Thank you for standing by, and welcome to the SunCar Technology Group's first half 2024 earnings call. Please note that today's call is being recorded. I will now turn the meeting over to Jennifer Jiang, Director of Investor Relations for SunCar Technology Group. Thank you, and thanks to everyone who joined us today for SunCar's first half of twenty twenty-four earnings call. Please note that our earnings press release was issued earlier today, and our semi-annual report on Form 6-K was filed with the Securities and Exchange Commission last Friday. Those are available in the investor relations section of our website at https://suncartech.com. Joining us on the call today are SunCar's Chairman, CEO, Zaichang Ye, and Breaux Walker, U.S.-based consultant. The format of today's call will begin with the opening remarks from Chairman Ye, followed by a financial and business update from Mr. Walker. Afterward, we'll move into a question and answer session, addressing the questions submitted by investors. We thank everyone for submitting these questions. Before we get started, I'm going to review the Safe Harbor statement. Please note that today's discussion will contain forward-looking statements made under the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may differ materially from the views expressed today. Further information regarding this and other risks and uncertainties are included in the company's semi-annual report on Form 6-K for the half year ended June 30th, 2024. Any other documents filed with the U.S. Securities and Exchange Commission. SunCar Technology does not assume any obligation to update any forward-looking statements, except as required under applicable law. With that, I would like to turn over the call to our first speaker, Mr. Zaichang Ye, SunCar's Chairman and CEO. 17 years ago, I founded SunCar to improve the auto services and auto insurance customer experience in China. SunCar is proud to have achieved set goal, and for the value of our $100 million investment in SunCar's technology platform delivers to our customers. It is a credit to our unique technology and the team's hard work that we have won the trust of China's largest bankers, insurers, and auto companies. We will adhere to our mission to meet our customers' rapidly changing needs as we digitalize China's auto services and e-insurance markets. We have been a leader in bringing digital auto services and e-insurance tailored to the EV market. According to the Wall Street Journal, China's August EV and hybrid sales rose 43% from a year earlier, making up 59% of all vehicle sales. SunCar continue to benefit from the EV market's rapid growth and strong relationships with our EV partners. These partners continue to innovate globally while growing their partnerships with SunCar. From January 2024, our e-insurance partnership with world's leading EV companies has grown rapidly from $400,000 million to over $36 million in premium value. As the EV market becomes hypercompetitive, there is a great need for EV companies to leverage auto services and insurance sales to increase their competitive advantage. SunCar has an even stronger advantage with new EV market entrants. These new market entrants face thicker competition. The newer EV companies understand the synergies between our e-insurance and auto services business, where SunCar's e-insurance technology can drive the sale of other auto services and the new vehicles purchased. Our partnership with Li Auto to develop its new broker system is an example of our mission to continue to innovate in the EV insurance market. We are honored that the exciting new EV companies, Xiaomi and Jiyue, a joint venture between Geely and Baidu, have decided to offer our integrated auto services and e-insurance platform to their customers. We estimate that this year's new EV sales will reach 10 million units, while there are over 300 million ICE vehicles, a much larger market. Due to the entry of many EV competitors in the market, ICE vehicles are facing increased competition. Through SunCar's e-insurance platform, ICE companies hope to encourage repeat customers and increase insurance-related service revenues. As part of their competitive strategy, our ability to help our ICE vehicle partners capture this large insurance market opportunity is one of the company's biggest revenue opportunities. ICE companies are quickly realizing the benefits they can achieve by digitalizing and using SunCar's leading e-insurance and auto services platform to accelerate that process. SunCar's recent partnership with SAIC, China's largest car company, is one example of this trend. Finally, we continue to invest in our R&D. We will continue to build up upon our unique AI-based technology, which allow us to provide drivers insurance quotes in under two minutes. This technology is a game changer for our e-insurance customers. Thank you, Zaichang. This is Breaux Walker. Thank you all again for joining us. SunCar is a leader in cloud-based and software-focused B2B auto services and e-insurance in China. The company leverages unique technology to provide valuable customer loyalty and e-insurance solutions to its customers, who are some of China's leading corporations. China is the world's largest and fastest-growing car market, and a market that is importantly, rapidly digitalizing. At the same time, large enterprises are facing significant competitive pressure in retaining and adding new customers. Together, these trends give SunCar an exciting and substantial addressable market opportunity. SunCar operates in three business segments: auto services, auto e-insurance, and technology services. In our auto services business, we offer access to a digital auto services platform and network of over 47,000 auto service providers as a customer loyalty solution to enterprise clients, which includes China's largest financial institutions and auto manufacturers. Our extensive auto services cover a wide range of services such as car wash, oil change, car detailing, roadside assistance, flight pickup, designated driving, VIP lounge access, and many others. In a country that doesn't have AAA or access to detailed information on auto service providers, SunCar's auto services are of high value to customers and drive increased customer loyalty for our large enterprise customers. We automate and streamline the insurance buying process through our proprietary cloud platform and mobile app, which integrate the full spectrum of products from leading insurers in China. We sell insurance policies through a network of over 64,000 external sales partners, including auto manufacturers and auto service providers. In this segment, we facilitate the sales of auto e-insurance products underwritten by major insurance companies in China, and receive commissions from these insurance company customers, which are typically calculated on a percentage of the premiums paid. Finally, our fast-growing technology services business provides technologies, technical software and consulting services to our auto services and e-insurance customers. With a growing need to manage their businesses more efficiently, our customers are rapidly implementing our digital tools to streamline their business workflows, manage their customer relationships, and automate order processing. We are continuously upgrading our technology to meet customers' needs, and are in the process of developing a SaaS product offering designed to convert our auto service providers into technology service customers. We expect the transition of auto service partners to our SaaS platform will accelerate as we offer them new AI-based services. What sets our business apart from would-be competitors is our unique technology and the fact that we have both a comprehensive digital auto service solution and a one-stop auto e-insurance solution. Other strategic advantages include our ability to provide nationwide auto service coverage in China, access to a large, high-quality service provider network, competitive prices, and an e-insurance product that enables customers to purchase an e-insurance policy in under two minutes. With a $120 billion addressable market for insurance services and a $20 billion market for B2B auto services, there is a tremendous opportunity for us to grow in our existing markets. In addition to having large addressable markets, we're benefiting from the joint tailwinds of China's auto market digitalization and the increased competition our customers are experiencing, leading them to digitalize and seek effective customer loyalty solutions. We will now transition to our operational performance. In the first half of two thousand and twenty-four, we continued to drive significant revenue growth and expand our presence within our large, high-quality customer accounts. In the auto services segment, we signed multiple exclusive service contracts with China Construction Bank, a leading bank in China. These include two two-year vehicle service contract with the bank's Fujian branch, where SunCar delivers tailored auto services to tens of thousands of CCB customers from four hundred and sixty car wash locations. Other contracts were signed with the bank's Sichuan and Yunnan branches. Our destination pickup service business continues to grow rapidly, with top-tier customer additions, including CITIC, China Merchants, Ant Fortune, and Ping An Insurance. Earlier this year, we launched a three-year partnership with CITIC Bank International to provide exclusive airport concierge car services for its private banking clients. In April two thousand and twenty-four, we collaborated with Ant Fortune to offer luxury airport concierge services to their Black Card V3 members. Demonstrating the quality and longevity of our auto services customer base, we expanded our partnership with Ping An Insurance, China's leading insurance company, to include new agreements with the Shenzhen branch, where SunCar will provide premium airport pickup. This marks the seventh Ping An branch to partner with SunCar for premium airport pickup services. SunCar was also selected as the provider of concierge car services for China Merchants Bank private banking clients through a two-year agreement. Demonstrating our commitment to providing our customers with innovative solutions, we established a new partnership with China Continent Insurance's Inner Mongolia branch, helping to create innovative service bundles, which boosted the China Continent's services sales by 30% in the first half of two thousand and twenty-four. In our e-insurance business, we executed on multiple strategic and operational fronts to further grow this segment. We signed a two-year agreement with SAIC Maxus, a leading commercial vehicle manufacturer, to enhance e-insurance management across its dealership network, with first-year service fees estimated at $14 million. This customer win is indicative of the large potential opportunity SunCar has in the ICE market. We began an innovative partnership with Beijing Li Auto Insurance to develop the Li Auto Insurance broker system, which aims to improve brokerage operations with the support of SunCar's advanced IT solutions. Additionally, we expanded our collaboration with Beijing Houji Insurance Brokerage to deliver insurance services in fourteen cities, all utilizing SunCar's e-insurance platform. We extended our partnership with Zeekr Intelligent Technology, a premium EV manufacturer, partner now listed on the New York Stock Exchange. For Zeekr, we're providing insurance services using SunCar's intelligent platform. Finally, we formed a strategic partnership with Lotus Technology to offer comprehensive automotive services and e-insurance to Lotus car owners. We will now transition to our financial performance, all of which will be presented in US dollars. For the first half of fiscal year 2024, we are very pleased to report total revenue of $203 million, up 27% from $159 million in the first half of fiscal year 2023. This growth underscores our leading position in the auto service and e-insurance sectors, the strength of our innovative cloud-based solutions, and our ability to meet the evolving needs of enterprise clients across China's automotive and financial services sectors. Our auto service segment reported revenue of $107 million in the first half of fiscal year 2024, an increase of 9% from $99 million in the first half of 2023. Growth in this segment was driven by an increase in service orders in 2024. Our auto e-insurance segment reported revenue of $74 million in the first half of fiscal year 2024, an increase of 55% from $48 million in the first half of 2023. This growth was driven by a 250% increase in the number of EV insurance policies sold for the six months ended June 30, 2024. The company experienced a 21% decline in the associated average commission rate due to normal fluctuations in regulatory guidelines. Our technology service segment generated revenues of $22 million in the first half of fiscal year 2024, representing a 70% increase compared to the prior year period. This increase was due to increasing demand from automotive service providers for online tools that streamline workflows, manage customer relationships, and automate order processing. Our ongoing technology upgrades, including a shift towards a SaaS model and the use of a private cloud platform, have simplified development and enhanced service capacity, driving this growth. We recorded a net loss of $60 million in the first half of fiscal year 2024, compared to a net income of $1 million in the first half of 2023. The net loss was primarily attributable to increased share-based compensation expenses related to the 2024 equity incentive plan. We continue to strategically invest in R&D and business development as we increase our presence in some of the largest enterprise customers in China. We believe that Adjusted EBITDA, a non-GAAP metric that excludes certain non-recurring items and non-cash expenses, helps evaluate our operational performance in addition to the GAAP metrics. Our adjusted EBITDA increased by 4% to $6 million in the first half of 2024, compared to $5.8 million in the prior year period. In conclusion, we continue to add large, high-quality customers and experienced strong revenue growth in the first half of 2024. SunCar remains well-positioned as the preferred cloud-based and software-focused B2B auto services and insurance provider in China. We will continue to invest in our differentiated technology platform, develop new AI-based and intelligent cloud solutions, and expand our high-quality auto services and high-growth insurance business. Before we focus on the question and answer portion of the call, Chairman Ye would like to thank our employees, partners, customers, as well as our loyal shareholders for their continued support and belief in our vision. We look forward to updating you on our business on upcoming earnings calls. We will now transition to the Q&A portion of the call. Thank you to everyone who submitted questions. Question number one: How do you view AI impacting your business? We see significant growth opportunities from AI, given that we are the only nationwide digital auto service and insurance platform. We expect that our cloud platform and strong database of automotive service providers gives us a unique opportunity to leverage AI. To be successful in implementing AI, a company needs scale. With our scale, we believe SunCar is uniquely positioned to take further market share from regional and non-automated competitors. Specifically, there's tremendous opportunity to provide predictive maintenance applications to our customers, which will increase their maintenance and insurance premium revenue. Additionally, we believe the nascent AV robotaxi markets will provide SunCar with significant new revenue opportunities as we tailor services to those markets. Question number two: The SAIC transaction seems very significant to the company. How would you put that deal in a perspective for your investors? The SAIC transaction is significant for the company, not only for its size, but also for the fact that it represents the large market opportunity SunCar has in our emerging traditional fuel or ICE market. In the past, we have primarily been focused on the EV market, but we now see the traditional ICE market rapidly digitalizing to better compete with the EV players. ICE is a bigger market than the EV market, so this is a good, very good trend for our business. Question number three: What is the biggest risk to your business? We continue to be in high growth mode, and as such, our team needs to continue driving towards our objectives, especially the opportunities we see to further integrate our auto services and e-insurance products, develop new AI-based products, and attack the ICE market opportunity. Question number four: The company's technology service business saw a significant increase of 70.3% in the first half of twenty twenty-four, reaching 21.9 million. What were the main driving forces behind this growth? What are the company's plans for sustained growth in the future? The company's technology services business mainly provides industry-specific technology solutions to EV manufacturers and ICE vehicle 4S dealers. The rapid growth of this business during the period was driven by demand from both new energy EV vehicle manufacturers and the ICE market, who view SunCar's integrated services and insurance platform as giving them a competitive advantage. With regards to our SaaS services aimed at the EV market, the company signed a strategic service agreement with the leading global EV manufacturer to provide a SaaS-based vehicle-specific insurance system. SunCar also provided advanced vehicle insurance sales systems to Xiaomi, NIO, Zeekr, and 18 other companies. It is expected that this part of the business will continue to grow rapidly in the future, strengthening the company's market leadership position. Question number five: The company's administrative expenses increased significantly by $37 million in the first half of 2024, corresponding to a more than 10 times increase year on year. What is the main reason for this growth? The increase of 37 million in administrative expenses for the first half of 2024 was primarily due to a one-time equity incentive expense of $31 million, which was granted to recognize and motivate the management and administrative employees who have made outstanding contributions. Additionally, $6 million dollars was set aside for bad debt provisions for accounts receivable. Question number six: The company's R&D expenses increased significantly by 28.2 million in the first half of 2024, corresponding to a 701% increase year on year. What is the main reason for this growth? The increase of $28.2 million in R&D expenses for the first half of 2024 includes a one-time R&D-related personnel equity incentive plan of $31 million. After excluding this impact, the actual R&D expenses decreased by $2.8 million year on year. This is mainly due to the company's current development of its big data platform, Pangu System, which has been capitalized according to the actual progress made during the period. Question number seven: The company's Adjusted EBITDA for the first half of twenty twenty-four increased to $6 million. What is the reason for significant change in operating profit or loss? The main reason for the change in the company's issue is the company issued equity incentives of approximately $62.8 million in the first half of 2024. These were granted to recognize and motivate employees who have made outstanding contributions to the company's development, especially those teams and individuals who have played a key role in our technology innovation, market expansion, and management optimization. The equity incentive plan is a one-time expenditure. Other differences are mainly due to a depreciation expense of $1.8 million, generated from normal operations. Question number eight: Besides the continuing rapid development of the China business, does the company have any plans for international expansion? The company's future international growth will be mainly driven by the availability of strategic M&A opportunities. We believe that acquiring an existing synergistic company in the U.S. could lower our market entry risk as we pursue the opportunities in that market. We have conducted extensive research in the U.S. and Southeast Asia, and plan to select targets with similar and core technologies for those markets, with the U.S. market being the top priority. In terms of the U.S. market, the company's existing advanced automotive service cloud platform can be used directly in the U.S. market through a localization process already identified by the company. The company plans to enter the U.S. market as the first step in its overseas expansion, and then expand its platform to other countries when it is matured enough to be transferable to other geographies. Question number nine: Are there any direct or indirect competitors in your industry? In terms of auto services, the company has a leading and nationwide automotive services platform that is differentiated by both its technology and scope. In certain provinces, we have some competitors who have not invested in their technology stack to the same extent. Most of these competitors rely on manual processes, which are relatively inefficient. Compared to the company's comprehensive offering of post-sales automotive services, their services are also more limited. Regarding automotive insurance, the company is the first nationwide online car insurance platform in the country, leading the development of the industry. The company offers an innovative insurance quote system, which can generate a quote within two minutes based on a vehicle license plate. Our EV-specific products, in particular, are extremely differentiated from would-be competitors. That concludes the Q&A, and we want to thank everyone again for participating on today's call. We look forward to providing additional updates soon. In the meantime, we can be reached at ir@suncartech.com. Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.