Ladies and gentlemen, thank you for standing by, and welcome to Huize's First Quarter 2025 Earnings Conference Call. [Operator Instructions] This conference call is being recorded, and a webcast replay will be available on Huize's IR website at ir.huize.com under the Events and Webcasts section. I would like to hand the conference over to your speaker host today, Mr. Kenny Lo, Huize's Investor Relations Manager. Please go ahead, Kenny.

Thank you, operator. Hello, everyone, and welcome to our first quarter 2025 earnings conference call. Our financial and operational results were released earlier today and currently available on both our IR website and global Newswire services. 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 measures today, which are more thoroughly explained in our earnings release and filings with the SEC. Joining us today are our Founder and CEO, Mr. Cunjun Ma; COO, Mr. Li Jiang; our CFO, Mr. Minghan Xiao; and Co-CFO, Mr. Ron Tam. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights, followed by Mr. Tam, who will go over our financial results for the first quarter 2025. Then we will open up the call for questions. I will now turn the call over to Mr. Ma.

[Interpreted] Hello, everyone, and thank you for joining Huize's first quarter 2025 earnings conference call. In 2025, against the backdrop of ongoing macroeconomic and geopolitical volatility Huize upholds its customer-centric approach. Leveraging years of insights into customers' needs, we stayed ahead of market trends and now working alongside leading insurers, continually expanding and refining our product offerings. At the same time, we are accelerating the integration of AI across our operations, driving remarkable productivity improvements and further optimizing our cost structure to lay the solid foundation for long-term value creation. In the first quarter, operating revenue exceeded RMB 280 million with gross written premiums and first-year premiums facilitated on our platform increasing 38% and 31% sequentially, reaching RMB 1.4 billion and RMB 730 million, respectively. Renewal premiums also grew 46% sequentially to approximately RMB 710 million. Huize remains committed to providing full life cycle insurance solutions for its high-value customers. By quarter end, our cumulative number of users surpassed 11 million with 390,000 new clients added during the quarter. The average age of long-term insurance customers was 35 with over 65% residing in high-tier cities where we have consistently achieved this percentage over the past few quarters. In terms of FYP, the average ticket size for long-term products rose 58% to over RMB 5,400, underscoring the effectiveness of our sustainable customer strategy. As of the end of February, 13th and 25-month persistency ratios for long-term insurance maintained industry-leading levels of over 95%. As of the end of March, we had strong partnerships -- as of the end of March, we had strong partnerships with 143 insurance companies and continue to develop and launch differentiated customized products with insurer partners. With declining yields on traditional bank deposits and wealth management products, demand for wealth protection solutions has been intensified. In response,…

Thank you, Mr. Ma and Kenny, good evening, everyone in Asia, and good morning for those in the U.S. It's Ron here. Despite a challenging macroeconomic and geopolitical environment, we have delivered yet another quarter of resilient performance during which the first quarter for both total gross written premiums, GWP and first-year premiums facilitated on our platform increasing by 37.8% and 30.9% sequentially, reaching RMB 1.4 billion and RMB 730 million, respectively. Total operating revenue remained at RMB 284 million. Our financial position remains very robust with a combined balance of cash liquidity of around RMB 202 million or USD equivalent $28 million as of the end of the March quarter. This resilient performance was driven by our efficient omnichannel distribution network our focused efforts to continue to acquire high-quality customers from the market and the deployment of advanced proprietary AI solutions. Crucially, we have made significant progress in executing on our international expansion strategy which is a key growth driver for long-term sustainable growth for the company. Our strategic focus has remained on long-term insurance products, which continue to account for over 90% of total GWP facilitated on the platform. Leveraging on our robust omnichannel distribution network and advanced AI solutions, we are significantly strengthening customer acquisition and engagement, adding approximately 390,000 new customers during the first quarter of 2025. This brings our total customer base count to 11 million as of the end of the first quarter. In addition, repeat purchase ratio for our long- term insurance products stood at a very high level of 38%, demonstrating our ability to continue to unlock the lifetime value of a high- quality customer base through effective upselling and cross-selling. We've also seen reasonable reductions in all three kinds of operating expenses ranging from 15% to 48% quarter-over-quarter, which has improved…

[Operator Instructions] Our first question comes from Amy Chen from Citi.

This is Amy from Citi. I have a couple of questions. The first one would be regarding selling expenses. We noted that the first-year premium facilitated in the first quarter saw around 15% year-over-year decline. However, selling expenses was up by 7%. What's the gap here? And the second question is on sales momentum in the second quarter and your outlook for the rest of 2025. The industry is expecting another round of pricing rate cut in the third quarter. Has this somehow boosted customer demand so far?

Thank you, Amy. It's a pleasure to have you again on the call. So I know that you have three questions to your -- just now. So the first one is regarding the year-on-year decline on FYP and versus an increase in expense -- some expense, I believe, right? So I think to address the question on the FYP decline, I would note that in June '24 in the first quarter, there was -- actually, there was a pricing cut effect during the quarter, which has also led to rush sales during that quarter. So I think effectively, we are comparing the first quarter of 2025 versus a relatively high base for the first quarter of last year. So I think that has to do with a high base effect for 2024, albeit that in the first quarter of this year, we have further driven our revenue growth from not just domestic but also from international markets. So that has to do with the reasons that are cited on the low base -- high base effect of last year. And then on the gap between the FYP downturn and the channel cost increase, I would note that the international business in terms of gross margins, it's relatively lower than the domestic business. And therefore, I think that has been reflected in what you noted in terms of the gross margin decline in the first quarter of 2025. So on your second question regarding the outlook for the rest of the year, we do think that Q1 for 2025 is probably the rock bottom for this year. In Q2, we are seeing a very decent momentum. Obviously, the international market is still in high growth phase. And for the domestic China market, also, we are seeing a revival of growth given that the transition to the par products has basically been completed over the last 2 quarters and channels have adjusted to the new product regime. So I think that in Q2, we're seeing growth in the -- across different products. And -- but you know that the expectation for a further pricing rate cut in August 31, which is now widely rumored and expected to be put in place. We do expect that there will be a, there will be an effect on rush sales in the third quarter, particularly in the months of July and August, where we have seen similar situations in the last year and also in the past few years as well. Although we would note that the pricing rate at this time, because relatively speaking, versus previous episode is relatively muted. And given that we're already in a sort of 2% handle kind of return level. The incitement for consumers to purchase would probably see a diluted effect versus what we have seen in the past years. So we do expect that Q3 will be strong with August being the peak for domestic sales of savings products. I hope that answered your question, Amy.

Next question comes from the line of Kenny Lim of UOB Kay Hian.

I'm Kenny from UOB. And I have two questions from my end. The first one, how do we expect the enforcement of [indiscernible] across the agency channels to affect your [ 2A ] business? And how does it change the overall industry competitive escape? And my second question is about the latest international revenue contribution in first quarter. And so what is the later progress of your business expansion plan in Singapore and Philippines as well.

Thank you, Kenny. [indiscernible] two questions, 1 on [indiscernible], which is the regulatory rule change impacting commissions for various channels. Given that we have lived through this regulatory change in the last 12 months now. And we do hear and expect that the similar measures will be implemented and imposed upon the tied agency channel, which you have noted in your question. if such a measure would be implemented in the second half of this year, we do expect that the so-called impact on our business will be positive because what that means is that the playing field is leveled among the different channels, among banker brokers and agencies -- tied agencies. And therefore, we do expect that there will be continued so-called exodus of agents from the agency model into independent third- party platforms such as ourselves. So we would likely will be capturing an additional influx of productive agents if such a measure will be implemented on the agency channel. And on the overall market, I would think that a similar observation will be seen across our competitors as well. And as a whole, the market would continue to gravitate towards a more independent third-party kind of broker-agency distribution model. We do know that right now in China. The third-party intermediaries still account for less than 10%. I think still 5%, 6% of overall premium distribution versus what we see in more mature and developed markets such as Japan or in Hong Kong or even Singapore, where we see that intermediary broker-agency distribution is as much as 30% to 50% of the market. So in the long-term secular trend, we do see that the intermediation of premium distribution will continue to be in favor of platforms such as ourselves. And the second point that I would note here…

Thank you for the questions. With that, I would like to hand the call back to Kenny for closing remarks.

Thank you, operator. In closing, on behalf of Huize's management team, we would like to thank you for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call.

That concludes today's conference call. Thank you for your participation. You may now disconnect your lines. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]