Ladies and gentlemen, thank you for standing by and welcome to the Huize Holding Limited Fourth Quarter, and Full Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will have a question-and-answer session. Today's conference call is being recorded and a webcast replay will be available. Please visit Huize's IR website at ir.huize.com under the Events and Webcast section. I'd now like to hand the conference over to your speaker host today, Mr. Harriet Hu, Huize's Investor Relations Director. Please go ahead, Harriet.

Thank you, Sarah. Hello everyone and welcome to our earnings conference call for the fourth quarter and full year of 2023. Our financial and operating results will read earlier today and are currently available on both our IR website and a newswire. Before we continue, I would like to refer you to the safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measure today, which are more partly explained in our earnings press release and filings with the SEC. Joining us today are our Founder and CEO, Mr. Cunjun Ma; COO, Mr. Li Jiang; Co-CFO, Mr. Minghan Xiao; and Co-CFO, Mr. Ronald Tam. Mr. Ma will start the call by providing an overview of the company's performance and operating highlights for the fourth quarter and full year of 2023. Mr. Jiang then provide details on the financial results for the period before we open up the call for question. I'll now turn the call over to Mr. Ma.

[Foreign Language]. Hello everyone and thank you for joining to Huize’s fourth quarter and full year 2023 earnings conference call. In 2023, China's insurance industry continues a positive growth trajectory marking the second consecutive year of growth following the industry, significant reform in particular, the demand for savings insurance products remains robust, driving a 12.75% [ph] growth in total premiums for China's life insurance industry, at least the declining RMB interest rate. The China Insurance Consumer Competence Index also reflected a resurgence in consumer competence towards the macroeconomic environment and the insurance industry. Notably, the intention to increase insurance coverage has refunded for three concept quarter surpassing levels in the same period of both 2021 and 2022. Navigating through this evolving market trend, we have successfully saved the market opportunities in long-term saving products by leveraging our strategic focus on long-term insurance products, divers’ operational tactics, product innovation, and customer acquisition capabilities. We have once again delivered satisfactory results. In 2023, total gross recent premium or GWP facilitated on our platform reached RMB5.8 billion up 18.2% year over year. Our total revenue increased by 3.3% year over year to RMB12 billion, and we achieved a non-GAAP net profit of RMB72.3 million, exceeding our guidance of RMB60 million. [Foreign Language]. First-year premiums or FYP facilitated on our platform reached RMB2.6 billion up significantly by 42% year over year, and renewal premiums increased by 4% year over year, reaching RMB3.2 billion. In terms of product mix, the GWP contribution from long-term insurance products in 2023 was 92.3%, representing the fourth consecutive year exceeding 90%. During the year, we witnessed a rise in demand for savings product and leverage our diversified product offering and omnichannel distribution capabilities to capitalize on the market opportunities. In light of that FYP from our long-term savings product…

Thank you, Mr. Ma and Harriet. Good evening everyone in the Asia time zone and good morning to everyone in New York. As the macro economy and industry conditions gradually recover, we are very pleased to report that the total GWP facilitated on our platform for the year increased by 18.2% to RMB5.8 billion in 2023. We think that this growth is largely driven by our omnichannel distribution platform capabilities, a high-quality customer base, a diverse range of product offerings, as well as our maiden contribution of international revenues from our expansion into the Hong Kong market in the second half of 2023. Our efforts to acquire new customers have also become increasingly efficient. With more than 212,000 new customers added to our ecosystem in the fourth quarter. By the end of the year, our total customer count has exceeded 9.3 million. We are proud to announce that we recorded a non-GAAP net profit of RMB72.3 million for the 2023 fiscal year surpassing our previously given guidance of RMB16 million. Our fourth quarter non-GAAP net profit of RMB16.4 million also marked our fifth consecutive quarter of profitability. Our first financial results are a testament to the effective execution of our key business strategies. To elaborate, first, we have consistently prioritized our strategic focus on long-term insurance products, which have contributed to over 90% of our gross recent premiums for the 17th straight quarter. Secondly, we have continued to empower the capabilities of insurance agents through our superb distribution network product innovation and technological advancements. This has resulted in a significant 73.4% year-over-year increase in premiums generated by our IFA platform reaching RMB354 million in 2023. Thirdly, we continue to pursue upselling opportunities across the high-quality customer base. In 2023, the repeat purchase ratio for our long-term insurance products client by…

[Operator Instructions]. We will now take our first question, and this is from the line of Amy Chen from Citi. Please go ahead.

Hi, first of all I want to congratulate management on another profitable quarter. And then I have two questions. The first question is on the rationalization of compensation paid to the brokerage channel, which is called [indiscernible] in Chinese. And I'm wondering, how would this impact our brokerage income, in terms of, for example, for annuity products or say for CI products, how would this impact our first-year commissions and the renewal commission? And the second question would be on customer demand, going to 2024, how has the product mix shift, so far and what is our most mainstream or most popular product at the moment? Thank you.

Thank you, Amy. So, I got two questions from you. The first one on policy employee impact on the business. So, we, we know that this is a very important topic among investors' minds right now. And, so far, I think what we've seen, which has happened already for the bank assurance channels, is that commission rates have generally been reduced by around 30%, to 50% in that area, for the brokerage and agency channels, of course, the actual regulations have not come out officially or in effective yet. But we do expect that this will come probably in the next few months, maybe as early as April. So, what we envisage is that probably there'll be a somewhat similar kind of impact on the brokerage and agency channels as we have seen in bank assurance channels, in terms of commission rate impact generally speaking. And I think the impact on the offline, so-called savings products will be more marked, or more, adversely impacted, and versus some of the online-only products. So, that's what we see, as the potential market impact on that question. On your second question about customer demand, and product mix shifts, I think that we have also continued to see strong and sustained momentum in the long-term savings category or annuities. This has still been the most popular or most in demand product among Chinese consumers, due to the declining rates environments and probably the lack of attractive alternative investment alternatives in the China market right now with what we've seen in the real estate market and also underperforming equities market. So, the long-term savings products offered by insurance companies still represent a very viable and attractive investment product or wealth allocation product for general Chinese consumer. So, we see that for the rest of this year and least for the first quarter, we are still seeing very strong demand for savings products. And in in particular, we have been distributing, participating long-term savings products. And we are probably, one of the leading online platforms to distribute hopefully the most popular participating product right now offered by the market, which is from generality China. So, we are probably the one of the leading platforms distributing this product in the China market. So, I think this is probably -- this is going to be the mainstream product for the rest of the year, and we will continue to work hard to co-develop customized products in this category with some of the larger brand names which we hopefully will be able to launch as early as April next month. We will be looking to cooperate with one of the top brands in the China market for a customized free exclusive long-term participating savings product. So those would be the answers to your questions, Amy.

We will now take our next question, and this is from the line of Coco Gong from Morgan Stanley. Please go ahead.

Congratulations on the very good results. I only have one question that's a little bit specific. Ron, talk a lot about the savings products de mine, and obviously the protection is still on investors' mind, although the de mine seems to be still kind of weak right now, especially in China. So, I want to understand, since we can see a lot of data on this. Do we see marginal improvement on critical illness, like the long-term health insurance product? Specifically, are we seeing more customers, new customers buying this insurance product, or are we just seeing more existing customers buying more coverage and do we see any other potential signs of marginal improvement in a specific product type? Thank you.

Thank you, Coco. Question on customers or consumers' demand on long-term health products, particularly in the critical illness type of products. I think, we do see continued, or at least from our internal data, I mean, obviously the savings category is what people want these days. And especially in the current macro environment. I think generally, Chinese consumers have a relatively stringent budget to allocate the money. So long-term savings or long a whole life products or particularly participating products these days have drawn a lot of the customer's focus and budget. And so, I think that this is why we still continue to see a readily lukewarm growth in the long-term health categories, for example, critical illness, which has continued to be recovering slowly. We do see customers, existing customers and new customers buying these products through our platform. It's not like the demand is not there, it is just that with the relative attention more towards savings products generally in the market. And especially, it is a function of intermediaries like ourselves, platforms like ourselves and our competitors, and also generally insurance agents in the overall market, mainly pushing the distribution and sales of savings products, which is resulted in such a market phenomenon. So, what we do is we will continue to innovate on the health products. So, we mentioned that we have just launched Power number eight, which is a new version of our long-term successful brand IP in the critical illness category. And this time we actually now working with PICC, which Mr. Ma mentioned earlier in the call. We are working now with large insurers on these customized products. So hopefully, create more attention among our customer set and to drive more sales in these categories.

We'll now take our next question. This is from the line of Zeyu Yao from CICC. Please go ahead.

Thanks, management. And congrats on your good result, this is Zeyu Yao from CICC, and I have one question here, and my question is for the 2A segment. Could you give us some more color on how is it going so far? And we've noticed that the recently insurance Association of China has asked for industry's advice about agent classification. So, if it's in claimant's eyes, I think it may have some effect on to a business. So, could share some more views on that. Thank you.

Thanks. So, we touched on the 2A business earlier in the opening remarks. I think, this business line has continued to be very strong at least in 2023. It's contributing almost 20% of our overall premium facilitated, and we continue to see strong growth in this business line. So, specifically, I think there's a number that I can share here. So, FYP facilitated by the IFA platform, which is the 2A platform was RMB350 million last year, which is a year-over-year increase of 73%. And I think the most important thing is more and more independent agents or IFAs are now coming to our platform as partners because they find the three things that are very much our competitive strengths. Firstly, we have a very extensive product matrix from simple PNC products to the extensive, life and health products that we have. And in particular the customized, exclusive creature products that we could develop with insurance carriers. So, I think that's a big draw to these inter -- independent agents to become associated with us as a partner. And secondly, I think, obviously, because of our scale advantage, we earn top commission rates with most of the insurance carriers. And thereby, these agents by plugging into our platform will be able to enjoy the revenue pickup versus maybe partnering with another platform or as an agent, inside an agency. So, I guess these are the things that are helping us attract more and more agents to come. And I think finally most importantly, we have a whole suite of the digital tools that we have been mentioning across our opening remarks, which really helps digitalizing the customer journey for these agents and also help them manage customers very efficiently with our digital and AI tools. And there's something that I…

Thank you. At this point, we have no further questions, so I would like to hand the conference back to Harriet for closing remarks.

Thank you, operator. So, on behalf of Huize Management team, we would like to thank you for your participation in today's call. And if you require further information, please feel free to reach out to Huize’s IR team. And thank you again for joining us today. This concludes the call.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.