Good morning, everyone. This is Tracy Lisang with Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's Second Quarter 2024 Earnings Conference Call. All participants are in a listen-only mode in our English line. As a reminder, today's conference call is being recorded. Please note that the discussion today will consist forward-looking statements made under the Safe Harbor provision of the U.S. Private Securities and the Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Certain risks and uncertainties include, but are 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 under applicable law. Also, this call includes 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. Ran Wei, Director and GM of Insurance Business; Xu Xiaoying, Head of Finance Department; and Jasmine Li, Board Secretary. We will be happy to take some of the questions in the Mandarin line at the end of the conference call.

Hello, everyone. This is Shen Peng. In May 2024, we celebrated Waterdrop's 8th anniversary. Over these years, we have continuously [indiscernible]. Particularly over the past two years, faced with a complex and changing environment, the company has proactively transformed its business. We have greater emphasis on delivering value, pursuing healthy operations and ensuring sustainable growth. As a technology company amid the new wave of AI, we are actively exploring the application of large language models Shuishou LLM in the industry to build the company's core competitiveness for the next stage. In Q2, our business continued to advance with existing strategies, achieving robust financial performance. The company's overall revenue reached a total of RMB676 million. Our net profit attributable to ordinary shareholders was nearly RMB88.3 million, reflecting a year-over-year increase of over 300%. Waterdrop has maintained profitability for 10 consecutive quarters since Q1 of 2022. This quarter, Waterdrop consolidated its leading position in the industry. Firstly, our insurance business quarterly FYP reached RMB1.78 billion with an operating profit margin increasing 21%. In April, we initiated a quality service upgrade year, offering good service, good product in new claims to users to further build our brand influence to also achieve the first export of customized solutions, exploring the broader application of the LLM with issuers. Secondly, with the Medical Crowdfunding actively participants in the multi-level medical security business offering services in bilingual language and including users churn, our operational efficiency improved and the segment loss was reduced continually. Thirdly, in health care-related business, our patient recruitment platform E-Find cooperation with computables. Moreover, we achieved a high-quality deliverable in CRO and the digital marketing with our clients. In addition, we are committed to social responsibility and sustainable development. In June, the company won annual charity project and annual charity model at the [24…

Thank you, Peng Shen. In Q2, the insurance business generated about RMB1.78 billion FRP, a Q-o-Q increase of 1.4%. Insurance related income was about RMB570 million and the operating profit was about RMB120 million. Operating profit margin maintained at a level of more than 21%. During the quarter, the short-term insurance FYP hit RMB1.25 billion, up 8.2% quarter-over-quarter. New policy premiums surged near 20% sequentially. We advanced our customer acquisition of the platforms through like Redbook, TikTok, WeChat videos and so on, we were able to gain further insight and provide more actually product recommendations via AI technology, driving the number of new users up by 15.8% Q-o-Q. We also focused on our synergy and efficiency, further increasing premiums from existing customers. Moreover, our short-term product range has expanded with more offerings meeting diverse needs and raising average premiums by 7.7%. In April, we initiated a quarter service upgrade year, introducing initiatives like direct claims line, claims within 24 hours and service star program to enhance our customer satisfaction, maintaining a high renewal rate with a sequential increase. The long-term insurance FYP reached RMB530 million and Y-o-Y and Q-o-Q performance was pressured by high-based figures and [collections unchanged] from few facing challenges. The company restructured its service teams, phasing out our low-digit operations and expanding the high-yield teams, which lead to a 1.7% rise in quarterly per-capita premium. To enhance our content metrics of life planner approach, increasing life planner premium contribution, emphasizing private domain operations for online sales, we leveraged holiday promotions to post the user engagement, resulting in a 22% increase in insurance domain premium. We also reached our product line-up with our disability insurance product premiums reaching RMB80 million in Q2. To increase user experience, we introduced an upgraded membership service, upgrading health management and other corporate…

Thank you, Ran Wei. As of the end of Q2 2024, around 461 million people cumulatively donated RMB65.1 billion to about 3.25 million patients through our Waterdrop Medical Crowdfunding. In Q2, adhered to the user-first service where most critical, we continue to optimize our business process and provide users with more personalized service. For infants in regions populated by ethnic minorities, our platform now supports bilingual fundraising, aiding in the spread of cases for the local communities and bolstered by AI-assisted bilingual case verification to minimum fraud. Further enhancing our reputation and credibility, we actually participated in the construction of [indiscernible] as a multi-level medical security platform. Thanks to this project and our charitable initiatives, in June, the company won the annual charity project and annual charity model at the 2024 [Charity Gala]. In the future, the company will continue leveraging its user insight and service capabilities to create more social value. During the quarter, our health care-related income was RMB26.4 million, up 4.2% quarter-over-quarter. We collaborated with a total of 185 pharmaceuticals and CROs. Moreover, we engineered services for 88 new programs during Q2. We've been focused on digital trends in clinical trials and in multi-channel marketing solutions to serve a broader client base from this angle. The health care-related business has been established for over two years and has quickly risen to the top lead. This year, we will continue to maintain our competitive position in the industry. At the same time, we will place more emphasis on the balance between the good growth and operational efficiency, assess the investment and promote the balanced development of business. In Q2, our robust patient network and AI technology, the E-Find platform enrolled over 820 patients, bringing the total to over 8,600 in the partnership for an E-Find with a leading…

Thank you, Shen. Hello, everyone. I will now walk you through our financial highlights for the second quarter. Before I go into detail, please be reminded that all numbers quoted here will be RMB, and please refer to our earnings release for detailed information on our financial performance on a year-over-year and quarter-over-quarter basis, respectively. In Q2, despite industry challenges, the company's overall performance remains stable. The company achieved net operating revenue of RMB676 million stable year-over-year but down 4.1% quarter-over-quarter. The insurance-related income amounted to RMB574 million, down RMB5.4 million sequentially, while funding service fees amount to RMB69.3 million, up 2.9% quarter-over-quarter, while health care-related income was RMB26.4 million, up 4.2% sequentially. Regarding operational costs and expenses, the company continued to focus on improving operational efficiency. In the second quarter, the company's overall operating costs and the expenses were RMB624 million, representing a decrease on both a Y-o-Y and quarter-over-quarter basis. Operating costs fell from RMB333 million in the second quarter of 2023 to RMB319 million in this period. This is inclusive of the scope of consolidation, operating costs increased by RMB11.5 million in personnel costs year-over-year, partially offsetting the RMB12.9 million decrease in cost of referral and service fees and a RMB8.6 million decrease in cost of patient recruitment teams. And in the combined influence, operating costs decreased by 4.2% compared with the same period last year. On a quarter-over-quarter basis, operating costs decreased by 3.7%, mainly due to a decrease in the cost of referral and service fees. S&M expenses were RMB157 million, decreased by 23% year-over-year and 13.6% quarter-over-quarter. This is mainly due to the decrease in marketing expenses to third-party traffic channels and personnel costs in this quarter. G&A expenses were RMB94 million, decreased by 2.1% year-over-year, mainly due to the decrease in personnel costs because of the team adjustment. On a quarter-over-quarter basis, it increased by 5.6%, mainly due to the combined impact of increasing allowance for stock [indiscernible] comps and the reduced professional service fee. R&D expenses were RMB53.3 million, down 38.5% year-over-year and 4.8% quarter-over-quarter due to the decrease in personnel costs and share-based comprehensive expenses. In the second quarter, the company retained stable operations. Net profit attributable to the company's ordinary shareholders increased by 307% from RMB21.7 million in Q2 2023 to RMB88.3 million in the current period. Operating cash inflow remains positive for the quarter with a net inflow of RMB15 million. Looking ahead, we will continue focusing on operational quality, optimizing financial performance and maintaining healthy business development. And ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining. Have a good time. End of Q&A: