Huize Holding Ltd (HUIZ) 2019 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. And welcome to Huize Holding Ltd.'s Fourth Quarter and Full-Year 2019 Earnings Call.

女士們先生們，謝謝你們的支持。歡迎參加匯澤控股有限公司 2019 年第四季和全年收益電話會議。

(Operator Instructions)

（操作員說明）

Now I'd like to hand the conference over to your Speaker-Host today, Mr. Jack Wang, vice president of ICR, the Company's Investor Relations Partner. Please go ahead, Jack.

現在我想把今天的會議交給你們的主持人，ICR副總裁、公司投資人關係合夥人王傑先生。請繼續，傑克。

Thank you, Operator.

謝謝你，接線生。

Hello everyone. Welcome to Huize Holding Ltd.'s Fourth Quarter and Full-Year 2019 Earnings Conference Call.

大家好。歡迎參加匯澤控股有限公司2019年第四季及全年業績電話會議。

The Company's financial and operating results were released by our newswire services earlier today and are currently available online.

本公司的財務和經營業績已於今天早些時候由我們的新聞專線服務發布，目前可在線查看。

Participants on today's call will include our Founder and CEO, Mr. Ma Cunjun; and our CFO, Ms. Tracey Chow.

今天電話會議的參與者包括我們的創始人兼執行長馬存軍先生；以及我們的財務長 Tracey Chow 女士。

Mr. Ma will start the call by providing an overview of the Company, and performance highlights for the fourth quarter of 2019. Ms. Chow will then provide the details on the Company's operating and financial results for the period, before I open the call for your questions.

馬先生將首先介紹公司的概況以及 2019 年第四季度的業績亮點。然後，週女士將在我開始電話會議之前提供有關公司該期間的運營和財務業績的詳細信息。你的問題。

As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the IR section of our -- of our website, at -- at ir@huize.com.

提醒一下，本次會議正在錄製中。此外，本次電話會議的網路廣播重播將在我們網站的 IR 部分提供，網址為 ir@huize.com。

Before we continue, I would like to refer you to our 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 thoroughly explained at reconciled to the most comparable measures reported under Generally Accepted -- Accounting Principles, in our earnings release and filings with the SEC.

在我們繼續之前，我想請您參閱我們的收益新聞稿中的安全港聲明，該聲明也適用於本次電話會議，因為我們將做出前瞻性聲明。另請注意，我們今天將討論非公認會計原則措施，這些措施在我們的收益發布和向美國證券交易委員會提交的文件中與公認會計準則下報告的最具可比性的措施進行了更徹底的解釋。

With that I will now turn the call over to our Founder and CEO, Mr. Ma Cunjun. Please go ahead, sir.

現在我將把電話轉給我們的創辦人兼執行長馬存軍先生。請繼續，先生。

Hello everyone. And thank you for joining Huize Holding Limited Fourth Quarter 2019 Earnings Conference Call.

大家好。感謝您參加匯澤控股有限公司2019年第四季財報電話會議。

Before we begin discussing our operating results, I would like to extend a warm welcome to our new shareholders. You have enabled us to successfully complete our IPO despite the unfortunate global outbreak of COVID-19, and the challenging capital market conditions which occurred in February as a result.

在我們開始討論我們的經營業績之前，我謹對我們的新股東表示熱烈歡迎。儘管新冠肺炎 (COVID-19) 在全球不幸爆發，並導致 2 月份資本市場狀況充滿挑戰，但你們使我們能夠成功完成 IPO。

Moreover as today is our first ever Quarterly Earnings Conference Call as a publicly-listed company, it is also an important milestone for both Huize and our shareholders alike.

此外，由於今天是我們作為上市公司首次召開季度收益電話會議，因此對於會澤和我們的股東來說也是一個重要的里程碑。

To our new shareholders I would like to provide a quick introduction to Huize. Fourteen years ago I founded this Company with a -- mission to become a trustworthy online insurance product and service platform for clients. Today we are proud to have secured a market position as a leading independent online insurance product and service platform in China.

我想向我們的新股東簡單介紹一下匯澤。十四年前，我創立這家公司的使命是成為客戶值得信賴的線上保險產品和服務平台。今天，我們很自豪能夠獲得中國領先的獨立線上保險產品和服務平台的市場地位。

We are also proud of our technology enabled and data-driven online platform which is dedicated to serving a young -- younger generation of insurance clients and providing solutions throughout the full lifecycle of their insurance needs.

我們也為我們的技術支援和數據驅動的線上平台感到自豪，該平台致力於服務年輕一代的保險客戶，並在他們的保險需求的整個生命週期中提供解決方案。

The success of our Company is driven by our ability to connect both insurance clients and insurer partners through our dual-engine business model. Powered by our closed-loop online technology platform, this model covers the entire insurance life cycle, provides one-stop services to insurance clients, and creates a seamless digitalized insurance transaction experience.

我們公司的成功得益於我們透過雙引擎業務模式連結保險客戶和保險公司合作夥伴的能力。此模式以閉環線上技術平台為支撐，涵蓋保險全生命週期，為保險客戶提供一站式服務，打造無縫的數位化保險交易體驗。

On the insurance client side, we offer over 1,300 types of insurance products through our platform with the focus on long-term life and health insurance products. On the insurer side, we empower insurance companies to more efficiently reach a large traditionally fragmented retail client base, and in doing so, [augment] their insurance [sales].

在保險客戶端方面，我們透過平台提供超過1,300種保險產品，並專注於長期壽險和健康險產品。在保險公司方面，我們使保險公司能夠更有效地接觸傳統上分散的大型零售客戶群，從而[擴大]他們的保險[銷售]。

By the end of 2019, we had served approximately 6.3 million insurance clients on a cumulative basis and worked with over 70 insurer partners, illustrating the underlying strength of our value proposition for both insurance clients and insurers.

截至 2019 年底，我們已累積為約 630 萬保險客戶提供服務，並與 70 多家保險公司合作夥伴合作，充分體現了我們對保險客戶和保險公司價值主張的潛在優勢。

Following the successful completion of our IPO, we have turned our focus to three key growth strategies going forward. First, expanding our customer base; second, accelerating customer -- engagements; and third, ramping up our customer conversion efficiency.

成功完成首次公開募股後，我們將重點轉向未來的三個關鍵成長策略。第一，擴大客戶群；第二，加速客戶參與；第三，提高客戶轉換效率。

So for customer base expansion, we intend to leverage our enhanced brand awareness resulting from our successful IPO to improve our direct customer-acquisition capabilities and expand our user traffic channel partnerships.

因此，在擴大客戶群方面，我們打算利用成功IPO後增強的品牌知名度來提高我們的直接獲客能力並擴大我們的用戶流量管道合作夥伴關係。

For customer engagement, we plan to set up off-line service centers in select strategic locations to enhance the synergies between on-line and off-line operations; enhance client engagement and offer a broader range of insurance products which will enable us to further increase customer wallet-share and thus customer life-time [value].

在客戶互動方面，我們計劃在選定的策略地點設立線下服務中心，以增強線上和線下營運之間的協同效應；提高客戶參與度並提供更廣泛的保險產品，這將使我們能夠進一步增加客戶的錢包份額，從而提高客戶的生命週期[價值]。

For customer conversion efficiency, we will focus on [investing in technology] especially on the data analytics front. More specifically these types of investments will help to improve our capabilities in customer conversion, as well as in the areas of risk management, marketing, and overall operating efficiency.

為了提高客戶轉換效率，我們將專注於[技術投資]，尤其是數據分析。更具體地說，這些類型的投資將有助於提高我們在客戶轉換方面的能力，以及在風險管理、行銷和整體營運效率方面的能力。

In 2019, total gross written premiums or GWP facilitated on our platform, exceeded RMB 2 billion which grew 114.1% year over year. Total operating revenue reached RMB 993.3 million which increased to 95.2% year over year, total adjusted net profits reached RMB 109.9 million which increased to 265.1% year over year.

2019年，我們平台促成的總保費或GWP超過 20億元，年增114.1%。營業收入總額達人民幣993.3百萬元，年增95.2%，調整後淨利總額達109.9百萬元，年增265.1%。

In summary, we are much encouraged by our 2019 results. We will maintain our dedication to serving the needs of insurance clients. And we strive to become a leading go-to gate-way for China's online insurance industry in the long term.

總而言之，我們對 2019 年的業績感到非常鼓舞。我們將繼續致力於滿足保險客戶的需求。我們長期致力於成為中國線上保險業的領先門戶。

I would -- I will now like to take a moment to update everyone on how the recent global outbreak of COVID-19 is impacting our business. [Notably] the outbreak has caused the government to impose a series [of] preventative and quarantine measures across the country both of which have caused significant disruptions to the overall economic activity in China.

我現在想花點時間向大家介紹最近全球爆發的 COVID-19 對我們業務的影響。 [值得注意的是]疫情的爆發導致政府在全國範圍內實施了一系列預防和檢疫措施，這對中國的整體經濟活動造成了嚴重干擾。

At Huize, we place the highest priority on the -- on the health and the safety of our employees and have quickly implemented a series of short-term measures to allow our staff to work from home.

在匯澤，我們將員工的健康和安全放在首位，並迅速實施了一系列短期措施，讓員工在家工作。

By February 3rd, our IT system were able to support our staff to work remotely from home. We were pleased to welcome back the majority of our staff to the workplace on March 23rd, following the successful containment of the outbreak in China.

到2月3日，我們的IT系統已經能夠支援員工在家遠距辦公。在中國成功遏止疫情後，我們很高興在 3 月 23 日迎來大部分員工回到工作場所。

This concludes my prepared remarks for today.

我今天準備的發言到此結束。

With that I will now turn to the -- turn the call over our Co-CFO, Tracey Chow, who will provide an overview of our key operational and financial highlights for the quarter.

現在，我將把電話轉給我們的聯席財務長 Tracey Chow，她將概述我們本季的主要營運和財務亮點。

Thank you, Mr. Ma.

謝謝馬先生。

And hello everyone.

大家好。

So let me start with our key operational metrics, Gross Written Premiums or GWP. Total GWP facilitated on our platform in the fourth quarter of 2019 reached RMB 642.5 million which grew by 108.4% year over year. And a total operating revenue in the fourth quarter of 2019 increased by [44.2%] (corrected by company after the call) to RMB 258.3 million, from RMB 179.1 million in the same period of 2018.

讓我從我們的關鍵營運指標開始，即毛保費或 GWP。 2019年第四季，我們平台促成的總GWP達到人民幣6.425億元，年增108.4%。 2019年第四季的總營業收入從2018年同期的人民幣1.791億元成長[44.2%]（公司在電話會議後修正）至人民幣2.583億元。

The growth of total operating revenue was driven by the growth in our brokerage income. Our brokerage income grew to RMB 253.6 million in the fourth quarter of 2019, from RMB 177.5 million in the same period of 2018. The strong growth in brokerage income was primarily due to the growth in GWP we facilitated, and enhanced product mix.

營業總收入的成長是由經紀收入的成長所帶動的。我們的經紀收入從 2018 年同期的人民幣 1.775 億元增至 2019 年第四季度的人民幣 2.536 億元。經紀收入的強勁增長主要歸功於我們推動的 GWP 的增長以及產品組合的增強。

The percentage of life and health products in the fourth quarter of 2019 took a higher proportion compared to the same quarter of the last year, accounting for 93.7% of the total GWP facilitated.

2019年第四季，生命健康產品佔比較去年同季度有所提升，佔推動GWP總額的93.7%。

The reason why the growth of brokerage income is relatively slower than the growth of GWP is firstly because of the higher percentage of renewal premium in Q4 2019. And secondly because of the increased sales of annuity products.

經紀收入成長率相對慢於GWP成長的原因，一是因為2019年第四季續保保費比例較高，二是因為年金產品銷售增加。

During Q4 2019, we adapted proactively to a surge in demand from customers in the market as a result of the regulatory changes, and scaled up the sales of annuity products. As a result our platform facilitated total annuity insurance products GWP of RMB 175.6 million, accounting for 27.3% of the GWP facilitated in the same quarter.

2019年第四季度，我們主動適應監管變化帶來的市場客戶需求激增，擴大年金產品銷售規模。結果，我們平台促成年金保險產品GWP總額為人民幣1.756億元，佔同季促成GWP的27.3%。

Even though the first-year insurance brokerage commission fee rate we charged for the annuity insurance products was lower than that of our main focus, critical illness insurance products, we believe the introduction of annuity helped to diversify our product mix and increase our clients' life-time value.

儘管我們對年金保險產品收取的第一年保險經紀佣金費率低於我們的主打重大疾病保險產品，但我們相信年金的推出有助於豐富我們的產品結構並延長客戶的壽命-時間價值。

Cost of revenue in the fourth quarter of 2019 increased by 40.3% to RMB 159.9 million from RMB 114 million in the same period of 2018 due to the substantial growth of our business [scale].

由於我們業務[規模]的大幅成長，2019年第四季的營收成本從2018年同期的人民幣1.14億元成長40.3%至人民幣1.599億元。

The majority of the increase is attributable to the increase in channel costs paid to our user-traffic channels for indirect marketing and to a lesser extent, the increases in personnel costs related to our insurance consultants for direct marketing.

成長的大部分歸因於支付給我們用於間接行銷的用戶流量管道的通路成本的增加，以及較小程度上與我們用於直接行銷的保險顧問相關的人員成本的增加。

Specifically, channel cost in the fourth quarter of 2019 increased to RMB 138.3 million from RMB 102.2 million in the same period of 2018. The channel cost as a percentage of revenue from our indirect to customer channel decreased from 75.5% in Q4 2018 to 71.5% in Q4 2019.

具體而言，2019年第四季的通路成本從2018年同期的人民幣1.022億元增至人民幣1.383億元。通路成本佔間接客戶通路收入的百分比從2018年第四季的75.5%下降至71.5% 2019 年第四季。

Personnel costs related to our insurance consultants for direct customer acquisition in the fourth quarter of 2019 increased to RMB 21.6 million from RMB 11.8 million in the same period of 2018. The personnel costs as a percentage of revenue from our direct customer acquisition channel increased from 28% in Q4 2018 to 35.9% in Q4 2019. The increase in personnel costs is due to our hiring of more talent to support the business growth in 2020.

2019年第四季直接獲客的保險顧問相關人員成本從2018年同期的人民幣1,180萬元增加至人民幣2,160萬元。人員成本佔直接獲客管道收入的百分比從28增加2018 年第四季的%至2019 年第四季的35.9%。人員成本的增加是由於我們僱用了更多人才來支持2020 年的業務成長。

Selling expenses in the fourth quarter of 2019 increased by 96.6% to RMB 61.8 million, from RMB 31.4 million in the same period of 2018. Selling expenses as a percentage of total operating revenue, increased to 23.9% in the fourth quarter of 2019, compared to 17.6% in the same period of 2018. The increase in selling expenses as a percentage of operating revenue is partially attributable to the investment in brand value in Q4 2019 in conjunction with the Company's IPO plan, and partially due to the increase in advertising costs for the direct customer acquisitions.

2019年第四季的銷售費用從2018年同期的3,140萬元成長96.6%至6,180萬元。銷售費用佔總營業收入的比例從2019年第四季的23.9%增至2019年同期的23.9%。 2018年同期成長至17.6%。銷售費用佔營業收入比例的增加部分歸因於2019年第四季配合公司IPO計畫對品牌價值的投入，部分歸因於廣告費用的增加用於直接獲取客戶。

General and administrative expenses in the fourth quarter of 2019 also increased by 91.7% to RMB 34.5 million from RMB 18 million in the same period of 2018. The increase is mainly due to the increase in the share-based compensation expenses, which accounted for 63.6% of the increase in G&A expenses year over year.

2019年第四季的一般及行政費用也由2018年同期的人民幣1800萬元增加91.7%至人民幣3450萬元。增加的主要原因是股權激勵費用的增加，該費用佔比為63.6%。G&A 費用較去年同期成長的百分比。

The share-based compensation expenses in G&A grew to RMB 10.5 million in the fourth quarter of 2019, from RMB 0.1 million in the same period of 2018. If we exclude share-based compensation expenses, G&A as a percentage of total operating revenue declined to 9.3% in the fourth quarter of 2019, compared to 10% in the same period of 2018.

2019 年第四季，G&A 中的股權激勵費用從 2018 年同期的 10 萬元增至 1,050 萬元。如果剔除股權激勵費用，G&A 佔總營業收入的百分比下降至2019年第四季成長9.3%，而2018年同期成長10%。

Research and development expenses in Q4 2019 increased by 61.6% to RMB 11.8 million from RMB 7.3 million in the same period of 2018. The increase in R&D expenses is primarily due to the increase in R&D's [head counts] which grew by 74.5% compared to the end of 2018.

2019年第四季研發費用由2018年同期的人民幣730萬元增至人民幣1,180萬元，成長61.6%。研發費用增加主要是由於研發人員數量增加所致，研發人員數量較2018年同期成長74.5% 2018年底。

Net loss for Q4 2019 was RMB 7.5 million as compared to a net loss of RMB 4.2 million in Q4 2018. Adjusted net profit for Q4 2019 was RMB 6.1 million, as compared to RMB 9.3 million in Q4 2018.

2019 年第四季淨虧損為人民幣750 萬元，而2018 年第四季淨虧損為人民幣420 萬元。2019 年第四季調整後淨利為人民幣610 萬元，而2018 年第四季為人民幣930 萬元。

In terms of our financial position, we believe we currently have a robust balance sheet and we are well capitalized to withstand the short-term challenges brought on by the global COVID-19 -- pandemic. We have also raised approximately $55.9 million in total gross proceeds from our IPO.

就我們的財務狀況而言，我們相信目前我們擁有穩健的資產負債表，並且我們有充足的資本來應對全球 COVID-19 大流行帶來的短期挑戰。我們也透過 IPO 籌集了約 5590 萬美元的總收益。

For the first quarter of 2020 we currently expect total operating revenue to be in the range of RMB 230 million to RMB 250 million. This forecast reflects the Company's current and preliminary view on the market and operational conditions which are subject to changes.

我們目前預計2020年第一季總營業收入將介於人民幣2.3億元至人民幣2.5億元之間。該預測反映了公司對市場和經營狀況的當前初步看法，這些看法可能會改變。

So here I will conclude our prepared remarks for today.

因此，我將結束今天準備好的演講。

We will now open up for the call to the Q&A.

我們現在將開放電話問答。

Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session.

謝謝。女士們、先生們，我們現在開始問答環節。

(Operator Instructions)

（操作員說明）

Our first question comes from Dan Tian of CICC. Please go ahead.

我們的第一個問題來自中金公司的丹田。請繼續。

(foreign language)

（外語）

So I'll translate here.

那我就在這裡翻譯一下。

Since the outbreak of the COVID-19, we see that the -- inquiries for insurance products are actually growing and we see that our clients are having more appetites for short-term insurance policies.

自從 COVID-19 爆發以來，我們發現對保險產品的詢問實際上正在增​​加，我們發現我們的客戶對短期保單的興趣更大。

As for the long-term insurance policies, it involves [the medical sectors] including people's forecast on their income and their awareness of long-term health risk. So the impact on the long-term policies is quite mixed.

至於長期保單，它涉及人們對收入的預測和對長期健康風險的認識。因此，對長期政策的影響是相當複雜的。

[Well we see] that this, what we see today, the policy changes, they do not simply exclude some critical illnesses such as thyroid cancer, exclude the virus -- cancer from critical illness. Instead the new regulation made a more detailed classification on different types and levels of critical illnesses.

[嗯，我們看到]這個，我們今天看到的，政策的變化，他們不簡單地排除一些重大疾病，比如甲狀腺癌，把病毒——癌症排除在重大疾病之外。相反，新規定對不同類型和級別的重大疾病進行了更詳細的分類。

So we believe that this change would benefit in terms of more flexible risk pricing which will be better adapted by diversified customer groups. So we think that the changes -- the update of the policies will encourage the long-term development of the online insurance industry.

因此，我們認為這項變更將有利於更靈活的風險定價，從而更好地適應多元化的客戶群。所以我們認為這些變化——政策的更新將鼓勵線上保險業的長期發展。

The third question is about our -- productivity. So if we look at the Q4 numbers, and you -- because we are selling more high-premium products so our consultant's productivity in terms of premiums has been increasing.

第三個問題是關於我們的生產力。因此，如果我們看一下第四季度的數據，你會發現——因為我們正在銷售更多的高保費產品，所以我們顧問在保費方面的生產力一直在提高。

However if you look at the numbers of the policies that our consultants sell every day, this number has decreased in -- slightly decreased in Q4. This is because the annuity products we sell, we scaled up to sell in Q4 our high-end premium and it takes more time to convert them.

然而，如果您查看我們的顧問每天銷售的保單數量，您會發現這個數字在第四季度略有下降。這是因為我們銷售的年金產品，我們在第四季度擴大了高端保費的銷售規模，需要更多的時間來轉換它們。

And also as I mentioned earlier, we recruited -- we increased the recruiting of our consultants in Q4 2019 to better cope with our business group prospectus in 2020, so there is -- there is a temporary drop in terms of the numbers of policies that our consultants sell per person per day but if you look at the total amounts, it increased.

正如我之前提到的，我們在 2019 年第四季度增加了顧問的招聘，以更好地應對 2020 年我們的業務集團招股說明書，因此，保單數量暫時下降，我們的顧問每天按人均銷售，但如果你看一下總金額，你會發現它有增加。

Thank you.

謝謝。

(Operator Instructions)

（操作員說明）

The next question is from the line of Leon He of FountainVest Partners. Please go ahead.

下一個問題來自方源資本的 Leon He。請繼續。

So let me translate my four questions into English.

那麼讓我把我的四個問題翻譯成英文。

The first is about the product mix and the typical terms, so we understand that the Company expanded its product portfolio from critical illness focus to annuity so could you please elaborate what's the rationale behind it? And also -- what's the typical commission rate schedule on annuity and the critical illness products?

第一個是關於產品組合和典型條款，所以我們了解到公司將其產品組合從重疾聚焦擴展到年金，請您詳細說明背後的理由是什麼？還有──年金和重大疾病產品的典型佣金率表是多少？

The second question is about acquisition cost or acquisition channel. We understand that, the indirect channel contributing -- less during the fourth quarter of 2019 so what's the -- customer acquisition cost in terms of dollar amount for direct channel and indirect channel, respectively?

第二個問題是關於獲取成本或獲取管道。據我們了解，間接通路的貢獻在 2019 年第四季有所減少，那麼直接通路和間接通路的客戶獲取成本分別是多少？

The third question is about, we want to understand the demand for online insurance distribution versus off-line, especially during the outbreak of the COVID-19?

第三個問題是，我們想了解線上保險分銷與線下保險分銷的需求，特別是在COVID-19爆發期間？

The fourth question is that, we understand the company has done plans [to develop] off-line customer acquisition so I appreciate if you could elaborate a little more about what measures [Huize is about] to take in the future?

第四個問題是，據我們了解，公司已經制定了線下獲客計劃，所以您能否詳細說明一下，未來會採取哪些措施？

Thank you.

謝謝。

So I will take the first two questions. And Mr. Jiang will take the second -- the third and fourth questions.

所以我將回答前兩個問題。江先生將回答第二個問題、第三個問題和第四個問題。

So the first question is about our products and mix. So our mission and our operational agenda is to provide our customers whatever they need in the appropriate and cost efficient way.

所以第一個問題是關於我們的產品和組合。因此，我們的使命和營運議程是以適當且具成本效益的方式為客戶提供所需的一切。

Yes, in the Q4 2019, we scaled up the sales for annuity, that is because we see the market, the demand for annuities. Third, because of some policy changes. That's why we made this kind of adaption.

是的，2019年第四季度，我們擴大了年金的銷售，因為我們看到了市場，看到了年金的需求。第三，因為一些政策的改變。這就是我們進行這種調整的原因。

Going forward, critical illness will still be one of our core products. And we will continue to focus our resources on critical illnesses. However as we are -- as our clients are getting more mature, sophisticated, and more wealthy, we will provide them annuity products as one of our strategical products in the pipeline.

未來，重疾仍將是我們的核心產品之一。我們將繼續將資源集中用於重大疾病。然而，隨著我們的客戶變得更加成熟、成熟和富裕，我們將為他們提供年金產品，作為我們正在開發的策略產品之一。

And we will also introduce products such as medical insurance, to [incorporate] with over critical illnesses product, as a good complement to better protect our customers from long-term health and [life-time] health risks.

我們也會推出醫療保險等產品，與過重疾病產品結合，作為一個很好的補充，更好地保護我們的客戶免受長期健康和終身健康風險。

So this is my answer to your first question.

這就是我對你第一個問題的回答。

And in terms of customer acquisition cost for direct and indirect, what I can say is, the customer acquisition cost for indirect channel is higher, definitely higher than the direct channel. That is because we engage the social media KOLs to do the heavy-lifting work of our customer acquisition and customer education. That's why we pay them more. But we will not disclose the basic customer acquisition cost because this is one of our core business -- [tactical] business information.

而就直接且間接的獲客成本而言，我可以說的是，間接通路的獲客成本更高，肯定高於直接通路。這是因為我們聘請社群媒體 KOL 來承擔客戶獲取和客戶教育的繁重工作。這就是為什麼我們付給他們更多的錢。但我們不會透露基本的獲客成本，因為這是我們的核心業務之一—[戰術]商業資訊。

So I defer the next two questions to Mr. Jiang.

那麼接下來的兩個問題就交給蔣先生吧。

So online and -- companies with on-line and off-line models are educating their customers, separate, in their own ways. Traditional insurance companies with off-line agents' teams, they use more off line approach to educate the customers about the virus, the outbreak.

因此，擁有線上和線下模式的公司正在以自己的方式分別教育他們的客戶。傳統保險公司擁有線下代理人團隊，他們更採用線下方式向客戶進行有關病毒、疫情的教育。

However because of the physical constraints, insurance companies are taking more measures to come up with online tools to approach their customers but we do see that some of their management and teams -- are not that sophisticated yet.

然而，由於物理限制，保險公司正在採取更多措施來開發線上工具來接觸客戶，但我們確實看到他們的一些管理和團隊還不夠成熟。

However we think with the coronavirus, we'll definitely encourage customers to go online to learn about insurance and there will be more transactions completed online.

但我們認為，在冠狀病毒的影響下，我們肯定會鼓勵客戶上網了解保險，並且將會有更多的交易在網路上完成。

So that will be a merge for the online and offline business models in the future.

所以未來這將是線上和線下商業模式的整合。

And talking about our off-line strategy, we're setting up our off-line operations not because we think our online model is slowing down growth but is because we see an increasing number of high net-worth clients in our client base, and having off-line operations for both our very elite members, will help the company to better serve these high net-worth individuals.

談到我們的線下策略，我們建立線下業務並不是因為我們認為我們的線上模式正在放緩增長，而是因為我們看到我們的客戶群中高淨值客戶的數量不斷增加，並且為我們的精英會員提供線下運營，將有助於公司更好地服務這些高淨值人士。

[With this about -- with this about], we hope to be able to sell more complicated products, increase wallet share and customer referral, and that increasing customer's [life-time value].

[有了這個——有了這個]，我們希望能夠銷售更複雜的產品，增加錢包份額和客戶推薦，並增加客戶的[終身價值]。

Thank you.

謝謝。

(Operator Instructions)

（操作員說明）

And there are no further questions as at this time.

目前沒有進一步的問題。

I'd I like to on the conference back to our management. Please continue.

我想在會議上向我們的管理層報告。請繼續。

Okay. Since -- if there are no more questions, we will conclude our conference call here.

好的。因為——如果沒有其他問題了，我們將在這裡結束我們的電話會議。

And thank you very much for your time and your support. We hope to talk with you in the next quarter. And please stay safe and healthy. Thank you all.

非常感謝您的時間和支持。我們希望在下個季度與您交談。請保持安全和健康。謝謝你們。

Thanks. Thank you.

謝謝。謝謝。

Ladies and gentlemen, that concludes your conference for today. And thank you for participating. You may all disconnect.

女士們、先生們，今天的會議到此結束。感謝您的參與。你們都可以斷開連線。