Welcome to the 2022 results announcement conference of CITIC Limited. For smooth proceeding of the conference, please turn your phone into silent mode. The briefing will be in Mandarin with simultaneous interpretation in English and Cantonese. Need a headset, raise your hand and one will be given to you. I see a couple of our friends probably need them. English is on channel two and Cantonese is on channel three. The briefing will start. Mr. Zhu Hexin, the chairman, planned to join us today at this conference. Unfortunately, he was unable to attend this briefing due to important work arrangements. He sends his apologies. Please allow me to introduce the management of CITIC Limited: Mr. Xi Guohua, Deputy Chairman and Vice President. Mr. Liu Zhengjun, Executive Director and Vice President. Mr. Wang Guoquan, Executive Director and Vice President. Mr. Fang Heying, Vice President. Mr. Cao Guoqiang, General Manager of the Financial Department. First of all, Mr. Cao will give a presentation on the 2022 business performance of CITIC Limited before we take your questions. Mr. Cao, please. Distinguished investors, analysts, good afternoon. I will give you a brief overview of the performance of the group in 2022. In 2022, amid a global slowdown of economic growth, the Chinese economy was affected by ongoing pandemic and threefold pressure. Despite the difficult internal and external environment, CITIC Limited maintained a strong development momentum and outperformed the market. Record revenue is HKD 771 billion, a year-on-year increase of 8.8%. Net profit attributable to shareholders was HKD 75.5 billion, increasing by 7.5%. Excluding the translation impact on RMB depreciation, the revenue and profit growth 13% and 11%. Our financial business continued to strengthen, demonstrating promising advantages, while industrial business withstood pressure from coronavirus outbreaks and declining demand to maintain a year-on-year growth in income. Last year, earnings per share, HKD 2.59. Dividend per share, HKD 0.651, up 7.5% year-on-year. Total assets, RMB 11.8 trillion, up by 10%. Total assets is down by 1.9% due to the RMB depreciation by 8% at the beginning of the year. Last year, capital expenditure was HKD 35 billion, mainly due to the subscription expenses for CITIC Securities and IT expenses for CITIC Bank, which I will not go into the details of. If you look at our performance by segment, 94% of our assets are comprehensive financial services. In terms of revenue, comprehensive financial services and advanced materials contributed 80% of our revenue. With consolidating CITIC Securities, financial services are up by 4%, reaching 40%, exceeding advanced materials. Profit contribution with CITIC Bank, financial services have seen an 11% increase, reaching 75%, while industries have seen lower proportions. The next page will give us an overview of the shareholdings of our major subsidiaries, which I will not elaborate on. This page shows the business performance of the main subsidiaries, which I will give you a breakdown later. When we look at comprehensive financial services, last year, the revenue was HKD 310 billion, increasing by 21%. The net profit is up by 7.2%. We focus on serving the real economy, managing financial risks, and deepening financial reforms. CITIC Financial Holdings made a good start and established an initial comprehensive risk and capital management system with CITIC characteristics. It's promoting the transformation and upgrading of CITIC's comprehensive financial operations, further consolidating its role as a financial ballast stone. As for the subsidiaries under financial services, CITIC Bank has a record revenue of HKD 211 billion, increasing by 3.2%, and profit of HKD 62 billion is up by 12%. Gains from debt securities led to an increase of 7% in non-interest income, contributed increase by 0.9 percentage points. Interest earning assets increased by 6%, offsetting the negative impact from the narrowed net interest margin, resulting in an increase of 2%. Deposits and loans exceeded HKD 5 trillion. Inclusive finance, green credit, and strategic emerging industries have higher proportion. Asset quality continued to improve with decrease in both NPL ratio and NPL balance. NPL balance decreased by 3.3 PP to RMB 65 billion, while NPL ratio is down by 0.12 percentage points to 1.27%. The professional coverage ratio is up by 21.12 percentage points to 201.19%, an 8-year high. CITIC Securities are affected by the volatile capital market. Its revenue is RMB 85.9 billion, net profit is down by RMB 1.8 billion, down by 11% and 7% respectively. CITIC Securities have steadily advanced its world-class investment bank business. It ranked first globally in equity underwriting by value for the first time. Its brokerage business revenue, asset under custody, asset under management, equity financing and securities financing amount, and domestic debt underwriting amount all ranked first in China. CITIC Trust had a revenue of RMB 6.4 billion, down by 25%. Profit RMB 3 billion, down by 14%. Amid a significant decline in the overall performance of the trust industry, CITIC Trust ranked second in the industry in terms of net profit attributable to shareholders. The scale of innovative business increased by 218% year-on-year, exceeding RMB 1 trillion. The proportion of total business increased by 36 percentage points to 70%. CITIC Prudential Life practiced diversified and differentiated distribution strategies. Last year, premium income was RMB 31.2 billion and a year-on-year increase of 16%. Due to the capital market fluctuations and the decline of long-term interest rates, profit is down by 63%. For advanced intelligent manufacturing, recorded revenue was HKD 60 billion, with a profit of HKD 618 million, a year-on-year growth of 26% and a drop of 2.2% respectively. Dicastal continue optimizing its business structure globally and enter the world's top 50 suppliers of automotive components for the first time. Heavy Industries was committed to making breakthroughs on key bottleneck technologies and won a number of science and technology progress awards. CITIC Dicastal achieved a revenue of HKD 42.8 billion and a profit of HKD 1.1 billion, an increase of 34% and 6.4% respectively. It has used its global advantage to make sure that we have stable supply of raw materials and productive delivery despite unfavorable conditions. The Mexican aluminum wheel and Moroccan aluminum casting production bases successfully produced their first products in December last year. CITIC Heavy Industries achieved a revenue of RMB 8.8 billion, an increase of 18%. R&D investment, RMB 120 million. A profit dropped by 36%. Recorded new orders of RMB 11 billion, setting another record. The company was also committed to making breakthroughs on key bottleneck tech, increased R&D investment by 0.4 percentage points to 7.2%. Advanced materials. The revenues of RMB 282.2 billion. Profit, RMB 15.1 billion. It maintained a sales volume growth trend on major products to ensure the supply of resources and energy. Profit margins narrowed due to the decline in iron ore and steel prices. Special Steel. Pacific Special Steel recorded revenue of RMB 98.3 billion and a profit of RMB 7.1 billion, a drop of 8.6%. The company maintained full load production and delivered 15.18 million tons of steel of the year. Because of a cyclical downturn of the steel industry, the profitability, despite that, also stayed at the leading position. They completed acquisition of the controlling stake in TPCO. Many members of the steel association has suffered a loss of 44%. We maintained a good profit level. In February, the company completed the acquisition of the controlling stake in TPCO, ranking number one in production capacity in the world. Sino Iron, despite labor shortages, extreme weather conditions and rising prices, has exported 21 million wet tons of iron ore concentrate. It remains the world's largest seaborne supplier of magnetite concentrate to China. Profit declined by 50% to $475 million. CITIC Metal recorded a revenue of $139 billion, a profit of $2.2 billion, hitting record high. Trade business revenues increased for four consecutive years and leading the industry. The sales volume of non-ferrous metals continue to grow. In terms of mining investments, overseas projects progressed steadily. Phase two of the KK Copper Mine in the Democratic Republic of Congo commenced four months ahead of schedule, and it has contributed a profit of $800 million. In terms of CITIC Resources, the recorded revenue is $5.9 billion. The profit, $1.9 billion, an increase of 35% and 21% respectively. For crude oil, the yearly output has hit a five-year high of 9.6 million barrels, with a revenue of $1.9 billion and a profit of $890 million, an increase of 38% and 20% respectively. Non-oil business also realized a revenue of $4 billion and profit of $705 million. An increase of 34% and 13%. The financial situation continued to improve with a reduction in the year-end interest-bearing debt ratio of 8.8% to 28.8%. When we look at new consumptions, we could see a delivered revenue of $61 billion and a profit of $619 million. International telecommunications recorded revenue of $10 billion and a profit of $1.2 billion. Making a growth of 6.6% and 11%. They secured the leading market position with Macau with a 46% and 97% market shares in the mobile and broadband market respectively. They successfully obtained a 5G license to become the first telecom operator in Macau to offer 5G services. CITIC Press recorded a revenue of HKD 1.8 billion and profit of HKD 126 million. They boosted their market share by 0.15 percentage points to 3% and is now again number one in the publishing industry. Dah Chong Hong realized revenue of HKD 49.6 billion and profit of HKD 612 million. There's been a drop in vehicle sales, but commercial and premium cars had very strong performance, while healthcare distribution maintained its growth momentum. CITIC Agriculture incurred a loss of HKD 680 million after making provisions for certain equity investment and sharing the losses of Longping High-Tech. For the new type urbanization sector, total revenues went up by 1.2% to HKD 57 billion, profit declined 73% to HKD 2.1 billion. An increase in settlement of real estate profits drove revenue growth. Some engineering, the segment profit actually dropped by 7.6%. We actively promoted the risk mitigation of key projects and made substantial progress. For property development, operation and management, we had a recorded revenue of HKD 12.6 billion, an increase of 34%, profit HKD 6.5 billion, increase of 2%. We had new projects, delivered projects in Harbour City in Guangzhou, Move Mansion in Shanghai, Fenghua Innovation Industrial Complex in Ningbo, and Danshan Courtyard in Chengdu. CITIC Urban Development established collaborative mechanism with Citibank and CITIC Trust, China Resources, and successfully managed risks of projects such as Kaisa Group, Evergrande Group, the China Resources CCP principle, and the Huanchuan Real Estate Construction. Urban operations also recorded a revenue of RMB 46 billion, an increase of 3%. If we exclude the impact of provisions on CITIC Envirotech goodwill and some engineering projects, underlying profit was RMB 2.3 billion, an increase of 27% year on year, mainly due to foreign exchange losses from CITIC, environments of foreign currency debt and reduced gains from equity disposal. We have proactively contributed to key national strategies and efficiently served Belt and Road markets. Thank you very much for your kind patience in listening. Now we will start taking questions. Before asking a question, please identify yourself and your affiliation. Thank you. The first question, please. Thank you management for giving me the opportunity. Wang Kai from Huatai Securities. Congratulate on the company for excellent performance. I have two questions. First, we see that 2023 is full of opportunities and risks. Can the management give us your outlook on the 2023 performance, and what are the main drivers for business growth? Secondly, can the management share with us your performance of business in Hong Kong, and how do you help Hong Kong integrate the Greater Bay Area and national development? Thank you. Thank you for the question. I will answer the first part of the question, and Mr. Xu will take the second part. 2023 is the beginning of implementing the spirit of the 20th National Party Congress. CITIC Limited will unswervingly implement the deployment of the national government, strive with determination, and achieve our targets, aiming to create CITIC Limited as a world-class company. In 2023, we will seek progress from stability and push forward our business performance in all aspects, so we will achieve better quality and higher amount. Specifically, we need to achieve growth in revenue, profit, and efficiency. Revenue, net profit will grow steadily and growth rate will outperform the market. The return on net asset will rise steadily, and we will continue to optimize labor cost, profit margin, and the intensity in technology investment for higher production and operation efficiency. We need to stabilize both the gearing ratio and non-performing loan ratio. We need to keep them at reasonable levels and continue to strengthen our capabilities to mitigate risks. We will stick with the good performance in quarter one and continue the good performance and momentum in the subsequent quarters to achieve good overall yearly result. In Q1, we had very good overall performance, which met our expectation. CITIC Limited will stick with our principle, which is high-quality development, and we will completely and accurately implement the concept of new development pattern. We will comprehensively strengthen our core competitiveness. We will work on the following aspects. First, we will strengthen our leading position in comprehensive financial services. First, we will need to build CITIC Financial Holdings into an international financial holding company with influence. We will make it the first powerhouse that boosts high-quality development of the group while managing risks. We will work around our company and our customer base in creating wealth management system. At present, the AUM of CITIC Financial Holdings is over HKD 22 trillion. We serve over 1.2 million corporate customers and over 200 million personal customers. We compared these numbers with some good performing companies in this regard. The highest number was only HKD 1.6 trillion. If we can give the full play to financial services, there will be a huge upward growth potential in the future. We will continue to support the development of CITIC Bank. We will support the bank to achieve a higher ranking in the industry by using the good momentum. We believe there is a lot to expect for in the future. We will seize the opportunities brought by the registration-based IPO scheme and consolidate and expand its leading position in securities services. Last year, we made a record in underwriting IPOs. On top of that, we will also invest more in consumer finance, making it a new growth driver. In financial services, we will maintain the high-speed growth momentum. Secondly. We will promote the value creation capability of industries and continue to consolidate the leading positions of our advantageous businesses, creating top companies in the industries segments. In industries segments, we will strengthen our core competitiveness and maintain the robust growth of their business operation. Thirdly, we will align ourselves with the national strategies and the demand for industrial transformation by nurturing the second growth curve. We need to keep our business always fresh. In business operation, we will achieve sustainable growth. Fourthly, we need to improve our management level and maintain the intrinsic momentum for better growth. We will aim at building a world-class conglomerate and benchmark ourselves with other corporations in the world and strengthen the supporting role of technology innovation to industrial development. We will focus on the bottleneck technologies by investing more in technological development. Through a digital CITIC campaign, we will promote intelligent and digital transformation in all arounds and integrate different businesses, creating a new headquarters with high management level, high efficiency, and a high level of synergy. We will also continue to improve our management level. Thank you. The second question. Let me take up the second question about CITIC's business in Hong Kong. I have three keywords for you. First, long history. CITIC was established in 1979. We, from the very start, attached great importance to the market and talents as well as capital, and viewed Hong Kong as a very important destination for investment. We have operated here for 40 years. We've been drinking the water here for 40 years. We've been nurtured here. We also have widespread participation. We have 20 institutions here. Five of them are tier-one subsidiaries, which are listed in the Hong Kong Stock Exchange. All five businesses have gone very deep in their development in Hong Kong. The third, it's deep integration. For decades, CITIC's development is deeply integrated with the social and economic development of Hong Kong. We can see it from the following respects. First, our financial subsidiaries have promoted the connectivity of the financial markets in the Greater Bay Area and have proactively supported Hong Kong as an international financial center. Secondly, we have been involved in the local life of Hong Kong and the economy of Hong Kong through such subsidiaries of CITIC Telecom International, Dah Chong Hong, and Pacific Property, CITIC Pacific, among others. For instance, Dah Chong Hong, during the COVID pandemic, has provided support for the storage and distribution of vaccines, contributing to the control of the pandemic in Hong Kong. Third, we have been a responsible corporate citizen here. We have delivered our social responsibility in supporting the SAR government in fighting the pandemic. We also have volunteers to engage in all sorts of volunteer activities, and our efforts have been complemented by both the government and the local communities. How do we support Hong Kong in its integration into the national strategy? First, the Greater Bay Area development strategy is a national level strategy. This, for us, is an obligation. We must implement the strategy. At the same time, we are also given opportunities by this strategy. We must make good use of these opportunities. Second, for the future of Hong Kong, CITIC is fully confident for the future of Hong Kong. Third, we must make good use of our advantages in comprehensive financial services, industrial development, and also comprehensive ecology and focus on our role as a connector. In order to promote Hong Kong's resources and talent in technology and financing, in the development of our GBA. The other focus is innovation-driven development. We must promote our Hong Kong-based institutions to adopt a new development strategy and to go after high-quality development. These are some things we're gonna do to help Hong Kong integrate into the Greater Bay Area strategy and the national development strategy. Thank you. Next question, please. Good afternoon. From HSBC. Thank you for the opportunity. I have two questions. First, macroeconomically wise, the global inflation is still high. Given the high interest rate, the main economies in the world are faced with a larger risk of recession. How does it challenge your business? This is the first question. Secondly, I'd like to ask a question about China's macroeconomy. Last year, China wrote out a series of policies to stabilize economy, and these measures were implemented, which will drive domestic demand. Does the management think that these measures will bring opportunities to your business operation? Mr. Fang Heying, Vice President and, the, Chair of CITIC Bank will take your first question, and Mr. Cao will take the second question. Thank you for the question. Indeed, the global economy is faced with sluggish growth and high inflation. At the same time, we can see that risks accumulated in long time will likely to explode, and some of them have already done so. In banking industries, the inflection point in the market probably goes with recession and with a suspension of interest hikes. In financial industry, the risks are becoming short-term and more sudden. Thirdly, the market will see a very high level of preference for risk aversion with higher risks surrounding financial transactions. I think there are implications for our business, but they are limited. Why? I think undoubtedly, the high inflation, high interest rates, and fluctuating commodity prices, and the quagmire, where the European and U.S. banks are currently in, will offer a high level of uncertainty. We're not sure if the economic recession overseas will have a spillover effect for China's economy. It's hard to tell what will happen, but this will surely impose a challenge on our business. We have opportunities. For example, inflation means that we need to face challenges in managing risks, but our financial institutions will have a keen demand for financial services for value preservation. They also offer opportunities for industries segments, and they have opportunities to offset the cost pressure through industrialization and integration. For example, the spillover effect of risks will lead to higher risks of financial institutions. I believe you're all concerned with the direct implications, but indirect implications. I think you are really concerned about the indirect implications, but there are very few. Why? In certain regions and in certain industries, we have a relatively low exposure to this risks. We have a very established responding system, including reporting systems and monitoring systems and the management of assets and value preservation capabilities. I think in a turbulent environment like this, CITIC is even more stable. There are four reasons. Number 1, it's stable thanks to the resilience of Chinese economy. I will not elaborate on that because you can see that from the predictions for Q1 of Chinese economy. Secondly, the stability comes from regional structures. 90% of our assets are located in mainland China. The high inflation and economic recession have relatively small impact despite the spillover effect. Thirdly, the stability comes from our comprehensive services. CITIC Limited is a company consisting of both financial services and industries, so we are like 2 aircraft carriers. We have five major segments. We have very high competitiveness. We have a diversified industry portfolio, and we have very high level of synergy between these industries. There are ebbs, ups and downs, but we can offset risks with growth in some aspect. Fifth, the stability comes from a good system. In recent years, we developed a new business model for our head office management, so we increased the capability to manage well our subsidiaries. In synergy and coordination, we have promoted our capabilities as well. Facing complex and ever-changing market trends, our integrated parent company, coupled with subsidiaries, will help us resist the risks and downward pressure. In recent years, we have established our moat. In the end, given the complexity of world economy, we sincerely invite you, our investors, to pay more attention to our business, and I hope you are fully aware of our unique advantages. Under the current circumstances, CITIC is one of the very scarce resources that you can get from international capital market. Well, thank you very much. I'll take up the second question that you have asked. Last year, there was tremendous downward trend for the economy development, but China has adopted very effective measures to boost up the economy. Many of these policies are already in place and beginning to yield results. This year, the economic dynamics is going to be even stronger. The work report of the government for 2023 has also emphasized the expansion of the market and stimulation of domestic consumption. All these will bring about good opportunities for development for CITIC Limited in the following four areas. First, financial sector. The Central Economy Work Meeting demanded that financial sector must support the real economy in terms of credit and loans, and support domestic consumption as well as the supply system to expand and promote economic recovery. This brings about tremendous opportunities for the financial subsidiaries in providing services. We will take advantage of these policy opportunities and expand credit placement as well as capital market financing in order to play to the full our financial, comprehensive financial services advantage. At the same time, the reform of the financial regulatory system is already started. The Registration-based IPO scheme is already implemented. This will provide good and systematic support for our high-quality financial services development. Second, in manufacturing, we also have good opportunities because the national strategy is to promote domestic consumption, focusing on the stimulation of auto consumption. This gives us a positive push in the production of parts, including CITIC Dicastal for aluminum wheels and aluminum casting, as well as CITIC Special Steel, which manufactures auto steels and bearing steels. The third sector is commodity trading. The policies to stabilize the economy cover infrastructure and fixed asset investment. This is good news for CITIC Advanced Materials business, especially the ferrovion in its production of iron concentrate powder. The fourth is new type of urbanization. There are now national policies to stabilize the property market. For instance, 14 regulations on the property market and 12 regulations on the rental market. All these policies will help us to stabilize the development of the property market. We are going to have our special market positioning and leverage the policy opportunities. Pursue stable and healthy development in the property market by innovation. We have integrated last year in industry and financial services. This gave us a unique edge in diffusing the risks in the property sector. We made our contributions in that way for the stabilization of the property market. We'll continue to do so in the coming year. This is not only in conformity with the national policy, but also helped the local government in stabilizing the livelihood of people. This year is also a transitional year, a key transition year for the 14th Five-Year Plan for CITIC Limited. Following the plan of the 20th Party Congress, we have to have more forward-looking thinking in our strategizing and in the comprehensive development of the whole group. We have to enhance our competitive edge so that we can develop and grow in a steady manner. Thank you. Next question. Thank you, management. From Citibank, I have two questions. First, on your valuation, how do you look at your current valuation? What measures can be taken to address the valuation discount of the company? I have another question. Could the management please share with us your initiatives in technology, innovation and digitalization? Thank you. Thank you for the question. First, I'll take your first question and my colleague would take the second one. I think this is a question that many investors are interested in. I would like to take this opportunity to exchange views with you on this question. I'm going to express my views in the three following aspects. First, the asset value of CITIC Limited has been clearly undervalued. The stock price trends deviated from our profitability and our better management capability. The current valuation is obviously remarkably lower than its intrinsic value. I think there are a couple of reasons. First, our company has a complex structure. We are a conglomerate with diversified business portfolio, which makes it more difficult for investors and analysts to do their job. Besides, given the COVID-19 pandemic and travel restrictions, we have not had enough events to exchange views with analysts and investors. Therefore, the intrinsic value has not been discovered, and that applies to many assets in our company. I asked the analysts of CITIC Securities to analyze our value. They told me that if we use the same NAV valuation method, and if we add back some items which have been ignored by investors, the net asset valuation of the company would be HKD 100 billion-HKD 140 billion higher than the current market value. That means our stock price will at least rise by 50%. Number 2, many potential but crucial valuation factors have been ignored. The current valuation model is more of based on financial factors, but less on other new valuation factors like ESG and policy orientation. For example, CITIC Limited is a pioneer among the SOEs in achieving the carbon peaking targets. Especially, the market has not realized the huge value of our headquarters in enabling their subsidiaries. People used to think that the headquarters of a conglomerate will make the business operation low efficient. Our headquarters are creating value and are innovating, and they're also operating businesses. They have a very high level of enabling effect to subsidiaries. On top of that, our efforts to promote our management capabilities was not recognized by the market. There were a few reasons, of course. The ratings by the Ministry of Finance of China increased from double B to double A. I believe the investors must price that in when doing analysis. Besides, we have a very high level of synergy between different business segments of our group. It's hard to put them into numbers. I asked my colleagues to do some research on how we can quantify the value of our synergy. In recent years, CITIC Limited successfully expanded its ecosystem and friend circles, so to speak. It played an important role in promoting the value of our headquarters. On top of that, the systematic importance of CITIC Limited and stable dividends and profit and strong resilience, I think these potential advantages have not been reflected fully in your analysis and valuation. These factors are just the core resources and capabilities that will drive the high-quality development of the company in the future. Number three, I think the valuation discount on a conglomerate is too high. We have a few independent directors who are very well-known professionals in the global capital market, and they all think that it's normal to give a conglomerate like us some valuation discount. I think the discount is too high. It's irrationally and unrealistically high. CITIC Limited has a special advantage in integrating technology industries and finance as a trial. This has been fully reflected in our business performance. Over the last couple of years, our business performance could speak volumes of the effort by the headquarters to enable different business segments to reinforcing each other. A conglomerate like CITIC Limited should not be granted a valuation discount for its comprehensiveness. Rather, it should be given a comprehensive premium because, as we said, when the economy is faced with downward pressure, we have the capabilities to reinforce each other with different segments offsetting the risks. That's why I think we should have some premium on valuation instead of discount. From the perspective of the management, we take the undervaluation problem very seriously, and we will tackle this issue. This year, we restructured our investor relations team, and we started reform of market valuation. We have combed through our work of market cap management since IPO, and we conducted investigation and research into major issues, and we have found some solutions. We have proposed a version 1.0 market value reform scheme based on value creation, value promotion, and awareness raising. It consists of 12 immediate reform measures and three long-term reform measures. Some of the reformative measures have been implemented, and they worked well. Let me give you a few examples. We continuously improve the quality and efficiency of investor relations job, and we strengthen our exchange with capital markets, and we optimize our information disclosure, making our company more transparent, so the market will better understand and recognize the value of our conglomerate headquarters. Besides, we fully support the high-quality development of CITIC Bank and unlock its potential as a ballast stone for the market cap and profitability of CITIC Limited. In 2022, CITIC Bank was the only one in banking industry that achieved positive growth in total market capitalization. At the same time, we are helping high-quality subsidiaries spin-off for listings. For example, the applications from CITIC Metal for IPO registration has been approved by CSRC, and we expect that the company will go public in April this year. In organizational structure, we optimized the top design of market cap management. We set an ad hoc committee for market cap management headed by myself to promote the working mechanisms of market cap management. We explored the management scheme, appraisal and incentive systems of market cap management. Both the management and other employees have higher awareness of the importance of market cap management. Over the years, we've been doing quite well in business operation. The stock price was up 48.76% in 2021 and 15.87% in 2022. In the same period, Hang Seng Index was down 15%. Our market cap was corrected to some extent. We have won the Golden Hong Kong Stock Award for 2 consecutive years. That speaks to the recognition by investors and analysts of our continuous effort. Last but not least, I would say this very responsibly, that is CITIC Limited has certainty in its value for long-term investment. If you can understand the nature and the trends of CITIC Limited, you will have full confidence for the value of our company in long-term investment, you will receive remarkable returns from investing our company. In this year, despite the internal and external adverse factors, we gave stable dividends. We delivered high-quality assets, robust profit, and secure liquidity, which manifested a very high level of investment certainty. Our management made promise of our strategy, which manifested the certainty of our value and its long-term commitment. I often tell my colleagues that strategies are promises. In 2022, CITIC Limited published the 14th Five-Year Plan. We have made our targets to reach HKD 10 trillion in assets, becoming a top 100 company with a net profit of HKD 100 billion and with a HKD 1 trillion revenue. By 2022, we realized the first three objectives. Our total assets amounted to HKD 10.6 trillion. I believe we will rank 80th or 90th in Fortune 500 companies list. Our net profit has exceeded HKD 100 billion, and it will not take long for us to reach the HKD 1 trillion target. We are very committed to our strategic objectives. This type of uncertainty is attributed to our confidence in the CPC Central Committee and the national government and the effort by our employees, and also the enabling capabilities of our headquarters. The confidence lies in the advantages and capabilities created by the integration of technology industries and finance. CITIC Limited will have very high level of advantage in different factors. By enabling our business performance with the three aspects, we will enable our business segments with sustained support. Going forward, we will pay more attention to technology innovation and digital transformation, so we can continuously improve our capabilities to create value. In current valuation system, ESG, social responsibilities, and systematic importance have higher importance. CITIC Group, CITIC Bank, as the core pillars of our business will continue to see higher value, which will drive our stock price to its reasonable intrinsic value levels. Let me repeat. I think reflected by the current stock price, our valuation is obviously too low. CITIC Limited has very high security margin and room for growth and value for long-term investment. You're all welcomed to pay a visit in person to CITIC Limited. Investors and analysts are all welcome to pay a visit to our headquarters and other subsidiaries that you are interested in. Thank you. About innovation, I would like to answer you from three levels. First, CITIC has always been committed to developing into a business of excellence in science and technology innovation. This is also our core competitive edge. Secondly, at the moment, we are enhancing two things. First, the unified management system. The company has established Science and Technology Innovation Committee and Expert Committee. We have also worked out a comprehensive plan and management system for innovation. The second thing we want to enhance is our investment in science and technology. In 2023, our investment is going to be more than 3% of revenues. First time in our history. This is a very high indicator and a substantial amount of investment in science and technology. The 3% is also a milestone record for us in our history. In recent years, we've also made breakthroughs in science and technology and innovation in all five sectors covered by the company. We have undertaken 22 national-level research projects. I can give you some specific examples. For instance, CITIC Bank has developed a blockchain platform and has been approved by the Ministry of Industry and Information Technology. CITIC Heavy Industries has successfully created a human computer interaction function and the hydraulic heavy-duty robotic arm. CITIC Steel has undertaken the high-speed rail bearing localization project. Agriculture, CITIC Agriculture has produced 85 new varieties, achieving great results, introducing new varieties, rice and corn. These are some of the innovations that we have been able to achieve. In terms of digitization, there are several things worth noting. First, we have very clear goals in digital transformation. We have a data center already included in the 14th Five-Year Plan. We have a very clear pathway and targets. Secondly, digitization is well founded, well grounded in the company. We have been working in the digital space for many years. CITIC Telecommunications, AsiaSat, and CITIC Networks all have relevant licenses. We've always said that we have network, we have scenarios, we also have the cloud. We also have a digital ecology. We have CITIC Cloud, which is a big platform with a large capacity. CITIC Networks has a license. All over the country, we have more than 150 stations to provide comprehensive ICT solutions for our users. Internally, we have many different scenarios and different business modes, which could give us the opportunity to innovate digitally in many different ways. We can support multiple business modes. We have a very solid foundation for digital transformation. Just now, we heard about the valuation of CITIC being low from the real value. Actually, science and technology and innovation, as well as digitalization, is also part of the value that has been underestimated by the market. Thirdly, in digital transformation, we are integrating this technology in business management and business development. We hope to use this digital technology to streamline our processes, improve management efficiency, as well as the resource allocation and value management capabilities. The cloud is our base. On the cloud, we are developing our smart headquarters to cover financial management, risk management, collaboration in the business. We are already beginning to see good results in the development of a smart headquarters. In addition to that, in the different business sectors and the subsidiaries, we are trying our best to use the best technology and improve the digital transformation process so that we could enable the different our competitiveness in different scenarios. We have a lot of achievements. For instance, number six line is a model factory. The CITIC Steel is totally digitized in its parallel line of production. All these achievements can be seen everywhere in the CITIC subsidiaries. The achievements are multitude in our subsidiaries, and we welcome you to visit our subsidiaries to actually see and experience these advancements. We are going to continue to target being a business of excellence in science and technology. First, we are going to focus on AI new materials and green and low carbon technologies so that we could make breakthroughs in the bottleneck problems and develop core technologies in the service of the national strategy and industrial development. Secondly, we must be a main player in the deep integration of technology, capital, industry, and innovation, so that we become a new type of alliance. With all these capabilities, we should be the source and the high ground of innovation. Third, we have to provide enabling environment to promote the full life development policy support system for science and technology, and stimulate the innovative vitality of our subsidiaries. We also want to build up our team of scientists and high-tech talents. Both, we want to work with universities and the academia so that we could produce world-level innovation results. We believe, this is not far from us. Thank you very much. Chia Wei. Next question. Good afternoon, management. Thank you for the opportunity. From Goldman Sachs, I have 2 questions. The first one has to do with the property market. In your presentation, you mentioned that over the past year, CITIC Limited contributed a lot effort into mitigating risks. Can you please talk about the business of CITIC Properties and how is its risk exposure, and how do you dispose of risks going forward? My second question has to do with CITIC Financial Holdings. It was established 1 year ago, we've observed many changes since the year. What are the new stuff that we are expecting in the coming year? Thank you. Mr. Zhang will take the first question. Thank you for the question. First, in 2022, I'd like to share with you the profit business in 2022. In 2022, our property business went very well. We have two entities, CITIC Pacific Properties and CITIC Urban Development Operations for property business. We've been committed to robust operation. Faced with market correction and downward pressure, both CITIC Pacific Properties and CITIC Urban Development and Operation surpassed the objectives in our budget with significant increase in net profit, especially CITIC Pacific Properties, which contributed with a record high of profit. The market is still in correction, China is still in the process of continuous urbanization. There is always the need for properties. The rigid demand will continue to unlock more potential, we can see that from the data of national property associations. We will give full play to our advantage in new type of urbanization business, which has a lot to expect for in the future. We have seen less risks in our financial services. In 2022, the exposure to real estate market was stable. There are two reasons. The concentration level in real estate sector was down compared with the beginning of the year. The exposure to major real estate customers was down. We have seen some effective work in our efforts to achieve synergy between industries and financial services, and we have formed a stable and replicable model. We implemented the national strategies to mitigate risks with synergies between financial services and real economy. We coordinated our property sectors and banking branches to form the so-called fleet to make full use of different approaches, like trust segregation, mergers and acquisitions, agent construction and management, custody services, et cetera. We can give full play to our professional capabilities, revitalizing our underlying assets, implementing a number of property projects, making contribution to the stability of a financial market in China and the real estate market. Our risk management model is to mitigate risks with development. We supported local governments in their efforts to guarantee supply and delivery of properties and people's livelihood. We maintained good quality of property development. We have upheld the interests of private companies, and we mitigated the pressure both on the downstream and upstream of the property developers. It's a win-win strategy where the home buyers and constructors are all satisfied with. This has been recognized by the Central Government as well. Thank you. Now, I'd like to take up the second question about CITIC Financial Holdings. Thank you very much for your interest in CITIC Financial Holdings. If we are going to assess the performance of CITIC FH, we could see that that year is the beginning year for the company. We have started steadily and performed smashingly. We have actually over-achieved our targets. In fact, in People's Daily, we have published an article that is to contribute financially to high-quality development of the economy, giving a comprehensive introduction to our strategies in supporting the financial development of the Communist Party and the nation and the country. Our achievements are reflected in the following ways. First, the governance system is continuously improving. We have established a governance structure and procedures. We have also put in place the authorization plans as well as the division of responsibilities between CITIC Financial Controls, CITIC Limited, and CITIC Company. We have now successfully transitioned to overall business operations. Secondly, we have promoted the monitoring and supervision reform. We want to be at the forefront of the industry in promoting the asset transfer approval process, which is a new experiment by the regulator. We have communicated actively with the regulator to formulate or shape the process. Secondly, we have focused on risks, capital, and related trading as our core functions in financial controls. We call it risk management, seven management mechanisms for risk management. We have also continuously explored innovation in our development, focusing on fintech and shared resources, wealth management, and smart controls. Now the digital 10 system is fully online. We have formed a synergy in our businesses and products, and have focused on key client groups in the provision of comprehensive services. We have also released financial resources into the real economy to provide strong support for the real economic development of the country. Fifth, we have given full play to our role as the leading engine by effective management and active enabling processes. We have contributed to 80% of the net profit of CITIC holdings. This fully demonstrates our role as the leading institution for high quality development. 2023 is going to be the first year in which we are going to have full operations. We will follow the policies and directions of the 20th Party Congress, as well as the Central Economic Work Meeting. We will embed ourselves in the national development plan and play our role in creating value. We are going to use capital as the connector, governance as the platform, and risk management as our baseline, and wealth management as our driver in order to promote our brand and also to achieve good results in financial holdings. We are also going to be continue to lead in high-quality development in order to improve all the key projects underway. Our risk management system must be effective. Capital must be managed in a more sophisticated manner. There should also be new results in coordinated mitigation of risks. Wealth management must lead the industry. Digitization will help us to achieve a goal of, no work, no digitization, no work. Our goal is to be number 1, safe, highly efficient, and value creation, as well as a smart bank. Many investors joined us through the online live streaming platform. Now we will give the opportunity to them. We have received a question from Tokio Marine. The question is as follows. How is the business performance of CITIC Bank in 2022? What's your outlook for business performance in 2023? How do you look at the changes of asset quality of a CITIC Bank in 2023? As for Huarong, it's been one year since CITIC Group injected capital to Huarong. How do you look at the business performance of Huarong since the year? Mr. Fang will take the question. Thank you very much for your interest in CITIC Bank. I'd like to thank Mr. Xi for mentioning the effort by the group to support CITIC Bank. It's very strong endorsement for the bank, and it's also incentivize CITIC Bank to make better contribution. CITIC Bank is one of the most important subsidiaries of CITIC Limited. Last Friday, we held results announcement conference in both mainland China and Hong Kong, answering questions from investors and analysts. Briefly, to your question, I'd like to first of all talk about our business performance in 2022. There are 3 points. First, stable and robust profit growth. Last year, the net profit was RMB 62.1 billion, up 11.6% year-on-year. Making us one of the best per-performing listed banks. If you look at our provision coverage ratio, then we're quite strong because the peer banks have reduced provisions coverage ratio by large margin, but our provision coverage ratio is up by a large margin of 21 percentage points. The robustness I'm talking about means stability. Last year, we're a two-digit growth. We hope that we can sustain that level. Last year, I'd like to say, the business performance is reflected on our balance sheet, but there are something that you couldn't see from that. CITIC Bank has ripped off its own historical legacy burden. That means the historic burden created before 2019, meaning the non-performing loan that were created and was a higher amount than other banks, but we have said goodbye to this legacy burdens. We have disposed of the non-performing assets, and we have mitigated existing risks. The NPL ratio is at 1.27%, down 1.2% year-on-year. The non-performing loan balance and ratio have declined for two consecutive years. Our effort has been recognized by the market. Some non-performing assets are still on the balance sheet. We have categorized them in an accurate way in order to deduct the impairment. We have a more and more healthy balance sheet, thanks to the disposal of non-performing loans. There are many other indicators. For example, credit asset is on the rise. Now with higher interest rates, this is of more higher uncertainty. For example, corporate loans and retail loans are in a 50/50 split. Retail loans have a higher interest rate by 1 business point than retail loans. The main locations of our business are in Beijing, Shanghai, Guangzhou, Shenzhen, Pearl River Delta, and Yangtze River Delta. We have less business from other lower-tier cities. We have improved the concentration level of key accounts. Last year, we controlled the cost of liability. Cost of liability was down 7% more than other peers. Our NIM is 5% less in the decline than other peer banks. The diversified business brings stability. Well, that's to respond to your question about the business performance in 2022. With regard to 2023 performance, we will continue to face with complex situation. We're not sure if the recovery is strong or not. We're not sure if the real estate market will sustain its recovery. You're also concerned about the risks surrounding a rural revitalization business, and this will have a huge impact on future business. The market is interested in the NIM issue, the added value of assets. I think in 2023, NIM will continue to decline in 2023, but we are faced with pressure in operating revenue. We're going to strengthen our cost control to make sure that we are doing better than peer banks. Generally, I am confident for 2023 performance for three reasons. Number one, China's economy will improve in general. Second, CITIC Bank is in a very important transitional period. Our confidence comes from our own progress, also it comes from our capabilities which we built in the last few years. Thirdly, our confidence comes from the support of the group, as Mr. Shi emphasized. Thirdly, our confidence comes from the fact that we have disposed of historical bad loans so we can move forward with light assets. In the past, NPL was eating into our profit, now we can have better asset growth and less provision. In 2023, we will need to work in a more stable and faster manner, and we will stabilize NIM and quality, and we will expand expenses from middle office income, and we will achieve higher efficiency and quality, so we can achieve sustained growth. You've also asked about asset quality, haven't you? Yes. If I can define where we are, simply put, CITIC Bank has already finished the period where we had high risks and we have improved asset quality. We have higher capabilities to mitigate risks, and we have an established risk resistance system which can support our long-term development. As I said, in 2022, the NPL ratio was down 0.12%, and question loans was down by 0.2%, and our recovery ratio is up by 21 percentage points. Many indicators have made historical high since 2014. For example, NPL ratio, provision coverage ratio, they have been in their best condition since 2014. The changes are much better than other peer banks. In 2023, we believe we will have stable and robust assets which delivers good quality. I think the economic recovery will offer some confidence. For example, in 2022, the new NPL ratio was 1.5%, down by 1.19%, the best since 2024. Overdue loans ratio 0.62%. Overdue 90 days and 60 days, the proportions have been standing on the good level. The interest discount rate is 2.26% and 29.38% for attention level loans, which have improved, and our coverage ratio, as I said, has improved as well. Thirdly, we have built a better risk management system. We need to be more aware of the immediacy of profit and long-term effect of risks, we cannot compromise our risk management. We need to be more determined in controlling risks, we have built capabilities with a better defense system. Given all these factors, stabilizing quality is one of the four major areas in 2023. In 2023, we will achieve a more stable and a better asset quality. Ms. Liu Zhengjun is going to take on the question on Huarong. Thank you very much for your interest in Huarong. First of all, I would like to say that CITIC Limited is the main investor, not CITIC Financial Holdings. The performance of Huarong is not gonna have a direct bearing on the performance of CITIC Financial Holdings. We look at the overall strategy, and we focus on the medium and longer term potential, as well as its specific, its unique value in growing against the grain. 2022 was the starting point for Huarong. Our guiding principle is to focus on development and efficiency. Last year, there were many challenges. We have some periodical, or rather, transient reduction of our revenues as well as NPL credit assets. For instance, the credit impairment loss provision has increased. The overall performance development has been stabilized compared with the second year. We have reduced loss by HKD 10.1 billion. We have about 9 months covered last year. The second half has performed better than the first half, the fundamentals were improving positively. We have sped up shrinking the balance sheet and completed the transfer of equity of 4 financial subsidiaries. Total assets has gone down to HKD 1,000 billion. Second, we tried to diffuse risks. We tried to pinpoint the. We had a general review basically of our risks in order to take stock of the quality of our assets. Second, we have also sped up the transition of our core business. The scale of main business non-performing assets has gone up to 69%. The substantial restructuring business. As a percentage of the newly invested business has reached 79%. Fourth, we have sped up internal reform by optimizing the organizational structure and regularizing the personnel system and incentive mechanisms. Fifth, we have optimized our financing structure and liability structure. There was no default of securities by the end of the year. Six, we have collaborated with our other business sectors of CITIC Limited in developing new business models. When we look into the future, we certainly hope that with the concerted efforts of the company and also of the group, we could become the fast-track player in the group. Some of the subsidiaries of the company will also explore such development opportunities. We are going to continue to optimize our management and continue to reform and build up our teams. We hope that within 3 years, we will have considerable achievements, and in 50 years, we'll be the leader in the industry. In the interest of time, we will now take the very last question. Thank you, management, for the opportunity. From Shenwan Hongyuan Securities. I have one question. Mr. Shi mentioned that CITIC Limited has 200 million customers with higher disposable income among China's population. Wealth management business has a huge potential to unlock. How does CITIC Financial Holdings use its licenses, including banking, securities, trust, and life insurance, to give full play to their function as a wealth management branch? Any specific measures? Thank you. Thank you for the question. I think according to a report by McKinsey, last year, the wealth management market in China is at 250 trillion RMB, only second to the US. It's estimated that in 10 years, meaning by 2033, the size will reach 500 trillion, 570 trillion. I think there is indeed great potential. CITIC Financial Holdings was established on 16th March last year, so today marks its one-year anniversary. I believe in risk management and asset management, we've done some work, and at the same time, we are committed to deepening the wealth management market by our subsidiaries. CITIC Financial Holdings has full licenses, including bank, securities, future, funding, funds, AMC, and financial leasing. There are 26 companies in total. Last year, the asset under management was RMB 6.6 trillion. As Mr. Shi said, it served 200 million individual customers. Even before our financial holdings was established, we started to build a digital financial platform. It features a sharing platform and a wealth management platform, as well as an intelligent management system. Wealth management business has been manifested in a so-called wealth management CITIC Square, which is a mobile online app. It uses a shared page which links with eight financial institutions under the big umbrella of CITIC Limited. There are eight of them. Customers can be mutually recognized, and one individual customer can access to all of the CITIC's platforms with one access. We can offer full scale of products to individual customers, especially the long-tail customers. At the same time, we can offer very convenient online services which are personalized. CITIC Square is an open ecosystem. It's not only available to the subsidiaries. At the same time, it's also available to the top wealth management institutions in this industry. As you all know, on 16th March, we held the first conference of wealth managers in Suzhou. It saw participants from 26 public funds, meaning 60% or more of AUM in China. We discussed with these people together the wealth management market outlook. Last year, we selected some goods from market, and in only half a year, the revenue was RMB 35 billion, and we received very good feedback. CITIC Financial Holdings does not only serve individual customers, but also corporate ones. We have established a 1 plus 3 plus 5 system. 1 means wealth management committee, 3 means 3 sub-committees, and 5 means that we set up 5 workshops for different lines of work. We have formed a CITIC fleet, so to speak. Last year, in IPO, bond underwriting public funds, REITs, we have achieved the top position in the market in three main businesses. We have led to a 16% increase in the IPO business of CITIC Bank, reaching 65%. We have seen a 32% increase in the sponsored business in IPO, and we have seen an 8% increase in other sponsored business. The coverage ratio for high-end customers in bond issuance is 55%, ranking the first in the market. We have reached RMB 2 trillion in co-financing projects, a 28% year-on-year increase. We have also established a system featuring specialized high-tech companies, and their proportion in our business portfolio is up by 19%, reaching 48%. Credit facilities have increased by 18% to these tech companies. As Mr. Shi said, the wealth management business has reached a level of RMB 22 trillion. CITIC Financial Holdings is building itself into a global financial institution that offers comprehensive financial services. Wealth management will for sure become the core competitiveness of CITIC Financial Holdings, and wealth management will for sure become the inevitable path towards light asset and high quality management. We are capable of and we are confident in the development of wealth management business in China and create the business for Chinese people. Thank you. Due to the interest of time, we will wrap up the results announcement conference here. Thank you. Today's briefing. Thank you.