Good day, ladies and gentlemen. Welcome to Noah Holdings Limited Third Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, there will be a Q&A session. [Operator Instructions] As a reminder, this conference is being recorded. After the U.S. market closed on Monday, Noah issued a press release announcing its third quarter 2019 financial results, which is available on the Company's IR website at ir.noahgroup.com. This call is also being webcast live and will be available for replay purposes on the Company's website. I would like to call your attention to the Safe Harbor statements in connection with today's call. The Company will make forward-looking statements, including those with respect to expected future operating results and expansions of its business. Please refer to the risk factors inherent in the Company's businesses and that have been filed with the SEC. Actual results may materially differ from any forward-looking statements that Company makes today. Noah Holdings Limited does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise except as required under the applicable law. The results announced today are unaudited and subject to adjustments in connection with the completion of the Company's audit. Additionally, certain non-GAAP measures will be used in our financial discussion. A reconciliation of GAAP and non-GAAP financial results can be found in the earnings press release posted on the Company's website. Today, the call will be hosted by Ms. Wang Jingbo, Chairlady and CEO; Mr. Zhao Yi, Group President; and Grant Pan, Group Deputy CFO. With that, I would now like to hand the call over to Mr. Zhao Yi, Noah’s Group President. Please go ahead.

[Foreign Language] Thank you, operator. For today's agenda, I will first briefly summarize Noah's overall performance for the first three quarters as well as the development of our segment business. Chairlady Wang will then provide an overview of the macroeconomic environment and the company's product strategies and updates on the Camsing incident. Grant will then follow with a detailed discussion of Noah's third quarter financial performance. We will conclude the call with a Q&A session. [Foreign Language] In the third quarter of 2019, Noah generated net revenues of RMB 840 million, up 0.4% year-over-year, but down 3.4% quarter-over-quarter. Non-GAAP net income of RMB 350 million, up 23.7% year-over-year and up 34.3% quarter-over-quarter. In the first three quarters, net revenues reached RMB 2.6 billion, up 5.5% year-over-year, and the non-GAAP net income reached RMB 920 million, up 17% year-over-year. We are encouraged to see the solid results achieved against the backdrop of challenging conditions in the third quarter. [Foreign Language] In terms of wealth management, as part of our overall transformation strategy on our product offerings, we have stopped offering private credit products in the third quarter. As a result, we distributed a total of RMB 13 billion products during this quarter, representing a decrease of RMB 15 billion compared with the same period last year. If we compare the distributions during the two periods on an apple-to-apple basis, that is excluding the impact of private credit products, the distribution of other products increased by 119% year-over-year, as the alternative of private credit products, our bond fund and the mutual fund products in particular are continuously gaining trust and the support from our clients. Consequently, distributions of our standardized products increased substantially by 74.3% compared to the previous quarter. [Foreign Language] As of the end of the third quarter, the number…

[Foreign Language] Thank you, Zhao Yi. The year of 2019 will mark the beginning of the paradigm shift in China's wealth management industry. What I mean by paradigm shift that meaning the occurrence of the fundamental change in industries on the line dynamics following changes in the macroeconomic environment and the regulatory policies. Take wealth management and asset management as an example, all industry players including but not limited to asset management companies, distribution channels, trustee agencies, client relationship managers and other are embracing the paradigm shift that changed how value is created throughout the industry value chain in the face of new laws, regulations, and the macro policies. The introduction and the gradual implementation of the new asset management guidelines have truly broken the illusion of implicit guarantees of all participants and formed the industrial consensus of supply side finance reform by converting non-standard to standard product. On October 12, the Central Bank issued rules for determining standardized debt assets on its website, fully launching the era of the NAV-based standardized products. [Foreign Language] In terms of our wealth management business, we remained dedicated to providing comprehensive wealth management service to high net worth Chinese individuals all over the world. Our commitment to maintaining a local platform and cultivating industry leading relationship managers enabled us to transform from product sales driven to investment consultant driven. In terms of product insurance, we're more focusing on distributions of products from major financial product suppliers, and the selected top managers. For other comprehensive services, we continue to provide clients with multifaceted services such as insurance, trust credit and immigration related service, so as to meet the diverse needs of high net worth clients, overall, our operational strategy has been well received by our teams and the market. In the third quarter, the…

Thank you, Madam Wang. It has been an honor to work with Noah the past eight plus years. As mentioned, I'll be pursuing new endeavors outside of the financial services industry. I’m confident Grant will continue to strive for excellence in his new role, especially within asset community. Lastly, I am proud to have been part of the Noah team and I wish everyone the best.

Thank you, Shang, and hello, everyone. Before I dive in to this quarter’s results, I'd also like to express my gratitude to Shang and it has been a great three years of here working with him side by side. It's always hard to see a friend lead. But at the same time, I'm also already excited to see him succeed elsewhere with his talents and experiences. Thank you and we wish you all the best, Shang. In the past quarter, we did travel a stretch of bumpy road, including the product transformation, the Camsing incident, as well as global and regional turbulences. But I'm pleased to report a solid set of financial results for third quarter, which fairly demonstrated the resilience arising from revenue structure and continuous improvement of operational efficiencies. For the third quarter, our total net revenues were RMB 842 million up 0.4% year-over-year, and down by 3.4% quarter-over-quarter. Non-GAAP net income was RMB 353.7 million, up 23.7% over the same period last year, and 34.3% from the last quarter showing earning power arising from business diversification. And now let me take you through performances by revenue mixes then by segment. If we look at the type of revenues on the one-time commission revenue, due to the fact that we stopped offering private credit products in this quarter, one-time commission revenues of this quarter were RMB 150 million down 35% comparing the same period last year. But keep in mind in that period last year, 80% of the RMB 22.8 billion, 80% or RMB 22.8 billion was private credit products. Now if we do a comparison apple-to-apple, the transaction value this quarter actually increased by 119% from the same period. More than that, we distributed RMB 6.9 billion of standardized products with the 74.3% increase quarter-over-quarter. The transformation…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Your first question today comes from Kathy Lei with JPMorgan. Please go ahead.

Good morning, Katherine.

Hi, good morning. So thanks for giving me this opportunity to ask the first question. I have two mainly, the first one is on the Hong Kong business. I see the net revenue from Hong Kong dropped in 3Q. So I'm wondering like, first is that related partially to the social unrest in Hong Kong and what is the trends going forward? And then maybe what's the trends that you have seen in 4Q so far? Second thing is the credit products because we know that that there's a very sharp drop in the credit products in 3Q and as explained, is because -- partly because of the withdrawn of the non-standardized products. But I'm just wondering like, are you going to totally exit all non-standardized products as part of your strategy? Are you looking to retain some of the good quality ones in the asset mix going forward? And then also that, what is the trends in wealth management sales related to the key product and credit products so far in 4Q, thank you.

Thank you, Katherine. Let me translate two questions to Madam Wang and Group President, then I will get back to your shortly.

[Foreign Language]

Okay. So the first question, Madam Wang commented that in association with social unrest situation in Hong Kong, it did not have lot of impact on asset management side as actually our main business in Hong Kong is rising and distribution of products. In terms of the insurance as it actually requires a physical visit to Hong Kong to finish the physical check, so it does have a short-term impact on that. Would you have backup plans and we’re actually undergoing the plans to actually establish and obtaining the licenses from Macau and Singapore which we believe will provide a good alternative to our clients in terms of insurance products. And on the credit product sides, yes we have made a strategic choice of completely moving away from the single counterparty credit product as you could see this quarter. But obviously we're not ruling out that if there is very good quality of similar products, we're looking to see if we have a different model that would actually help place that product for our clients. And in terms of the PE product, we're actually seeing very encouraging signs that with the more stringent KYC requirements, lots of the smaller key GPs that are having sort of a difficult days raising funds. And also the fund distributions are concentrated for the top GPs which we happen to maintain a very strong relationship with these top GPs. So we believe that one is that we're continuing to demonstrate in our conventional strength in terms of distribution for the PE products, and we're actually seeing a growing trend in terms of distribution fees for the top GPs as the services we have to put in place to comply with the stringent KYC as well as the follow-up services for our clients. So we're seeing a good signs in terms of PE distribution. I hope that answers your questions, Katherine?

Thank you, I also have a follow-up question. So on the non-standardized products, does this include like the consumer credit related products and also that like say in Gopher right, what is the stock of non-standardized credits product due in Gopher? Okay, first is that on the non-standardized credit, does that include the consumer credit that you have with (inaudible) that you cooperate with accounting, does it included in the non-standardized product? So the second question is that in your Gopher AUM, what is the job of non-standardized credits because I assume that those once they reach maturity then you won’t go over right, so I just wanted to see what is the potential downside on the asset management business as well? Thank you.

Okay. Thank you, Katherine. The answer to your first question is yes. On the non-standardized especially, we're strictly speaking about the single counterparty private credit products, it includes consumer financing products like JC and Mahjong like we have mentioned and the impact on the Gopher AUM is primarily, as I mentioned before that the change in the AUM mix that is going to shift basically from especially the single counterparty credit product to standardized products in that particular category. So, the remaining duration for the private credit products is probably between 12 months to 60 months at the original terms. So for the remaining products we're seeing hopefully completing, coming down to a limited amount in the second half of next year. And then the same time, the distributions for the standardized products are climbing up and we’re hoping that growth in the particular standardized products will take up a little bit of space for that void sort of in the AUM for Gopher.

[Foreign Language]

So Chairlady Wang supplemented that during the transformation in the third quarter, we did realize that there's still very ample room in terms of standardized bond market and with the strong counterparties that we have worked with in the past, for example, JC and Mahjong, they also have been issuing public ABSs in the past, and we believe if we do in looking to that are satisfied with the quality of those products would believe on the public ABS side will be able to partner with them from our standardized bond funds side.

[Foreign Language]

Yes, we have also added in-house credit rating team and since the beginning of this year, and also adding the research team to enable the researching ability for the standardized bond investing capabilities. Thank you, Kathy.

Thank you. [Operator Instructions] Your next question comes from (inaudible) with CICC. Please go ahead.

[Foreign Language]

Okay, for the benefit of the audience, I will translate Yuan’s question from CICC. The first question is regarding the change in number of active clients in third quarter and he was wondering, what is the main reason for the change or decrease especially in which tier, the lower tier or the higher tier of the client basis and secondly he has a question specifically for Chairlady Wang about the macro environment, especially in the downward cycle of the economy, and what will be the competitive landscape in the next few quarters? I hope I recap your questions, okay.

Thank you.

[Foreign Language]

Okay. So let me translate the first question as well. For the previous sort of criteria to define the active clients, we actually only included clients with transactions, single transaction values over RMB 1 million. But now we're transforming to standardized products, including the mutual funds. So sometimes the transaction values may not be over RMB 1 million, but if we do include that particular group of clients, the total number of active clients is actually close to 10,000, that's 9,961. So that actually indicates a pretty good jump from the previous period. And also if you look at our core group of clients or the higher tier of clients which is the Black Card clients, take them as example, actually have the increase of 7% from the same period last quarter, and their actual average AUM or AUA with us is over RMB 90 million. So if you look at the top tier clients or the total number of active clients actually shows a pretty good trend of growth.

[Foreign Language]

Okay, so on the topic of macro environment as well as competitive landscape, we believe actually the situation or environment now is actually helping us in terms of competition. The first important reason is that investors are gaining deeper understanding of this financial service industry in the past. And they actually started to appreciate companies like us who continuously being transparent and disclose risks or sometimes, the things we're probably not doing perfectly, but they are gaining more trust for this type of clients. And for example, after the Camsing incident, we have started, sort of a group to initiate the one-on-one discussions with our clients. And I believe we're pleasantly surprised that a lot of our clients are getting more and more matured in terms of with the knowledge of this market and they understand, especially the risks associated with investments. And secondly in terms of competitors, especially from maybe some security brokers or some brokerage firms that we’re seeing recently. They are being quite aggressive, to be honest. But we're pretty confident about remaining the competitive advantage from our size is that one, we're obviously still having the first mover advantage. And we're having pretty good customer loyalty and stickiness with us. And third is we have a very stable group of elite RMs that will help us through this particular cycle. And the three things, we're doing are focusing on to maintaining that competitive advantage is while continuing focusing on the investor education, and two is to train up RMs especially our transformation of new products and IC capabilities, as well as continuing to strengthen on the product strategy.

Thank you.

Thank you. This concludes our question-and-answer session. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

Thank you everyone.

Thank you.