Welcome to China Life 2024 First Quarter Results Briefing. My name is Li Yinghui, Securities Representative of the company. Today's briefing is being held online. Mr. Li Mingguang, President; Ms. Liu Hui, Vice President; Mr. Zhao Guodong, Vice President and Board Secretary; Ms. Hou Jin, Chief Actuary; and Ms. Yuan Ying, Appointed Person in Charge of the Finance; Mr. Dai Yubing, General Manager of the Individual Insurance Planning Department, and heads of other relevant departments participate in the briefing. We will start with a presentation on the company's first quarter results, then followed by a Q&A session for about 20 minutes, during which our management will take your questions. Now let's have Ms. Hou Jin, Head of the IR team, to introduce the first quarter results. Good evening, ladies and gentlemen. This is Grace speaking. I would like to report our first quarter results briefly. During the first quarter, focusing on high-quality development, we achieved steady progress while maintaining stability in business development, consistently improved our business operations in terms of both quality and efficiency, and further enhanced comprehensive strengths with our market-leading position solidified. Firstly, the company achieved good growth in our insurance business. We saw continued growth in the insurance business on a high base for the corresponding period of 2023. Gross retained premiums amounted to CNY 337.6 billion, an increase of 3.2% year-on-year, of which renewal premiums were CNY 225.2 billion, an increase of 7.5% year-on-year. Affected by the decline in single-payment business, premiums from new policies were CNY 112.4 billion, a decrease of 4.4% year-on-year, and first-year regular premiums amounted to CNY 74.8 billion, an increase of 4.7% year-on-year. In particular, our first-year regular premiums with payment duration of 10 years or longer were CNY 25.2 billion, an increase of 25.4% year-on-year. Short-term insurance premiums were CNY 34.8 billion, a decrease of 0.5% year-on-year, and the surrender rate was 0.26%, a decrease of 0.14 percentage points year-on-year. Secondly, the quality of our business development was enhanced steadily. We continue to strengthen asset liability management, proactively push forward the construction of our product system with diverse forms, durations, and cost compensation, and continuously optimize our business structure that's further driving up the quality of our business development. The proportion of first-year regular premiums with payment duration of 10 years or longer in the first-year regular premiums was 33.67%, which was up 5.57 percentage points from the corresponding period of 2023. Driven by the rapid growth of mid-to-long-term regular premium business, as well as the cost reduction and efficiency enhancement, the value of new business for the first quarter achieved the highest growth in recent years, reaching a year-on-year increase of 26.3%. Thirdly, our sales force remained stable with in-house quality. We steadily proceeded with sales team reforms and made consistent efforts to enhance the professional competence of our sales force, as a result of which the quality of our sales force continued to improve. Our total sales force has reached 679,000, of which the number of agents in the individual agent business sector was 622,000, and the size of the sales force remains stable. Meanwhile, the quality of the sales force was significantly improved with an increase in both the number and proportion of high-performance agents. The productivity of the sales force realized continued growth on the high base, with the monthly average first-year regular premiums per agent rising by 17.7%. The pilot program of new sales models was launched directly, and the Seed Program was rolled out on a pilot basis in provincial branches such as Yangzhou, Guangdong, and Shenzhen. Fourthly, the company maintained consistency in long-term asset allocation. Amid the downward trend of the benchmark interest rate in the first quarter, the equity market experienced fluctuations at low levels with continuous structural differentiation. The company upheld the philosophy of long-term investment, value investment, and prudent investment, and adopted multiple measures to stabilize our investment income. In the first quarter, we achieved gross investment income of CNY 64.7 billion, an increase of 7.2% year-on-year on a like-for-like basis, and annualized gross investment yields were 3.23%. The net investment income was CNY 42.7 billion, a decrease of 0.1% year-on-year under the same basis, and annualized net investment income was 2.82%. Meanwhile, our total assets and investment assets reached CNY 6 trillion and CNY 5.9 trillion, respectively, an increase of 4.6% and 4.8% from the beginning of 2024. The solvency ratio continued to remain at relatively high levels. Core solvency ratio reached 154.97%, and comprehensive solvency ratio reached 209.17%. We took active actions to strengthen our underwriting capability and stabilize investment income. Net profit was CNY 20.6 billion, demonstrating our strong resilience in development. We will pursue the customer-centric approach, adhere to the guideline of seeking progress while maintaining stability, promote stability through progress, and establish new growth drivers before abolishing the old ones. We will practice the "three consistencies", meaning strengthening partnerships and building, promoting reforms, and guarding against risks. The "three enhancements" mean stabilizing business growth, increasing business value, and empowering our sales force. The "three breakthroughs" meaning optimizing services, facilitating integration, and cutting costs. We will strengthen the asset liability interaction, accelerate transformation upgrading, enhance customer services, carry out in-depth resources integration, reinforce cost management and control, and hold on to the bottom line of risk with a view to driving high-quality development to a new level. Thank you, everyone. Now let's begin the Q&A session, which will be conducted in consecutive interpretation. Please limit your questions to no more than two, and let us know your name and the institution you represent. Let's invite the first question, please. Ladies and gentlemen, if you'd like to ask a question, please press * followed by 1 on your telephone keypad. Thank you. The first question comes from M.W. Kim of Morgan Stanley. Please go ahead. Good evening. Thank you for taking my question. I have two questions. One is about the new life growth. So there was a very strong new business value growth in Q1 2024, and the company also commented agent productivity increase. However, there was limited data on the quarterly announcement. As there are many moving parties in the product mix and also the macro trend, so I just want to learn whether new business value product margin in Q1 2024 was higher than Q1 2023 level. My second question is about the solvency capital sensitivity. Could you please share the core solvency capital sensitivity against the 50 basis point decline on China 10-year bond yield? I'm trying to understand what level of yield the solvency the company could maintain even under the more pessimistic bond yield scenario. Thank you. [Foreign language] Kim, could you please repeat your second question? My second question is about the solvency capital sensitivity. The pure insurance company provided solvency capital sensitivity against 50 basis point change on the interest rate or the bond yield movement. I just want to understand what level of the solvency capital we would actually expect if that China the bond rate actually downs another 50 basis points and stays at that level until the end of the year. [Foreign language] [Foreign language] [Foreign language] [Foreign language] First question, there is no doubt that the NBV margin in the first quarter is increasing. That is because of three reasons. First, the company took initiative to optimize its business structure. The proportion of regular payment business with payment duration of 10 years or longer is increased by 5.6 percentage points in total FYRP. Secondly, we actively control the cost and enhance efficiency, and we took initiative to reduce the cost in the banc assurance channel that leads to the decrease in the cost. Thirdly, we took the initiative to control the interest rate cost. That is to control the guaranteed rate for the traditional products as well as the crediting rate for the participating and universal products. Kim, I want to make sure that your scenario is about the interest rate rebound back of 50 basis points or both rise and decrease 30 basis points. Thank you. Yes. I want to learn about the scenario that interest rate going down another 50 basis points from here. So that is actually the main scenario I want to learn. Okay. Thank you. [Foreign language] Secondly, about the sensitivity to the interest rate decrease. If there is another decrease of 50 basis points into the year-end, the impact on the solvency ratio will be determined by the following two reasons. Firstly, how the assets and liability is matching in terms of duration. Currently, the duration gap of China Life is slightly over four years. Because of the duration gap, if the interest rate goes down, the actual capital will go down. However, the slightly more than four years duration gap is one of the shortest within the whole industry. Secondly, it will depend on the factor on the asset side. That is, how much fixed income asset is calculated under the market value. If the proportion is larger, the smaller the impact will be by the downward interest rate trend. Thank you. Let's take the next question. The next question comes from Rick of Morgan Stanley. Please go ahead. Okay. Thank you, [management], for taking my question again. My question is more focused on the liability side. First, we see our overall FYP was quite stable in first quarter, and the new business with payment period over 10 years up 20% from around CNY 20 billion to CNY 25 billion. So what kind of these products are? Are they more long-term payment period participating products or traditional savings or whole life or protection? Also, was the driver behind it more due to high demand or more from our proactive push optimization on the payment period? The second question is a follow up to this one, more focused on the protection products. Do we see any positive signals of increased demand on critical illness and other protection products, or when might we see this trend? [Foreign language] [Foreign language] [Foreign language] Indeed. In the first quarter, we took the initiative to optimize the business structure and increase the proportion of regular payment business with duration of 10 years or longer. For this part of long-term business, we have the diversified strategy. That is, we develop annuity that is mainly focused on the pension function and life insurance products that is based on the death and survival protection as well as the critical illness, as you mentioned. We should say that in the first quarter, there's more demand from the pension business than the health-related business. That is the actual situation for the market demand in the first quarter. In general, the proportion of critical illness or health-related long-term insurance business still had a relatively low percentage in first quarter, and we will enhance that part in the following three quarters of the year. Okay. [Foreign language] Let's have the next question. Next question, please. The next question comes from [Inaudible] of Bloomberg Intelligence. Please go ahead. Hello. Hi. Thank you for giving me the opportunity to ask some questions. I want to follow up firstly on the solvency ratio. I think during the Chinese call, we mentioned the reason of a sequential decline. I just want to double-check that I think the last point about the redemption of the CNY 35 billion bond, is that the most important part that was driving the decline? Based on my rough calculation, I think that may have probably caused anywhere between six-seven percentage points. So I guess what I'm trying to say is if we take that out, can we basically ignore the drop in core solvency ratio? On top of that, I was under the impression that if your duration gap is improving and then the equity market was better in the first quarter, that should have very good positive contribution to your core solvency ratio. Could you maybe give some numbers around that so we can put things in the context? That's the first question. The second question, just want to follow up on Rick's question about the margin improvement in the first quarter, new business margin improvement. So based on my rough calculation, it's probably an increase of a few percentage points, call it five percentage points. Is it possible to help us understand the breakdown of the margin improvement? How would you break those into, say, the product mix improvement, the channel fee reduction, and the pricing interest rate changes? If I can squeeze the last one. I think in the Chinese call, you also talked about the net profit. There's tax issues. Could you remind us the details of the tax changes? Thank you. [Foreign language] [Foreign language] About the solvency ratio change. Firstly, the redemption of CNY 35 billion capital supplementary bond does not impact the core solvency ratio. [Foreign language] The improvements in the duration gap are definitely beneficial to the solvency ratio. It is also related to the value creation and the risk prevention. Ms. Hou Jin, the Chief Actuary, will elaborate on that. [Foreign language] About the duration impact. Actually, the decrease in the duration gap will naturally decrease the occupation of the interest rate risk capital, and that will enhance the solvency ratio. Secondly, about the equity market development. If the equity market value increases, it will have two impacts. First, the actual capital will increase. Secondly, the exposure to the equity risk will also increase. So the impact on solvency ratio will depend on the actual range on these two aspects. [Foreign language] About the improvement in the new business margin, we mentioned there were three main reasons: the product mix optimization and the channel expense control as well as the interest rate impact. We think there are basically equal impacts from each of these three categories. Okay. Now, this brings to the end of 2024 first quarter results briefing. If you have any further questions, please feel free to contact our IR team at any time. Thank you for your participation. Goodbye.