Huize Holding Ltd (HUIZ) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Huize Holdings Limited's Fourth Quarter and Full Year 2020 Earnings Conference Call. (Operator Instructions) Today's conference call is being recorded, and a webcast replay will be available. Please visit Huize's IR website ir.huize.com, under the Events and Webcasts section.

女士們、先生們，感謝大家的支持，歡迎參加匯澤控股有限公司 2020 年第四季及全年獲利電話會議。 （操作員說明）今天的電話會議正在錄音，並將提供網路廣播重播。請造訪 Huize 的 IR 網站 ir.huize.com，位於「活動和網路廣播」部分。

Now I'd like to hand the conference over to your speaker host today, Ms. Harriet Hu, Huize's Investor Relations Director. Please go ahead, Harriet.

現在我想將會議交給今天的演講主持人，Huize 的投資者關係總監 Harriet Hu 女士。請繼續，哈麗特。

Thank you, operator. Hello, everyone, and welcome to our earnings conference call for the fourth quarter and full year of 2020. Our financial and operating results were released earlier today and are currently available on both our IR website and the Newswire.

謝謝你，接線生。大家好，歡迎參加我們 2020 年第四季和全年的收益電話會議。我們的財務和營運業績已於今天早些時候發布，目前可在我們的 IR 網站和新聞專線上查看。

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 the use of non-GAAP measures today, which are more thoroughly explained 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，今天使用非公認會計準則衡量標準，我們的收益發布和向美國證券交易委員會提交的文件中對此進行了更全面的解釋。

Joining us today are our Founder and CEO, Mr. Cunjun Ma; COO, Mr. Li Jiang; Co CFO, Mr. Minghan Xiao; and Co CFO, Mr. Ronald Tam. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights for the fourth quarter of 2020. Mr. Tam will then provide details on the financial results for the period before we open up the call for questions.

今天加入我們的是我們的創辦人兼執行長馬存軍先生；營運長李江先生；聯席財務長蕭明漢先生；及聯席財務長譚俊榮先生。馬先生將首先概述公司 2020 年第四季的業績和營運亮點，然後在我們開始提問之前提供該期間財務業績的詳細資訊。

I will now turn the call over to Mr. Ma.

我現在把電話轉給馬先生。

(foreign language)

（外語）

[Interpreted] Hello, everyone, and thank you all for joining Huize's Fourth quarter and Full Year 2020 Earnings Conference Call. 2020 marked an important milestone for Huize. We are officially listed on NASDAQ despite a challenging capital market condition, due to our Huize as 1 of the pioneers in China's online insurance industry.

【解讀】大家好，感謝大家參加匯澤2020年第四季及全年獲利電話會議。 2020年對於會澤來說是一個重要的里程碑。儘管資本市場情況嚴峻，我們慧擇作為中國互聯網保險行業的先驅之一，仍在納斯達克正式上市。

In February, the pandemic was at its work in China. And it was not an easy task for us to complete our IPO. Therefore, I would like to express my gratitude to all shareholders and investors for your support and trust.

二月份，疫情在中國肆虐。對我們來說，完成IPO並不是一件容易的事。在此，謹向各位股東及投資人的支持與信任表示感謝。

(foreign language)

（外語）

[Interpreted] Despite the uncertain macro conditions throughout the year, we delivered robust results due to our years of experience in the insurance industry, the competitive advantages of our online platform business model, unique focus on long-term insurance product distribution and our leading digital development capabilities.

【解讀】儘管全年宏觀形勢存在不確定性，但我們憑藉多年的保險行業經驗、線上平台業務模式的競爭優勢、對長期保險產品分銷的獨特關注以及領先的數位化服務，取得了穩健的業績。開發能力。

During the year, total GWP facilitated on our platform increased by 50% year-over-year to RMB 3 billion, while total operating revenue increased by 22.8% year-over-year to RMB 1.22 billion. Particularly in the fourth quarter, we capitalized on the recovery trends in the industry and overall economy, with both total GWP and total operating revenue increasing by more than 50% year-over-year, to reaching new quarterly highs.

年內，平台促成的總GWP年增50%至人民幣30億元，總營業收入較去年同期成長22.8%至人民幣12.2億元。特別是第四季度，我們抓住產業和整體經濟復甦的趨勢，總全球升溫潛勢值和總營業收入年增超過50%，再創季度新高。

(foreign language)

（外語）

[Interpreted] On the business strategy front, Huize pursued the long-term development of user value in place of short-term traffic monetization. Our differentiated long-term insurance product strategy enhanced our resilience during the market downturn and generate sustainable growth momentum.

【解讀】在經營策略上，會澤追求的是使用者價值的長期發展，而非短期的流量變現。我們差異化的長期保險產品策略增強了我們在市場低迷時期的韌性，並產生了可持續的成長動力。

In 2020, long-term life and health GWP accounted for 93.4% of total GWP, increasing from 87.4% in 2019. Meanwhile, GWP for long-term health insurance increased by 50.6% year-over-year to RMB 2.14 billion. Over the past 3 consecutive quarters, persistency ratios for long-term life and health insurance in the 13 and 26 months have remained about 94%. We believe that Huize's capabilities in online acquisition of high-quality clients as well as its higher client retention of both economic modes, which are difficult for our competitors to replicate.

2020年，長期壽險及健康險保費收入佔總保費收入的93.4%，較2019年的87.4%有所上升。同時，長期健康保險保費收入年增50.6%至21.4億元。過去連續3個季度，長期壽險和健康險13個月和26個月的持續率維持在94%左右。我們認為慧擇在線獲取優質客戶的能力以及兩種經濟模式的較高客戶保留率是競爭對手難以複製的。

(foreign language)

（外語）

[Interpreted] In terms of product innovation, leveraging our massive and multidimensional user data and insurance transaction data, we've been able to design more valuable and customized insurance products for our clients with this understanding of their insurance needs. For example, we launched the Darwin 3 critical illness insurance, which was yet another success of our original Darwin product line.

【解讀】在產品創新方面，我們利用大量、多維度的用戶數據和保險交易數據，在了解客戶保險需求的基礎上，為客戶設計出更有價值、更個人化的保險產品。例如，我們推出了達爾文3重疾險，這是我們原有達爾文產品線的另一個成功。

We also took the lead in the customization of annuity products, launched our first online version of joint-life annuity, which was also a unique feature and innovation in China's online insurance market.

我們也率先進行了年金產品定制，推出了首個網路版聯合人壽年金，這也是中國網路保險市場的特色和創新。

In 2020, GWP for co-developed insurance products with our insurer partners totaled RMB 1.29 billion, and accounted for 42.7% of total GWP compared with 36.3% in 2019.

2020年，與保險公司合作夥伴共同開發保險產品的GWP總額為12.9億元人民幣，佔總GWP的42.7%，而2019年為36.3%。

(foreign language)

（外語）

[Interpreted] Regarding offline structure, we maintained our user-centric focus, constantly improving our platform functions and services to optimize user experience. In 2020, Huize further upgraded its client service centers system combining an automatic portal with human assistance and increased its service fleet by up to 5x. During the year, the number of claimed cases assisted by Huize increased by 22% year-over-year to 43,000, and the claimed amount increased by 71% year-over-year to RMB 242 million. As the pandemic accelerated online insurance consumption, our differentiated services and market reputation enabled us to continue attracting and converting new users. By the end of 2020, the number of Huize's accumulated insurance clients has increased to 6.85 million.

【解讀】線下結構上，我們堅持以使用者為中心，不斷完善平台功能與服務，優化使用者體驗。 2020年，會澤進一步升級了客戶服務中心系統，將自動門戶與人工協助結合，並將服務車隊增加了多達5倍。年內，會澤協助理賠案件數量較去年同期增加22%至4.3萬件，理賠金額較去年同期增加71%至2.42億元。隨著疫情加速線上保險消費，我們的差異化服務和市場聲譽使我們能夠持續吸引和轉化新用戶。截至2020年底，會澤累計保險客戶數已增至685萬戶。

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[Interpreted] Moving to technology development, we embedded AI algorithms, data intelligence and machine learning into our key business processes. We accumulate data from transactions, extract knowledge from this data and apply the knowledge to our services in order to achieve win-win in terms of cost reduction and efficiency improvements. For example, on the front end, we launched AI Proposal application in 2020. This application can quickly process user interest and recommend optimal insurance products. It has not only boosted the efficiency and prospectivity of our consultants, but also improves our clients' experience.

[解讀]在技術開發方面，我們將人工智慧演算法、資料智慧和機器學習嵌入到我們的關鍵業務流程中。我們從交易中累積數據，從數據中提取知識，並將知識應用到我們的服務中，以實現降低成本和提高效率的雙贏。例如在前端，我們在2020年推出了AI Proposal應用，這個應用可以快速處理使用者興趣，推薦最優的保險產品。它不僅提高了我們顧問的效率和前景，還改善了客戶的體驗。

On the middle end, Huize's new consultant workstation has been officially put into use. It provides analytical tools such as user portraits and user preference to empower our consultants. Meanwhile, the same screen explanation function also provides clients with an immersive and interactive experience.

中端，匯澤新顧問工作站已正式投入使用。提供使用者畫像、使用者偏好等分析工具，為我們的顧問賦能。同時，同屏講解功能也為客戶提供了沉浸式的互動體驗。

On the back end, our intelligent inspection system can transcribe, calculate and analyze multichannel voice and text information to improve the efficiency of our compliance personnel and reduce operating and compliance risk.

在後端，我們的智慧巡檢系統可以對多通道語音和文字資訊進行轉錄、計算和分析，以提高合規人員的工作效率，降低營運和合規風險。

(foreign language)

（外語）

[Interpreted] Then on our operational and financial growth, our industry value and positioning also continue to gain recognition. During the year, Huize research institute released a list of top 10 China digital insurance agencies in 2020, with Huize placing among the first tier level of companies in terms of innovation capabilities and market performance over the past 2 years. At the same time, Huize was included in KPMG's 2020 China leading fintech top 50 list as a result of our development in insurance technology. This was also the fourth consecutive year that we've been short listed.

【解讀】然後在我們的營運和財務成長上，我們的產業價值和定位也不斷獲得認可。年內，慧擇研究院發布了2020年中國數位化保險機構十強榜單，慧擇近兩年的創新能力和市場表現都位居第一梯隊。同時，會澤憑藉在保險科技領域的發展，入選畢馬威2020中國領先金融科技50強榜單。這也是我們連續第四年入圍。

(foreign language)

（外語）

[Interpreted] Such achievements are the driving force behind our ongoing developments and assessments. Looking ahead, we are confident in the process of the online insurance industry in China and we aim to further establish Huize as the go-to-digital insurance service platform for new generation consumers empowered by data and technology. In order to achieve this fall our team will focus on the following aspects in 2021.

【解讀】這樣的成績是我們持續發展和評估的動力。展望未來，我們對中國網路保險產業的進程充滿信心，我們的目標是進一步將慧澤打造成以數據和技術為賦能的新一代消費者的數位化保險服務平台。為了實現今年秋季的目標，我們團隊在2021年將重點放在以下幾個方面工作。

(foreign language)

（外語）

[Interpreted] First, we will fully embrace digitalization, continuously strengthen our technology research and development as well as talent acquisition and enhance Huize's core competencies. At the same time, we will optimize our corporate culture and governance structure to ensure better adaptations to the ongoing digital transformation.

【解讀】一是全面擁抱數位化，不斷加強技術研發與人才引進，提升匯澤核心能力。同時，我們將優化企業文化和治理結構，以確保更好地適應正在進行的數位轉型。

(foreign language)

（外語）

[Interpreted] Second, we will promote a comprehensive strategic upgrade by expanding our off-line business in core cities such as Shanghai and Shenzhen by setting up high-value client service centers to further optimize the service experience and maximize client's lifetime value.

【解讀】二是推動全面策略升級，在上海、深圳等核心城市拓展線下業務，設立高價值客戶服務中心，進一步優化服務體驗，實現客戶終身價值最大化。

(foreign language)

（外語）

[Interpreted] Third, we will strengthen our collaborations with upstream and downstream partners along the industry value chain to enrich our product offerings and improve service capabilities. We expect Huize to become a more open platform with a follow range of products and services and its ecosystem related to insurance, including medical and health care.

【解讀】三是加強與產業鏈上下游合作夥伴的合作，豐富產品線，提升服務能力。我們期望慧擇成為一個更開放的平台，擁有一系列與保險相關的產品和服務及其生態系統，包括醫療和保健。

(foreign language)

（外語）

[Interpreted] Fourth, we will take full advantage of the capital markets, actively identify high-quality investment targets, and improve our platform's value proposition and market positioning through mergers and acquisitions to further realize our development strategy.

【解讀】四是充分利用資本市場優勢，積極尋找優質投資標的，透過併購提昇平台價值主張與市場定位，進一步實現發展策略。

(foreign language)

（外語）

[Interpreted] This concludes my prepared remarks for today. I will now turn the call over to our CFO, Mr. Ronald Tam, he will provide an overview of our key financial highlights for the quarter.

[解讀]我今天準備好的發言就到此結束。我現在將把電話轉給我們的財務長羅納德·譚先生，他將概述我們本季的主要財務亮點。

Thank you, Mr. Ma and Harriet, and hello, everyone. It's Ron here. In summary, we are very excited to report yet another strong set of results for the fourth quarter, in which we have delivered record quarterly numbers again for both total GWP facilitated on our platform as well as total operating revenues, which has beaten our previous guidance given to the market.

謝謝馬先生和Harriet，大家好。這是羅恩。總而言之，我們非常高興地報告第四季度的另一組強勁業績，我們平台上促進的總 GWP 以及總營業收入再次創下了季度數據記錄，這超出了我們之前的指導給予市場。

For the first time in the single quarter, we managed to facilitate over RMB 1 billion in first EM renewal premiums. The corresponding strong top line performance continues to reflect importantly, the underlying recovery trend in Chinese insurance industry following a containment of COVID in the country as well as the increasing adoption of online purchases of insurance products are key target customers, which is represented by a new generation of young mass affluent consumers from the high-tier cities in China. From a product perspective, our key focus in critical illness products particularly co-developed products with our insurer partners, continue to drive a large part of the GWP growth in the long-term health segment of the business. With total GWP contribution of RMB 589 million in the quarter, which is up 61% year-over-year.

我們單季首次成功促成首次新興市場續保保費超過 10 億元。相應的強勁營收表現繼續重要地反映出，中國保險業在新冠疫情得到遏制後的潛在復甦趨勢以及越來越多地採用在線購買保險產品是主要目標客戶，其中新客戶為代表。來自中國一線城市的年輕大眾富裕消費者。從產品角度來看，我們專注於重大疾病產品，特別是與保險公司合作夥伴共同開發的產品，繼續推動長期健康業務領域 GWP 成長的很大一部分。本季GWP貢獻總額為人民幣5.89億元，年增61%。

Mr. Ma earlier mentioned Darwin 3 earlier in his prepared remarks, which we co-developed together with Sinatay Life Insurance was the best-selling critical illness product during the quarter. And we continue to see a strong momentum being carried into the new year for Q1 of 2021, ahead of the transition to the new critical illness definition regime for the overall industry.

馬總剛才在準備好的發言中提到了達爾文3，我們與新泰人壽共同開發的達爾文3是本季最暢銷的重疾產品。在整個產業向新的重大疾病定義制度過渡之前，我們繼續看到 2021 年第一季的強勁勢頭正在延續。

In addition to critical illness, we have also successfully ramped up distribution of savings insurance products, including annuities as well as whole life insurance during the quarter, which amounted to a first year GWP of RMB 228 million during the quarter, as we capitalize on the seasonally strong market demand for savings insurance products, during the year-end and pre-Chinese New Year period. Our efforts in broadening our product portfolio also reflects our continuing focus in providing our customers with additional products along the life cycles which, in turn, helps create better engagement with our users and obviously drive higher customer lifetime value for the platform.

除重疾險外，本季我們也成功加大了儲蓄保險產品的分銷力度，包括年金和終身壽險，本季首年總保費達人民幣2.28億元。年末及春節前夕，儲蓄保險產品的市場需求季節性強勁。我們在擴大產品組合方面的努力也反映出我們持續致力於為客戶提供整個生命週期的附加產品，這反過來又有助於與用戶建立更好的互動，並明顯為平台帶來更高的客戶終身價值。

Overall, total GWP facilitated during the quarter totaled RMB 1 billion, of which RMB 613 million was trust fee premiums, which is up 40% year-over-year and RMB 433.5 million in renewal premiums, which is up 1.1x year-over-year. Here, I would like to highlight the continued strong renewal metrics, which again demonstrates the high-quality clients that our platform is able to acquire through our multichannel marketing strategies. And we continue to see very robust persistencies during the quarter, with 13 and 26 months persistency ratios being maintained at about 94%.

整體而言，本季促成的總保費總額為人民幣 10 億元，其中信託費保費為人民幣 6.13 億元，年增 40%；續保保費為人民幣 4.335 億元，年增 1.1 倍。在這裡，我想強調持續強勁的續訂指標，這再次證明了我們的平台能夠透過多通路行銷策略獲得高品質的客戶。我們在本季繼續看到非常強勁的持久性，13 個月和 26 個月的持久性比率保持在 94% 左右。

Now turning to our revenue line. Total operating revenues for the Q4 was RMB 388.1 million, again, a record quarterly high, which was up by 50.3% year-over-year and outperformed our guidance previously given to the market in our Q3 results. The increase in revenue was primarily driven by the increase in brokerage income due to the 63% increase in total GWP facilitated in the quarter.

現在轉向我們的收入線。第四季總營業收入為人民幣 3.881 億元，再次創下季度新高，年增 50.3%，優於我們先前在第三季業績中向市場給出的指引。收入的成長主要是由於本季全球升溫潛能值 (GWP) 總額成長 63% 而導致經紀收入的成長。

Cost of revenue for Q4 increased to RMB 291.2 million, primarily due to increased service fees paid to our user traffic channel partners.

第四季的收入成本增加至人民幣2.912億元，主要是因為支付給我們的用戶流量通路夥伴的服務費增加。

Selling expenses for the quarter increased by 15.7% year-over-year to RMB 71.5 million, which was primarily attributable to an increase in advertising and marketing spend in the quarter, which increased by 43% year-over-year. And here, you can see that we proactively increased marketing spend during the quarter to capitalize on the significant market demand for critical illness products in the period.

該季度銷售費用年增15.7%至人民幣7,150萬元，主要是由於該季度廣告和行銷支出增加，較去年同期成長43%。在這裡，您可以看到我們在本季度主動增加了行銷支出，以利用該期間對重大疾病產品的龐大市場需求。

G&A expenses for the quarter increased by 8.1% year-over-year to RMB 37.3 million. This increase was primarily attributable to the increase in G&A salaries and professional service expenses, and offset by a decrease in share-based compensation expenses.

該季度的管理及行政費用年增 8.1% 至 3,730 萬元。這一增長主要歸因於一般管理工資和專業服務費用的增加，並被股權激勵費用的減少所抵消。

R&D expenses for the quarter grew by 33.9% year-over-year to RMB 15.8 million as we continue to invest in AI applications for our platform and increasing R&D and data analytics headcount.

隨著我們繼續投資於平台的人工智慧應用以及增加研發和數據分析人員數量，本季研發費用年增 33.9% 至人民幣 1,580 萬元。

During the fourth quarter, we have recorded a GAAP net loss of RMB 27 million. We continue to maintain robust liquidity and a strong financial position. And at the quarter end, we had a combined balance of cash and cash equivalents of approximately USD 62 million.

第四季度，我們的 GAAP 淨虧損為 2,700 萬元。我們繼續保持強勁的流動性和穩健的財務狀況。截至季末，我們的現金和現金等價物合計餘額約為 6,200 萬美元。

Now with regards to our outlook for the first quarter of the year, as we have touched briefly upon earlier, we invested quite heavily in marketing spend in the last quarter. And we have also undertaken incentive campaigns with our channel partners in a bid to capture a disproportionate market share during Q4 in light of the significant market demand for the old definition critical illness products.

現在，關於我們對今年第一季的展望，正如我們之前簡要提到的那樣，我們在上季度的營銷支出上投入了大量資金。鑑於市場對舊定義危重疾病產品的巨大需求，我們也與通路合作夥伴開展了激勵活動，以期在第四季度佔據不成比例的市場份額。

And we are now seeing such strong demand building over in the first quarter of the new year. And as a result, we are now on track to achieve yet another record quarter for total operating revenues. As for our formal Q1 guidance for revenues, we currently expect total operating revenues for Q1 to be in the range of RMB 650 million to RMB 700 million, which represents at a low end over 1.6x growth year-over-year.

我們現在看到新年第一季的需求如此強勁。因此，我們現在可望再創季度總營業收入的紀錄。至於我們正式的第一季營收指引，我們目前預計第一季的總營業收入將在 6.5 億元至 6.5 億元至 7 億元之間，較去年同期成長 1.6 倍以上，處於較低水準。

This forecast reflects the company's current and preliminary views on the market and operational conditions, which are obviously a subject to change caused by various uncertainties, including those related to the ongoing COVID-19 pandemic.

這項預測反映了該公司對市場和營運狀況的當前和初步看法，這些看法顯然會因各種不確定性（包括與持續的 COVID-19 大流行相關的不確定性）而改變。

With that, this concludes our prepared remarks for today, and we will now open up the call to Q&A. Thank you, operator.

我們今天準備的演講到此結束，現在我們將開始問答環節。謝謝你，接線生。

(Operator Instructions) Your first question comes from the line of Michelle Ma of Citigroup.

（操作員指示） 您的第一個問題來自花旗集團的Michelle Ma。

(foreign language) My first question was about the new critical illness product and the new definition of critical illness. And how the prices of new products compared to the old version? Is it still very competitive? And how are the overall sales in February?

（外語）我的第一個問題是關於新的重疾產品和重疾的新定義。而新產品的價格與舊版相比如何？還是很有競爭力嗎？ 2月整體銷售如何？

And the second question is about some new regulations, which will be implemented this year and the next year on February 1, May 1 and January 1 next year. What are the biggest challenges management see to be comply with these new regulations?

第二個問題是關於一些新的規定，今年和明年分別是2月1日、5月1日和明年1月1日實施。管理階層認為遵守這些新法規面臨的最大挑戰是什麼？

Thank you, Michelle. It's Ron here. Let me take the questions for the team. So the first question regarding the new critical illness product. I think it's very early to say, given that we have just launched the new Darwin #5 literally today, so results are still yet to be seen. But we believe that the new product, obviously, we would like to say that given that this is another intuition of the product. And again, this time, we are working with Sinatay Life Insurance. We believe that the new products should be able to drive sales, probably in the second half of this year. And for any new product to be coming online, it would require a period of marketing and education for the insurance clients at large through our direct channels and also through our -- through the marketing channels.

謝謝你，米歇爾。這是羅恩。讓我來回答團隊的問題。第一個問題是關於新的重大疾病產品。我認為現在說還為時過早，因為我們今天剛推出了新的 Darwin #5，所以結果還有待觀察。但我們相信新產品，顯然，我們想說的是，鑑於這是該產品的另一種直覺。這次，我們再次與 Sinatay Life Insurance 合作。我們相信新產品應該可以帶動銷售，大概是今年下半年。對於任何新產品的上線，都需要透過我們的直接管道以及我們的行銷管道對廣大保險客戶進行一段時間的行銷和教育。

So I think it's still very early days to tell. But we are obviously very confident that the new definition product would also be very well received by the market. So the strong numbers that we have previewed for Q1 is mainly coming from the old definition product, which we -- early in the prepared remarks. We commented that the slower demand coming from Q4 into Q1, especially given the deadline of January 31 for both of the products in the market, we see a significant demand in that month of January. So that's really the answer to the first question. And to the second question regarding regulatory changes, I would say that given where we are in the industry as 1 of the leading operators, we are in very constant dialogue with the regulators. And in actual fact, we are 1 of the consultative members on the Board of the relevant regulatory bodies in terms of coming up the dropping of the relevant policies or the new regulatory measures.

所以我認為現在下結論還太早。但我們顯然非常有信心新定義的產品也會受到市場的歡迎。因此，我們預覽的第一季的強勁數據主要來自舊定義產品，我們在準備好的評論中很早就提到了這一點。我們評論說，從第四季度到第一季的需求放緩，特別是考慮到市場上這兩種產品的截止日期為 1 月 31 日，我們看到 1 月份的需求量很大。這確實是第一個問題的答案。對於有關監管變化的第二個問題，我想說，鑑於我們作為領先運營商之一在行業中的地位，我們與監管機構保持著非常持續的對話。事實上，我們是相關監管機構董事會的顧問成員之一，負責提出相關政策的取消或新的監管措施。

And so to that effect, I think that we are already anticipating such changes. And I think most of the regulatory changes focused on making sure that the sales process of insurance products are done in the compliant way. And for example, they're now requiring that all conversation or all interactions with customers could be tracked and to be provided on to the client on an as required basis.

因此，我認為我們已經在期待這樣的改變。我認為大多數監管變化都集中在確保保險產品的銷售過程以合規方式完成。例如，他們現在要求可以追蹤與客戶的所有對話或所有交互，並根據需要提供給客戶。

And to that effect, we are very proud to say that we have already an online system that would be able to achieve this requirement so that clients can request for any records of conversations they have with our consultants.

為此，我們非常自豪地說，我們已經擁有一個能夠實現這一要求的線上系統，以便客戶可以要求提供他們與我們顧問的任何對話記錄。

To the other point on the regulatory changes, for example, they are now requesting or setting some certain requirements for insurance companies itself to meet in order that they can provide insurance products online. For example, core solvency ratio, requirements, credit rating requirements for 4 consecutive quarters. And these requirements or these new measures will come into effect in the new year, next year.

另一方面，例如監管變化，他們現在要求或設定保險公司本身必須滿足的某些要求，以便他們可以在線提供保險產品。例如，核心償付能力充足率要求、連續4個季度信用評級要求等。而這些要求或說這些新的措施將會在新的一年、明年開始生效。

And I think that the regulators are given adequate time for the industry participants, both on the insurance company side as well as the insurance brokerages like ourselves, to adapt to the new changes. And for the insurance companies, I think that they were very likely to undertake matches to strengthen the capital basis, strengthen the balance sheet in advance for these new measures to come into effect.

我認為監管機構有足夠的時間讓行業參與者，無論是保險公司方面，還是像我們這樣的保險經紀公司，來適應新的變化。對於保險公司來說，我認為他們很可能會進行配對以增強資本基礎，提前強化資產負債表，以便這些新措施生效。

So overall, I think that the industry is hoping with the changes. And I think as 1 of the leading players in the market, we are very well positioned to manage these changes. That's the answer to the second question.

總的來說，我認為業界希望做出這些改變。我認為，作為市場的領先參與者之一，我們非常有能力應對這些變化。這就是第二個問題的答案。

Your next question comes from the line of Joey Yang of CLSA.

你的下一個問題來自里昂證券的 Joey Yang。

(foreign language) So my first question is about the products. So we understood that the Darwin #5 officially launched today. And we also understood that with AI platform that sells out the products that are not customized. So could management help us understand the difference between the 2 types of products, which 1 could offer us a better profit margin? And is there a preference between the 2 types of products?

（外語）所以我的第一個問題是關於產品的。據我們了解，達爾文#5今天正式啟動。我們也了解到，透過人工智慧平台，可以銷售非客製化的產品。那麼管理階層能否幫助我們了解這兩種產品之間的差異，哪一種可以為我們提供更好的利潤率呢？這兩種產品之間是否有偏好？

(foreign language)

（外語）

So my second question is about the take rate in 4Q. We noticed that there was a slight decrease in 4Q compared with previous quarters. And at the same time, we also see that the structure of the premium -- the first year premium actually accounted for like 60% of the 4Q premium. So I was wondering what's the driver of the decreasing take rate in 4Q? Is it because of selling of more short-term insurance products?

所以我的第二個問題是關於第四季的採用率。我們注意到第四季度較前幾個季度略有下降。同時，我們也看到保費的結構──首年保費實際上佔了第四季保費的60%左右。所以我想知道第四季採用率下降的驅動因素是什麼？是因為短期保險產品銷售較多嗎？

(foreign language)

（外語）

And my last question is related to the off-line services centers, as Mr. Ma has mentioned, I would like to ask about the latest progress of this offline services development. And also about what's the selling point or was our -- we obtain to attract the talented -- the talent employee to our offline servicing centers? (foreign language)

我的最後一個問題是關於線下服務中心的，正如馬總提到的，我想問線下服務發展的最新進展。還有關於賣點是什麼，或是我們的──我們吸引人才──人才員工到我們的線下服務中心？ （外語）

(foreign language) Thank you, Joey. Thanks for following us and for your questions. Why don't I take the questions on behalf of the team again. So the first question is really about the product mix of our GWP and whether we have any preference towards customized or co-developed products versus the standard product that we can take off the shelf like other brokers.

（外語）謝謝你，喬伊。感謝您關注我們並提出問題。為什麼我不再代表團隊回答問題？因此，第一個問題實際上是關於我們的 GWP 的產品組合，以及與我們可以像其他經紀商一樣下架的標準產品相比，我們是否對定製或共同開發的產品有任何偏好。

I think the clear answer here is that, first of all, I think that we always come from the customers perspective. The first, which for is the best suitable product for their circumstances. And I think typically, when users come to our platform, they're being attracted by the very good valuable money, critical illness product that we are codeveloping with our insurance company partners.

我認為這裡明確的答案是，首先，我認為我們總是從客戶的角度出發。第一個，這是最適合他們情況的產品。我認為，通常情況下，當用戶來到我們的平台時，他們會被我們與保險公司合作夥伴共同開發的非常有價值的重大疾病產品所吸引。

And therefore, the answer to this question naturally would be that we have a slight preference towards the customized or co-developed products that we co-manufacture with like Sinatay and the likes of Huize Med Health, because oftentimes, these products represent the best value for money products currently available at any given point in time in the marketplace. And so naturally, customers will prefer to inquire about these products.

因此，這個問題的答案自然是我們對與 Sinatay 和 Huize Med Health 等公司共同生產的定製或共同開發的產品略有偏好，因為通常這些產品代表了最佳價值適用於市場上任何給定時間點當前可用的貨幣產品。因此，客戶自然會更願意詢問這些產品。

And I think from our perspective, as a corporate, we do prefer co-developed products given that we will be able to cultivate and deepen our relationships with our upstream insurance partners, deepening engage with them would, therefore, lead to better economy of arrangements for us down the road. For example, Darwin #5 is the second time that we have worked with Sinatay, and therefore, we will be looking to receive better treatment from the insurance company partners.

我認為從我們的角度來看，作為一家企業，我們確實更喜歡共同開發的產品，因為我們將能夠培養和加深與上游保險合作夥伴的關係，因此加深與他們的接觸將帶來更好的安排經濟性為我們在路上。例如，達爾文#5是我們第二次與Sinatay合作，因此，我們將尋求保險公司合作夥伴提供更好的待遇。

And I think also the way that we can demonstrate to the overall industry as to our high persistencies, we give a lot of comfort to our insurer partners to partner with us in future versions of the products. And so therefore, I think that's the overall answer to your first question.

我還認為，我們可以向整個行業展示我們的高度堅持，這讓我們的保險公司合作夥伴在未來版本的產品中與我們合作感到非常放心。因此，我認為這就是你第一個問題的總體答案。

And the second question regarding the take rate. I think the explanation to this is really the particular product mix as it pertains to first year premiums in the fourth quarter. I think in the fourth quarter, we have done 21% of our first year premium fee in annuities. And we also additionally achieved 16% of our first year premiums in whole life insurance. This is an entirely new product segment that we've entered in the fourth quarter. And so combined, that is 37% of the first year premiums in the quarter.

關於採納率的第二個問題。我認為對此的解釋實際上是特定的產品組合，因為它與第四季度的第一年保費有關。我認為在第四季度，我們已經將第一年保費的 21% 用於年金。我們也額外實現了終身壽險首年保費的 16%。這是我們在第四季進入的全新產品領域。合計起來，即佔本季首年保費的 37%。

And typically, as I think the market and investors have come to understand the annuities typically carry the lower commission rate for the first year premium compared to the likes of critical illness or long-term life. And therefore, it's really the product mix being a bit slanted towards annuities in the fourth quarter.

通常情況下，我認為市場和投資者已經認識到，與重大疾病或長期壽險相比，年金的第一年保費佣金率通常較低。因此，第四季的產品組合確實有點偏向年金。

In the fourth quarter and the pre-Chinese New Year period in the industry, there is the so-called time and home which is denominated in China and both insurance companies push savings related insurance products during the time. And therefore, as a brokerage company in the core, we're naturally also aligned with the market development that we set. And therefore, there's a higher contribution from annuity and savings-related products in the fourth quarter, leading to a slightly lower overtake rate. So it's a product mix factor coming into play.

產業內第四季和春節前，有一個以國內計價的所謂時間和家，兩家保險公司都在這段時間推儲蓄相關的保險產品。因此，作為一家核心經紀公司，我們自然也與我們設定的市場發展保持一致。因此，第四季年金和儲蓄相關產品的貢獻較高，超額率略有下降。所以這是一個產品組合因素在發揮作用。

So for the third question regarding the plan for going offline, I think I can make a few remarks here, and maybe the team would like to add on to this. I think the plan for us is to really roll out the offline presence in this new year. Last year, we mentioned about this, but then due to COVID, we were pulling back the plans. But this year, given how we are seeing strong momentum for the last 2 quarters going into the new year. I think we're much more confident in pushing this initiative.

那麼對於第三個問題，關於下線的計劃，我想我可以在這裡說一下，也許團隊還想補充一下。我認為我們的計劃是在新的一年真正推出線下業務。去年，我們曾提到這一點，但後來由於新冠疫情，我們取消了該計劃。但今年，考慮到我們在進入新的一年的最後兩個季度中看到了強勁的勢頭。我認為我們對推動這項措施更有信心了。

And then a few factors I'd like to point out here. One is that the offline presence will enable us to have better interaction and better engagement with our existing user base. We have 6.8 million users right now. And obviously, we have proprietary in-house data at these users. And if we can just achieve the top 10% of this user base. And then ranking those in terms of our data, we can really have a list of high-value customers to approach.

然後我想在這裡指出一些因素。一是線下存在將使我們能夠與現有用戶群進行更好的互動和參與。我們現在有 680 萬用戶。顯然，我們擁有這些用戶的專有內部數據。如果我們能夠達到這個用戶群的前 10%。然後根據我們的數據對這些客戶進行排名，我們確實可以擁有一份可以接觸的高價值客戶名單。

And with these offline service centers, we are able to reach out to the customers. In the first phase, I think we were very focused on the first tier cities and for the first phase of the initiative. I think we're looking at Shanghai and Shenzhen, and probably hiring less than 100 people to really speed this new initiative.

透過這些線下服務中心，我們能夠接觸到客戶。在第一階段，我認為我們非常關註一線城市和該計劃的第一階段。我認為我們正在關注上海和深圳，並且可能僱用不到 100 人來真正加快這項新舉措的速度。

And I think for the hiring side of things, we are looking to attract professional talent from the marketplace. I think the value proposition that creates and that can pull back to this -- these consultants would be that, one, they can leverage on our online business leads to be routed to the respective offline centers, and therefore, they can use this list, and make use of this list to capture new customers. And also they can leverage on our internal user database, which I just mentioned earlier, to cultivate repeat purchases or increasing life time values for the platform. And so we're expecting these new consultants to be delivering higher-value products to our customers and more differentiated services as well.

我認為在招募方面，我們希望從市場上吸引專業人才。我認為創造並可以回溯到這一點的價值主張是，第一，他們可以利用我們的在線業務線索將其路由到各自的線下中心，因此，他們可以使用這個列表，並利用此列表來吸引新客戶。他們還可以利用我剛才提到的我們的內部用戶資料庫來培養重複購買或增加平台的生命週期價值。因此，我們期望這些新顧問能夠為我們的客戶提供更高價值的產品和更具差異化的服務。

Your next question comes from the line of Brian Lee of AMTD Group.

您的下一個問題來自尚乘集團的布萊恩李（Brian Lee）。

(foreign language) I have noticed that you just had RMB 100 million on the account payable on your balance sheet. So could you please give more color on this item?

（外語）我注意到你們資產負債表上的應付帳款剛剛有1億元。那麼你能給這個物品更多的顏色嗎？

Sure. Thanks, Brian, and thanks for joining the call today. I think the simple answer to this is the strong month of December that we have experienced as a business. And therefore, a lot of the business has generated this account payable balance at the end of the year. So it really had to do at the strong month of December from a business perspective.

當然。謝謝布萊恩，也謝謝您今天參加電話會議。我認為這個問題的簡單答案是我們作為一個企業所經歷的強勁的 12 月。因此，許多企業在年底都產生了應付帳款餘額。因此，從商業角度來看，這確實與 12 月的強勁表現有關。

Your next question comes from the line of Jan Oli of (inaudible) Securities.

您的下一個問題來自（聽不清楚）證券公司的 Jan Oli。

(foreign language) So my first question is about the M&A, mentioned by Mr. Ma just now. This year -- this current year, your company are going to acquire 1 more M&A deals? And my question about what's the potential target?

（外語）我的第一個問題是關於剛才馬先生提到的併購。今年—今年，貴公司將再進行 1 筆併購交易？我的問題是潛在目標是什麼？

(foreign language)

（外語）

So my second question is still about the offline service center. So what are the main functions of those offline service center?

那麼我的第二個問題仍然是關於線下服務中心的問題。那麼那些線下服務中心的主要功能有哪些呢？

Okay. Thank you. It's Ron here. Let me take the first question and maybe for the second question, (foreign language).

好的。謝謝。這是羅恩。讓我回答第一個問題，也許還有第二個問題（外語）。

Okay. So first question about the M&A targets. I think we are prioritizing our investment targets, I think, in 3 major brackets. I think the first major bracket would be possibly some of the existing channel partners that we are working with for the past 3 years. I think some of those could be interesting collaborations from a capital perspective for us to better integrate into these distribution and marketing channels. So that's 1 area.

好的。第一個問題是關於併購目標的。我認為我們正在優先考慮三個主要的投資目標。我認為第一個主要群體可能是我們過去三年合作的一些現有通路合作夥伴。我認為從資本角度來看，其中一些合作可能是有趣的，可以讓我們更好地融入這些分銷和行銷管道。所以這是 1 個區域。

Second area is similar online or even offline brokerages. This will be very synergistic to our core business. For online, brokerage would be a horizontal expansion for us and to capture better market share. For offline will be a complementary business strategy for online business so that we can accelerate the treatment of an online to offline business model. So I think those 2 could be the key focus for us. And the third area could be other insure tech platforms. Platforms have innovative technologies in the business processes, whether it be the front end, and just AR customer service or the middle to back-end where they have very strong technologies in terms of customer service and online support, and also underwriting and claims product and so forth. So I think this will be the major M&A target areas for us to be looking at.

第二個領域是類似的線上甚至是線下券商。這將對我們的核心業務產生很大的協同作用。對於線上業務來說，經紀業務將是我們的橫向擴張，並獲得更好的市場份額。線下將是線上業務的補充業務策略，這樣我們就可以加快線上到線下業務模式的處理。所以我認為這兩個可能是我們的重點。第三個領域可能是其他保險技術平台。平台在業務流程中擁有創新技術，無論是前端、AR客戶服務還是中後端，在客戶服務和線上支援、承保和索賠產品和服務方面都擁有非常強大的技術。等等。所以我認為這將是我們要考慮的主要併購目標領域。

(foreign language)

（外語）

[Interpreted] Okay. Thank you. (foreign Langugae] Thank you. That's Mr. Ma commenting on the second question, and I'd like to translate here for the team. So the second question relating to the key strategy for the offline centers plant that we just mentioned. I think we're echoing the points that we have made earlier, I think we are really trying to leverage on the core online platform that Huize has did over the last 15 years to more efficiently serve differentiated high-value customers for existing use of Huize. Because given we have the internal data on all our customers, we are able to extract a segment of a high-value customers for us to initially focus at serving higher-value products to this products as well as customer segment.

[解釋]好的。謝謝。 （外語）謝謝。這是馬總對第二個問題的評論，我在這裡給團隊翻譯一下。所以第二個問題是關於我們剛才提到的線下中心工廠的關鍵策略。我認為我們呼應了我們之前提出的觀點，我認為我們確實在嘗試利用慧擇在過去15 年中所做的核心在線平台，更有效地為慧擇現有的使用提供差異化的高價值客戶。因為鑑於我們擁有所有客戶的內部數據，我們能夠提取一部分高價值客戶，以便我們最初專注於為該產品以及客戶群提供更高價值的產品。

And given that we're still in the initial testing phase or rolling out pace of this business plan, I think we would like the market to give us time, and we will be keeping the Investor Days updated in our subsequent calls as to the progress of this new offline business plan.

鑑於我們仍處於初始測試階段或該業務計劃的推出速度，我認為我們希望市場給我們時間，我們將在隨後的電話會議中隨時更新投資者日的進展情況這個新的線下商業計劃。

(Operator Instructions) Your next question comes from the line of C.C. Wang of Independence Investment.

（操作員說明）您的下一個問題來自 C.C.獨立投資的王先生。

(foreign language) Hello, can you hear me?

（外語）你好，你聽得到我說話嗎？

Yes.

是的。

Okay. Thank you. (foreign language) We understand that Huize leverage itself to tap into new users and meeting customers. But since that with the brand itself as online insurance aggregator, it's not well-known to end users till now. Do you have anything to enhance the brand agreement to our holding?

好的。謝謝。 （外文）據我們了解，匯澤利用自身優勢挖掘新用戶、認識客戶。但由於該品牌本身是在線保險聚合商，因此到目前為止，它並不為最終用戶所熟知。您有什麼可以增強我們持股的品牌認同感嗎？

(foreign language)

（外語）

So Huize has achieved a record high financial performance, and although there was a surge of price before the recent downturn. But I think that Huize still remain a low profile to overseas investors. For example, comparing to a U.S. company eliminate a similar insurance tech company that it has only CNY 60,000 revenue. Its market cap is already like CNY 50 billion. Does Huize have any plan to lease up investors awareness and exposure to adjust the cap estimation?

因此匯澤的財務表現創下了歷史新高，儘管在最近的低迷之前價格曾出現過飆升。但我認為匯澤對海外投資者仍然保持低調。例如，與一家美國公司相比，剔除類似的保險科技公司，其收入僅6萬元人民幣。其市值已達500億元左右。匯澤是否有計劃提高投資者的認知度和曝險來調整上限估計？

Thank you. It's Ron here. I'll take these questions for the team. And for the first question on our overall brand recognition in the market, I think we have been around for 15 years. And I think that the proud thing that we like to say about our company is that we have built on very limited capital support over the years before the IPO, on a very stringent budget, we have been able to build up this platform to where it is today. And we have been very stringy on spending on our brand advertising or marketing in the consumer space. And therefore, I think that the business model that we have devised and the way that we can leverage on social media channels as our partners has really scaled the business to where it is today and has enabled us to achieve ultimately a listing in the U.S. market. I think this itself is a very big achievement.

謝謝。這是羅恩。我將為團隊解答這些問題。對於關於我們在市場上的整體品牌認知度的第一個問題，我認為我們已經存在了 15 年。我認為，關於我們公司，我們想說的一件值得驕傲的事情是，在首次公開募股之前的幾年裡，我們在非常有限的資本支持下，在非常嚴格的預算下，我們已經能夠將這個平台建立到它想要的水平。是今天。我們在消費者領域的品牌廣告或行銷方面一直非常嚴格。因此，我認為我們設計的商業模式以及我們作為合作夥伴利用社交媒體管道的方式確實將業務規模擴大到了今天的水平，並使我們最終實現了在美國市場的上市。我認為這本身就是一個非常大的成就。

So we -- obviously, there's still a lot of work to be done, and we recognize that we can do a lot more on the branding side. And in the new year of 2021, I think we are now earmarking more and more funds in terms of really building up a bigger brand presence in the consumer market as well as the capital markets. So that's the answer to the first question.

因此，顯然，我們還有很多工作要做，而且我們認識到我們可以在品牌方面做更多的事情。在2021年新的一年裡，我認為我們現在正在撥出越來越多的資金，以真正在消費市場和資本市場上建立更大的品牌影響力。這就是第一個問題的答案。

And for the second question, I think that the reason why, I guess, we have been a bit under the radar over the last year has a couple of external factors at the play as well. I think when we relisted, we were very much hit by the unfortunate timing of COVID-19 at this outbreak, and we were actually the first Chinese IPO to get done after COVID broke out in January of last year.

對於第二個問題，我認為去年我們一直沒有受到關注的原因也有一些外部因素在起作用。我認為，當我們重新上市時，我們在這次爆發期間受到了 COVID-19 不幸時機的打擊，而我們實際上是去年 1 月 COVID 爆發後第一家完成的中國 IPO。

And subsequently, various things has happened as well. For example, the scandals surrounding Luckin Coffee in the U.S. market has led to a confidence crisis in the over smaller capital on Chinese ADRs in the U.S. and then the ongoing U.S.-China trade frictions has also led to a slightly depressed market sentiment towards Chinese stocks. But then you have seen that in the last 1 to 2 months, you can see the liquidity of the stock of the company has improved significantly.

隨後，也發生了各種各樣的事情。例如，瑞幸咖啡在美國市場的醜聞導致中國ADR在美國的資金過少出現信心危機，而中美貿易摩擦的持續也導致市場對中概股的情緒略顯低迷。 。但你看到最近1到2個月，你可以看到公司股票的流動性有了明顯的改善。

And I think we have to thank the overall market for recognizing the work that we have been doing at the company and the financial performance has also been leading to more and more investors being on board with our story, I guess. And we have also been doing a lot of investor out which work over the last 6 to 8 months.

我認為我們必須感謝整個市場對我們在公司所做的工作的認可，而且我想，財務表現也導致越來越多的投資者參與我們的故事。在過去的 6 到 8 個月裡，我們也做了很多投資者的工作。

And we are in constant investor dialogue with a very prominent and reputable institutional investors in the marketplace. So I think that the overall recognition in the capital markets have been improving, and we will be doing a lot more this coming year in terms of Investor Relations, investor outreach, hopefully, we can bring the stock to a higher level and also to create a much better liquidity for the investors.

我們與市場上非常著名且信譽良好的機構投資者進行持續的投資者對話。所以我認為資本市場的整體認可度一直在提高，明年我們會在投資人關係、投資人外展方面做更多的工作，希望能夠把股票帶到一個更高的水平，也創造更多的機會。為投資者提供更好的流動性。

As there are no further questions at this time, I'd like to hand the conference back to our management for closing remarks.

由於目前沒有其他問題，我想將會議交還給我們的管理階層進行總結發言。

Okay. Thank you very much, everyone, for joining this call, and appreciate the strong participation, and we look forward to the next call for the second quarter -- first quarter of 2021. Thank you very much.

好的。非常感謝大家參加這次電話會議，感謝大家的大力參與，我們期待第二季－2021 年第一季的下一次電話會議。非常感謝。

Thank you for joining us today. Thank you.

感謝您今天加入我們。謝謝。

Thank you.

謝謝。

Ladies and gentlemen, this does conclude our conference for today. Thank you for participating. You may now all disconnect.

女士們、先生們，我們今天的會議到此結束。感謝您的參與。你們現在可以斷開連結了。

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

[本筆錄中的英語陳述是由現場通話中的口譯員說出的。]