Welcome everyone to Cathay Financial Holding Co.'s first quarter 2022 conference call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a question and answer session. Please follow the instructions given at the time if you would like to ask the question. Now I would like to introduce Ms. Sophia Cheng, CIO of Cathay Financial Holding Co. Ms. Cheng, please begin. Thank you. Good afternoon, and good morning to investors in Europe. Welcome to Cathay Financial Holdings' 2022 first quarter analyst meeting. My name is Sophia Cheng, the Chief Investment Officer of Cathay Financial Holdings. Today, I would like to host the conference call. Thank you very much for joining us today. In the beginning, I would like to introduce the senior managers who are with us on the line. Today, we have Mr. Daniel Teng, Senior EVP of Cathay Financial Holdings; Ms. Grace Chen, Chief Financial Officer of Cathay Financial Holdings; Mr. Abel Lin, Managing Senior EVP of Cathay Life; and Mr. Juan Yuan Xu, Senior EVP of Cathay Century, the property and casualty insurance. For today's conference call, Yajou from our IR team will present the first quarter results and announce the new 2021 embedded value details. After the presentation, we are open for a Q&A session in which senior management will be answering your questions. Without further ado, let me pass the call over to Yajou for the briefing of first quarter results. Yajou, over to you. Thank you, Sophia. Let's start with the business overview on page four, which provides a quick highlight on each subsidiary. Cathay United Bank delivered robust loan growth in deposits and loans. Asset quality remains benign. Interest spread expanded. Net interest income grew 10% year-on-year. Net fee income grew 15% year-on-year, driven by robust fee growth in wealth management, credit cards, and syndicated loans. Cathay Life continued the value-driven strategy. Protection type policies first-year premium grew 21% year-on-year. AUM for investment-linked product rose to over TWD 700 billion, ranking number 1 in the industry. Cathay Life also delivered sound investment performance with after-hedging investment yield of 4.7%. Hedging cost also showed improved substantially. Embedded value increased 5% to TWD 1.2 trillion, equivalent to TWD 91 per share of the holding company. Cathay Century, the general insurance subsidiary premium income grew 14% year-on-year. Market share was 12%. Asset management subsidiary Cathay Securities Investment Trust AUM was over TWD 1.2 trillion, ranked number one in the industry. Lastly, Cathay Securities' number of customers hit a new record to 1.3 million as of the end of the first quarter. Please look at page five, Cathay Financial Holdings net income and EPS. Cathay Financial Holdings net income for the first quarter reached its second highest record of TWD 34.4 billion. The year-on-year earnings decline was mainly due to higher base period for investment gains amid favorable financial markets last year. EPS was TWD 2.6. Page six shows the subsidiaries' net income and ROE. Cathay United Bank's net income grew 7% year-on-year, driven by robust net interest income and fee income. Cathay Century and Cathay Securities Investment Trust both recorded record high first quarter earnings. Cathay Life delivered its second highest historical first quarter earnings. The year-on-year decline was due to the higher base period for capital gains in the same period of last year. On a consolidated basis, the holding company ROE was 16.4% in the first quarter. Please turn to page seven to see the book value of Cathay Financial Holdings. The consolidated book value of holding companies was TWD 767 billion as of the end of the first quarter. The book value declined due to the rising bond yield and falling equity markets. Book value per share was TWD 50.3. Page nine and 10 show our overseas expansion. Cathay Financial Holdings continue to expand overseas business. For banking, the Ho Chi Minh City branch opened in April. In Cathay Life, Vietnam's total premium increased 11% year-on-year. As for the subsidiaries operation in China, Cathay United Bank Hong Kong branch issued the first structured product, providing greater flexibility in asset allocation for high-net-worth customers. For Cathay Life's joint venture in China, the total premium grew 8% year-on-year. Please turn to page 12 for more details about the banking subsidiary. Cathay United Bank delivered robust loan growth across consumer, mortgage, and corporate loans. The total loan balance increased 7% year-on-year to TWD 1.8 trillion as of the end of the first quarter. Deposits grew 11% year-on-year to TWD 2.9 trillion. The demand deposit ratio reached 73%. Interest yields is shown on page 13. The interest spread increased five basis points quarter-on-quarter to 1.79% due to optimized loan mix and increasing in lending rates. The net interest margin slightly declined quarter-on-quarter as we reduced the foreign currency bond position in the first quarter. Page 14 shows the asset quality. Cathay United Bank maintains low NPL ratio at eight basis points and coverage ratio at 19.44%. Gross provision was TWD 0.7 billion, both with the general provision for regulation requirements. Recovery was TWD 0.5 billion. Please turn to page 15 for SME and foreign currency loans. Cathay United Bank grew SME with benign asset quality. SME loan balance reached TWD 279 billion, accounted for 15% of the total loan. Foreign currency loan balance grew 4% to TWD 227 billion. While showing notable growth if we're excluding the impact from the Taiwan dollar depreciation. Page 16 shows offshore earnings. The offshore earnings was TWD 2.7 billion. The decline was mainly due to the lower investment income this year. Please turn to page 17 for fee income. Fee income grew 15% to TWD 5.2 billion in the first quarter, driven by growth in wealth management, credit card, and syndicated loans. Page 18 shows the breakdown of wealth management fees in the first quarter. Please turn to page 27 for regional breakdown of overseas fixed income. For overseas fixed income investments, Cathay Life allocated 48% in North America, 18% in Europe, and the rest are in Asia, Pacific, and other countries. Page 28 shows the book value and unrealized financial assets, both were down year-to-date, reflecting mark-to-market decline from rising bond yield and falling equity markets. If we base our IFRS 17 standard to mark to market both asset and liability, as the decline in liability exceeded that in assets, the book value increased by over TWD 100 billion between September 2021 to the end of the first quarter this year. Next, please turn to page 32-34 for the performance of Cathay Century. Cathay Century's premium income grew 14% year-on-year to TWD 7 billion. Market share was 12%. Page 34, the gross combined ratio and retained combined ratio declined due to higher year-on-year base for loss ratio, resulting from various few large claim events from commercial fire insurance last year. This is our first quarter operating results. The next section, we will provide the 2021 embedded value and appraisal value. Please turn to page 36 for the summary of embedded value and appraisal value major components. In this table, you can see the asset yield assumption for various insurance policies. We increased the equivalent asset yield by three basis points to 4.06%. Based on the new assumption, Cathay Life 2021 embedded value increased by 5% year-on-year to TWD 1.2 trillion, equivalent to TWD 91 per share of the holding company. Cathay Life's appraisal value as of 2021 was TWD 1.46 trillion, TWD 111 per share of the holding company. We estimated 2022 value for one-year new business of TWD 30 billion and applied multiple of 8.8 when deriving value of new business. In the following pages, you can see more detailed analysis on 2021 movement of each EV component. You can refer to page 43 and 44 for the scenario of impact from various investment yields and discount rates. On page 45, you can refer to a summary table for year-on-year comparison. We hope this information is useful to you. Lastly, we would like to provide you with an update regarding the COVID-related policies for Cathay Century. The number of total effective policies was 1.3 million as of the end of April. 450,000 policies has already expired in May. As of today, the total effective policies was down to 850,000. Year-to-date, the accumulated return premium was TWD 418 million. The accumulated claim payment was TWD 180 million for around 10,000 cases. As the COVID cases surge, the claim payment and number of claim cases might increase in May and June. So far, the average claim payment per day in the previous week was around TWD 11 million. given the still evolving government's prevention policies and epidemic situation, we will put the loss reserve in accordance with the developments in the epidemic and reflect that in our monthly earnings results. This is the end of the presentation. Now let's open to Q&A. Thank you. Ladies and gentlemen, we will now begin our question and answer session. If you wish to ask a question, please press zero one on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. Should you wish to cancel your question, you may press zero two. Thank you. Now please press zero one to ask the question. Thank you. Thank you, Jason. Before the Q&A, let me just highlight, because today in the Chinese session, there were many Q&A already occurred. I will expect in this session the questions may be fewer than usual. Allow me to have some key summary from our Chinese version. There were three areas I'd like to highlight, summarize with you. First one is related to the COVID-related T&C insurance, the COVID-related insurance policies. What is the current update and what is potential impact? The accumulated policies Cathay Century has issued was about 1.3 million policies. Because about 600,000 has matured in middle of May, as of now, we have 850,000 policies left. This will fall down to about 500,000 plus into July. Afterward, the expiration speed will be more flattened. So far, the first tranche that we have sold before May last year, they have quite high reinsurance rate. Even, there was one question asked about if after the expectation whether there will be potential financial risk from the old policy, which had entered the two-year insurance claim filing time. Because of the high reinsurance rate, we do not expect significant financial impacts or sort of remaining how we manage the current 805,000 insurance product policies in hand. The total premium we have sold last year was TWD 550 million, this year is TWD 950 million, and where this year year-to-date was TWD 520 million. On combined basis, the COVID-related insurance total premium income was TWD 1.47 billion. So far, we have year-to-date received about 11,000 cases for insurance claims. Year-to-date, we have TWD 190 million for the claim. Each day so far as the pandemic cases, confirmed cases is rising, we handle about 20,000 policies a day and roughly 11 million insurance claims a day. Because the whole situation is moving very dynamically, we will confirm the policy makers' idea, the industry association's consensus, we will respond accordingly. We have accumulated TWD 6.3 billion related insurance reserve can be a buffer, we will also review into the next few months to see the emergence of the new insurance claim to see the impact. This is so far the information we can share with you. We hope in the next quarter we will have more additional update. If needed, of course, monthly update can be provided. The part here for the summary from the Chinese section was related to Cathay United Bank. The bank is expecting loan growth to show low double-digit loan growth and also high single income growth. The asset quality remains very healthy, we are expecting rising interest rate to support the quarterly net interest margin, which will be positive for earnings of Cathay United Bank if we combine with quite decent loan growth. We have seen some growth in foreign currency loan, the overall growth could be furthermore again loaded. The part three for the Chinese section is for Cathay Life. The company continued to focus on protection-type insurance policies. After 2021, protection-type policy has grew by 10%. In first quarter this year, it further grew by 20% year-on-year. We are expecting double-digit growth for the whole year. This will enhance overall contract service margin for Cathay Life in preparation for IFRS 17. Each year, we are expecting roughly TWD 450 billion for reinvestment, therefore a structural increase in interest rate is quite favorable to the company. This will also allow us to load into better yield in terms of asset allocation. Currently, despite the rising rate will affect the mark-to-market on assets, considering that we only apply IFRS 4, which only mark-to-market asset without mark-to-market liability. Because the whole industry has been doing annual review, the test we have been doing that every September. If we do the IFRS 17 calculation, the test which mark-to-market both asset and liability is actually net quite favorable positive benefit through the interest rate rise in the past six months. It was a quite significant positive to the net worth based on the IFRS 17 net worth for the six month ended March 2022. These are the three key highlights from the Chinese section I have provided. If you have further questions, please feel free to ask your question. Thank you, Ms. Jane. Ladies and gentlemen, we are now in question and answer session. Please press zero one on your telephone keypad if you would like to ask a question. Thank you. Okay. If no further question, because in the training section there were so many questions, people who understand mentoring are more than welcome to watch the replay in the other one. If people who are interested in mentoring, we'll be more than happy to answer your detailed questions either now or after the call. Let me check whether there were more questions from the audience. Yes. As a reminder, please press zero one on your keypad if you would like to ask a question. Thank you. Okay. If no further question, I think we can maybe end this call. The whole IR team will stand by for you. If you think about any question, we will be more than happy to follow up with you. Okay, thank you. May I close the call, I think? Yes, of course. Thank you, Ms. Jane. Ladies and gentlemen, Thank you. Thank you. We thank you very much for your participation in Cathay Financial Holding Company's conference call. You may now disconnect. Goodbye. Thank you.