Good morning, everyone. This is Lee Hongjing from Waterdop Investor Relationships. It's my pleasure to welcome everyone to Water drop's First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. Please note that discussion today will contain forward-looking statements made under the safe harbor provision of U.S. Private Securities and the litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties and that results to differ materially from our current expectations. Potential risks and uncertainties include but not limited to those outlined in our public filings with the SEC. The company does not undertake any obligation to update any forward-looking statements, except as required and applicable law. Also, the call includes a discussion of certain non-GAAP measures. Please refer to our earnings release for reconciliations between non-GAAP and GAAP. Joining us today on the call are Mr. Shen Peng, our Founder, Chairman and CEO; Mr. Yang Guang, Co-Founder, Director, SVP and GM of International Business; Mr. Ran Wei, Director, GM of Insurance Technology business; Mr. Zhu Zetao GM of Crowdfunding and Pharmatech business; Mr. Chen Ruichen, Board Secretary. And we will be happy to take some of the questions in the manner in-line at the end of the conference call.

Hello, everyone. This is Shen Peng. Thank you for joining our first quarter 2023 earnings conference call. After the adjustment of the pandemic control policies, there was a peak period of domestic infection in January. Combined with the impact of the spring festival holiday, which briefly brought external headwinds to the industry. However, as the impact of the pandemic and holiday subside, the domestic macro economy show sign of recovery and the overall trend of the insurance and pharmaceutical industry is gradually picking up. In the long term, as the insurance customer base gradually become younger and the distribution and so become more separated. The life insurance industry is significantly shifting towards online and intermediary direction. Additionally, as a hospital outpatient determine goes back to normal, clinical trial projects continue to operate. The overall demand for new drug and research and development will further increase. In first quarter of 2023, the company continued to focus on creating value for our users and keep pursuing healthy development. The business performance remains robust with the company's revenue reaching RMB 606 million in the first quarter, carrying over the upward trend for the last whole year. The net profits in the first quarter with RMB 49.7 million, demonstrating the sustainable and high-quality development of the company's operations. With sustained positive net profit, the company maintains ample cash reserves. As of the end of March, the company had a total of RMB 3.6 billion in cash, cash equivalents and short-term investments. The bond and cash reserves helped the company to face uncertain environment with more confidence and supported our long-term planning and layout for the future growth. All of our business model achieved strong performance in the first quarter, continuously consolidating our leading position and influence in the industry. First of all, order of…

Thank You, Shen Peng. Hello everyone. Let me give you an update on our insurance business. In first quarter, the life insurance market shows some certain growth, and there was a noticeable increase in precautionary savings demand. In this setting, we continue to enhance operational efficiency and business health, optimize operations for existing customers and actively explore new channels while adhering to product innovation. This leaves a solid foundation for the long-term sustainable growth of our business. For the first quarter of 2023, the first year premiums generated through our Waterdrop insurance marketplace amounted to RMB 1,692 million, an increase of 6.3% quarter-on-quarter. Our insurance-related income amounted to RMB 536 million. In first quarter, leveraging algorithm, our short-term insurance continued to improve in product offering, channel efficiency and content innovation. In order to better serve our invest, we offer differentiated user service to a wide range of users and steadily enhanced business engagement. Furthermore, we upgraded service capability in policy renewal improve user experience and value perception and follow further improvement in the short-term insurance policy renewal rate. Overall, FYP of our short-term insurance increased 6.4% quarter-over-quarter. As for long-term insurance, we focus on user value and boldly innovated in user service, leading to a further increase in insurance premiums contributed by enterprise WeChat. The LPG maintains industry-leading capabilities in fine business operations and further activity per capita. We invest in new talent while improving in the performing branches. As a result, there was a 27% increase in productivity per capita and the number of policy per capita increased by 14% quarter-over-quarter. While achieving rapid growth in personal productivity. The company maintained strict control over user service and policy quality, resulting in a 2% quarterly increase in the first year renewal rate of our long-term insurance policies. In terms of…

As of the end of Q1, accumulated total of 432 million helped exceeding 2.6 million -- 2.86 million patients with around [ 38.4 ] billion on our medical crowdfunding platform. The overall number of users on the rising target represent an upward trend. In this quarter, the operational transparency committee [Technical Difficulty] upon the rising target and the regulation of consultant service, optimizing and improving our operational capabilities regarding the determination of reasonableness of rising targets. On one hand, the committee strengthened another ability to identify medical material, allowing for more accurate filtering of duplicated material and photoshop information. On the other hand, we optimized medical risk control [ steps ] for variable scenarios. Including rare disease and complex treatment plan, achieving intelligent auditing of underwriting targets. Additionally, in the initial review process, we enhanced the medical risk control audit is partially for fund raising capital. Timing and accurately assess and eliminate cases with unreasonable target amount to enhance the regulation of consultant service. The Operational Transparency Committee established Mystery Visitor Mechanism. By adopting a patient perspective, we’ll delve into the actual service programs of comporting to edifices and collect natural in internal infection of consulting. This will ensure a slow process for standard setting, implementation to effective assessment, significantly reducing irregular behavior. During service and enhancing service level of our fundraising consulting. We're continuously improving our own service and risk control stability. We actually collaborate with various stakeholders, including judicial departments, hospitals and industries. To crack down on dishonest fundraising activity. Ensuring that every single donation is used properly. This year at Integrity Beijing 315 Gala Waterdrop was honored as consumer in-force integrated integrity, commitment enterprise for 2023. As a medical crowd funding platform, Waterdrop has always maintained an open and transparent attitude, providing assistance to extremely needy patients…

Thank you, Zetao. Hello, everyone, and will now walk you through our financial highlights for the first quarter. Before I go into the details on the financial performance, please be reminded that all numbers quoted here will be RMB, and please refer to our earnings release for detail information on our financial performance on both year-over-year and quarter-over-quarter basis. In the first quarter, the company adhered to a high-quality development model. The company's revenue was RMB 606 million, slightly lower compared to RMB 649 million in the same period of 2022. Among them, insurance-related income was RMB 536 million, representing a year-on-year decrease of 14.6%. Corresponding service fees were RMB 42 million compared to nil in the same period last year. Digital clinical trial solution income was RMB 22.8 million, achieving a significant year-on-year growth of 167%. The company's overall operating cost and expense has increased by 12% Y-o-Y and decreased by 1.8% Q-o-Q. Operating costs increased by 60% year-over-year to RMB 248 million for the first quarter of 2023. Comparing with RMB 155 million for the first quarter of 2022, which was primarily driven by 2 effects: Firstly, there was a RMB 29.1 million increase in professional and outsourcing customer service fees. Secondly, an increase of RMB 61.5 million, mainly due to recording the core funding consulting team costs as operating costs rather than sales and marketing expense as we started to generate crowd-funding service fees since April '22. On a quarter-over-quarter basis, operating cost has decreased by 11%, primarily due to a decrease of RMB 25.9 million in professional and outsourcing customer service system. Sales and marketing expense decreased by 15.1% year-over-year to RMB 173 million for the first quarter of 2023. Compared with RMB 204 million for the same quarter of 2022. This decrease was mainly due…

The conference has now concluded. We thank you for attending today's presentation, and you may now disconnect.