Good day, and welcome to the Noah First Quarter 2025 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to [Doreen], IR. Please go ahead.

Thank you, Kim. Good morning, and welcome to Noah's 2025 First Quarter Earnings Call. Today's call will be divided into three parts. Mr. Yin will begin with an overview of our business highlights, followed by Mr. Pan, who will discuss our financial performance. After the 2 presentations, there will be a Q&A session. 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 are not limited to, those outlined in our public filings with the SEC and the Hong Kong Stock Exchange. Noah does not undertake any obligation to update any forward-looking statements, except as required under applicable law. Without further ado, I shall pass the call to our CEO, Zhe Yin.

Let me do the translation. Good morning, everyone. Today, I will share a summary of overall market conditions and our results for first quarter 2025. Then I will walk you through our overseas and domestic performance and strategy, followed by our insights and outlook for the rest of the year. Our Q1 CIO report predicted that an increased likelihood of further market volatility this year with a higher frequency of such fluctuations, the main factors influencing this include the uncertainty that Trump's return to the presidency is having on global trade and [indiscernible] the lack of coordination among major global economies on monetary policies and increasingly fierce competition and downstream application of AI. With this in mind, our advice to clients is to adopt the following 4 approaches to their asset allocation. Firstly, maintain disciplined asset allocation and prioritize geographic diversification. Secondly, remember, investing is not the same as managing wealth. Wealth management aims for the best overall results. Thirdly, wealth managers need to build robust portfolios to manage and preserve growth; and lastly, take decisive action and adjust asset allocation when needed. Despite the tough global economy, we had a solid quarter. Non-GAAP net income in the first quarter was RMB 169 million, up 4.7% from the same period last year and 27.4% sequentially. This was due to operating costs and expenses dropped by 18.8% from last year. On the revenue side, transaction value for our renminbi-denominated private secondary products grew a remarkable 2.6x from last year. Revenue contribution from these products increased 9.4%. Transaction value for overseas private investment products also increased 27.7%, with revenue contributing growing 20.3%. Revenue from overseas insurance products fell 22.8% from last year. This results in total net revenue in Q1 falling 5.4% from the same period last year. I will now dive…

Thank you, Zander, and greetings to everyone joining us today. I'd like to begin by sharing with an overview of our recent share price performances. Management is fully aware that our stock has been trading with an upward pressure for the past few quarters at only around 0.5x TB and under cash value. Our cash reserves alone represents USD 11.4 per ADS, exceeding our current stock price and our P/E ratio is only around 9x, well below industry average of 12x to 16x. While continuing to focus on regaining the growth after transformation of the wealth management organization, we have also, in the past few quarters, introduced several initiatives to enhance shareholder returns, including the USD 50 million share buyback program announced in August last year. As of today, we have already repurchased over 1.3 million ADS, equivalent to over 2% of total issued shares. Furthermore, as part of our commitment to prioritizing shareholder interest and delivering sustained returns, we plan to distribute annual and special dividends totaling RMB 550 million in July, subject to AGM approval. This amount represents 100% of our non-GAAP net income for 2024 and offers a dividend yield of 12% based on current share price, which is much higher than the 7% to 9% average dividend yield range among leading international financial institutions. Notably, this makes the second consecutive year that the company would distribute 100% of its net income. Since 2022, 3 years in aggregate, we have distributed a total of RMB 1.8 billion dividends to our investors, roughly equal to 40% of the current market cap. The continuous sharing of high dividend payout is expected to be sustainable based on our estimate of future operations and our strong balance sheet position. By the end of quarter 1, cash, cash equivalents had increased to…

[Operator Instructions]. The first question today comes from Helen Li from UBS.

[Foreign Language]

Thank you for your first question. That's actually related to recent news of some of the probably domestic high net worth clients receiving notices from tax bureaus about their overseas taxation information. So I'll try to take the first half of the question, and Zander and [Nora] will jump in for anything that I probably missed. Yes, we were seeing many, or hearing many of our clients or their friends receiving calls from tax bureaus. But the information about gathering high net worth, actually, all the Chinese tax residents' taxation overseas income has been implemented a few years ago. But obviously, I think the bureau probably now has more collected information that we'll be able to actually reach out to these individuals. Obviously, I think it's probably the law is always there as some of the tax professionals and adviser clients to be aware of, but the actual enforcement of the information or tax filing probably something new to our clients. I don't think it necessarily affect their sentiment in terms of future investments in overseas products, especially. But obviously, I think they are more aware or curious about future tax planning, if you will, how to increase the efficiency in terms of investment income. That's something new, probably some new subject for this generation of high net worth individuals who are probably more used to filing for tax and gains on the domestic and operational income.

We'll do a quick translation here. [indiscernible] just started, it's a challenge, but it's also an opportunity to Noah regarding our high net worth clients getting phone calls from the tax bureau. The reason behind that is because if you look at what we've been doing for our clients, the wealth management, the asset management, and the family heritage business, all of us are trying to provide solutions to our clients for how to protect their wealth. And also, when they are receiving the phone call from tax bureau and they needed to solve that issue, they will need to build a closer relationship with our relationship managers because we will go into their wealth as a whole to plan for them for the future. And that means we can have a better access to clients' wealth and knowing better about their whole planning. So yes, in the short term, there may be a challenge because that affected the investment sentiment. However, in the long run, we still believe that it can bring opportunities to the company.

Second question. Helen, I'll do a quick translation for you as well. Helen actually asked about we have an improved efficiency or reduction on G&A and selling expenses in this quarter, and she's actually wondering how much of that has to do with probably lower activity of marketing events as well as the reduction of probably back office headcounts. So Helen, I just wanted to clarify that obviously, some of the expense reduction does come from an improvement in efficiency, especially in mid-back office headcounts, probably optimized around 25% compared to the same period last year as the continued effort to improve the efficiency and structure of mid-back office to the front office is now showing effect. We're also seeing a reduction in selling expenses, but that's partly attributed to probably fewer marketing activities this quarter in the first quarter. We don't think that's necessarily sustainable, and that's rather not a direction we're trying to control as long as we are holding the events more efficiently. So we're seeing more marketing expensecoming up in the second quarter, but we're obviously still trying to keep that under a reasonable range, and also the effectiveness of marketing activities. Helen, does that answer your question?

Yes, thank you.

[Operator Instructions] The next question comes from Peter Zhang with JPMorgan.

Congratulation on the first quarter results. I have 2 question. First is about the recent market volatility. We noticed that there's a increasing market volatility since April, and we are wondering what's the clients' behavior in terms of investment sentiment and their purchase on the wealth product. In addition, some of Noah's clients are business owners. We are wondering whether any of their business is affected by the recent tariff introduction and how is their investment sentiment changed? My second question is about the overseas business. Can management give us some guidance on what will be the key driver for your overseas business '25? And on the insurance front, we are wondering whether Noah see any sign of an improvement in overseas insurance in second quarter.

[Indiscernible] to start create an impact to our clients. But when we talk to our different types of clients, I mean the impact could be slightly different. So yes, a lot of our clients are entrepreneur and the business made related to trade. However, when we talk to merchants like the EMU like the small manufacturing products, those types of companies, yes, they do -- we do see that some suspension in orders from overseas or we do see some worries about the orders from [indiscernible] as well. However, the merchants themselves, they're very pretty confident in their own products, and they believe that the China production is very competitive in this way and could maintain a high margin. And that's why the impact for those manufacture -- those clients to us could be quite in a short term instead of a long-run impact. But then, for some more like small products, they are really bigger types of manufacturer, they may have bigger concern about their future growth. So we believe that our clients these days are getting more and more used to the concept that they need to have their assets go through geopolitics distribution. And they also are planning for their own business to grow overseas as well. And under these 2 belief, we believe that our clients are getting more mature and that the impact should be rather limited. And in terms of the product side, we have seen that the investors are getting more concerned about liquidity. So what does that mean? It means when they are picking the investment product, the product mix tends to be structured products like FDN or some product that is [indiscernible] with liquidity. That means they can have a chance to do the redemption over different periods of time. So…

[Operator Instructions] The call is now concluded. Thank you for attending today’s presentation. You may now disconnect.