Good day and welcome to the Noah Holdings Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Melo Xi, Senior Director and Head of Global Capital Markets Group. Please go ahead.

Thank you, operator. Good morning and welcome to Noah's third quarter 2024 earnings conference call. Joining me today on the call today are Ms. Wang Jingbo, our Co-Founder and Chair Lady; Mr. Zander Yin, our Co-Founder, Director and CEO, and Mr. Grant Pan, our CFO. Mr. Yin will begin with an overview of our recent business highlights followed by Mr. Pan who will discuss our financial and operational results. They'll all be available to take your questions in the Q&A session that follows. Before we begin, I'd like to gently remind everyone that we'll be hosting a Corporate Open Day in Hong Kong on the afternoon of December 6th. The event will host analysts and investors and feature today's executive management team as well as others who will offer insights into the wealth management needs of our target client base, discuss global investment allocation strategies and showcase the progress we have made with our competitive global investment product offerings and comprehensive service metrics. Advanced registration is required to attend in person. A link to register was included in the press release announcing the event we issued last week. The event can also be viewed live by webcast or replay on our IR website. Please feel free to reach out to our IR team should you have any questions about how to register or watch the event online. In addition, please note that the discussion today will contain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially from those in our forward-looking statements. Potential risks and uncertainties include, but not limited to those outlined in our public filings with SEC and Hong Kong Stock Exchange. Noah does not undertake any obligation to update any forward-looking statements except as required under applicable law. With that, I would like to pass the call over to Mr. Zander Yin. Please go ahead.

[Foreign Language] Thank you and good morning or evening to everyone. Similar to last quarter, we'll share our financial results and domestic -- by domestic and international segments, followed by the overview of our growth strategy for both. As noted on last quarter's call, we're actively pursuing the strategy of refining the domestic market while expanding internationally. Domestically, we're strategically deploying sales personnel to specific independent and licensed business units. We're leveraging Noah Upright Fund Distribution whose core strategy is to focus on developing an online-first business model, complemented by offline services to allocate RMB assets globally. In the insurance brokerage segment, Glory Insurance Brokerage is focusing on building a commission-only agency team. In the asset management segment, Gopher Asset Management is focused on managing exits in the primary market and cross-border products in the secondary market. At the group level, we are establishing a dedicated business development team to engage more effectively with high net worth clients through investor education and cross-industry partnerships. The evolving regulatory environment requires us to adjust each business unit to adopt a distinct service model to ensure compliance and improve operational efficiency. Globally, we launched new brands to serve overseas Mandarin-speaking clients this year, including our wealth management arm ARK Private Wealth, asset management arm, Olive Asset Management, and global insurance trust and comprehensive services arm, Glory Family Heritage. At the same time, we are accelerating our expansion into global markets by gradually rolling out our wealth management services targeting key markets such as Southeast Asia, Japan, Canada, the United States, and Europe. We target three client segments, high net worth families and companies that recently relocated overseas or are preparing to do so. Secondly, Mandarin-speaking individuals or businesses who have immigrated abroad for less than five years. Thirdly, Mandarin-speaking settled immigrants who have…

Thanks, Melo, and thank you Zander and greetings to everyone joining us today. Globally, the three major US stock indices reached historical highs in 2024 with the Nasdaq Composite up 25% this year and 80% since the end of 2022. Our clients have benefited from a forward-looking global CIO house view, which began recommending clients to allocate funds to QD products especially linked to US equity in 2022. We believe the overseas wealth management needs of clients remain adequately addressed. Therefore, we continue to actively expand our international businesses by increasing the number of local branches, strengthening our local relationship manager teams and enhancing our online services capabilities to improve the quality of our offerings. Now let's get into the details of our financials. I'm very pleased to report that our third quarter results have regained positive trend with net revenue reaching RMB684 million. While this is still weaker 8.8% comparing to the same period last year, it does reflect an 11% increase sequentially comparing to last quarter despite significant market pressures. This increase is mainly driven by the growth of overseas businesses. Overseas net revenue in the third quarter reached RMB377 million, a year-over-year increase of 28.9%, accounting for 55.1% of total revenue. Specifically, revenue from US dollar denominated investment products reached RMB191 million, up 42.5% year-over-year and 40% growth sequentially. Revenue from overseas insurance products was RMB145 million, up 42.4% year-over-year and 44% growth sequentially. Revenue from US dollar liquidity products increased significantly by 190% year-over-year, an impressive growth from online wealth management growth on iARK platform. These figures underscore the strong performance of our overseas business this quarter. By revenue type, one-time commissions increased significantly by 28.5% quarter-over-quarter, primarily due to the recovery in overseas insurance. Recurring service fees declined 13.8% year-over-year and were relatively flat sequentially,…

[Operator Instructions] The first question today comes from Chiyao with Morgan Stanley. Please go ahead.

Hi, good morning. Thanks for taking my question. This is Chiyao Huang from Morgan Stanley. I got a question. Obviously we are observing quite some excitement on the equity market since September. So a lot of the momentum we think is very much retail driven. So wondering to what extent, as a wealth management provider, Noah can participate in this rising sentiment of equity market and how does that impact revenue and the profitability. So relating to that, how is Noah advising the clients on the asset allocation side under this environment? Thank you. [Foreign Language]

[Foreign Language] So thank you, Chiyao, for the question. So with regard to the financial performances, obviously, the major policy was rollout at the end of September. So our third quarter financial results were largely not impacted by the recent policy changes and the rebound in the stock market. In terms of client sentiment, we're seeing more activities, interest among our onshore mainland China clients definitely. In the past, we have seen that the investment sentiment and confidence among our clients towards Asia market was very low or very weak, but at least right now we're seeing a rebound in trading activities and interest. But from a house view, CIO house view perspective, we still strongly believe that to advise clients to use their RMB assets to invest in global beta returns, which is still one of the most important asset allocation advice that we give to clients because we think that the policy still needs time to be implemented and the fundamentals or the economic fundamentals need time to show whether we'll be in hoop. And since we're a wealth management company, we are not a trading-driven strategy. Rather we are more taking a long-term asset allocation view. Therefore we haven't really changed our CIO house view. But that being said, we still have enhanced our product shelf on the RMB side, although we're still advocating to advise clients using QDII and then QDLP products to invest globally, but we have definitely introduced some of the RMB exposure products as well recently.

Thank you.

[Operator Instructions] Your next question comes from Peter Zhang with JPMorgan. Please go ahead.

[Foreign Language] Thanks, management, for giving me this opportunity to ask the question. I have -- this is Peter Zhang from JPMorgan. I have two questions. So my first question is we have been doing this refining domestic operation and expanding international strategy, and I think during the past few reporting quarter, our domestic revenue has been under pressure while our overseas revenue have been improving and the total revenue have improved sequentially in third quarter. I'm just wondering can we say that we have passed this period where Noah's value has been under pressure and going forward, our revenue trend can be stably improving. And domestic and internationally, what do you think will be the largest or most important driver for our revenue outlook in the next, say, one year or so? And then my second question is a follow-up question to the earlier question. I'm just wondering have we observed any trend in customer behavior or activity like what products are clients mostly purchasing in fourth quarter after this big stimulus in mainland China, and with this improving client sentiment, can we see that our -- the revenue trend in fourth quarter can be improved sequentially from third quarter. I will stop here. Thank you.

Thank you, Peter. And I think it's probably a little bit yes and no to your question. Maybe it's a little bit too early to say that revenue growth trend has come into a turning point. As we know, the market has been changing drastically, especially after the election, but I guess it's safe to say the structure or our growth probably has come into shape that more resources and more expansion efforts are going into the international expansion. So in terms of accumulation of US dollar denominated investment opportunities, probably it's going to be more dominant in the future periods. Especially with the recurring management fees and carry, the structure of both sides probably would not stay the same or identical to the last quarter, but obviously we're hoping that we'll be able to accelerate the transformation, but at the same time, also remain very patient so that we don't deviate from the overall strategy. So I will let Zander take the question about the Asia market.

[Foreign Language] Thank you. Thank you, Peter, for the question. So I think Grant pretty much answered the first part of the question, and regarding your second point of question as a follow-on to the first question, so I think our overall view is that it's still quite difficult to see the effectiveness of the recent policies and also the continuation of these policies and to really make a decision on whether this is short term or midterm or long term driven, but we are seeing a trend among our clients or investors that they have been increasingly willing to communicate with us more. So I think at this critical point, this time window, we have the privilege of the more opportunities to engage with clients on one-on-one meetings, providing more asset allocation advice and insights and also to -- I guess, to drive more clients' transaction and also help them to reshape their portfolio allocation. So we still continue to provide long-term asset allocation advice and basically in three different perspectives. So first is to provide a safety net, which includes the different protection and inheritance tools for our clients globally. And secondly is the -- we call it cash management or cash flow portfolio that provides different liquidity and long-term inflation protection investment tools. And thirdly is to pursue growth strategy through private equity, venture capital and also AI-related investment opportunities. So also in this process, we need our different business units to provide each of their featured products and services through a client-centric mindset, but as we mentioned before, this is A -- pretty much a new sales model and we're still undergoing our transition period. It has been a few quarters, but we're still trying to work out the best way to improve efficiency under this new model. And we believe that as we gradually figure out the new sales model, it would be reflected in our future financial performance.

Peter?

Thank you. Thank you management for the explanation. Really helpful.

Thank you for the question too.

This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks.

Thank you all again for participating in our third quarter earnings call. And just another gentle reminder that we will be hosting our annual Corporate Open Day in Hong Kong on December 6th. So please don't hesitate to register or contact our Investor Relations team for further details. Thank you again.

For those of you in the States, Happy Thanksgiving.

Happy Thanksgiving.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.