Morning, ladies and gentlemen, and thank you for standing by for Waterdrop Inc's second quarter 2026 financial results earnings conference call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to Ms. Tracy Lee. Please proceed, Ms. Lee. Thank you, Operator. Dear investor and analyst, this is Tracy Lee from Waterdrop Investor Relations. Please note that the discussion today will contain forward-looking statements made under the safe harbor provision of U.S. Private Securities and the Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. The company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Also, this call includes discussion of certain non-GAAP measures. Please refer to our earnings release for reconciliation between non-GAAP and GAAP. Joining us today on the call are Mr. Shen Peng, our Founder, Chairman, and CEO, Mr. Ran Wei, Director and GM of Insurance Business, Mrs. Li Jier u, Finance VP, Head of Strategy and Capital Markets. Certain members of our management team will deliver their remarks in Mandarin, followed by an English translation. Moreover, a webcast reply will be available on our Investor Relations website. I will now turn the call over to our CEO, Shen Peng. Please go ahead. [Non-English content] Dear investors and analysts, thank you for joining Waterdrop's second quarter 2026 earnings conference call. In this quarter, we maintained growth momentum and achieved a total revenue of CNY 1.45 billion, up 72.8% year-over-year, and a net profit attributable to our ordinary shareholders of CNY 130 million. Since the first quarter of 2022, we have maintained profitability for 18 consecutive quarters. [Non-English content] Segment-wise, our insurance business continued to optimize user acquisition and conversion, driving 80.5% year-over-year revenue growth. Waterdrop Medical Crowdfunding has cumulatively raised medical funds for 3.82 million patients as of the quarter end. Our digital clinical trial solutions business performed strongly, with quarterly patient enrollment up over 50% year-over-year. These growth trends were underpinned by a deep integration of AI across our core business scenarios. As of the end of June, the company has filed 88 large language model patents, including 10 of them overseas. [Non-English content] With strong performance and cash reserves, we continue to prioritize shareholder returns. Our board recently approved two new initiatives. Firstly, the board has approved a cash dividend of $0.03 per ADS, or $0.003 per ordinary share, payable to holders of the record on October 9th, 2026. The aggregate dividend payment is approximately $10.8 million, with payments to be made in early November. Second, the board approved a fixed share repurchase program of up to $50 million over the next 12 months. Since the initial program launched in 2021, we have repurchased approximately 62.9 million ADS for $121 million as of August 31st, 2026. The company remains committed to sustainable development and to giving back to society in meaningful ways. As of June 30, 2026, Waterdrop Charity platform has partnered with 119 public charitable organizations and launched more than 15,600 charity programs. [Non-English content] Waterdrop remains focused on growth and investment in core businesses. We expect that our current incremental investment to continue translating to solid user base and future product potential. We always regard technology as a core driver of the company's growth. Today, our AI capabilities are deeply embedded across the platform, enabling us to better capture growth opportunities in our existing businesses and further sharpen our competitive edge. At the same time, we are actively piloting new AI-driven initiatives for global markets and have made early progress in select markets. For full year of 2026, Waterdrop targets more than 40% year-over-year growth in total revenue and over 10% growth in operating profit. This concludes our overview of Waterdrop's business performance. Now we will walk you through each of our business segments in more detail. [Non-English content] Hello, everyone. This is Ran Wei. Let me briefly update you on our insurance business. In the second quarter, insurance-related income reached CNY 1.33 billion, up 80.5% year-over-year and 15.4% quarter-over-quarter. Operating profit was CNY 180 million, up 20% from the previous quarter. With continued refinement in our AI-driven user insight and conversion capabilities, newly acquired customers grew 32.3% sequentially. The first year premiums of long-term insurance grew 33.4% sequentially as we capture market demand for endowment insurance this quarter. [Non-English content] On the product side, our core strategy remains improving the accessibility of insurance products. This quarter, we delivered several new products in line with this direction, including the launch of Rongyi Bao, the market first long-term critical illness insurance product requiring no health disclosure and offering five-year guaranteed renewability. We also expanded our Jixing Gaozhao product matrix, which now includes the market first specified disease insurance offering lifetime coverage with no health disclosure. During this quarter, products for users with preexisting conditions contributed CNY 310 million FYP and disability insurance at CNY 84 million. [Non-English content] On the service side, we've adopted differentiated scenario-based operations across customer touchpoints. In this quarter, AI applications across our user-facing interactions scenarios helped generate nearly CNY 100 million in FYP. Among them, AI Pro Insurance generates FYP in millions each month. FYP facilitated by our AI medical insurance experts rose by 25.6% sequentially. In WeCom scenario, AI executed our strategies directly from the demand identification and user profiling to key moment engagement and batch outreach, contributing over CNY 10 million in FYP during this quarter. [Non-English content] In long term insurance sales, the value of AI ultimately comes down to expanding what our life planners can do. As a part in our underwriting assistant KEYI.AI had answered more than 13,000 underwriting questions since its launch. Our AI super sales assistant has constantly outperformed human life planners on annual premium per lead. And the number of users in third grown nearly 50% sequentially. Powered by multi agent collaboration, our AI conversion model captures user preference from natural language interactions, turning them to doable profile we can draw on over time, and proactively surface topics tailored to each user, effectively extending the range of every life planner we have. That concludes our update on the insurance business for the second quarter. [Non-English content] Next, let me briefly update on Waterdrop Medical Crowdfunding and healthcare businesses. As of the end of June 2026, Waterdrop Medical Crowdfunding has cumulatively contribution from around 499 million donors, helped 3.82 million patients and raised a total of CNY 74.7 billion. This quarter, we continue to upgrade our AI driven risk control models, further improving asset concealment detection and sensitive identity detection. By combining semantic analysis of ID information, medical materials and user generated content, the upgraded engine can better identify hidden inconsistency and improve risk control efficiency. [Non-English content] In our healthcare businesses, our performance exceeded expectation across several key metrics. We enrolled more than 1,500 patients in this quarter, up 54% year-over-year, and cumulative patient served surpassing 17,000. Growth was driven by the higher matching efficiency and a stronger enrollment capability. Oncology projects remain our core focus, while chronic disease projects have driven most of the sequential growth this quarter. Although chronic disease studies have a larger patient pool, they typically carry high screening failure rates and place greater demands on matching precision and speed. Chronic disease enrollments increased 80% year-over-year in this second quarter, further validating our enrollment ability in high screening failure enrolling. Meanwhile, our proven enrollment track record is translating into deeper and broader trust among partners. In this quarter, E-Find Platform signed 167 new projects, and the number of pharmaceutical companies and CROs we partnered with surpassed 255. Going forward, we will continue to optimize operational efficiency and work with our partners to advance digitalization across the clinical business precision. This concludes our update on the crowdfunding and healthcare businesses. Hello, everyone. This is Li Jieru. Next, I will walk you through our financial highlights for the second quarter of 2026. Before I go into details, please be reminded that all the numbers quoted here will be in RMB. Please refer to our earnings release for detailed information on our financial performance on both the year-over-year and quarter-over-quarter basis, respectively. In the second quarter of 2026, Waterdrop delivered net operating revenue of CNY 1,448 million, up 72.8% year-over-year, maintaining a strong growth momentum. Our insurance business contributed about CNY 1,333 million in revenue, representing an 18.5% increase year-over-year. Net insurance businesses accounted for around 7.9% of total revenue, including CNY 63.6 million from medical crowdfunding service fees and CNY 35.2 million from our digital clinical trial solutions. Total operating costs and expenses came in at about CNY 1,337 million in the second quarter, up 80.5% year-over-year. Operating costs were CNY 537 million, increasing 29% year-over-year. The increase was primarily driven by business scale expansion, including an increase of around CNY 63.8 million in cost of referral and service fees, as well as an increase of CNY 21.4 million in short message service costs and CNY 11.2 million in personnel costs, respectively. Sales and marketing expenses reached nearly CNY 638 million, compared with CNY 199 million in the same quarter of 2025. The year-over-year increase mainly reflected our active step up in public domain traffic investment, with marketing expenses for third-party traffic channels increasing by about CNY 450 million and marketing-related professional technical service fees increasing by around CNY 21.8 million. G&A expenses were CNY 93.4 million, up 27.2% year-over-year, mainly due to an increase of CNY 33.3 million in allowance for credit losses. This was partially offset by decreases of nearly CNY 10.5 million in personnel costs and share-based compensation expenses. R&D expenses were CNY 68.8 million, up 32.4% year-over-year. The increase was mainly driven by cloud server fees, token fees, and other IT support expenses, which rose by about CNY 11.1 million, as well as an increase of CNY 6.3 million in personnel costs and share-based compensation expenses. For this quarter, operating profit reached about CNY 111 million, up 14.3% year-over-year and 39.2% quarter-over-quarter. However, due to tax-related items and non-recurring gains and losses, net profit attributable to shareholders was around CNY 126 million, down 10.3% year-over-year, but up 27.9% quarter-over-quarter. As of June 30, 2026, cash and cash equivalents, short-term investments, and other cash positions totaled about CNY 2.653 billion. Our cash reserve maintains ample and provides solid support for both business investments and shareholder returns. In terms of shareholder returns, since the launch of our first share repurchase program, we have cumulatively repurchased 62.9 million ADS for approximately $121 million as of August 31st, 2026. Recently, the board approved the sixth share repurchase program, under which we plan to repurchase up to $50 million over the next 12 months, and also approved the sixth cash dividend of approximately $10.8 million. Overall, both the quality and scale of growth in our core businesses improved this quarter. The continuous deployment of AI across every scenario in our business is becoming an important driver of efficiency gains. Meanwhile, we are expanding proactively while investing prudently in new initiatives in global markets, which for now have very limited impact on our current period financial results. As these initiatives reach a larger scale, we will keep the capital markets informed in a timely manner. In the future, the company will remain committed to disciplined strategic investments and continue creating long-term value for users and shareholders. That concludes the company's financial results for the second quarter of 2026. We will now move on to the Q&A session. Okay. Thank you, Jieru. Ladies and gentlemen, we will now begin our Q&A session. To ask a question, please press star one on your telephone. To withdraw your question, please press star two. In addition, this conference is being webcast live on the ChinaVenture platform. If you are joining through the platform, you may also submit your questions in writing there. Okay. We will now proceed to take our first question, and it comes from the line of Amy Chen of Citi. Her question is: In terms of the mainland Chinese business in Hong Kong, media have reported that mainland tax authorities may tax policy dividends. Has management seen any change either in international business or domestic business? [Non-English content] [Non-English content] Regarding recent market attention, we are reading that what we are seeing reflects the enforcement of tax rules that have long been in place rather than a new policy specifically targeting Hong Kong insurance. In the near term, the media coverage has some effect on our customer sentiment. But the differentiating value of Hong Kong insurance products, like the multi-currency allocation, access to global healthcare resources, and inheritance planning are clear, and fundamental drivers of the Hong Kong insurance market has not changed. Turning to the drivers of mainland China insurance market today, the growth is driven by a rising health protection awareness, policy tailwinds for commercial health insurance, continued product innovation, and a structural shift of household savings into long-term assets such as insurance in the current low interest rate environment. Waterdrop serves as diversifying the customer base across multiple markets and multiple service models, and our business mix remains solid and we are confident in serving user demand wherever it rises. We will now take our next question from [Chinghao Chen] of CICC. The question is: We have noticed that several insurers have recently launched health insurance products targeting customers with preexisting conditions. How does management evaluate this opportunity in this category, and what is Waterdrop's product strategy in this area? [Non-English content] [Non-English content] As checkups become more common, chronic illness and living with pre-existing conditions are far more typical. So a clean standard life is actually quite rare. And traditional health care insurance has long focused on healthy lives, but millions of people with pre-existing conditions still go unprotected. The industry consensus is clear: we are shifting from ensuring more healthy people to protecting the health of more people. This is both a real demand-side opportunity and a clear path of commercial insurance expanding its coverage. And early practice with federal-level inclusive health plans, that logic is now moving to more commercial medical insurance, critical illness insurance, disability insurance and others. This is not simply diluting underwriting, it is segmenting the disease risk and building differentiated underwriting and claims. So the certain risk can actually be written and paid. For Waterdrop, lowering coverage threshold is central to our product strategy. On the supply side, we break the demand down by scenario, age and condition, and co-design terms and coverage with our insurer partners. On the acquisition side, we use platform and AI insights to match the right product to the right customer, so people with pre-existing conditions can actually find something that works for them. Longer term, our view is that health cover for people with pre-existing conditions can become more like auto insurance: people can actually buy it, claim on it and renew it. Accessibility and sustainability will have to move together. Okay, we will now take our next two questions from Will Wu of Guotai Junan International. The question is: Is there a clear timeline for AI agent to start generating commercial value? And how will AI investment impact on R&D expense ratio going forward? And what other new initiatives is the company currently exploring? [Non-English content] [Non-English content] As previously introduced, our AI is planning across four value chains: acquisition, risk screening, and claims, and it grows series by stage. We are not commercializing AI as a standalone business, and its value will show up in our top-line growth and bottom-line growth we deliver. As I introduced earlier, in the user targeting and conversion, our AI directly supports user consultation and purchase decisions, driving nearly CNY 100 million. Our long-term insurance advisory tools like KEYI.AI and our AI pre-sales assistance that help our life planners work more efficiently and close more cases. On our operation, our AI customer service and quality inspection applications have fully absorbed the actual volume as we scale. In our R&D side, the overall R&D ratio is stable, but we are actively shifting resources towards AI, both in talent and in token cost. As usage scales, the spend will grow naturally. We are disciplined about ROI under each scenario, and it will keep the overall ratio to a reasonable range. Turning to our new initiatives, we are incubating a portable AI office assistant, a smart hardware product that leverages our AI agent know-how, in-house R&D, and China's supply chain strength. It is in pilot sales across major global markets with some encouraging early feedback. That said, it is still at an early stage and its financial impact is limited for now. The experience we are gaining along the way, both for the business and for the company overall, is generally valuable. We will now take our next question from Kate Liu of UOB Kay Hian. Her question is: from product and supply perspective, which insurance category does the management view as having the strongest growth potential? [Non-English content] [Non-English content] There are two forces that reshaping our health insurance, like the raising health protection awareness and an aging population. The market is shifting from the standardized product to more tailored to actual needs. Demand-driven coverage including our insurance for previous conditions, lead to high-end medical insurance and products bundled with health management and elderly care services. A demand that traditional product never really served is being unlocked. We will keep building in this area. This category play right into the strengths we have built through our online platform. We can reach broadly and target precisely, leveraging our AI capability and spot protection gaps in specific customer groups, can matching them with the right products and deliver better, faster service at the point of user complication. So we will keep building on what we are uniquely good by. Okay, we will now take our next question from Xinyu Wo of China Securities. The question is: noticing the strong growth in Q2, could you walk us through your recent customer acquisition investment outcomes and what we can expect on the cost side for the rest of 2026 and into 2027? [Non-English content] [Non-English content] We're still in an investment circle in the user acquisition in Q2, and that speed is already show up in the numbers like insurance revenue and operating profit both grow further from the last quarter. The new users were actually up more than 30% sequentially. This is a combined result of better reach out and conversion and product supply. In terms of the user acquisition strategy, actually we are not simply pursuing the cost reduction. What matters most of us is how we leverage AI capability to better align our product supply with our user profile and improving conversion efficiency. Currently, AI has been embedded across the entire process from our customer acquisition to service, and is continually improving our efficiency across our core scenarios. For the second half of 2026 and the full year of 2027, our strategy direction remains consistent. We continue to expect to maintain an active user acquisition pace, expanding our reach to target customer segments, and broadening the user acquisition coverage. At the same time, we expect the user value generated by the current period acquisition to be gradually realized through renewals and up-sells and cross-sells over the sequential user life cycle. We have received no further question online, and this concludes our Q&A session for today. Thank you to all the investors and analysts who joined us today. Betsy, Operator, back to you. We are now approaching the end of the conference call. Thank you for your participation in today's conference. You may now disconnect. Have a good day.