Welcome to the Noah Holdings Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Melo Xi, Director of Investor Relations. Please go ahead. Thank you, operator. Good morning, and welcome to Noah's 2023 second quarter earnings call. I'm Melo Xi, Director of Investor Relations at Noah Holdings. The presenters joining us today are Miss Jingbo Wang, our co-founder, chairlady, and CEO, and Mr. Grant Pan, our CFO. Before we start, we would like to kindly remind you that during today's call, we may make forward-looking statements based on our current expectations of the business. Please keep in mind that these statements are subject to risks and uncertainties that may cause Noah's actual results to differ from these statements. We do not undertake any duty to update these statements. For discussion of some of the key risks that could affect results, please see the Safe Harbor Statement section of our 6-K filing. We'll also refer to certain non-GAAP measures, and you will find reconciliations in our 6-K reports made available on the Financial Report section of Noah's Investor Relations website. Also, please note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase any interest in any Noah or Noah-affiliated products. This call is copyrighted material of Noah and may not be duplicated without consent. Please also be aware that the link to a live webcast with presentation materials is available on our investor relations website. With that, I would like to welcome our Chairlady and CEO, Miss Jingbo Wang. Chairlady, handing to you now. Thanks. Thank you, Melo. [Foreign Language]今天电话会议的议程，我想首先谈谈对宏观经济和财富管理行业的思考，诺亚的国际化进展，再汇报上半年的整体业绩和几大业务板块的发展情况。接下来就请潘青再为大家介绍本季度的财务信息，最后是问答交流。2023年第二季度，我们观察到华语高净值客户对于地缘政治冲突和全球经济衰退的担忧已经超越了通胀，成为亚洲高净值客户最关注的核心问题，成为他们考虑战略资产配置的关键因素。与此同时，由于ChatGPT所带动的人工智能技术的创新和突破，也让熟悉VC等一级市场投资的高净值财富管理者，对于其可能带来的新一轮技术周期和投资机会充满了期待，希望有所布局。宏观的高度不确定性，让多地域和多元配置策略有了发挥的空间。我们建议诺亚的高净值和家族客户，在这个关键节点上进行战略资产配置检视和调整。首先是基础的各项安全检视，然后是调整战略底仓配置，再通过各类多策略组合投资，未来布局增档，实现反脆弱的战略资产配置和战术资产配置。 For the agenda of today's conference call... Thank you, Chairlady. For the agenda of today's conference call, I'd like to start with my thoughts on the macroeconomy and the wealth management industry. Noah's progress in our global expansion plan, and then a report on the overall performance of the first half of the year and the development of our business units. Then Mr. Grant Pan, our Group CFO, will present the financial information, followed by a Q&A session. In the second quarter of 2023, we observed that the geopolitical conflicts and global economic slowdown has replaced inflation as the top concerns for Chinese high-net-worth investors, and they are taking account of these considerations when actively adjusting their asset allocation strategies. At the same time, due to the innovations and breakthroughs in AI technology driven by ChatGPT, high-net-worth clients who are familiar with primary market investments such as venture capital, are also hoping to take part in this new round of technology advancement cycle and the investment opportunities that comes along the way. A diversified asset allocation strategy in terms of geography and asset classes, becomes increasingly important amid heightened level of macroeconomic uncertainties. We recommend that Noah's high-net-worth clients to review their portfolios, starting with running through a checklist across all aspects of their investment, ensuring sufficient allocation in the safety net portion, coupled with multi-strategy investments to capture cross-cycle growth opportunities, achieving an antifragile strategic and tactical asset allocation. [Foreign Language] 在国内，我们也注意到近期有一些财富管理公司和部分信托非标类固收产品发生了兑付危机。我想特别说明一下，诺亚自2003年创业，20年来一直以合规作业为底线，尊重金融行业的常识。从产业第一天开始，就从未设立过资金池，不给客户杠杆配资，没有期限错配的产品，坚持不刚兑，不进行任何形式的客户资金跨境操作等。我们坚持以研究和产品品质为先，持续深化投资者教育，以专业的资产配置能力满足客户财富管理需求。基于对投研土壤的建设和投入，以及管理层对宏观形势的前瞻性判断。... [Foreign Language] 我们自2016年开始逐步退出住宅类房地产资产类别，该类别的基金产品，诺亚客户整体获利占比达到98.7%，截止今天已经实现完全的退出。2019年，我们在经历了风险事件以后，也完成了所有类型的非标类募集基金产品退出。在退出的过程中，我们虽然短期经历了阵痛，也经历了一些客户和员工的流失，但我们在2021年成功地完成了非标转标，帮助诺亚客户成功地规避了此类资产的风险，真正地保护了客户的财产。 We are also aware of the recent payment default by certain wealth management companies and trust product platforms on their non-standardized private credit products. I would like to point out that Noah, since its establishment in 2003, has been sticking to our founding principles and the common practices of the financial services industry for 20 years. From the inception of our company, we have insisted on the segregation of client capital, maintaining separate custodian accounts for our asset management products, no leverage funding for clients, no products with maturity mismatches, and no cross-border fund, fund movement transactions. Together with our continued devotion to investing in research capabilities, such principles not only established us as a pioneer in terms of compliance and vision, but also bolster our capacity to navigate economic headwinds and shield our clients' hard-earned capital through professional asset allocation advisories. Thanks to our continued devotion to strengthen our investment research capabilities, coupled with our management's forward-looking macroeconomic judgments, in 2016, we started to wind down our exposure in residential property assets. We have fully exited this asset class and among the clients who invested in this type of products, 98.7% were profitable. After the Camsing incident in 2019, we also started to wind down and fully exited non-standardized private credit exposure, or so-called trust products. During this exit process, although we experienced short-term hardships and lost some of our clients and employees along the way, we have successfully completed the standardization transformation in 2021, nevertheless, which was proven to have effectively safeguarded our clients' wealth amidst recent challenges faced by this asset class. Chairlady. [Foreign Language] 财务数据方面，2023年上半年，公司整体录得净收入 CNY 17.5 亿元，同比增长 13.8%，其中国内业务贡献 CNY 10.04 亿元，占比 59.2%，同比回落 13.4%。随着诺亚国际在渠道、产品和综合服务端的持续投入，海外业务贡献 CNY 7.1 亿元，同比增长 104.1%，占总收入占比从去年的 22.6% 提升至 40.8%。分板块来看，财富管理板块贡献 CNY 13.3 亿元，同比增长 22.5%，其中国内业务贡献 CNY 7.7 亿元，同比小幅回落 4.3%，海外业务贡献 CNY 5.7 亿元，受益于海外产品募集规模和综合服务收入的增长，同比提升 96.4%。资产管理板块贡献 CNY 3.9 亿元，同比回落 5.4%，其中国内业务贡献 CNY 2.4 亿元，同比回落 31.2%，海外业务贡献 CNY 1.5 亿元，同比增长 140.3%，主要源于海外资产管理规模的增长。综合服务端，财富的保护和传承仍然是高净值客户和家族最关注的财富管理需求。今年上半年，国内保险经纪业务创收同比增长 50.6%，海外保险、信托等综合服务同比增长 380.8%，活跃客户数同比增加超过 6 倍，主要由香港及新加坡业务贡献。2023年上半年录得经营利润 CNY 6.3 亿元，经营利润率为 36%。国内财富管理的业务，随着国内高净值客户向一线和区域中心城市迁移，以及更丰富的人才供给，我们持续聚焦和做大中国的一线和中心城市，加大高端人才的招募力度，提升客户经理的资产配置能力和服务品质，夯实投研能力，以 CCI 模式为客户提供定制化的资产配置解决方案。截止二季度末，国内理财师数量为 1,319 人，同比提升 5.1%，环比提升 1.5%。国内在线财管端，通过持续的科技端投入，我们将客户的存续报告与 CCI 配置工具进行有效整合，基于流动管理、成长配置、保障传承和抵偿配置四类账户的持仓分析与配置建议，探索通过线上存续带动产品营销。2023年上半年，公募基金募集量超过 CNY 220 亿元，同比增长 14%，私募证券产品募集量超过 CNY 85 亿元，同比增长 33.6%。在法人客户方面，2022年推出微笑私库平台，成功地吸引了近 6,000 家中小微企业和金融机构的开户和下单。上半年，私库活跃客户数同比增长 73.7%，客户存量近 CNY 60 万人民币。 In terms of financial performance, the company recorded overall net revenues of CNY 1.7 billion in the first half of 2023, up 13.8% year-on-year. Domestic business contributed CNY 1.0 billion, accounted for 59.2%, down 13.4% year-on-year. With our continued investment in distribution, product selection and comprehensive services, overseas business contributed CNY 714.9 million, up 104.1% year-on-year, and increased its share of the group revenue to 40.8% from 22.6% last year. By segment, wealth management segment contributed CNY 1.3 billion, up 22.5% year-on-year. The domestic portion contributed CNY 769.9 million, down slightly by 4.3% year-on-year. While due to the expansion of overseas product offerings and comprehensive services income, overseas portion contributed RMB 566.8 million, up 96.4% year-on-year. Asset management segment contributed RMB 389.9 million, down 5.4% year-on-year. Domestic portion contributed RMB 241.9 million, down 31.2% year-on-year, while overseas portion contributed RMB 148.1 million, up 140.3% year-on-year, mainly due to the increase in overseas AUM. In terms of comprehensive services, wealth preservation and inheritance remain the most concerned wealth management needs among high net worth clients and families. In the first half of this year, revenue, revenues contributed by domestic insurance brokerage business grew 54.6% year-on-year. Overseas insurance, family trust and other comprehensive services grew by 380.8% year-on-year, with the number of active clients in this segment increasing over six times, thanks to the growth of operations in our Hong Kong and Singapore offices. For the first half, we achieved operating profits of the Group of CNY 628.3 million, with an operating margin of 36.0%. For our domestic wealth management business, with the migration of domestic high net worth clients to Tier one and central hub cities, as well as more supply of talent, we continue our strategy to focus on and expand our presence in China's Tier one and central hub cities by increasing the recruitment of top-tier talents, enhancing the asset allocation capabilities and service qualities of our relationship managers, strengthening investment and research capabilities, and providing customized asset allocation solutions to our clients with the help of our CCI model. By the end of the quarter, the number of domestic RMs stood at 1,319, up 5.1% year-on-year and 1.5% quarter-on-quarter. In terms of domestic online wealth management, through continuous investment in technology infrastructure, we have effectively integrated our clients' portfolio report with CCI allocation tools, which provides recommendations for clients four types of wallets, namely liquidity management, growth investments, protection inheritance, and safety net portfolio. During the first half, transaction value of mutual fund exceeded RMB 22 billion, up 14% year-on-year, while the transaction value of private secondary products exceeded RMB 8.5 billion, up 33.6% year-on-year. In terms of corporate and institutional clients, the Smile Treasury platform, which was launched in 2022, has successfully attracted nearly 6,000 clients on board. During the first half, active clients increased by 73.7% year-on-year, with an average client AUA of nearly RMB 600,000. Chairlady? Chairlady, turning to you now. [Foreign Language] Well, 香港和新加坡的财管团队有56位客户经理，环比增长100%。我们也计划在2023年下半年开设洛杉矶以及迪拜的客户服务站，以更好的服务和覆盖全球华人的财富管理需求。截止2023年第二季度，香港和新加坡的开户客户数同比分别实现了12.8%和185.2%的增长，国际客户数超过了13,600人。客户以全权委托方式在诺亚进行资产管理的AUM存量规模达到了2.6亿美元，环比增长20%，20.4，累计客户数达到了471人，环比增长44%。国际在线财管端，我们成功上线了iNoah One Account综合账户解决方案，为诺亚的海外华人客户提供多域、多类的资产配置及管理，并通过诺亚国际代理人账户连接了全球9家系统性重要银行，大幅节省了客户单独开户的时间成本。诺亚国际在线财管上半年美元公募基金活跃客户数达到了1,956人，同比大幅增长465.3%，募集规模达到了6.1亿美元，同比大幅增长超过700%。国际私库业务也开始发力，截止目前，成功扩展了超过170家海外法人客户开户和下单，上半年下单规模超过7,300万美元，同比增长193.5%。... [Foreign Language] 在资管端，歌飞的资产管理总规模1,568.5亿元人民币，同比增长0.9%，0.9%。同时，歌飞在上海、香港、新加坡分别组建了三个战略客户部，团队成员均来自投行咨询、买方、买卖方投研或海外的背景，不仅可以协同国内外财管为战略级别的客户提供专属多元化定制的资产配置服务，同时也借助歌飞国内外丰富的主动管理产品，积极拓展海外机构渠道和服务海外业务。2023年上半年，歌飞主动管理的目标策略产品团队在兼顾回撤波动控制和长期收益最大化的目标下，动态配置高波动策略，增强组合收益。上半年目标策略积极型年化收益4.4%，4.04%，年化波动6.31%，夏普比例0.4，平衡型年化收益8.01%，年化波动5.56，夏普比例1.17。稳定型年化收益8.98，年化波动2.06，夏普比例3.63。歌飞主动、歌飞国际主动管理产品的海外AUM达到了$47.2 billion，折合人民币CNY 342.5亿元，同比实现增长15.8%，占总AUM的比例也提升至21.8%。在2023年，我们加强对海外顶尖对冲基金管理人的筛选、覆盖和上线，并首次上线了结构化产品，完善了海外美元产品矩阵。Next. On the international wealth management side, we continue to implement our private banking recruitment program in Hong Kong and Singapore. By the end of the quarter, we had 56 relationship managers in Hong Kong and Singapore, up 100% quarter on quarter. We're also in the process of setting up client service stations in Los Angeles and Dubai, which should be completed in the second half of 2023, to better serve the global wealth management needs of Chinese clients around the world. As of second quarter of 2023, Noah International had more than 13,600 international clients, with the number of clients in Hong Kong and Singapore grew by 12.8% and 185.2% year-on-year, respectively. Client AUM with Noah on a discretionary investment basis reached $262 million, up 20.4% quarter-on-quarter, and the cumulative number of clients for this product reached 471, up 44% quarter-on-quarter. In terms of international online wealth management, we successfully launched our Noah One Account platform, an integrated account solution that provides multi-domain and multi-asset class asset allocation for Noah's overseas clients. We also successfully connected nine systematically important banks globally through our nominee accounts, effectively reducing the time and cost of opening and managing separate bank accounts for our global clients. Active clients for overseas mutual funds reached 1,956 people, a significant increase of 465.3% year-on-year. Transaction value reached $609 million, an increase of more than 700% year-on-year. International Smile Treasury business also began to show significant progress, and so far has successfully attracted more than 170 overseas corporate and institutional clients. The transaction value of the first half reached over $73 million, an increase of 193.5%. On the asset management side, Gopher's total AUM was RMB 156.9 billion, up 0.9% year-on-year. Meanwhile, Gopher has established three strategic client groups based in Shanghai, Hong Kong and Singapore, with team members coming from diverse backgrounds including investment banking, consulting, buy-side and sell-side investment research, and family offices. This not only enables Gopher to cooperate with domestic and international wealth management teams to provide exclusive, diversified and customized asset allocation services for strategic level clients, but also to actively explore opportunities in expanding overseas institutional and family offices clients by leveraging Gopher's diversified, actively managed products at home and abroad. In the first half of 2023, Gopher's actively managed target strategy product team dynamically deployed high volatility strategies to enhance portfolio returns while balancing pullback and volatilities to maximize the long-term returns. During the first half, its active investment product achieved 4% annualized return, annualized volatility of 6.3%, and Sharpe ratio of 0.4. Its balanced investment product achieved an 8% annualized return, 5.6% annualized volatility, and Sharpe ratio of 1.2. Lastly, its stable investment product achieved a 9% annualized return, 2.1% annualized volatility, and a Sharpe ratio of 3.6. Overseas AUM of Gopher International's asset managed products reached $4.7 billion, equivalent to CNY 34.3 billion, up 15.8% year-on-year, and its proportion of the group's total AUM also increased to 21.8%.... In 2023, we strengthened screening coverage and launching of top-tier global hedge fund managers, as well as the introduction of USD structured products, effectively completed our overseas product matrix. Chairlady? ESG In terms of ESG, we continue to promote the integration of investment products with ESG concept. Since the end of 2022, Gopher has launched an ESG public market product in cooperation with Rayliant Asset Management, which integrates ESG evaluation framework into fundamental quantitative strategy, maximizing long-term investment returns amid the state's effort to promote the development of various segments of key ESG initiatives such as carbon neutrality. As of July, we have cumulatively raised nearly RMB 100 million for this product, with a cumulative return of over 14%, outperforming the CSI 300 benchmark index over the same period. In summary, Noah's long-term success as an independent wealth management firm lies in its adherence to our core strategy of client-centric survival as of the bottom line, as well as respecting the common senses of the financial services industry. Our three complementary business segments, including wealth management, asset management, and comprehensive services, not only enable us to fully meet the needs of a diverse range of clients, including individuals, institutions, and family offices, but also brings a greater degree of inherent stability and balance to our business. Next, I would like to ask CFO Grant Pan to present the financial performance in detail. Thank you all. Thanks, Noah. Thank you, Chairlady, and hello, investors and analysts. With the lifting of travel restrictions, the second quarter saw steady recovery on track, and the contribution of contract-related activities, contact-related activities to economic growth also expanded, as evidenced by a 5.5% year-over-year increase in GDP in the first half of the year. Despite more active domestic economic activities, the recovery is still at an early stage and being confronted with uncertainties due to a slowing global economy and rising geopolitical concerns. The investment sentiment by high-net-worth individuals still remains at a conservative side as they continue to seek out safe havens and wealth preservation. Our dedicated focus on client-focused strategy has paid off in strong financial numbers, showing that we're aligning client best interests with the wealth management advices provided by us. For the six months ended June 30, 2023, our net revenues increased by 13.8% year-over-year to RMB 1.7 billion, of which 30.2% came from insurance income, as we have executed our CIO house view on wealth preservation and bottom-line focused asset allocation strategy. Together with our continued investment in talent capital, global research capabilities, and broadened coverage network of top-tier global asset managers, net revenues from overseas business experienced a rise by 104.1% year-over-year, accounting for 41% of the group's total net revenue. In the meantime, we're committed to demonstrating the progress in building client channels, resulting in a 13.1% increase in the number of core Diamond and Black Card clients. Within active clients, overseas active clients reached almost 2,000, an increase of 140% year-over-year. Top line wise, it's encouraging to witness a rather solid recovery in their revenues, mainly driven by expanding distribution of protection-oriented products and the growth in international business. We increased the distribution share of insurance products, both onshore and offshore, as evidenced by the quarterly one-time commission fees increased by 95% year-over-year, and 130% quarter-over-quarter to RMB 400 million, the highest single quarter since 2022. In the first half of the year, one-time commission fees amounted to RMB 580 million, up 87.8% year-over-year.... We expect a gradual recovery investment sentiment in the second half of the year, which may lead to a rebound in growth-oriented investment products. In addition, we have a robust pipeline of client events in overseas markets, which will lead to increased opportunities to the distribution of offshore investment and insurance products to overseas Chinese high-net-worth individual clients. The stabilizing income stream recurring service fees was CNY 921 million in the first half of the year, largely stable compared to the first half of last year. Performance-based income was CNY 111 million, down 44% year-over-year, due to the relatively muted exit environment. Other service fee income in the first half of the year was CNY 133 million, up 62.8% year-over-year, resulting from more value-added services provided to our clients. Benefiting from our effective cost efficiency strategy implemented in G&A and selling expenses, the first half of 2023 achieved an operating profit of CNY 628 million and a healthy operating margin of 36%, down 1.4% and 5.5% respectively from the corresponding period of last year. This was mainly due to the low base of 2022 under strict restrictions on traveling and client activities, as well as higher government subsidies during COVID. Our strategy is to be cautious on our overhead expenses. We're still able to invest our resources into client interfaces and international talent acquisitions and operations. The transaction value in the second quarter was CNY 18.4 billion, up almost 10% year-over-year, an aggregate transaction value of CNY 35.2 billion as of the six months ended. In tandem with the expansion of global footprint, overseas transaction value reached $1.5 billion for the six months ended, equivalent to RMB 10.5 billion, up 162% year-over-year, primarily owing to the introduction of discretionary investment and cash management products that have successfully significantly increased 764.5% year-over-year to nearly $4.8 billion, equivalent to RMB 3.5 billion. In terms of transaction value in RMB products, our continuous efforts to expand our client base, including both individual and institutional clients, resulted in a 32.2% quarter-over-quarter increase in the transaction value, including both individual and institutional clients, resulted in a 32.2% quarter-over-quarter increase in the transaction value of mutual funds. But we maintain a cautious approach of fundraising and investment allocation in other investment products, especially in private equity. That being said, we'll continue to closely monitor the space for attractive opportunities, especially in the technology sector, as China's economic recovery continues. From the perspective of segmented results in the first half of 2023, net revenues from wealth management were CNY 1.3 billion, accounting for 76.3% of total net revenues. Asset management net revenues were CNY 0.4 billion, accounting for 22.3% of total net revenues. Internationally, we're able to effectively assist our clients in safeguarding their wealth in volatile capital markets, thanks to our forward-looking assessment of RMB macroeconomy and advice to clients on wealth preservation in this environment. Dedication to global expansion helped fuel growth in overseas AUM, with a 15.8% year-over-year increase to $4.7 billion as of June 30, 2023. Primarily attributable to our expanded array of offerings, including structured products, mutual fund distribution, and private secondary products. Turning to the balance sheet, we have maintained a healthy liquidity position with our current ratio at 3.2 times. The gearing ratio is 19.8%, and we have RMB 4.7 billion in cash to further execute our globalization plan. At the end of June, we voluntarily request S&P Global to withdraw its credit rating coverage, which stood at BBB- with a stable outlook, according to S&P, given our current capital structure need, and no need to raise debt financing in the foreseeable future. In addition, the board has approved a 1-to-10 share split proposal for Hong Kong-traded shares in order to lower the investment barrier and increase the trading liquidity of the subdivided Hong Kong shares. Our ADS price traded on the New York Stock Exchange will not be affected, and the conversion rate between Hong Kong shares and the ADS will be 5-to-1 after the subdivision takes effect. This plan will be subject to shareholder approval through an extraordinary general meeting, which is expected to take place on October 26th, 2023, Hong Kong time. In conclusion, our performance in the first half of the year has delivered steady growth in revenues and positive progress for our international expansion strategy. Looking ahead to the second half of 2023, we're optimistic that China will continue to produce growth opportunities, and are confident that investor sentiment, consumer confidence, and consumption will gradually but steadily improve. Against this backdrop, we're confident that we can better assist our domestic clients optimize their asset allocation strategy and provide more advanced client experiences. On the overseas side, as geopolitical conflicts and financial environment become more unstable, tightening conditions are still seen as top concerns for high-net-worth individuals across the globe. Not only is their demand for global asset allocation service increasing, but their need to enter global markets as some entrepreneurs is also on the rise, resulting in a faster wealth accumulation effect for our clients in the coming years. We have always evolved our strategy, structure, and footprint to adapt to changing trends. With more offices and international talent recruitment, we believe this innovation will enable us to attract high-net-worth and support, and we will remain committed to creating diversified offerings and long-term value for our clients and shareholders. Thank you for your time, and we will now open the floor for questions. We will begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Yuyu Fan with CICC. Please go ahead. Uh, hello. [Foreign Language] 好，谢谢管理层给我这个提问的机会。我是中金公司的分析师，樊优。那我这边有两个问题想要再请教一下管理层。第一个的话，其实刚刚管理层也有提到一些，就可能还是关于近期大家讨论比较多的这个中植系旗下财富管理机构暴雷的事儿，也想再追问请教一下管理层，可能咱们怎么去看待这个事件，以及可能包括对于整个行业，还有包括对于咱们诺亚来说，可能有一个影响如何？然后第二个问题是，也是看到咱们这个季度，其实内地这边的覆盖的城市还是进一步收缩，也想再请教一下管理层，可能咱们目前收缩主要是哪些城市，然后未来具体的一个国内城市分布的计划大概会是如何？ I will translate my questions. Thanks, management, for taking my questions. This is Yuyu Fan from CICC. I have two questions here. The first one is regarding the recent risk events faced by the wealth management company of Zhongzhi. So, what, what's the impact on the whole industry and also on our NOAH? The second question is about our coverage network. As we can see, the cities we've covered decreased this quarter. So, what's our future plan for the domestic cities layout? That's my questions. Okay, thank you, Yuyu. Yuyu Fan with CICC 好，那我第一个问题，我先回答一下。我觉得中植系暴雷是非常正常的，是迟早的事情。因为他们的模型就是，一个是通过房地产最赚最大的利润，一个是希望通过一些ST的股票的持有，股市上来以后能够，赚取利润，其他的基本都是资金池。所以诺亚从业二十年，大家也可以看到，我们是从来没有跟他们合作过，而且我们认为这是迟早的事情。虽然在这个过程中，他们抢我们的理财师，抢我们的客户，只是说我们没有想到他们这么长时间才爆，所以我认为对我们没有什么影响，甚至可以说是一个深刻的投资者教育吧，基本上是属于庞氏。那，在这个过程中的话，可能会有一些客户是有重叠的，客户资产也受损，但我对于整个财富管理行业的规范是更有意义的。大家可以看到，就是巴菲特老先生说的嘛，不可持续的事情终将消失，只是时间问题。这是我的看法。 So I think it's Yuyu, a little translation and also supplement from me. Clearly this are, you know, it's actually expected matter. It's probably a matter of time in terms of how their asset is consist of, you know, mostly real property exposure, as well as some the, ST or low price, A stocks, very heavy investments, and also some probably we think, sort of pseudo capital tool, capital pool. That's in a history we never had any cooperations with their companies. And I believe it's also a very, I guess, historical moment in terms of investor education for this industry. As Warren Buffett has once said, you know, things that are not going to last, it's going to disappear. It's just a matter of time. So yeah. Yuyu Fan with CICC 那，第二个问题。 Yuyu Fan with CICC 第二个问题是内地覆盖的城市。 Yuyu Fan with CICC 就是，我们的核心策略还是我们的客户去哪，我们就跟随这个客户的行动到当地城市的布点吧。那过去20年呢，我们看到的就是中国的这些高净值客户，其实他也是在一些百强县。因为中国的出口的发展，这个制造业的一些发展，所以诺亚的很多客户呢，首先我们的客户大部分都是民营企业家，所以很多都是一些隐形富豪，比如说这个拉链的，这个做杯子的，做纺织的。那我们现在也看到这些客户群体，他们也在进行城市化的迁移，越来多的集中在这个北上广深和一些大城市，省会城市。那么经过20年的耕耘以后呢，我们认为跟随客户的足迹回到大城市，然后在大城市里边更加聚焦。一个是人才，有好的人才；一个是客户已经迁移到这些大城市了，因为我们的客户也在变老嘛，他们从创业到50岁、60岁，他们也开始慢慢退休了。其实财富管理的需求是更加旺盛的，但他们住在大城市的时间也是越来越多的，那么跟随这个客户去哪，我们就去哪，这是我们的主要的城市布局的计划。 So our strategy has always been evolving around, you know, the whereabouts of our clients. So as we first started in this industry, obviously many of them are entrepreneurs in probably four- or five-tier cities, 20 years ago. But I guess as of now, you know, 2023, most of them are already moved into first-tier cities, and I believe actually have better talent supplies, and probably closer in terms of physical distance to our clients. That's why we're focusing our resources in the top cities in China, and that way we'll be able to be more efficient and also consolidate our resources in these top cities. Yuyu Fan with CICC 好的，非常清楚，感谢管理层，thank you very much. OK, thank you, Yuyu. OK, thank you. 谢谢。 Our next question comes from Chi Yao Huang with Morgan Stanley. Please go ahead. [Foreign Language]感谢管理层给我机会，我是摩根士丹利的分析师Chi Yao Huang 。有两个问题想请教，一个是关于现在管理层对于就是国内的一些PE/VC的一个募集和退出情况的一些判断，因为看到现在确实海外的IPO也持续低迷，国内A股的IPO虽然过去几年有一些商量吧，但是好像流动性上完之后其实也不见得有好，退出可能也有些难度。最近其实这个中间会也开始提到，这个要收紧，监管层在收紧这个IPO和这个限制，一些，一些退出啊等等。所以想请教管理层，就是我们对这些退出的情况以及在，在为，对，对未来的这些这种PE/VC的募集情况的一些展望，这是第一个问题。啊，第二个问题是关于这个账上的现金的一些安排，我们看到这个账上的现金确实也是规模比较大，然后也持续的在，比较健康的在增加，所以想请教管理层后续还有哪些比较大的一些投资的情况，啊或者，或者还有哪些可能会进一步加强股东回报的一些机会？谢谢。我简单翻译一下。My first question is regarding the management outlook on the PE/VC investment and exit condition in China, as well as the outlook for the PE/VC fundraising and product sales in the future, considering the IPO environment domestically and offshore. And second question is on the plan for the cash balance that Noah have, which is quite sizable, and is there any wonder if there's any investment plan or any plan to further enhance shareholder returns? Thank you. Okay, thanks. I, I'll have Chairlady to answer the first question. I'll take the second question in terms of balance sheets capital. [Foreign Language] 我觉得，首先就诺亚呢，我们非常早就介入了这个 VC/PE 这个行业，其实我们最高峰的这个 VC/PE 的募集的话，也应该是在这个 2017 年左右吧。所以其实我们在退出端，总体来讲，这些公司还比较成熟了，所以我觉得现在大家肯定对退出还是抱有更长的一个耐心吧，只要这个公司是好的，能够长期生存的，那我们觉得未来还是有希望的。另外呢，你也可以看到，我们其实在这个 202.. [Foreign Language] 有很多增配，因为2020、2021年吧，当时我们觉得可能通胀啊这些问题，所以也是，让很多大部分的客户落袋为安了。最近我们有一个统计，就我们在VC，刚才我在汇报里讲，我们在房地产端，我们的客户超过98%的客户都是获利的，而且现在基本上全都退出了。那我们也有一个统计，我们在VCPE端，我们的客户这个退出的比例和我们的这个盈利的比例大概超过90%。嗯，所以我们总体还是谨慎乐观的吧，但是时间会变长。但是我们对于VC这个行业，能够推动整个国家的进步，经济的发 展，包括推进科技啊，卡脖子工程还是充满信心的。所以在这个点上，我们还是非常积极地在看，可能 会投得更早一点，然后以科技为核心，然后以这种，这个技术啊来为核心的一些，一些业务吧，并没有说，完全没有信心。 So as you know that if you're familiar with Noah obviously, we have been in this industry PE/VC actually rather early stage and the peak actually of distribution placement PE/VC came in the year 2017. So I guess we're still pretty confident in terms of how the portfolio companies are performing. Obviously, people need a better, a longer patience in terms of exiting. But as long as you're holding on to the good companies, I would believe things will, you know, get on the brighter side in terms of exiting conditions. Another thing is we actually have did a batch of exiting in the year span between 2020 and 2021, where the market conditions were performing relatively well and realized carry, carry income for both the company as well as the clients. We did a quick survey or historical statistics, if you will, for the past historical investments for our clients. As we mentioned on the call, the products relating to real properties, actually 98% investors clients have benefit, have made a profit on the exits. In terms of VCPE existing clients, probably also over 90% are at least profitable in terms of their investment costs. So we're optimistic, although prudently optimistic about the future of the VCPE industry. We'll continue to probably move a little earlier stage in terms of VCPE and focusing on technology based companies. So that's for the VCPE question, Chi Yao. And in terms of the cash on the balance sheet, obviously, we plan and consciously maintain a very strong liquidity position. Although the balance sheet under accounting principle shows $4.7 billion, we actually do have another around $300 million-$400 million in short-term investments, so the total capital and liquidity position is around $5 billion cash. I think one plan, one part of the plan is obviously to continue to support our international expansion, which obviously have a pretty high demand on capital. And the second plan, we're also, you know, debating to continue to increase public dividend distributions in the future, as we want to make sure that we bring better returns to our clients. Chi Yao. Thank you very much. Very clear. Thank you. I think one another interesting fact to, I guess, to supplement, is that we do put together a dedicated team to work on the exiting of our portfolio companies. And we're noticing an interesting trend, where, probably in the past, the founders of these portfolio companies are a little bit reluctant to give cash back to their shareholders as they continue growing. But we, we believe we're noticing a trend that more and more of them are willing to actually distributing cash and capital back to the shareholders. If the IPO is, you know, the timing of their IPOs are uncertain, they're willing to, you know, giving a little bit more capital back to the shareholders, just like what Noah is doing. Again, if you have a question, please press star, then one to be joined into the queue. The next question comes from Peter Zhang with JP Morgan. Please go ahead. 首先恭喜管理层... [Foreign Language] 我的第一个问题是关于公募基金降费的，就七月以来，中国国内大部分的公募基金开始了，管理费和托管费的降费，我想请教一下管理层对诺亚的影响。然后第二个问题是关于未来的一个展望。二季度我们看到，保险贡献了比较多的一个收入，那三季度以来，国内的，保险公司就停止了3.5保证，产品的，保险产品的一个销售。我想请教一下管理层，对于下半年，保险端或者收入的一个展望。Let me do the translation. Thanks for giving me the opportunity to ask question. My first question is regarding the mutual fund management fee cut. We noticed that major mutual fund in China has been cutting their management fees since July. We wish to understand what's the potential impact to Noah. My second question is regarding the second half outlook. We noticed that in second quarter, insurance business contributes a large proportion of the revenue and we noticed that a major insurer in China has been stopped selling the 3.5% guarantee insurance product. We wish to understand what will be the trends in second half for insurance related business or your revenue trend? Thank you. Okay, thank you, Peter. I'll take the first question. You know, mutual fund is actually a very important tool for us to attract new capital from clients or maintain their wallet share between products. So although, you know, obviously, it's, we're seeing this trend of downward pressure on mutual fund fees, but the actual contribution of revenue from mutual funds to our group net revenue is actually at a pretty small percentage. The total distribution fee plus the management fee to the contribution of the net revenue actually is less than 5%. So the impact of our 2023 net revenue of the fee downgrading is not going to be more than CNY 3 million. Even we annualize that, it will be less than CNY 10 million. So I guess the direct financial impact on group's net revenue is rather limited, but we'll continue to, you know, use mutual fund and continue to expand, you know, the distribution and placement as a good way to attract new capital and also, I guess, maintenance of the existing capital of clients. [Foreign Language] 我补充一下，我觉得这个公募基金降费的话，对于高净值客户的下单和交易还是有帮助的。其实你可以看一下很多基金公司的数据，包括一些大的这个，独立的，基金销售的平台，像蚂蚁、天天基金，它可能在基金的交易上都是趋向于饱和了。然后还有就过去的话都是产品驱动的，比如说发一个很大基金，CNY 800亿 CNY 1000亿，都在一个平台上或一两个平台上，就是客户亏损的规模也比较大，那就也对平台造成了巨大的压力。但是在高净值客户端的公募基金呢，其实规模是比较小的，以前诺亚也比较小，那随着这个费率的降低和一些，目标营销，目标策略投顾的模型的公募基金，甚至是全权委托的，投顾型的公募基金的这种组合的推出的话，对高净值客户愿意持有这部分资产，我觉得有很大的，这个影响的，有驱动的。而且现在客户呢，也非常关注这个费率的高低，然后以及，这个策略就是说，能够，把投顾做得比较好，能够跟他们来做一些，advisor这样的 一些工作吧。所以我们还非常看好公募基金的高净值客户端的这个发展，特别是在费率，下降了以后，但我认为总量会增加，而且客户可能会从私募，以及非标类业务转移到这个方向来，所以我们还，更，更乐观吧，在这个点上。 We also think it's probably going to be helpful for high net worth individuals to attract new orders because some of the, you know, you know, mega Internet platforms for mutual funds probably has reaching its peak in terms of distribution and maintenance and mutual funds. Many platforms, actually, you know, clients may have concentrated portfolio that probably will experience a, you know, some significant, or at least some major losses, because of the concentration. So now, with IC model, in terms of our mutual fund placements, and also we believe that high net worth individuals are getting more and more sensitive, to the fees, associated with the mutual funds. So IC model, as well as lower transaction costs and friction costs, will help them, to actually put more, investments or transferring more investments from traditional private, hedge funds or private equity, into more standard and lower cost, mutual funds. In terms of 就 对 未 来 的 一 个 展 望 嘛, in terms of the future, I guess for the second half of the year, we know that, you know, insurance products from domestic contributed, you know, quite a bit of, revenue, honestly, to the entire industry for the first half. But, I guess for the second half of the year, we'll continue to advise our clients based on our CIO view, probably still on a pretty conservative side, and oversee insurance products... Insurance, also diversified, investment product portfolios will continue to consist of a large part of the transaction values of second half. 所以，下半年 的一个展望。 [Foreign Language] 就保险端呢，以前是我们的一个，非主航道的产物吧，我觉得我们在推，就是在跟客户推荐保险产品的过程中，还是有很多都是靠产品驱动的，就像你谈到，Guobao，就这个3.5，类似这样的一些卖通型的。但过去的一年呢，诺亚在保险端呢，我们还是做了非常多的，这个基础设施的工作。第一个是我们构建了一个产品的平台，然后能够在这个过程中去挑选和给客户配置不同类型的保险产品。第二呢，就是我们增加了客户类型，从高净值客户到一些机构客户，他们的这种财产险，多个方面的配置吧。所以我觉得在保险端呢，我们，会-... [Foreign Language] 把它很认真地做成一个主航道，然后真正地来构建我们在保险经纪公司，帮助客户配置保险，筛选他不同类型的保险需求方面，来构建我们的核心竞争力。那我们现在还是看到了一些，一些成效吧，可能我们的打法呢，跟一些完全的做保险代理和经纪的公司还是不一样的，啊在这一点上我还充满期待。 So also in the past, insurance distribution probably is very helpful supplement in total solution to our clients. But mostly in the past, it's either product driven or campaign driven, like, what you have mentioned, 3.5% domestic insurance. But we have been building or putting together a lot of infrastructure and platform around insurance as a total solution to our clients. And also diversify the client types from, you know, purely individual based to probably more enterprise based. And we'll continue to build that into one of our primary solution to our clients. I guess that the way we actually conduct insurance business is a little different from purely agency based insurance type of institutions, as we, we do put insurance product strategy as part of the total solution to our clients. Peter? That's very clear. Thank you. 谢谢管理层的解答。 [Foreign Language] 好，谢谢 Peter。 As we have no further questions, this concludes the question and answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may all now disconnect. Thank you all for listening.