Good day, everyone. And welcome to the financial results for the Third Quarter of 2017 Conference Call. All participants will be in listen-only mode. [Operator Instructions] And please note that today's event is being recorded. I'd now like to turn the conference over to Kenny Lam. Please go ahead.

Thank you, operator. I want to welcome all our investor and analysts friends to our earnings conference call today. In addition to myself, Chairlady Wang and CFO Shang will also be participating on call. For today’s agenda, I will first summarize Noah's overall performance for the first three quarters of 2017 as well as the performance of our two core businesses, wealth and asset management. Then I'd talk about recent developments in our overseas business and our mid and back office initiatives. Chairlady Wang will then talk about products by segment and provide her views on the current macro and regulatory environment. Our CFO Shang will then follow with a detailed discussion of Noah's third quarter financial performance. We will conclude the call with a question-and-answer session. In 2017, China's economy has shown resilience and strength, and its capital markets are also on a solid ground for recovery. However, financial de-leveraging and risk control remain as key concerns of China's domestic regulatory framework. Within this environment, we strive to uphold the highest standards and due diligence in all operations, continually providing a wide offering of diversified global asset allocation and integrated financial services that best cater to demanding needs of our high net worth clients. Our stringent risk management processes ensure that our overall group operations run smoothly and our financial performance remains solid. In the first three quarters of 2017, we distributed a total of RMB89.2 billion worth of financial products, up 16.6% year-over-year. As of September 30, 2017, AUM in our asset management segment reached RMB142.9 billion, a 24.4% increase over the same period last year. In terms of financial metrics, the group achieved net revenue of RMB2.1 billion in the first three quarters of 2017 representing a 12.7% increase over the same period of last year. Non-GAAP…

[Interpreted] Thank you, Kenny. A month ago the 19th party Congress convened thereby attracting worldwide attention to address China's current development stage and major issues that are facing our society. As a deep thinker and an active participant in China's wealth management and asset management industry, we are fortunate enough to witness the starting, shaping, and substantial growth of many industries in China. From a product driven to integrated service driven, it's a new trend that we've observed in wealth management industry. The asset management industry has also begun to shift from scale driven to investment capability and brand driven. Superior asset management companies might lower their market share in bull markets but significantly increase their market share in their market. We sincerely believe that for the world as a whole, the greatest opportunities in the future will be found in China because of the strengthening of China's economy and a new round of technological revolution. As a business, our biggest challenge is how to keep up with China's rapid rise, continue our adaptive learning and interest and evolve our capabilities. Wealth management and asset management industries in the long run will benefit from the economic growth in China. Year 2017 represents the 12th anniversary of Noah's inception and 7th anniversary of our IPO. We are pleased to see that in November many Chinese companies representing new financial technology were listed in the United State and Hong Kong. Many of them are also our partners. We believe that 2017 will not only be a year of succession but also a year of new beginning. We are ready to embrace the unprecedented growth stage. Now I'll provide a more specific report on several major product categories of Noah and Gopher. Noah has always been a preferred channel for domestic leading GPs…

Thank you Chairlady Wang and hello everyone. [Technical Difficulty] we are pleased with our financial results in the third quarter of 2017 and we are on track to deliver solid results for the full year. We've realized RMB684.3 million of net revenue for our third quarter of 2017, an increase of 12.5% year-over-year and non-GAAP attributable for net income in the same period was RMB215.4 million, up 19.9% year-over-year. Our revenue contribution, recurring service fees in the third quarter of 2017 were RMB346.5 million, up 17.5% from the same period last year, contributing to 50% of total revenue. The growth of our accumulated distributed product and asset under management continues to provide strong revenue stream going forward. One-time commission received in the third quarter was RMB213.1 million compared with RMB281.2 billion in the same quarter last year. The decline was primarily due to lower effective commission rate year-over-year as distribution of insurance product was lower. Total transaction value for financial product we distributed during the quarter was RMB23.5 billion, relatively flat from the year ago. However, I'd like to highlight the robust transaction value growth of equity product which have strong reoccurring service fees and most have performance fee closet. Total performance based income for the third quarter of 2017 was RMB74.8 million, driven by the successful exit of several real estate funds. We are pleased that our performance based income as a share of total revenues increased to 11% this quarter. It demonstrates our effort to build a leading multi strategy asset management platform with strong investment capability and performance. We have now realized the performance based income for 13 consecutive quarters and we expect to carry revenue to increase in the future as we generate strong fund performance for our clients. This will also be positive to our…

[Operator Instructions] And our first questioner will be Katherine Lei with J.P. Morgan. Please go ahead.

Hi, good morning. I would like to ask a question I think I want to elaborate -- can you elaborate more on the fixed income product sales? I think the transaction volume is actually significantly down from second Q and also comparing to the same quarter last year. Yes, so please help us to understand what lead to this and then going forward what should we expect? This is the first question. The second question, I noted that on the revenue side I think fund fee is also lower compared to last quarter and also same time this last year. Is that because of the slowdown in fixed income sales? But recurring fees is improving and then is it due to -- [Technical Difficulty]

Katherine, you cut off. Hello, are you still in the line?

Yes. I am still on the line.

So to answer your second question, you have a second question around recurring fees and one time part of it.

Yes. I think the upfront fees is actually I mean the upfront fees is slightly weaker this quarter so but then the recurring fee makes up for that. So I was just want to understand the dynamics there and then also going forward how should we expect because that actually will increase distribution of key products in recent years. Should we expect that recurring fee will continue to be strong? Can we extrapolate the result of this quarter into future quarters on the recurring fees? Thank you.

Yes. So, Katherine, I'll answer both of your questions. So on the first question regarding the fixed income transaction value in the third quarter. As madam Wang has mentioned in her remarks, I think for fixed income product, I think our strategic plan going forward is to launch more alternative credit portfolio, so effectively we are distributing less single project fixed income fund and we are doing more portfolio like fund. We think the new type of portfolio fund is better for the client and ourselves because it really helps diversify better in terms of the underlying assets, and so we are evolving the type of product we are doing. I think this will take time for our relationship managers as well as our clients to adapt, but we are seeing good results in the last few months. So I wouldn't be too worried about the fixed income transaction for our third quarter. And I'd like to highlight that if you look at our product mix over the last few years, I think there will be a rotation among the asset classes and this is because of the changes in the macro environment as well as our top-down strategy approach in terms of helping our clients in terms of rebalancing their portfolio. So I think our goal in terms of transaction value is to continue to increase overall transaction value but from time to time the product mix will alter. Now in terms of your second question which is one time commission revenue lower year-over-year and quarter-over-quarter, I think it is because of two reasons. One is compared to year-over-year, we did less insurance product. Last year was a very strong insurance year. Insurance products are more front end loaded in terms of revenue and less recurring. Third quarter compared to second quarter, we did more equity products as opposed to fixed income products. Again, equity products have a lot of revenue recurring rather upfront one time. So to some extent I think you can see more equity product help in terms of building a bigger base for recurring service fee going forward and so that as you noted recurring fees have continuously grown over last two years and makes it more than 50% of our total revenue, and from the CFO perspective I think it helps lay the foundation for strong start in 2018 and more than half of our revenue are recurring in nature.

And Katherine just a point [Technical Difficulty] product in early years was mostly real estate back. I think we are shifting it to other types of underlying assets, that's one. And two is we think it's actually a healthier mix of products for clients. If you look at the first two quarters, it was over 70% of the allocation, it was on what we call fixed income. The market in deed has demand for that but we are actively helping clients to reallocate assets to lower allocation to fixed income products.

And can I have a like a follow up questions on that because if I look at that on the revenue side, actually we did not -- even on [indiscernible] it is like some decline but the decline is not -- I think the magnitude is not as much as in the sales, in the fixed income sales. Can I say that exotic product like the multi portfolio, fixed income product that you mentioned about actually has a higher fee than the single project products.

Yes I'll comment a little bit in terms of the revenue contribution from single based fixed income, single project based fixed income product versus portfolio. So for the single project based it's mostly upfront so you could almost good as we are charging like a fixed and mostly it's recognized upfront and received upfront. We have the portfolio of credit fund which is almost like portfolio of highly bond fund where in addition to upfront discretion fee there are ongoing reoccurring service fees. So our credit portfolio we've been working with clients over the last few months is general duration is two plus one. So it actually helps us lock-in that fixed income investment for much longer than one year. So we will see part of the revenue being contributed in recurring service fee. And in addition to that for some of the portfolio fund, we actually have performance fee clauses as well. So this is in terms for the return of preferred rate let say 6% or 7% where we may receive 5% to 10% and carry. So we are actually seeing both for the client in terms of diversification risk and second in terms of our perspective building of our active management and credibility we think moving into credit portfolio is strategic move.

And our next questioner will be Haifeng Cao with Nomura. Please go ahead.

Thank you for the opportunity and congratulations on the good results. I am Haifeng Cao from Nomura. I just have three questions. Firstly, in terms of the new asset management regulation rollout last Friday. One of the regulation is the non financial institute cannot allocate to series of asset management products going forward. So I wondered how much our wealth management business is actually asset management product. This is first question. The second question. I noticed that the average transaction value per client for the third quarter decreased by around 4.1 percentage. I wondered what's the reason behind this decrease? And then thirdly, can the management team share our strategy for the next year especially from the perspective of products, ours and our clients. Thank you so much.

Yes. If you excuse me. Let me just quickly transfer your three questions sorry once again. So let me answer the first two questions and madam Wang will answer third question. So your question is regarding the latest -- seek for comments guideline that was promulgated by CRC I believe. And that I mention that non financial institution cannot distribute financial product. And I think this is in line with the regulation we've been seeing over the last two -three years where regulation is stepping in terms of both wealth management and asset management. And we think it favors the state affair but obviously we have had licenses now for many years. And it's really a crackdown on those institutions that are active in the industry but they are non compliant, they don't have licenses and so overall we think it's a very strong benefit for leading players in the industry. And also madam Wang mentioned is a crackdown on guarantee repayment and it's pressing NAV- based product which again highlights our strategy into credit portfolio. And so in short comment about the non financial presentation doesn't affect us because we have the relevant licenses for both our wealth management and asset management businesses, the primary regulator is CRC. On your second question is regarding the average transaction value per active plan is down this quarter year-over-year. This is primarily due to the increase transaction in value for public market product. Public market product compared to private equity and credit product lower minimum start so the minimum start for hedge fund in China is RMB1 million. So it's really due to product mix rather than anything else. We do expect for the full year 2017 average transaction value per client to be stable or around RMB7 million to RMB8 million per year. Now regarding your third question, I'll ask our madam Wang to comment on our strategy next year and I'll help with the translation.

So, first, I would like to comment overall I think the market will be much healthier next year. Clients are now starting to understand the direction of the regulation and several many clients actually over the last few years have got hurt by products that were not managed properly. So high net worth individual I believe next year will be focusing more on brand and quality and obviously these two will direct client our way because obviously we have very strong brand in the market. I would like to comment on our product strategy for next year. I think for our product strategy next year it will be centered around value and investing in particular very strong focus on public market product so Asia and shares in Hong Kong or globally. We think is really to help our clients in terms of value investing. Now so our goal is to increase overall transaction value for our secondary market product and where we are seeing results in the third quarter. And we expect that to go forward next year. Now in terms of credit product strategy, as I mentioned, we are rolling or launching new type of credit related product such as credit portfolio fund, mezzanine fund and preferred fund. We think these types of many funds are better for our clients as opposed to historically we are doing a lot more single based project fund and I think after it will probably take two to three quarters of investor education and we can see volume really to help next year. In terms of VC venture capital and private equity, we have already locked in a secured several leading GP who will do new rounds of fund raising next year. And so that really gives us a good foundation in terms of our VC fund raising next year. In addition, now for several years we've been managing our private equity secondary funds. And given our leading position this asset class; we have the strong advantage in terms of managing our secondary fund. And we think we have now build, if not the leading, if not the number one brand and we expect this to grow in overall end and attract a lot more institutional investors. On a real estate side, as I mentioned earlier, we have also locked in a several very high quality commercial building which will help us with rolling our new product for real estate. So, overall we feel quite confident in terms of product pipeline for next year. For overseas product, I think the focus on innovation and also renewed efforts in terms of building or developing product around Shanghai connect.

Also I want to add to two more points [Technical Difficulty] as madam Wang talked a lot about the product strategy which is a substantial transformation along side the market trend. We also are doing two things to substantially increase the growth rate of the company. One is there will be substantial transformations of the front line that includes as I mentioned in my speech a training program that will take training for RMs to the next level. We are also launching a new approach in terms of network expansion that I'll detail later that would allow us to grow much faster in terms of client wallet and productivity of the RMs. So that's one thing we are going quickly. The second thing that I mentioned is around technology. We will be investing heavily on new technology to ensure that we are a way ahead of the curve in terms of technological innovation and that includes not only online transaction for net affluent clients but also high net worth clients, plus also how we use and leverage data in a very systemic way. We are expected to increase not only in technology of investment and infrastructure but also in talent. That's the two things; the whole idea is that we are looking at pushing on growth for the company through not only as product transformation but also frontline technology.

This will conclude the question-and-answer session. I'd like to turn the conference back over to Kenny Lam for any closing remarks.

Operator, is there more questions? Why don't we wait for another one or two minutes if there are more questions?

And our next question is a follow up from Katherine Lei with J.P. Morgan. Please go ahead.

Hi. I have a follow up questions on the recurring fees. I would like to ask if the recurring fees like what's the portion of that is performance related and what is the portion that is like non performance related?

Right. So we actually book our performance systems [Technical Difficulty] and performance fee income. So as you look our quarterly annual disclosure, it's revenue time. One time commission performance fee and performance based income. Now so it's separate. In terms of our AUM, about 50% to 60% of the AUM that we currently manage has performance based fee clauses; typically equity product will have performance based fee income more often than fixed income product. So I mentioned earlier that the third quarter more than half of the product mix was equity product that's actually help in terms of our recurrence fees and also help potentially if we do well in terms of managing the fund on a performance based fee income. I would like to remind our investors that in terms of our performance based fee income; we take a very conservative approach in terms of revenue recognition. We only recognized performance based income when it is actually realized. So we do not mark-to-market. So with that in mind over the last 13 quarters we have consecutively book performance based fee income despite the Asia market volatility, it is because we have build multi strategy asset management platform. So it helps us achieve, returns for our client and revenue for performance fee income in all weather almost.

Okay. If there are no more questions. Just one more, okay, great. .

And we do have another question from [indiscernible] Private Investor. Please go ahead.

Could you please repeat your outlook for the balance of 2017? Or for the full year 2017 if you would?

Yes. We have a full year non-GAAP attributable net income of RMB825 million to RMB860 million.

And it looks to me no further questions. So this will conclude the question-and-answer session. I'd like to turn the conference back over to Kenny Lam for any closing remarks.

Thank you all for dialing in. After call if you have any questions, please reach out to our investor relations team. We'll gladly return your request and answer your questions. Thanks very much.

And the conference is now concluded. Thank you all for attending today's presentation. You may now disconnect.