Thank you for standing by for Fanhua's second quarter and first half 2022 earnings conference call. At this time, all participants are in a listen-only mode. All lines have been placed on mute to prevent background noise. After the management's prepared remarks, there will be a question-and-answer session. Please follow the instructions given at that time if you'd like to ask a question. For your information, this conference call is now being broadcast live over the Internet. The webcast replay will be available within three hours after the conference is finished. Please visit Fanhua's IR website at ir.fanhuaholdings.com under the Events and Webcast section. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I'd now like to turn the meeting over to your host for today's conference, Miss Oasis Qiu, Fanhua's Investor Relations Manager. Good morning. Welcome to our second quarter and first half 2022 earnings conference call. The earnings results were released earlier today and are available on our IR website as well as on Newswire. Before we continue, please know that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause our actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, those outlined in our filings with the SEC, including our registration statement on Form 20-F. We do not undertake any obligation to update this forward-looking information except as required under applicable law. Joining us today are our Chairman and Chief Executive Officer, Mr. Yinan Hu, Chief Financial Officer, Mr. Peng Ge, and Chief Operating Officer, Mr. Licheng Liu. Mr. Hu will provide a review of our financial and operational highlights in the second quarter 2022. There will be a Q&A session after the prepared remarks. Now I will turn the call over to Mr. Hu. 大家好，我是胡一楠，非常感谢大家参加今天的季报会议。 Good morning and good evening. This is Yinan Hu. Thank you for joining today's conference call. 二零二二年的第二季度，泛华稳步推进专业化、职业化、数字化和开放平台的发展战略。随着各个战略项目的落地，泛华的多项经营指标总体呈现持续向好的趋势，新战略实施效果初显。 In the second quarter of 2022, as we continued executing on our professionalization, career-based digitalization and open platform strategy and implemented a series of strategic initiatives, the efforts started to show some encouraging results with positive improvements across various operating metrics. 2022年的第二季度，泛华实现总保费规模28.5亿元，同比增长12.2%。其中，寿险新单保费规模达到6.2亿元，同比增长43.7%，环比增长25%。增长的核心驱动力在于泛华的高产能的人力数量增长及产能的提升。 Our insurance business grew 12.2% year-over-year to RMB 2.9 billion in gross written premiums, of which our life insurance first-year premiums reached RMB 615.7 million, up by 43.7% year-over-year and 25% quarter-over-quarter. The growth was primarily driven by substantial increases in the number of high-performing agents and their per capita productivity. 二零二二年的第二季度，在泛华主动清理低效、低产能的人力措施之下，泛华的总开单人力同比下滑了37.6%。但高产能的人力数量及人均产能指标均呈现同比大幅提升的态势。其中，三个月连续万批人力同比增长23.6%，人均产能同比增长33.3%。十万批的人力同比增长41.2%，人均产能同比增长6.3%，贡献产能占比达到31%，充分体现了在专业化、职业化战略指引下泛华聚焦中高净值客户，聚焦经营极优代理人的经营策略初步显现成效。 During the quarter, both the number of high-performing agents and the per capita performance indicators have enjoyed great improvements on a year-over-year basis. The number of three months, 10,000 premium agents who are defined as those contributing over RMB 10,000 annualized premiums equivalent or APE monthly for three consecutive months during the quarter increased by 23.6% year-over-year, with per capita productivity up by 33.3% year-over-year. While the number of 100,000 premium agents who are defined as those contributing over RMB 100,000 APE during the quarter increased by 41.2% year-over-year, with per capita productivity growing 6.3% year-over-year. Correspondingly, as we purposely reduced the number of non-performing and low performing agents, the total number of Fanhua's performing agents reduced by 37.6% in the second quarter of 2022. These are clear signs of the positive effects of our strategic focuses on serving mid to high-end customers and high performing agents. With the steady progress in executing our new strategy, we were proud to deliver robust growth in our new business during the quarter, while operating income reached RMB 31 million, well exceeding our prior expectation. The year-over-year decrease in operating income was mainly due to, one, a loss of RMB 7 million within our claims adjusting segment due to impacts of COVID-19 during the quarter. Especially, in our major business areas, we have failed to operate for quite a long time. We have a profit of RMB 3.5 million in the same period of last year. That is to say, we have been impacted in income due to COVID-19 for about RMB 10 million in claims adjusting segment. Two, an increase of investment in our Yuntong branches, which correspondingly incurred a loss of RMB15 million due during the quarter. Three, our increased expenditure amounting to RMB 10.3 million on refining our IT infrastructure to support digitalization of our operation and empower frontline operation of our agents. Although such investments may have increased our cost pressure, we believe it is necessary investments to strengthen capabilities. If excluding the impact of the above-mentioned factors, our operating income would have been approximately RMB 63 million, representing a growth of 34%, which again demonstrates that we are on track for future sustained growth. After over a year of implementation and continued refinement, our strategy is clear and pragmatic, and the preliminary results have contributed to significant improvements of our brand image in the industry, further boosting the morale and confidence of our staff and sales force. Building on the preliminary achievements in the first half of 2022, we will focus on pushing forward the following strategic initiatives to further solidify our core competitiveness. One, recruitment and training of top talents to build a highly productive sales force. 首先，泛华将继续扩大在集优人群中的FOC家庭财富规划师和FRP养老传承顾问技能培训的覆盖，同时启动FPC家庭保冠保单的管家认证培训，促进代理人从保险产品专家到家庭资产配置专家再到养老传承专家的进化。 Firstly, further expanding the coverage of family office consultants for FOC and family retirement planners or FRP training programs among high performing agents. While starting to initiate training and certification programs for family policy managers, or FPC, which focus on helping agents to develop the ability to offer policy custody services so as to help our agents transform from focused experts on insurance products to broader experts on family-based asset allocation, and then expanding to experts on elderly care and legacy management. 其次，借助泛华在康养服务和保险金信托服务的优势和我们的3R的行销模式，内育外引行业高素质人才，大力引进MDRT，确保实现年度十万P人力增长30%的目标。 Secondly, leverage our advantages in insurance trust services and health care services with the support of our well-proven Triple R marketing model, i.e. account responsibility, solution responsibility and fulfill responsibility and step up efforts to attract industry top talents, especially Million Dollar Round Table members or MDRT, to achieve the target of 30% year-over-year growth in 100,000 premium agents. 第二方面，落地康养和信托服务的场景化，3R行销流程的标准化。 Two, providing scenario-based trust, health care and elderly care services facilitated by standardized Triple R marketing procedures. 首先，信托服务加保险。截至2022年的六月底，泛华累计举办超过一百场的客户沙龙，协助受理一百二十三件这个家庭信托，受托资产十二点三亿元，撬动新保单两百一十五件，平均一件信托撬动两件保单，件均三十万的标保。泛华通过保险金信托和家族信托切入中高端市场的策略效果显著，并在行业内树立了良好的口碑，形成了泛华的竞争优势。2022年的下半年，泛华将结合FOC培训和3R的行销模式，大规模地开展高客沙龙，协助这个客户经理、方案经理、交付经理三方人才的能力全面覆盖客户对接、资产配置规划与解决方案设计、保险金信托的设立、交付及售后等关键环节，打造保险金信托服务的闭环，将保险金信托账户打造成为泛华新的成长核。 Firstly, trust plus insurance. As of the end of June 2022, Fanhua has organized over 100 customer engagement activities and facilitated in setting up 123 trust accounts for over RMB 1.2 billion in trusted assets, covering 215 new insurance policies, with each trust account contributing one to two insurance policies on average, and RMB 30,000 APE per policy. Our strategy of offering referral of insurance trust and family trust services to ultra-high net worth customers have delivered significant results. Establishing a good reputation in the industry and standing out with a competitive advantage. In the second half of 2022, in combination with our FOC training programs and the Triple R marketing model, we plan to widely organize high-end customer engagement activities with the professional support of the triple R talents to provide a full suite of services from customer engagement, asset allocation planning and solution making, selling, setting up insurance trust accounts to fulfillment and post-sale services. As such, we expect to offer a closed loop of insurance trust services, making insurance trust accounts a new competitive mode for Fanhua. 其次，康养加保险。泛华去年成立了健康管理事业部，致力于对接市场上的优质医疗健康和养老服务资源，为合作伙伴、代理人和客户服务富人。2022年的上半年，除了推出多样化的获客邀约产品，连接生命银行、高端医疗等服务资源之外，泛华健康管理事业部也在养老社区服务资源方面取得重大突破。与央企的养老社区签订了深度的合作协议，这也是泛华成为中小保险公司的公共服务平台，连接中小保司和第三方养老服务资源迈出的关键一步。2022年的下半年，泛华将充分利用这些服务资源，结合实际场景的参观，触发客户对品质生活管理的感受，激发其对医疗健康、养老、财富传承等解决方案的迫切需求，从而促进保险产品的销售。 Secondly, health and elderly care plus insurance. Established in 2021, Fanhua's health management business unit is dedicated to pooling quality resources of medical and elderly care on the market to empower our partners, agents and customers. In the first half of 2022, Fanhua has launched a wide spectrum of customer acquisition products and collaborated with providers of quality services such as cord blood banks and high-end medical service providers. Furthermore, we have made a breakthrough in securing access to quality elderly care facilities by sealing an in-depth cooperation agreement with the state-owned enterprise. It also marks the first step for Fanhua to become an open platform for connecting small and medium-sized insurers with third-party health and elderly care service facilities. Into the second half of the year, we will make full use of these resources to facilitate scenario-based marketing by organizing on-site visits to healthcare and elderly care facilities for customers to experience quality lifestyles and related services, so as to stimulate their demand for wellness, health, retirement and legacy management solutions, and thus boost sales of insurance products. 第三，蓝掌柜升级，数字化落到实处。2022年的上半年，蓝掌柜3.0完成升级。蓝掌柜3.0及客户经营、客户服务、产品交易、线上线下运营与管理、专业成长与IP打造五大赋能体系为一体，确保高效服务一线的代理人。蓝掌柜3.0上线以来，运营的效率显著提升，多项关键指标提升显著。其中蓝掌柜上的活跃代理人日活提升50%左右，并持续上升。通过数字运营工具，经营客户的代理人的产能是不使用数字工具的代理人将近1.5倍，成为了管家的代理人的产能，比普通代理人的产能高出将近20%。数字化赋能效果显现。 Thirdly, upgraded Lan Zhang Gui app to support digitalized operation. In the first half of 2022, our Lan Zhang Gui app has been upgraded to a 3.0 version, a comprehensive platform that integrates customer engagement, customer service, trading support, online and offline operation, and professional training and personal branding. With the release of the Lan Zhang Gui 3.0, we have observed significant improvement in the operational efficiencies with key performance indicators of the platform also showing remarkable improvement. Specifically, the number of active agents on the platform were up by about 50% and has continued to increase. The productivity of agents using our digital tools was nearly 1.5 times that of agents otherwise. The productivity of agents that have become a Guanjia or insurance service butler was about 20% higher than that of those otherwise. All this shows that our digitalization efforts have been paying off. 二零二二年的下半年，泛华将全力在蓝掌柜的功能模块和系统稳定性、操作性等方面持续进行优化，进一步提升用户体验，支持代理人全线的高效展业。 For the second half of 2022, Fanhua will continue to improve user experience by further optimizing key functions and making the system more stable and easier to use so as to support agents' activities more efficiently. 二零二二年的第三季度，尽管疫情及双录等外部因素的影响依旧存在，泛华将继续深化发展战略，抓牢市场机遇，提升公司价值。在持续加大科技和培训投入的情况下，管理层仍有信心实现公司经营利润不低于三千万元，实现同比正增长。 Into the third quarter of 2022, while external factors such as COVID-19 and double recording may continue to exert a negative impact, Fanhua will continue to further implement our digital development strategy and work to improve company value by aggressively pursuing the enormous market opportunity. After considering our plans continued increased investment in technology and training in the near term, which will take time to fully show their benefits. The management is confident in achieving positive growth with an operating income of no less than RMB 30 million. 下面我们将回答大家的提问。 This concludes my presentation and now the floor will open for your questions. Thank you. Hello, Sarah. We'll now- Are you ready for it? Thank you. We'll now begin the question and answer session. If you'd like to ask a question, please press star then one one on your telephone keypad and wait for your name to be announced. Once again, that's star then one one to ask a question. Please stand by while we will compile the Q&A roster. Our first question comes from Yuyu Zheng at CICC. Please go ahead. 管理层好，感谢管理层给我这个提问的机会。首先恭喜这个公司 2Q 以来的业绩。那我这边可能有三个问题想要请教一下。那第一个就是其实也看到就是公司 2Q 的这个收入以及 FRP 达到了一个较好的增长。那想请教一下管理层，就是有没有一些具体的对公司下半年的，我们说包括收入以及盈利的一些展望。那第二个其实是想追问一下，就是目前公司这个代理人的这个画像，是怎样的？就比如说在地区、这个年龄以及学历方面是怎样一个情况？那现在的整体的一个产能大概是怎么样的？那第三个问题还是就是想问一下公司目前这个产品组合是一个什么样的情况，那这个目前是储蓄型的这个销售是比较好的。那请问一下管理层如何看待这个储蓄险的这个需求，以及储蓄险这个未来增长的一个可持续性。好，那我简单翻译一下我的这个问题。 So the first question, how to expect the company's revenue and the profit in second half of this year? And the second one is about the agent force. So what is the portrait of our sales agents in respect of region, age, education, etc.? How about their income and their productivity? And the last one, can you share us with your current product mix? How to expect the demands for savings products? The duration of this product sustainable? Thanks. 好的，关于第一个问题，就是对于公司下半年佣金收入及盈利情况的一个展望。公司的这个新的战略已经被验证是非常有效的，而且有比较强大的这个驱动力，核心就是公司聚焦双高的战略。所谓的双高就是我们聚焦这个服务中高净值的客户，和我们这个打造这个高端的营销员，同时提供数字化的赋能。这一方面呢，在过去的这个几个月的时间里面，越来越明显地显现出它的这个驱动力。第二季度我们也看到，即使我们的出单的人力下降了有30%多，但是我们的这个产能，总的这个保费并没有减少，而是大幅度增长，这就说明了就是我们的内部的驱动力是已经是明确的。所以我们相信随着这个战略的推进，下一个季度，Q3、Q4以及明年，我们认为就是公司会重启这个增长的这个轨道。 Thank you for the questions. For the first one regarding the outlook for our commission income and profit guidance for the second half of this year. Our new strategies has been proven to be quite effective in driving our business growth. A key part of this strategy is our focus on double high, which means that we focus on high-end customers and as well as high-performing agents with digital empowerment. These strategies have been proven to be quite effective in driving our business growth in the past quarters. As we can see that even though the number of total performing agents has dropped by roughly 30%, however, our first-year premium continued to increase substantially, which proves the internal driving force remains strong. As we continue to execute our strategies, we believe that we will see our growth momentum will pick up over time in the third quarter, fourth quarter and next year. 即使如此，我们看到有两个方面的因素对我们的财务数据是有影响的。第一个方面呢，是这个现在的产品结构，虽然说我们保费有比较大的增长，但是这些保费的期限相对缩短了。所以内涵价值，就是作为我们比这个中介公司来讲，它的内涵价值其实是下降了的。这也是为什么我们的佣金收入和利润的增长跟保费的增长不成正比的原因。第二个方面呢，就是我们也看到第三季度已经又出现了疫情，就是全国大面积的疫情。还有呢，就是在我们的重点的一些销售区域实施双录。这两个因素的影响也对我们的财务表现会产生打折。 However, we do notice that there are two factors may pose adverse impact on our business results. Firstly, our product mix. Even though we maintain strong growth in our first-year premium. However, our products are mostly short-term products, which means that these products have lower embedded value for the company. So that's why that our commission income and profit growth are not exactly in line with the growth of our first-year premium. The second factor is the resurgence of COVID cases in many regions in the third quarter, as well as the regulatory requirement for double recording in some key markets, particularly in our major markets, which may pose some pressures on our business growth. 一正一负两个方面的效应的对冲。我们认为现在这个对冲的结果，公司的在财务方面再往下这个大幅度的这种持续的这个下滑已经止住了。我们认为在财务上的表现应该说是，到了一个底部。 Net-net wise, I believe that we are bottoming out, and we don't believe that we will see any further substantial decline in our business. 第二个问题是关于我们营销员的情况。营销员的情况，我们目前有60%多的营销员的年龄在四十到六十岁之间，超过60%。那么这个呢，是跟我们这个聚焦中高净值客户，是匹配的。现在的这个中高净值客户，也就是我们所说的有钱人，目前的年龄段也只处于四十到六十岁，特别是接下来，特别是五十岁到六十岁的这部分人，有将近三亿人，有将近三亿人。那么这部分人的这个是属于，目前的这个关于养老、传承这方面有强烈需求的一个群体。那我们的营销员呢，正好是跟这个客群的年龄段是比较吻合的，对于我们的新的战略是一个比较好的支持。 The second question regarding agents' profile. Currently, about 60% of our agents are in the age of between 40-60 years old. This also aligns with our current strategy, our strategy focus on high-end customers. As many of the wealthy populations or the affluent populations are also in the age of 40-60 years old, especially, for those in the age group of 50-60 years old. There are about 300 million of them, who have strong demands for, elderly care and legacy management. The age profile of our agents are actually basically aligned with our customer group, which is a positive thing for us to execute our strategy. 这部分代理人主要分布在二三线的城市，而且呢，这个学历本身这个普遍的学历不是很高。 Most of our agents are located in the second-tier cities. To be honest, not very high education level. 为了克服这一些代理人的这个不足，所以我们推出了这个3R的形象模式，也就是将这个销售行为进行专业化分工。那么代理人只负责带客户到我们的这个职场，到职场呢，由我们这个培养的这个专业的人士来给他们提供专业的这个客户的方案的设计和帮助他们做客户的成交。 In order to make up for the shortcomings of some of these agents, we launched a 3R marketing model, which basically is to separate the whole sales process into several steps and with several roles to be played by different agents. For those agents that do not have very professional skills, they are responsible for our customer engagements. While more professional agents will be responsible for providing solution designs and to execute the transaction. 所以公司同时也在打造一批高学历的年轻的这样的一帮营销员，是培养作为平台的方案经理和交付经理来支持那60%多的营销员。那么目前的这个三十岁到四十岁这部分人，我们已经拥有了2%…… 占到已经25%的占比。这一部分人的学历相对高，同时他们的学习能力也很强。我们在过去的半年里面，我们培养了FOC的培训和FRP的培训，着力就是打造一帮专业化的这一帮人来支持前面这一帮，就是学历相对比较低的这帮代理人，去完成对客户的服务和成交。 In the meantime, we are also stepping up efforts to recruit higher education agents and younger generation of agents to become professional solution managers or fulfillment managers to support the customer services of those relatively ordinary agents. Currently, about 25% of our salesforce are in the age group of 30-40 years old, and this age group of agents have typically higher education level and better learning abilities. In the first half this year, we hosted a lot of FOC and FRP training sessions in order to improve the professional skills of our salesforce to support the customer services. 至于产能的情况，目前我们的数据在第二季度有效的代理人，就是累计出单的代理人的人均产能超过了2万的新单保费，相比去年同期是1.2万，所以有60%的产能提升，就是就人均的代理人出单来看。 As for productivity, in the second quarter, the productivity of our effective agents were about 20,000 per agent as compared to 12,000 per agent in the same period last year. That's a 60% improvement year-over-year. 第三个问题是目前公司的产品组合，以及关于储蓄险的需求和储蓄险增长的可持续性问题。目前第二季度我们的终身寿和年金险的新单保费占比达到79%，也就是储蓄险的占比达到了79%，去年同期是68%，去年同期的重疾险的占比是20%，而今年的只有第二... 今年的第二季度只有7%。 The third question regarding to our product mix as well as the demand and sustainability of growth for savings products. In the second quarter, whole life insurance and annuity products accounted for 79% of our first-year premiums as compared to 68% in the same period last year. While critical illness products accounted for only 7% as compared to 20% in the same period last year. 这也是为什么我们看到我们保费增长很大，但是我们的佣金的增长或者内含价值的增长体现没有同比的原因。 That's also the reason why we deliver strong first year premiums. Commission income was not exactly in line with the strong growth in first year premiums. 至于储蓄险的需求和储蓄险增长的可持续性，我们认为至少在未来的十年是有一个比较强劲的需求的，或者一个强劲的可持续的需求的。原因就是因为六十年前的婴儿潮带来六十年后今天的退休潮。六十年前的六二年开始，每年有两千五百万以上的人出生，那就意味着从今年开始，每年有两千五百万以上的人进入六十岁，就进入退休。那么好了，这一部分人，他们的需求，他们的心理，更多的就是在养老，如何品质养老，财富的保值而非增值，以及他们财富的传承，核心是在这里。所以在接下来的十几年的时间里面，每一个…… 随着大量的人进入六十岁，所以在有关的储蓄险和这方面的需求，就是基于养老 As for the savings product demand as well as the sustainability of the growth, we believe that in the next 10 years, we'll continue to see strong demand for savings products driven by the aging population in China. Well, 60 years ago in China, there was a baby boomer trend, and then which means that 60 years ago, roughly every year there are 20 million people were born. That means that starting from this year, there will be 20 million people every year going into the retirement age. The key demands for this age group of people are for quality retirement lifestyle and for wealth appreciation as well as legacy management. Believe that in the next 10 years, the people in this age group, the strong demands for savings product, which may cater to their needs for retirement and legacy management will become a key trend. Uh, Based on the strong market demand, as well as considering the potential adverse impact of the increased contribution from savings products in our total mix, we will step up efforts to introduce our healthcare and elderly care services, to cater to people's needs for quality retirement lifestyle as well as to step up efforts to expand our insurance trust services, which may help people to cater to their needs for wealth management as well as legacy management. Secondly, we also make effort to optimize our product mix by encourage the sales of products with a longer payment periods, particularly, for products with over 10 years payment periods. Thirdly, we will also design new products by cooperating with reinsurance companies to improve the product in embedded values. For example, we recently cooperating with Aviva-COFCO to introduce a leveraged style whole life insurance products. For this type of product, customers typically preferred a longer payment period in between 10 years to 20 years. This will help improve the overall embedded value of our product. Thank you. Thank you. We have no further questions in queue. Once again, if you would like to ask a question, please press star then one one on your telephone keypad. If there are no further questions, I will hand back to management for closing remarks. Thank you for participating in today's conference call. If you have any further questions, please feel free to contact us. Thank you. Have a good day. Bye. Thank you so much. This does conclude today's conference call. Thank you all for joining. You may now disconnect.