Good morning, afternoon and evening, and welcome to the Noah Holdings Limited Third 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 Chiu, company's Investor Relations. Please go ahead.

Thank you, Jason. Good morning, afternoon and evening to everyone, and welcome to Noah's Third Quarter of 2025 Earnings Conference Call. Joining me today are Ms. Wang Jingbo, our Co-Founder and Chairlady; Mr. Zander Yin, Co-Founder, Director and CEO; and Mr. Grant Pan, the 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 will all be available to take your questions in the Q&A session that follows. 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, nor 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. Yin.

Thanks Doreen. [Interpreted] Good morning to everyone, and thank you for joining us today. During the quarter, we are seeing 3 very clear trends emerge. First, despite ongoing revenue pressure, our profitability and margins improved significantly with non-GAAP net income increasing by over 50% year-on-year. Second, investment products have seen accelerated growth and are accounting for a larger share of new revenue. And lastly, key initiatives, including the establishment of 4 overseas booking centers and the rollout of AI-related projects have transitioned from planning to actual implementation. These 3 trends give us greater confidence that our transformation strategy is making solid progress. Financially, net revenues for the third quarter reached RMB 633 million, down slightly year-on-year, but up sequentially, marking the second consecutive quarter of sequential growth. The year-on-year revenue decline was mainly due to continued softness in both domestic and overseas insurance businesses, in line with our expectations that 2025 to 2026 would be a period of revenue mix adjustment. Notably, our revenue mix continues to improve significantly, driven by growing investment products revenues, which accounted for approximately 28% during the quarter compared to 18% a year ago, a clear improvement compared to the same period last year and something we will continue to focus on going forward. As a result, our bottom line delivered a solid performance with non-GAAP net income for the third quarter up more than 50% year-on-year to RMB 229 million. This brings non-GAAP net income for the first 3 quarters of 2025 to RMB 587 million, a clear reflection of the results our prudent investment strategy and cost controls are delivering. Performance of our overseas and domestic operations are each following distinct trends. For overseas operations, it has maintained a pattern of strong investment product growth and soft insurance product distribution. Net revenues from…

Thank you, Zander, for the comprehensive strategy and market overview and warm greetings to everyone joining us today. For those of you that in the United States, happy Thanksgiving and holiday season. I also want to make an introduction of the AI RM, Noah actually did the English translation just now, if you have noticed. I'm very pleased to share Noah's financial performance for the third quarter of 2025 and resource allocation priorities from a financial perspective. During this quarter, we delivered solid profitability supported by prudent investment decisions and disciplined cost management. Non-GAAP net income reached RMB 229 million, up 52.2% year-over-year and 21.2% sequentially with a margin of 36.2%. The first 9 months of 2025, non-GAAP net income totaled RMB 587 million, a 40.5% increase from the same period last year. This was achieved despite a 7.4% year-over-year decline in total net revenues for the quarter as we continue to optimize our revenue structure. Total revenue for the third quarter was RMB 633 million, reflecting a year-over-year decline primarily driven by lower insurance income amid intensified competition in both domestic and overseas insurance markets. Yet it still recorded modest sequential improvement overall, marking our second consecutive quarter of growth. Total transaction value remained high at RMB 17 billion, maintaining the same elevated level as the previous quarter and rising 19.1% year-over-year. RMB-denominated products increased 28.7% year-over-year, while U.S. dollar-denominated products grew 9.6% year-over-year. The strength in investment-led transactions helped offset softness in insurance and domestic management fees, which continue to weigh on overall revenue. Onetime commissions related to investment products grew 85.5% year-over-year, supported by stronger client sentiment, expanded range of quality global investment solutions offered to our clients. Overseas net revenues for third quarter remained robust at RMB 311 million, contributing 49.1% of total net revenues. By…

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

Can you hear me?

Yes. Please go ahead. Helen, we lost you.

The next question comes from Peter Zhang with JPMorgan.

[Foreign Language] Congratulations on the very strong results. I have 2 questions. First is management gave very clear guidance on strategy on AI on increasing the investment product proportion and on the booking center. And I have 2 follow-up questions. First is, can we understand what will be the potential financial impact from these strategies? For example, with the adoption of AI, will we see any cost saving on the operating expense side? Or will we see any improving in revenue? And regarding the booking center, particularly on the U.S. booking center, will we see very strong upfront investment into the 2026 where we fully launch this business? And the second follow-up question is we also wish to understand from the investor perspective, is there any metrics we can track on Noah's progress in this strategy in the coming 1 or 2 years? And my second question is on the overseas relationship manager and the domestic coverage city. I observed that overseas relationship manager headcount has dropped in third quarter, while the domestic coverage city has increased in third quarter. And the trend is a bit different from the trend we have been observing in the I think past 2 years. We wish to understand what's the rationale behind? Is there any major change in our company strategy? Or this is just due to some market or the RM headcount fine-tuning?

Thank you Peter, and thanks for actually asking a pretty comprehensive question. So, I'll try to take the first question and Zander will supplement on the second one. So, for the first question, especially on the 3 significant measurements, especially for the strategy of optimizing revenue structure. I think a couple of things that investors could track or pay attention to is one is the weight of revenue that's coming from investment-related products. We do believe that both revenue and top line will continue to grow. But at the same time, the structure that comes from investment-related products, given the actually expansion on product shelf and how the recovery of sentiment relating to investing from our clients, we believe that, that's one of the things, obviously, we could track. Secondly, obviously, we want to see a meaningful accumulation on investment-related AUM and AUA as well. Secondly, to your question, I believe our Chairlady, Noah, could also add on is the AI investment. It's not a small optimization or extracurricular activity in terms of AI investments. We're actually looking to innovate the business model on top of the traditional offline or physical RM team, if you will, by actually adding 2 teams. One is the AI RM that will continue to activate the existing client group to activate sort of the nonactive clients or new clients. We believe that AI actually provide a more structural method and a more tailor-made capability to active the new client leads. And secondly, we're actually trying to see if we could -- as Noah actually do have pretty established infrastructure in terms of systematic infrastructure as well as the capability offering various products, we want to see if we could use with the help of AI to consolidate or aggregate some of the EAM services that seems to be pretty mature in overseas market. So basically, in short, we're trying to see if the AI capabilities that we continue to invest in will increase the capability on several fronts. One is obviously client acquisition, new client acquisition; and 2 is to upgrade the business model in the future. So, we have been doing that, especially the design organization structure this year, and we'll have a strategic investment in AI starting from 2026. To your question on the booking center, yes, we will have a little bit of infrastructure construction, obviously, in the U.S. booking center, but we already had presence in the U.S. market for the past few years. So many of the teams are actually already out there. Obviously, we'll be adding some of the mid-back-office capability for the broker-dealer business. But from the budget standpoint, it's actually not going to be a very significant addition in terms of operating expenses, but basically the necessary infrastructure for the year of 2026. Okay. So, Peter, that's the first question.

[Foreign Language]

[Interpreted] [Let me do a quick translation first.] So, CEO just mentioned for the 3 strategies is actually very correlated because the key thing is trying to do is to drive the company as an AUM-driven company. So, during these structural changes, and we've been trying to more -- because in the past few years, the clients are more conservative in terms of investment. But the recent year, we have seen that there has been changed and clients have been more active in the investment now. So that's why we believe that AUM-driven structure in terms of our revenue is the key engine for the company growth in the near future. And when we're talking about AUM-driven revenue growth, that is why we needed to think about the AI development and also the different booking centers that we've been having in globally. Because for AI investment that it can help to enhance our business efficiency and also it provide a better experience to our clients and which we believe that it can further reinforce our momentum. In terms of giving clients a better service and our sales performance. And also, for broking center, basically, it's the same idea. We've been trying our clients to plan as well because we have seen more global demand in terms of the investment need. And that's why we needed to build up the platform and provide these infrastructures to our clients. And also, yes, it may have a little impact unavoidably. But that we believe that with our strong balance sheet, we've been able to keep a very prudent investment team, but at the same time, been able to support our development.

[Foreign Language]

[Interpreted] To your second question, Peter, CEO emphasized that we didn't change any of our focus on developing our overseas market. When you have seen that they dropped the number of our overseas RM, I would also say that it's more like an active adjustment internally instead of other reasons. It's because to have the right RM is actually -- require a lot of investment and time. And I mean we will need to have the right RM. And that's the reason why we've started to invest in our AI development and try to introduce the AI RM concept. Now that you've just met. It's actually one of the AI RM that we are having. And because when we look at the efficiencies, they can actually cover the number of clients will be a lot more, and that is what our CEO mentioned, the capacity that AI RM could have compared to any human beings. And also, you may have seen the number of cities in domestic market we cover seems to have increased. But again, that's not exactly the same types of office that we've been having in some of the major cities. Those increases are mainly just that the cut will call it more like a clubhouse. It's more for client relationship and for our elite clients better experience with us. So, we wanted to emphasize that our focus on developing overseas market remains the same.

Can you hear me? [Foreign Language]

[Interpreted] [Yes. Let me do a very quick translation.] So, what Chairlady has mentioned, we've been started to invest in different types of AI or investment-related fund since 2016, and we've been staying very close to a lot of top-tier high-tech company. And why we bring this up is because we've been trying to demonstrate where do all this knowledge about AI and technology we've been adopting. And for example, investors or analysts could been seeing that we've been launching all these type of infrastructure fund in our -- under our brand as well. So, we've been trying to demonstrate that we have a very deep knowledge about AI. And that we believe that's going to have a very structural changes to the wealth management industry. In the past, it's more like RM-driven, human-driven model, but we believe that going forward, it's more like an operational driven model. What is the operational driven model, we believe this depends on -- I mean, it depends on development of AI, which is, for example, we can have an AI wealth management team, it could have people still to do the data analysis and some people may hold license. But at the end of the day, it's about AI. They've been able to help and enhance human beings' knowledge about different investment products and their client needs. And so that they can come up and they can cover a lot more clients per person unlike in the past. And that's what we call this operational driven. And also, when we are developing the overseas market, what we've seen is it's hard to rely on human being at the sense that because the cost could be high and also the loyalty, or the stability may not be as high or not be that high. And that's why the company believe that using operational-driven wealth management system is a more efficient way of running this business. And that's not only happening in Noah, we believe that it's going to be very -- it's going to be a new development in the entire industry in the coming 3 to 5 years' time. But that we've been trying to take advantage, or we've been trying to take step ahead of the industry so that the company can be ahead of the industry to adopt this operations-driven model. And to supplement this also, we've been introducing the EAM or what we call IAS system in the U.S.A. And also, we've been hiring this commission-based agency during our insurance products. That said, overall, we are talking about -- from the company's point of view, it's about building the global platform, the infrastructure for all these operational-driven models being able to deliver good results for the company.

[Foreign Language]

[Interpreted] So as a conclusion, we believe that with AI, so currently, what we are having is that all of our RM, they have their own AI assistant. And we believe that, that can enhance the capacity to like become -- one people become 3 RMs. And more importantly, it is about the new business unit or business line that we've been setting up. So, another one will be AI wealth management that we mentioned previously, which is within the AI wealth management team, they've been able to give better experience to the new clients and also, they've been able to help to take into our client base and try to reconnect with those clients may not be very active in the past few years. And another business that we've been trying to -- or we have been developing is also this AI ecosystem team, which is they've been focusing to serve the EAM business that we've been mentioned and also this commission-based agency that will be supplement the company's development.

[Operator Instructions] Our next question comes from Calvin Wang with Citi.

[Foreign Language] Congrats on the solid premium in third quarter. And I have a question on investment product sales, which sustained a robust growth in the quarter. What measures have Noah taken specifically? And looking into the fourth quarter, what is our strategy in investment product sales across domestic and overseas markets? Are there any products that would be our key focus this year?

[Foreign Language]

[Interpreted] You may be aware that in this company, we have this CIO report, which has been issued every half year. And during the recent publish, we talked about the 3 types of products that we believe that should be paying more attention to. So, for the first time is some fund or investment that has been able to fight inflation, which would be more traditional types of funds, including those property fund or maybe gold or material-related types of funds. And secondly would be more technology related, which is using technology to fight inflation. For example, this AI that would been mentioned, not only for the companies adopting of the using, but also related type of investment as well. And the third one would be some newly developed business is more like the crypto that we've been paying -- or we've been advising our clients to pay more attention to. And I mean, as Chairlady mentioned, luckily, we've been connecting with the U.S. product market since 2016, and we have developed a team there to sourcing different types of funds or investment products for our clients. And that's why we've been able to been enhancing our product share in the past few years. And that's why starting from the last few years, you may have been able to see reflecting on our financial performance. Instead of just PE fund being able to sell to clients, we have seen a very substantial improvement in selling hedge funds. That is the secondary market types of fund that we've been able to sell to our -- to our clients. And also, about the renminbi market, we may have to say that, yes, because of the performance of our Asia market, we have seen a lot of interest in our clients for the renminbi-related products. However, the company still keep a very rather prudent and conservative belief towards the renminbi type of product. We still believe that our strength or our focus is more on overseas investment products is more particularly these technology-related type -- AI-related type products.

[Foreign Language]

[Foreign Language]

[Interpreted] [Thank you, Chairlady.] So, what in mentioned, timing to CEO's answer is we probably shouldn't just look at a particular type of products when we've been doing -- answering this question. It's more about the company's position. It's also about our own DNA, which is that we've been able to serve all the global Chinese. We understand them, and we know how to give them better services. And also, it's about the infrastructure that we have, the broking centers globally and also the different business units, for example, Ark in Hong Kong, in Singapore, they've been able to provide services for opening accounts, buying equities, buying bond-related products. And also, we have Olive, our asset management that's been strong traditionally in PE funds, and we're now introducing hedge fund. And also, our brand Glory, we've been able to provide trust services or even insurance advice and family planning. So, it's about the infrastructure that we've been having and means that we've been always able to meet our clients' needs. So, for example, that's why what we've been keep on saying, we wanted to be an AUM-driven revenue model. That's also why we've been starting to build up the commission-based insurance agency team because we've been trying to lower the running cost, but at the same time, still provide comprehensive services. to meet our clients' needs. And I guess that's our advantage of the company. So, it's not about picking what products to be sold to the clients, but we've been able to provide whatever our client needs and meet the demand.

[Foreign Language]

[Interpreted] So, Chairlady, this also explained the strategy. So since starting this year, I mean, for -- we wanted to focus on the Chinese high net worth. So, it's not no longer competing by providing what type of products, but about we've been able to provide the services. So, she emphasized again about the RM team that we've been building, the group booking center we've been able to have globally so that we've been able to provide services across different time zones and across different geographical restrictions. And also, when we've been serving the high net worth, one thing is different. They no longer just related to one geographical places. They've been speaking different languages. And when we've been entering different markets, we also face the difficulties of regulatory requirement. And that is one of the lowest competitive edge because if any wealth management company with a smaller scale, that may be a very difficult thing to override. And that's why we've been in the right size to be able to set up our global infrastructure platform, being able to cooperate with local EAM IAF team so that we've been able to provide global to any potential high net worth clients that we've been able to reach.

[Foreign Language]

[Interpreted] I guess Chairlady wanted to further share her confidence -- I guess she's very excited and everyone can sense that. We've been able to find the right strategy going forward to develop this company. So again, she emphasizes about the global platform. It's about the different business units that we have already developed and invest in the previous years. And it's also about the new development like ecosystem and AI RM. Together, we've been able to serve globally and meet all the clients, all the particularly Chinese high net worth needs in this global market. So, she's very confident and has a very high hope about this development strategy for the company.

And the next question comes from Jin Jiang Yan with CICC.

[Foreign Language] My first question is about the investment income and income from equity affiliates. I see that both these items have significant meaningful contribution to the growth of net profit. And I would like to -- could you please share the reasons behind and the trends in the fourth quarter? And the second question is about the active clients. I see that the active clients increased both double digits Y-o-Y and Q-o-Q. Could you please share what you have observed from the clients' behavior, the impact on the financial statement and the trend in the fourth quarter?

[Foreign Language]

[Interpreted] So, about the investment gain that we've been having. So, one of the major reason is due to the previous investment the company is having, particularly being the GP for some of its PE funds, and we've been seeing some exit in the recent years during the good market. And also, we can have a valuation gain for some of the investment as well. And in terms of active clients, we've been able to have the better result because we've been now more focusing on investment products and which for investment product and life insurance clients may have repeat buying with us that we've been able to enhance or have or maintain a rather stronger relationship with them. And that CEO emphasis why that's the reason why we would like to be more focused as an AUM-driven company.

[Foreign Language]

[Interpreted] So, Chairlady further explained that, that is because one of the -- I mean, the investment gain that we've been able to have is because the right decision that we have made in the past. So being invested in different types of these PE fund or also even listed in the U.S.A. We may have some hurdles in the previous year, but that we've been seeing good results. For example, this investment income, that is one of the example showing that the company has been able to make right decisions in the previous years. And that's also the reason explained why. I mean, when we have good result investment, that is an attraction point to our clients that made them more willing to invest with us.

And the next question comes from Helen Li with UBS.

[Foreign Language] I have a follow-up question regarding AI application. How will AI support client acquisition in the overseas market? Given the recent decline in overseas relationship managers, does this suggest a strategic shift towards serving existing clients' overseas investment needs rather than focusing on expanding local client acquisition? And is the reduction in headcount primarily affecting mid- to back-office RM? Or does it also affect client-facing front office RM? Do you still plan to expand the client-facing front office RM team? Previously, the target was to grow the overseas RM team to 300 in the medium-term. With the adoption of AI, has there been any change to this medium-term target?

[Foreign Language]

[Interpreted] So, to answer your question, the Chairlady is just joking about that we want to -- we don't want to share the secret of how we've been able to get clients, but that's more like a joke because I mean, ultimately, it's about how many clients that we have already been served. We have already served more than 400,000 clients over the last 22 years. And also, with all these different types of PE fund that we have invested, we have mapped a lot of potential high net worth or going to be high net worth or have become high net worth individuals by their business development. So that the company is very confident that we have already had the database. But that in the past, one of the difficulty is that we have the capability or we are capable to serve these types of clients in a good way. But that with the AI assistance, we believe that we've been able to deliver better services and better solutions to all our clients. And that's why with this kind base that we already have, we've been able to give the right service to them with the assistance of AI. So, she also provided one example. We have this client in Singapore. We met him and he became a client. He invests with us only top 5 days. And that is impossible in the past. It may take more than 2 months in the past. But now with the assistance of AI, that is providing solutions, explanation and different types of understanding. And that's the reason why it has enhanced the company's efficiency in getting potential clients.

[Foreign Language]

[Interpreted] The CEO just explained how AI is affecting the company. We believe that everyone is talking about AI, every company wants to use AI. But it's about if they have the basic to be able to really adopt AI. That is -- because using AI and using AI efficiently is 2 different topics that we've been talking about. And why Noah been able to have in this competition is because we have adopted digitalization. I mean, in the earlier stage, we have developed the right system. We internally have all these data analysis, or system buildup, even the OA structure and all that. And because of that, we've been able to adopt AI in a faster pace compared to some of our peers. And also, when Helen is asking how AI has been able to help the company, CEO's answer was, yes, we have already seen some benefits being arise using AI, but that AI's adoption could be out of our imagination. So, the benefit that we've been experiencing could be a lot more in the future.

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

Yes. Thank you. And thank you very much for joining us today. And if anyone has any further questions, please contact IR team as usual. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]