可避免地給行業帶來重大挑戰，但也將帶來巨大的機會。我們相信，在產業加速轉型的放鬆管制階段，規模化的龍頭企業、多元化服務企業、數位智慧平台企業將處於更有利的地位。憑藉著過去兩年在專業化、數位化、開放平台和服務化方面所取得的策略成果，我們有信心泛華將成為最大的受益者。

Meanwhile, our internationalization strategy is steadily advancing. Hong Kong serving as the cornerstone of our international expansion efforts has obtained the official launch of 2 subsidiaries with Asia Insurance for business operations, providing a solid foundation for our global business layout. Recently, we signed a strategic summer agreement with Singapore White Group, marking a significant milestone in our development journey. The potential collaboration represents a strategic upgrade towards artificial intelligence development and internationalization. (inaudible) such as mergers and acquisitions, we will invest in high-quality overseas assets, deepening our presence in family services, including insurance, wealth management, education, health care and family governance. This moves aims to achieve horizontal and vertical integration, allowing us to offer comprehensive and efficient family asset allocation services to our clients. Moreover, it will accelerate our expansion in international markets, paving the way for broader development opportunities and propelling the company to greater heights.

同時，我們的國際化戰略正在穩步推進。香港作為我們國際化拓展的基石，與亞洲保險旗下兩家子公司正式開幕開展業務，為我們的全球業務佈局奠定了堅實的基礎。近日，我們與新加坡懷特集團簽署了夏季策略協議，這標誌著我們發展歷程中的一個重要里程碑。此次潛在的合作代表了人工智慧發展和國際化的策略升級。 （聽不清楚）例如併購，我們將投資海外優質資產，深化家族服務，包括保險、財富管理、教育、醫療、家族治理等。此舉旨在實現橫向和縱向一體化，使我們能夠為客戶提供全面、高效的家族資產配置服務。同時，也將加速我們國際市場的拓展，為我們開闢更廣闊的發展機遇，推動公司邁向更高的高度。

Looking ahead, we firmly believe that the industry will gradually move towards consolidation (inaudible) geopolitical landscape dominated by a few major players with services and technology driving the way forward. We are poised to emerge as one of the biggest beneficiaries of this transformation. Embracing the insurance cost service plus technology model, we will provide comprehensive products and diversify services to our customers while leveraging technology to enhance service efficiency. Our focus will be on serving the high net worth customers and MDRTs, which are also our core assets. The year 2024 will be pivotal for our development. We will further expand our scale through industry-leading technology platform, comprehensive service capabilities and strong capital to acquire high quality assets. We believe that in the journey ahead, we will continue to maintain our leading position, create more value for our customers and achieve the long-term development goals of the company.

展望未來，我們堅信，該行業將逐漸走向由少數主要參與者主導的整合（聽不清楚）地緣政治格局，並以服務和技術推動前進。我們準備好成為這項轉型的最大受益者之一。採用保費服務加科技的模式，為客戶提供全面的產品和多元化的服務，同時利用科技提升服務效率。我們的重點將是服務高淨值客戶和百萬圓桌，這也是我們的核心資產。 2024年是我們發展的關鍵一年。我們將透過業界領先的技術平台、綜合服務能力和雄厚的資本，進一步擴大規模，收購優質資產。我們相信，在未來的旅程中，我們將繼續保持領先地位，為客戶創造更多價值，並實現公司的長期發展目標。

Now, I would like to invite Mr. Ben Lin, our Chief Strategy Officer, to discuss our business highlights in the fourth quarter and 2023.

現在，我想邀請我們的首席策略長林本先生來討論我們第四季和2023年的業務亮點。

Thank you, Mr. Hu, and thank you, Oasis. Let me just walk you through our results for 2023. Some of the numbers that I'm going to quote, you can find them in our results release as well as our online presentation.

謝謝胡總，也謝謝綠洲。讓我向您介紹我們 2023 年的業績。

Impacted by 2 significant regulatory policy changes in 2023, specifically, the pricing rate change and commission cap at the bancassurance channel, the life insurance industry in China witnessed a roller-coaster ride in terms of premium growth. Starting with single-digit growth in the first quarter, it soared to double-digit growth in the second quarter due to the pull-forward demand prior to the pricing rate adjustment. What we saw was then a reversion to single-digit growth in the third quarter and ultimately negative growth in the fourth quarter.

受2023年兩項重大監管政策變化，特別是銀保通路定價費率變化和佣金上限影響，中國壽險業保費成長率出現雲霄飛車式成長。從第一季的個位數成長開始，由於定價率調整前的需求拉動，第二季飆升至兩位數成長。我們看到的是第三季恢復到個位數成長，最終在第四季出現負成長。

Overall, we saw a 10% year-on-year increase for the entire year of 2023 at the industry level. Amidst the dual pressures of sluggish performance on both the liability and investment side, major insurers are expected to experience a significant decline in profitability, as indicated by the 15% negative growth in average profit of the listed companies in the first 9 months of 2023. Against this backdrop, Fanhua continues to outperform the industry with stable performance. In 2023, we achieved RMB 16.1 billion in total life insurance premium, which is a 30% increase year-on-year. And net income to shareholders reached RMB 280 million, up almost 18% year-on-year. Overall, we are very pleased with our financial results given the backdrop of a challenging macro and insurance industry environment in 2023. More importantly, we are particularly proud of the strategic execution we have carried out to achieve these results.

整體而言，我們看到2023年全年產業層級較去年同期成長10%。在負債端及投資端業績低迷的雙重壓力下，各大保險公司獲利能力預計將大幅下滑，2023年前9個月上市公司平均獲利負成長15%。業績穩定。 2023年，我們實現壽險保費總額161億元，年增30%。股東淨利達2.8億元人民幣，較去年成長近18%。整體而言，在 2023 年宏觀和保險業環境充滿挑戰的背景下，我們對我們的財務表現感到非常滿意。

Throughout 2023, we successfully executed each strategic initiative as we had planned. We firmly believe that these strategic achievements will set us on a higher quality and sustainable growth path. I would like to highlight 4 key strategic achievements that we saw in 2023. Firstly, our strategic focus on improving our agent quality and productivity produced significant results and is the major driver of our success in 2023. Our MDRT and [100,000] premium agents have emerged as major contributors to our growth. These agents saw productivity increasing by 15% and 10%, respectively, and they accounted for 65% of our total first year premium, up by 9 percentage points from 2022. These achievements helped offset the significant decline in overall agent number, a metric that we are no longer focused on and is also an industry-wide trend.

2023 年，我們依照計畫成功執行了每項策略舉措。我們堅信，這些策略成果將使我們走上更高品質、永續的成長道路。我想強調我們在2023 年看到的4 項關鍵策略成就。 [100,000] 優質代理商成為我們成長的主要貢獻者。這些代理人的生產力分別提高了 15% 和 10%，占我們首年保費總額的 65%，比 2022 年增加了 9 個百分點。再關注，也是全產業的趨勢。

Secondly, we saw significant achievements in our digital technology empowerment. Based on the digital infrastructure built on big data intelligent algorithm, Fanhua has built an industry-leading digital empowerment system, covering 5 major systems, including operational support and management empowerment, professional growth and IT promotion system, customer management system, customer service system and transaction support system. Among the many important tools in our digital system, in 2023, Fanhua focused on strengthening digital marketing empowerment for functions such as digital avatar, intelligent recommendation systems, insurance AI assistance and intelligent customer marketing. It helps our salespeople achieve intelligent management across these areas. The cost reduction and efficiency improvement brought by the digital empowerment that we have built, our efficiency increased significantly over 2023. If you look at our operating expense ratio, it decreased from 29.4% to 25.7%. Agents who frequently use our system have productivity that is 1.6x higher than those who do not use the system.

二是數位科技賦能成效顯著。基於大數據智慧演算法建構的數位基礎設施，泛華打造了業界領先的數位化賦能體系，涵蓋營運支撐與管理賦能、職涯成長與IT提升體系、客戶管理體系、客戶服務體系和交易支援系統。在我們數位化體系的眾多重要工具中，2023年，泛華重點加強數位化身、智慧推薦系統、保險AI輔助、智慧客戶行銷等功能的數位行銷賦能。它幫助我們的銷售人員實現這些領域的智慧管理。我們打造的數位化賦能帶來的成本降低和效率提升，我們的效率比2023年大幅提升。經常使用我們系統的客服人員的工作效率比不使用該系統的客服人員高 1.6 倍。

Thirdly, our open platform strategy accounted for over 30% of our total new business. By the end of 2023, we have signed contracts with 854 channels and an increase of 63% from the last quarter of -- the third quarter of 2023. These partnerships contributed to a total first year premium of over RMB 1.1 billion, accounting for over 32% of our total new business. There are also insurance companies, human research consultancy agencies and numerous other 2B channels expressing their interest in further collaboration with us to use our open platform system and digital tools to sell life insurance in their main business.

第三，開放平台策略佔新業務總量的30%以上。截至2023年底，我們已與854家通路簽約，較2023年第三季成長63%。 這些合作夥伴貢獻的首年保費總額超過人民幣11億元，佔我們新業務總量的 32%。還有保險公司、人類研究諮詢機構和眾多其他2B管道表示有興趣與我們進一步合作，利用我們的開放平台系統和數位工具在其主要業務中銷售人壽保險。

Fourthly, our service-oriented ecosystem continues to take shape with evident results. We have developed a robust ecosystem beyond just life insurance, covering trust service, family office, health care and wellness, overseas asset allocation, education, tax consulting, family affairs processing, et cetera, providing customers with a rich experience scenarios and substantial support to our sales agents in insurance marketing. During 2023, we held 256 family office consultants training sessions (inaudible), certifying more than 1,200 family office advisers who have since served a total of 500 families in assisting them to set up a total of 450 trusts with total asset value exceeding RMB 5.6 billion and facilitating approximately RMB 100 million in first year premium.

四是服務生態體係不斷形成，成效明顯。我們打造了超越壽險的強大生態系統，涵蓋信託服務、家族理財、醫療健康、海外資產配置、教育、稅務諮詢、家務處理等，為客戶提供豐富的體驗場景和實質支援。代理。 2023年，我們舉辦了256期家族辦公室顧問培訓課程（聽不清楚），對1,200多名家族辦公室顧問進行了認證，服務了總計500個家庭，協助他們設立了總計450個信託，總資產價值超過人民幣56億元並促成首年保費約人民幣1億元。

By the end of 2023, more than 20,000 FRP or Fanhua Retirement Planners have been trained and certified. During 2023, nearly 300 visits to our continuing care retirement community were organized, helping nearly 1,000 customers lock-in rights for long-term stays in these retirement communities. And more than 4,000 customers obtained rights for these retirement communities across the nation, helping to achieve over RMB 600 million in first year premium. At the end of 2023, Fanhua has trained and certified more than 20,000 policy trusteeship experts serving more than 130,000 policy trustee families with 630,000 policies under trusteeship, generating cross-sell and upper sales to 30,000 customers, facilitating about RMB 550 million in first year premium.

截至2023年底，已有超過2萬名FRP或泛華退休規劃師接受培訓和認證。 2023年，我們組織了近300次參觀持續照護退休社區，幫助近1,000名客戶鎖定了這些退休社區的長期入住權利。全國已有4,000多名客戶獲得養老社區權益，首年保費收入超過6億元。截至2023年底，泛華已培訓認證保單託管專家2萬餘名，服務超過13萬個保單受託家庭，託管保單63萬張，為3萬名客戶帶來交叉銷售和上位銷售，帶動首年保費約5.5億元。

Lastly, we have made significant progress in our global expansion strategy. Since the establishment of our 2 joint ventures with Asia Insurance in Hong Kong in October, the insurance brokerage company has completed the formation of its core business team and signed contracts with about 10 major insurance companies in Hong Kong, ensuring the ability to meet diverse customer needs. Operations officially commenced in early February for our insurance broker business. On the technology side, we are actively engaging with a number of insurers and we're confident that our technology business will have (inaudible) milestones in 2024.

最後，我們的全球擴張策略取得了重大進展。自10月與亞洲保險在香港成立兩家合資公司以來，保險經紀公司已完成核心業務團隊組建，並與香港約10家主要保險公司簽約，確保滿足多元化客戶的能力需求。我們的保險經紀業務於二月初正式開始營運。在科技方面，我們正在積極與多家保險公司合作，我們相信我們的技術業務將在 2024 年實現（聽不清楚）里程碑。

Looking ahead, for 24, the insurance industry, especially the independent intermediary channel will face a series of challenges and opportunities. Due to the significant uncertainties surrounding the specific timing and extent of the implementation of the requirement for consistency in reported and actual fees in the independent intermediary channel, we are unable to make precise predictions regarding our annual performance targets. However, what can be anticipated is that whilst the regulatory change may lead to short-term pains, you also bring important opportunities for the development of our open platform.

展望24年，保險業特別是獨立中介管道將面臨一系列挑戰和機會。由於獨立中介管道報告費用與實際費用一致要求的具體實施時間和程度存在重大不確定性，我們無法對年度業績目標做出準確預測。但可以預見的是，雖然監管變化可能會帶來短期陣痛，但也為我們開放平台的發展帶來了重要機會。

Our strategic focus in 2024 will include number one, continue to build a professional and specialized sales team. We aim to increase our market share by growing the number of high-quality agents, particularly MDRTs, taking advantage of the market consolidation opportunity that is likely to arise as a result of the commission cap to be implemented. Number two, enhance our capabilities to serve high net worth individual clients. We will continue to build out our service ecosystem, supplementing our offerings in financial services to education, elderly care and overseas travel.

我們2024年的策略重點第一，持續打造專業化、專業化的銷售團隊。我們的目標是透過增加優質代理商（特別是百萬圓桌）的數量來增加我們的市場份額，並利用因佣金上限實施而可能出現的市場整合機會。第二，增強我們服務高淨值個人客戶的能力。我們將繼續打造服務生態圈，將金融服務補充到教育、養老、出境旅遊等領域。

Number three, bring in high-quality assets, while going global, accelerating our internationalization and digitalization process. We have been invited by a number of insurers to set up operations in Macau and Singapore. And lastly, we will pursue M&A opportunities to achieve horizontal and vertical integration. Given our strong financial position with over RMB 1.4 billion in net cash and the backing of our potential strategic shareholder, Singapore White Group, we are probably the most well resourced intermediary in the region with the capacity and capability to undertake attractive and accretive M&A opportunities, both inside and outside of Mainland China.

第三，引進優質資產，走出去，加速國際化、數位化進程。我們已獲多家保險公司邀請在澳門和新加坡設立業務。最後，我們將尋求併購機會，以實現橫向和縱向整合。鑑於我們擁有超過 14 億元人民幣淨現金的強勁財務狀況以及我們潛在戰略股東新加坡懷特集團的支持，我們可能是該地區資源最豐富的中介機構，有能力承擔有吸引力和增值的併購機會，中國大陸境內和境外。

This concludes my presentation, and I'll hand the session back to Oasis. Thank you.

我的演講到此結束，我將把會議交還給 Oasis。謝謝。

Thank you. Now, the floor open for Q&A session. Andrew?

謝謝。現在，問答環節開始。安德魯？

Thank you. (Operator Instructions) Our first question comes from the line of Yuyu Zhang with CICC.

謝謝。 （操作員指示） 我們的第一個問題來自中金公司張宇宇的電話。

So, my first question is about (inaudible). You've made a lot of discussions before (inaudible) and can give a little bit more appetite on this beyond your observation to what extent made commission revenue be cut. If there are any numbers you can share with us? My second question is for the overseas business. Could you share some more details on what you've done in 2023 and will do in 2024? And about White Group, how can Fanhua cooperate with it to achieve more market share in Asia?

所以，我的第一個問題是關於（聽不清楚）。您之前已經進行過很多討論（聽不清楚），並且可以對此提出更多的興趣，超出您的觀察範圍，導致佣金收入被削減。如果有任何數字可以跟我們分享嗎？我的第二個問題是關於海外業務的。您能否詳細分享一下您在 2023 年所做的事情以及 2024 年將要做的事情？而對於懷特集團，泛華如何與他們合作，在亞洲獲得更多的市佔率？

[Interpreted] So, Mr. Hu would like to invite our Chief Operating Officer, Mr. Liu to take your first question. And the second question actually consists 2 parts. So, the first part regarding our international initiatives, especially the business in Hong Kong, this part will be answered by Mr. Ben Lin, our Chief Strategy Officer and the last part regarding our potential collaboration with White Group, Mr. Hu, he will answer the question.

[解讀]那麼，胡先生想請我們的營運長劉先生來回答你的第一個問題。第二個問題其實由兩個部分組成。所以，第一部分是關於我們的國際舉措，特別是在香港的業務，這部分將由我們的首席戰略官Ben Lin先生回答，最後一部分是關於我們與懷特集團的潛在合作，胡先生，他將回答回答問題。

[Interpreted] Well, the requirement for the reported and fire fee consistency in the independent, the brokerage channel is up and coming. Although the regulatory body has not yet given a specific timing as to when it will be implemented, but the rumors in the industry is that it will probably be implemented in April. And as for the extent of the commission cap, there is also no specific guidance from the regulatory body yet. But the consensus among a lot of insurance companies is that probably the commission rate for the same type of products, the commission will be probably be down by 30% to 40%.

【解讀】嗯，獨立經紀管道的申報費和火費一致性要求正在興起。雖然監管機構尚未給出具體何時實施的時間，但業內傳言很可能會在4月實施。至於佣金上限的範圍，監管機構也沒有具體指導。但許多保險公司的共識是，同類型產品的佣金率可能會下降30%到40%。

Well, it's for certain that the business for insurance, independent insurance focus will be severely impacted. But right now, the insurance companies will have a different product strategy to adapt to this market change, diverting their focus from the whole life insurance products to participating insurance products to make up some of the loss on the commission income for independent brokers. Well, the requirement for commission cap and the reported and fire fee consistency is an inevitable trend given the continued decline in interest rates. However, and it will probably bring a short-term (inaudible) to industry as well for Fanhua, but we are fully prepared for these new changes. And we have also been expanding our platform model. We believe that this regulatory change will result in more medium-sized intermediate companies to collaborate with Fanhua in terms of platform business, and it will help us to continue to drive our market share. Thank you.

嗯，可以肯定的是，保險業務、獨立保險業務將會受到嚴重影響。但目前，保險公司將有不同的產品策略來適應這種市場變化，將重點從終身壽險產品轉移到分紅保險產品，以彌補獨立經紀人佣金收入的部分損失。那麼，在利率持續下降的情況下，佣金上限以及報告費和火費一致性的要求是必然趨勢。不過，對於泛華來說，這可能也會為產業帶來短期（聽不清楚）的影響，但我們已經為這些新的變化做好了充分的準備。我們也一直在擴展我們的平台模式。我們相信，這項監管變化將導致更多中型中間體公司與泛華在平台業務方面合作，這將有助於我們繼續提高市場份額。謝謝。

Okay. I'll answer the first part of the second question with regard to our progress in the Hong Kong market. So, we established the 2 joint ventures with our partner, Asia Insurance back in late October. So, it's been about 5 months. And I'm very pleased to say that we have made very, very significant progress with our 2 joint ventures. Firstly, in terms of our team set up in office, so we now basically have 2 offices in Hong Kong. One is our brokerage business and the other one is our technology business. In our brokerage business, we have now built a team of 13 members. They're basically in the administration, in the technical presentative areas to facilitate contract signing.

好的。我將回答第二個問題的第一部分，關於我們在香港市場的進展。因此，我們早在 10 月底就與合作夥伴亞洲保險成立了兩家合資企業。就這樣，已經過了大約5個月。我很高興地說，我們的兩家合資企業已經取得了非常非常重大的進展。首先，從我們辦公室的團隊設定來看，所以我們現在基本上在香港有2個辦公室。一是我們的經紀業務，二是我們的科技業務。在我們的經紀業務中，我們現在已經建立了一個由13名成員組成的團隊。他們基本上在行政管理、技術展示領域，以促進合約簽署。

In the period of November to January, together with the management team from Asia Insurance, we met with all the major life insurers in Hong Kong to start the process of contract signing. So far, we have signed contract with 10 insurers. And over the last few weeks, we have received the commission schedule from some of the insurers. So, I'm very, very pleased to say that we can officially commence business from this week. In terms of where we differentiate in Hong Kong and why we are confident that we can be successful in our first market of Hong Kong, I think it comes down to really 2 things.

11月至1月期間，我們與亞洲保險的管理團隊一起與香港所有主要的人壽保險公司會面，開始簽訂合約的過程。截至目前，我們已與10家保險公司簽訂了合約。在過去的幾周里，我們收到了一些保險公司的佣金表。所以，我非常非常高興地說，我們可以從本週開始正式開始營業。就我們在香港的差異化優勢以及為什麼我們有信心在香港的第一個市場取得成功而言，我認為這實際上可以歸結為兩件事。

Firstly, we are the only broker in Hong Kong, in fact, in the region that's backed by 2 listed companies with abundant resources. And this provides us with abundant opportunity and capability to offer comprehensive services to our customers. Secondly is on the technology front. As I've highlighted in the past, the broker technology segment in Asia remains very, very underdeveloped even in mature markets like Hong Kong, a lot of the contract signing is still very paper-based compared to 100% digital or paperless in China. So, we're the only broker with more than 200 in-house IT support staff that can basically transfer a lot of the know-how that we've built in the Chinese market to Hong Kong.

首先，我們是香港唯一擁有兩家上市公司支持且資源豐富的經紀商。這為我們提供了豐富的機會和能力為客戶提供全面的服務。其次是在技術方面。正如我過去所強調的那樣，即使在香港這樣的成熟市場，亞洲的經紀商技術領域仍然非常非常不發達，與中國的 100% 數位化或無紙化相比，許多合約簽署仍然非常紙質。因此，我們是唯一擁有 200 多名內部 IT 支援人員的經紀商，基本上可以將我們在中國市場累積的大量專業知識轉移到香港。

In the discussions that we had with all the life insurers from the period of November to January, the focus was really on 2 topics. The first one is obviously contract signing. But more importantly, the second one is really on IT integration. And I'm very pleased to say that all insurers expressed a strong interest not only to work with us in terms of doing the business of selling, but they're also very interested in our digital capability and how we can work together to improve the sales technology in the Hong Kong market. And what's interesting is we're not only trying to work with these insurers to develop technology that would help them to work with brokers. But more importantly, we're now also convincing them that maybe they could also outsource their in-house sales technology to Fanhua because the reality is we have spent an enormous amount of resources over the last 4, 5 years in our sales technology capability. And a lot of this know-how, I think, is probably 10 years ahead of the Hong Kong market even compared to insurers.

從 11 月到 1 月期間，我們與所有壽險公司進行的討論中，重點實際上集中在兩個主題上。第一個顯然是合約簽訂。但更重要的是，第二個問題其實是關於 IT 整合的。我很高興地說，所有保險公司都表達了濃厚的興趣，不僅在銷售業務方面與我們合作，而且對我們的數位化能力以及我們如何共同努力改善保險業務也非常感興趣。有趣的是，我們不僅試圖與這些保險公司合作開發有助於他們與經紀人合作的技術。但更重要的是，我們現在也在說服他們，也許他們也可以將內部銷售技術外包給泛華，因為現實是我們在過去四、五年裡在銷售技術能力上花費了大量資源。我認為，即使與保險公司相比，許多此類專業知識也可能比香港市場領先 10 年。

So we're very, very confident that our technology capability and differentiation is going to be one of our strong competitive advantages in the Hong Kong market. And although, we just commenced our Hong Kong business, we're already invited by a number of insurers to basically start operations in Macau and also in Singapore. Because in these markets, there is also a lack of presence in terms of a major broker that has strong shareholder backing as well as technology capability. So one step at a time, I wouldn't be too surprised that in 2024, we will expand beyond Hong Kong.

因此，我們非常非常有信心，我們的技術能力和差異化將成為我們在香港市場的強大競爭優勢之一。雖然我們剛開展香港業務，但我們已經受到多家保險公司的邀請，基本上在澳門和新加坡開展業務。因為在這些市場中，也缺乏擁有強大股東支持和技術能力的主要經紀商。因此，一步一步地，到 2024 年，我們將擴展到香港以外的地區，我不會感到太驚訝。

So, the second question -- the second part of the second question, Mr. Hu will talk about our progress with Singapore White Group.

那麼，第二個問題——第二個問題的第二部分，胡先生將談談我們與新加坡懷特集團的進展。

[Interpreted] So look, first and foremost, what we want to reiterate is that our collaboration will not change the positioning of Fanhua and our strategic direction. Last year, we basically issued our new mission statement for the company and we made it very clear that our objective going forward is to become the regional service provider for family services, broadening our capability beyond insurance, but into education, retirement, et cetera. So what we're advocating is insurance plus model beyond Mainland China. And we think this opportunity to have a reason White Group is very, very timely for us.

【解讀】所以你看，首先我們要重申的是，我們的合作不會改變泛華的定位和我們的策略方向。去年，我們基本上發布了公司的新使命宣言，我們非常明確地表示，我們未來的目標是成為家庭服務的區域服務提供商，將我們的能力擴展到保險之外，擴展到教育、退休等領域。所以我們提倡的是中國大陸以外的保險加模式。我們認為懷特集團的這個機會對我們來說非常非常及時。

So the synergy that can bring about with our cooperation with White Group is really based on 2 upgrades in terms of our capability. The first one is that the Singapore's White Group have much better capability in terms of capital raising, particularly in the international market compared to Fanhua. Secondly is that their track record and capability in mergers and acquisitions is also very evident given their history and success. We think these 2 capabilities serves as important upgrades for Fanhua as we pursue our strategy of going global through organic and inorganic strategies.

所以我們和懷特集團的合作能夠帶來的協同效應其實是基於我們能力的兩個升級。第一，新加坡懷特集團在融資方面，特別是在國際市場上，比泛華集團有更好的融資能力。其次，考慮到他們的歷史和成功，他們在併購方面的業績記錄和能力也非常明顯。我們認為，這兩項能力是泛華透過有機和無機策略實施全球化策略時的重要升級。

M&A will be a core part of our strategy because we think that the opportunity for consolidation in the market, not only in China but across the region is very, very significant. And really, we will focus on 2 areas. Number one is all our mergers and acquisitions will focus on bringing capabilities to improve or help us execute on our strategy of developing a professional sales team across the region. And then secondly, it's helping us to broaden our services to high net worth clients.

併購將成為我們策略的核心部分，因為我們認為，不僅在中國，而且在整個地區，市場整合的機會都非常非常重要。事實上，我們將重點放在兩個領域。第一，我們所有的併購都將專注於帶來能力，以改善或幫助我們執行在整個地區發展專業銷售團隊的策略。其次，它幫助我們擴大對高淨值客戶的服務。

So without a doubt, the biggest change to our industry from 2024 onwards is the commission cap. And we think if you look at the regulatory purpose of the commission cap is really to drive higher quality growth. Now how do you achieve that? We think, at the end, it comes down to upgrading your capability. That's going to be very, very important. So, we think the commission cap is the right thing for the industry. We fully embrace it. And our strategy is on basically putting the resources on improving our capability so that in this environment, we will become the biggest beneficiary. Thank you.

所以毫無疑問，從2024年開始，我們這個行業最大的變化就是佣金上限。我們認為，如果你看看佣金上限的監管目的，實際上是為了推動更高品質的成長。現在你如何實現這個目標？我們認為，最終還是要提升你的能力。這將非常非常重要。因此，我們認為佣金上限對於該行業來說是正確的。我們完全接受它。我們的策略是基本上把資源放在提升我們的能力上，這樣在這個環境下我們就會成為最大的受益者。謝謝。

And I'm showing no further questions at this time. So with that, I'll hand the call back over to Oasis Qiu for any closing remarks.

目前我不會再提出任何問題。因此，我會將電話轉回 Oasis Qiu 進行總結發言。

Thank you for joining us on today's conference call. If you have any further questions, please feel free to contact us. Thank you.

感謝您參加今天的電話會議。如果您還有任何疑問，請隨時與我們聯繫。謝謝。

Thank you for participating. This concludes today's program and you may now disconnect.

感謝您的參與。今天的節目到此結束，您現在可以斷開連線了。