Huize Holding Limited (NASDAQ:HUIZ) Q2 2023 Earnings Conference Call August 15, 2023 8:00 AM ET Company Participants Harriet Hu - Investor Relations Director Cunjun Ma - Founder and Chief Executive Officer Ron Tam - Co-Chief Financial Officer Conference Call Participants Coco Gong - Morgan Stanley Mindy Gao - CLSA Michelle Ma - Citi Operator Ladies and gentlemen, thank you for standing by. And welcome to Huize Holding Limited Second Quarter 2023 Earnings Conference Call. At this time, all participants are i ...

Huize Holding Limited (NASDAQ:HUIZ) Q1 2023 Earnings Conference Call May 30, 2023 8:00 AM ET Company Participants Harriet Hu - Investor Relations Cunjun Ma - Founder and Chief Executive Officer Kwok Tam - Co-Chief Financial Officer Operator Ladies and gentlemen, thank you for standing by and welcome to Huize Holding Limited’s First Quarter 2023 Earnings Conference Call. [Operator Instructions] Today’s conference call is being recorded and the webcast replay will be available. Please visit the Huize’s IR web ...

Corporate Structure and Regulatory Environment - Huize Holding Limited operates primarily through a variable interest entity (VIE) in China, with no direct equity ownership in its operating entities[19]. - The VIE's shareholders have pledged 100% equity interests to Huize's wholly foreign-owned enterprise (WFOE) to ensure control over the VIE's operations[20]. - As of the report date, Huize's PRC subsidiary and VIE have obtained all necessary licenses and permits for operations, including a value-added telecommunications business operating license and insurance brokerage business license[28]. - The PRC government has increased oversight on capital raising activities, requiring cybersecurity reviews for network platform operators holding personal information of over one million users before any public offering[29]. - The Overseas Listing Filing Rules, effective March 31, 2023, mandate that domestic companies file with the China Securities Regulatory Commission (CSRC) for overseas offerings and listings[29]. - Failure to obtain necessary approvals or complete filing procedures could result in sanctions, including fines and restrictions on operations in China[29]. - The Holding Foreign Companies Accountable Act may prohibit Huize's shares from being traded in the U.S. if audit reports are issued by firms not inspected by the PCAOB for two consecutive years[27]. - The PCAOB has recently regained the ability to inspect audit firms in mainland China and Hong Kong, which may affect Huize's future compliance status under the HFCAA[27]. - Huize faces various legal and operational risks due to evolving PRC laws and regulations, which could materially impact operations and the value of its American Depositary Shares (ADSs)[25]. - The company relies on a series of contractual agreements to maintain effective control over the VIE and ensure it receives economic benefits from its operations[20]. Financial Performance and Revenue - Total operating revenue reached RMB 2,245,016, with a significant contribution from brokerage income of RMB 1,215,434[41]. - The company reported a net loss attributable to common shareholders of RMB 18,292, reflecting challenges in the market[42]. - Operating costs totaled RMB 2,359,427, indicating a need for cost management strategies moving forward[41]. - Research and development expenses amounted to RMB 120,478, highlighting the company's commitment to innovation[41]. - The company reported a profit before income tax of RMB 110,377, showing potential for future profitability despite current losses[41]. - Interest income was reported at RMB 645, contributing positively to the financial performance despite overall losses[41]. - The company plans to enhance market expansion efforts and explore new product development to drive future growth[41]. Assets and Liabilities - Total assets increased to RMB 1,857,454,000, up from RMB 1,089,000,000 year-over-year[43]. - Current assets amounted to RMB 1,420,684,000, compared to RMB 750,000,000 in the previous year, reflecting significant growth[43]. - Total liabilities reached RMB 1,222,241,000, an increase from RMB 559,000,000, indicating a rise in financial obligations[43]. - Cash and cash equivalents stood at RMB 381,158,000, compared to RMB 277,000,000, showing improved liquidity[43]. - Total current liabilities were RMB 1,222,241,000, compared to RMB 559,000,000, reflecting a significant increase in short-term obligations[43]. - The accumulated deficit was reported at RMB (499,940), showing a slight improvement from the previous year's deficit[44]. Regulatory Compliance and Risks - The company operates in a highly regulated online insurance industry, facing uncertainties in compliance with evolving laws and regulations[61]. - The regulatory environment in China is complex and evolving, which may adversely affect the company's business operations[73]. - The company must continuously adapt its product offerings to meet the evolving needs of insurance clients to retain and attract customers[61]. - The company is subject to evolving regulatory requirements that may limit its business operations and affect its financial condition[81]. - The company has ceased offering cash rewards to potential insurance clients to comply with regulatory standards, which may impact marketing strategies[77]. - The company’s compliance with data privacy and protection laws is critical, as any failure could lead to liabilities and negatively impact its reputation[85]. Market and Economic Conditions - The COVID-19 pandemic has materially and adversely affected the company's business operations since 2020, leading to decreased productivity and operational efficiency due to remote work measures and compliance with health protocols[168]. - Economic conditions in China, including the impact of COVID-19, have resulted in a slowdown in GDP growth, which could materially and adversely affect the company's business and financial condition[173]. - The potential for a prolonged downturn in the Chinese or global economy poses a risk to the company's business, particularly in light of ongoing geopolitical tensions and economic uncertainties[172]. Operational Challenges - The company has incurred operating losses in the past and may struggle to achieve profitability in the future[61]. - Rapid business growth may strain management and operational resources, potentially leading to increased expenses that could outpace revenue growth[135]. - The company faces risks related to natural disasters and health epidemics, which could significantly disrupt operations and adversely affect financial performance[170]. Shareholder and Investment Considerations - The shareholders of the VIE may have potential conflicts of interest, which could adversely affect the company's ability to control the VIE and receive economic benefits from it[183]. - The newly enacted PRC Foreign Investment Law may create substantial uncertainties regarding the company's corporate structure and financial results, as it does not explicitly classify contractual arrangements as a form of foreign investment[185]. - The company may rely on dividends and other distributions from its WFOE to meet cash and financing requirements, and any limitations on these payments could materially affect its operations[193].

Shareholder Structure - As of February 28, 2023, Mr. Cunjun Ma holds 76.8% of the Company's aggregate voting power[4] - Huidz Holding Limited owns 150,591,207 Class B common shares, representing 14.7% of total outstanding shares and 72.1% of voting power[5] - Crov Global Holding Limited holds 155,928,400 Class A common shares, accounting for 15.2% of total outstanding shares and 5.0% of voting power[5] - Wande Weirong Limited owns 98,321,680 Class A common shares, representing 9.6% of total outstanding shares and 3.1% of voting power[6] - CDF Capital Insurtech Limited holds 80,991,300 Class A common shares, accounting for 7.9% of total outstanding shares and 2.6% of voting power[6] - Bodyguard Holding Limited owns 55,110,084 Class A common shares, representing 5.4% of total outstanding shares and 1.8% of voting power[6] Regulatory and Reporting - The Company is classified as a Commission-Identified Issuer under the Holding Foreign Companies Accountable Act (HFCAA)[2] - The audit report for the Company's financial statements was issued by PricewaterhouseCoopers Zhong Tian LLP[3] - The Company filed its annual report on Form 20-F for the year ended December 31, 2021 on April 26, 2022[3] Management Control - The Company is not aware of any governmental entity in mainland China that has control over its management and policies[7]

Huize Holding Limited (NASDAQ:HUIZ) Q4 2022 Earnings Conference Call March 27, 2023 8:00 AM ET Company Participants Harriet Hu - Investor Relations Cunjun Ma - Founder and Chief Executive Officer Kwok Tam - Co-Chief Financial Officer Conference Call Participants Amy Chen - Citigroup Rick Zhao - Morgan Stanley Operator Ladies and gentlemen, thank you for standing by, and welcome to Huize Holding Limited's Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time all participants are in a liste ...

Huize Holding Limited (NASDAQ:HUIZ) Q3 2022 Earnings Conference Call November 11, 2022 7:00 AM ET Company Participants Harriet Hu - Investor Relations Cunjun Ma - Founder and Chief Executive Officer Li Jiang - Chief Operating Officer Minghan Xiao - Co-Chief Financial Officer Kwok Tam - Co-Chief Financial Officer Conference Call Participants Michelle Ma - Citi Operator Ladies and gentlemen, thank you for standing by, and welcome to Huize Holding’s Limited Third Quarter 2022 Earnings Conference Call. [Operato ...

Huize Holding Limited (NASDAQ:HUIZ) Q2 2022 Earnings Conference Call September 23, 2022 8:00 AM ET Corporate Participants Harriet Hu - Investor Relations Director Cunjun Ma - Chairman and Chief Executive Officer Ronald Tam - Co-Chief Financial Officer Conference Call Participants Amy Chen - Citigroup Operator Ladies and gentlemen, thank you for standing by, and welcome to Huize Holdings Limited Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the ...

Huize Holding Limited (NASDAQ:HUIZ) Q1 2022 Earnings Conference Call June 24, 2022 8:00 AM ET Company Participants Harriet Hu - Investor Relations Director Cunjun Ma - Chairman and Chief Executive Officer Ronald Tam - Co-Chief Financial Officer Conference Call Participants Amy Chen - Citigroup Mindy Gao - CLSA Operator Ladies and gentlemen, thank you for standing by, and welcome to Huize Holdings Limited First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A ...

Part I [Item 3. KEY INFORMATION](index=7&type=section&id=Item%203.%20KEY%20INFORMATION) Huize's corporate structure, relying on a VIE in China, faces significant risks from PRC regulations and potential delisting, alongside presenting key consolidated financial data - Huize Holding Limited operates as a Cayman Islands holding company, conducting business in China through a Variable Interest Entity (VIE) due to PRC foreign investment restrictions, meaning investors purchase equity in the holding company, not PRC operating entities[12](index=12&type=chunk)[13](index=13&type=chunk) - The company's VIE structure faces significant risks, including potential PRC government non-compliance rulings and uncertain enforceability of contractual arrangements in PRC courts[13](index=13&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - The company holds necessary PRC licenses but faces risks from potential future CSRC approvals for offshore offerings and CAC cybersecurity reviews, which could impact financing and operations[17](index=17&type=chunk) - In 2020 and 2021, the Cayman holding company transferred a total of **RMB 196.7 million** to its PRC subsidiary and VIE subsidiaries for operations, with no dividends paid to the holding company or U.S. investors[18](index=18&type=chunk) [D. Risk Factors](index=21&type=section&id=D.%20Risk%20Factors) The company faces significant business, structural, and operational risks, including regulatory challenges, VIE enforceability, and potential delisting under the HFCAA - Key business and industry risks include operating in a highly regulated and competitive online insurance industry, historical net losses, dependence on user traffic channels, and data privacy and cybersecurity risks[39](index=39&type=chunk)[40](index=40&type=chunk) - Key corporate structure risks include reliance on VIE contractual arrangements, potential conflicts of interest with VIE shareholders, and uncertainties regarding PRC Foreign Investment Law and equity pledge enforceability[41](index=41&type=chunk)[42](index=42&type=chunk) - Key risks of doing business in China include the PCAOB's inability to inspect the company's auditor, potentially leading to ADSs trading prohibition under HFCAA by **2024**, and significant PRC government oversight and regulatory uncertainties[43](index=43&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - Key risks related to the company's ADSs include high price volatility, the founder's **76.5%** decisive voting influence through a dual-class structure, and no expected dividends in the foreseeable future[44](index=44&type=chunk)[182](index=182&type=chunk)[187](index=187&type=chunk) Selected Consolidated Financial Data (2019-2021) | Financial Metric | 2019 (RMB thousands) | 2020 (RMB thousands) | 2021 (RMB thousands) | | :--- | :--- | :--- | :--- | | **Total operating revenue** | 993,319 | 1,220,222 | 2,245,016 | | **Operating (loss)/profit** | 1,639 | (25,911) | (114,411) | | **Net (loss)/profit** | 14,968 | (18,292) | (107,717) | | **Total assets** | 508,805 | 1,335,976 | 1,857,454 | | **Total liabilities** | 362,831 | 867,293 | 1,496,541 | | **Net cash provided by/(used in) operating activities** | 118,024 | 137,666 | (175,917) | [Item 4. INFORMATION ON THE COMPANY](index=74&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) This section outlines Huize's history, business model as an online insurance platform, strategic acquisitions, and its operational reliance on a VIE structure - Founded in **2006**, the company reorganized in **2019** to establish its VIE structure and completed its IPO on Nasdaq in **February 2020**, raising approximately **US$47.7 million** in net proceeds[219](index=219&type=chunk)[220](index=220&type=chunk) - In **December 2021**, the company acquired **100%** equity in Shanghai Senhao Insurance Agency Co., Ltd. to expand its business network[222](index=222&type=chunk) Key Business Metrics (2019-2021) | Metric | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | Cumulative insurance clients (million) | 6.3 | 6.8 | 7.5 | | Cumulative insured (million) | 53.2 | 57.6 | 62.5 | | GWP facilitated (RMB million) | 2,014.3 | 3,019.9 | 5,018.2 | - The company partners with **109 insurer partners** as of December 31, 2021, with the top five accounting for **78.4%** of total operating revenue in **2021**, up from **63.0%** in **2020**[237](index=237&type=chunk)[352](index=352&type=chunk) - Life and health insurance products are the primary revenue driver, contributing **97.2%** of brokerage income in **2021**, with annuity and endowment products accounting for **46.8%** within this category[222](index=222&type=chunk) [Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=115&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes Huize's financial performance from 2019-2021, highlighting significant revenue growth, increased operating losses, and liquidity status, along with key accounting policies Results of Operations Summary (2019-2021) | Metric (RMB thousands) | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | **Total operating revenue** | 993,319 | 1,220,222 | 2,245,016 | | **Total operating costs and expenses** | (991,680) | (1,246,133) | (2,359,427) | | **Operating (loss)/profit** | 1,639 | (25,911) | (114,411) | | **Net (loss)/profit** | 14,968 | (18,292) | (107,717) | - Operating revenue increased by **84.0%** in **2021**, driven by a **66.2%** increase in total GWP facilitated and **99.2%** growth in first-year premiums (FYP)[361](index=361&type=chunk)[362](index=362&type=chunk) - Cost of revenue increased by **107.5%** in **2021**, primarily due to higher channel costs for user traffic to expand the client base and boost sales[362](index=362&type=chunk) - The company's liquidity is supported by **RMB 381.2 million** in cash and cash equivalents and **RMB 227.8 million** in restricted cash as of December 31, 2021, despite net cash used in operating activities of **RMB 175.9 million** in **2021**[387](index=387&type=chunk)[390](index=390&type=chunk) [Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=133&type=section&id=Item%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, executive compensation, dual-class share structure, and employee breakdown by function - In **2021**, aggregate cash compensation for executive officers was **RMB 17.9 million (US$2.8 million)**, and for non-executive directors was **RMB 1.0 million (US$0.2 million)**[409](index=409&type=chunk) - As of **February 28, 2022**, Chairman and CEO Mr. Cunjun Ma held **76.5%** of total voting power through a dual-class share structure, granting him decisive control[187](index=187&type=chunk)[429](index=429&type=chunk) Employee Headcount by Function (as of Dec 31, 2021) | Function | Number of Employees | % of Total | | :--- | :--- | :--- | | Insurance consulting | 379 | 23.1% | | Sales, marketing and training | 599 | 36.4% | | Client service | 89 | 5.4% | | Product management | 50 | 3.0% | | Research and technology | 376 | 22.9% | | General and administrative | 151 | 9.2% | | **Total** | **1,644** | **100.0%** | - The company operates two share incentive plans, with significant options and restricted shares granted to directors, executive officers, and employees as of **February 28, 2022**[411](index=411&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk) [Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=142&type=section&id=Item%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section outlines major shareholders and key related party transactions, primarily focusing on the VIE contractual arrangements and shareholder registration rights - The most significant related party transactions are contractual arrangements with the VIE and its shareholders, enabling the company to control and consolidate the VIE's financial results[431](index=431&type=chunk) - A shareholders' agreement grants certain investors registration rights, including demand and piggyback rights, which terminate five years after the IPO[432](index=432&type=chunk)[433](index=433&type=chunk)[434](index=434&type=chunk) - In **2021**, the company incurred **RMB 11.8 million** in service fees to Xiaoke Huixuan (Shenzhen) Technology Co., Ltd., a company under Huize's significant influence[439](index=439&type=chunk) [Item 8. FINANCIAL INFORMATION](index=144&type=section&id=Item%208.%20FINANCIAL%20INFORMATION) This section confirms the inclusion of consolidated financial statements, absence of material legal proceedings, and the company's dividend policy of retaining earnings for growth - The company is not currently involved in any material legal or administrative proceedings[440](index=440&type=chunk) - The company has no present plan to pay cash dividends, intending to retain future earnings for business expansion, with dividend payments also subject to PRC profit distribution regulations[440](index=440&type=chunk)[441](index=441&type=chunk) [Item 10. ADDITIONAL INFORMATION](index=145&type=section&id=Item%2010.%20ADDITIONAL%20INFORMATION) This section details the dual-class share structure and tax implications for the company and investors across Cayman Islands, PRC, and U.S., including PFIC risk - The company operates a dual-class share structure where Class B common shares carry **15 votes** per share compared to **one vote** for Class A shares, with Class B convertible to Class A[444](index=444&type=chunk) - As an exempted company in the Cayman Islands, the company is not subject to local profits, income, gains, or appreciation taxes there[454](index=454&type=chunk) - There is a risk that PRC tax authorities could classify the Cayman Islands holding company as a PRC resident enterprise, subjecting it to a **25%** enterprise income tax on global income and potential dividend withholding tax[455](index=455&type=chunk)[456](index=456&type=chunk) - For U.S. investors, there is a risk of the company being classified as a Passive Foreign Investment Company (PFIC), which has increased due to ADSs market price fluctuations and could result in adverse U.S. federal income tax consequences[215](index=215&type=chunk)[462](index=462&type=chunk) [Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=155&type=section&id=Item%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section addresses the company's market risks, primarily foreign exchange risk due to RMB-USD exposure, minimal interest rate risk, and business seasonality - The company's primary market risk is foreign exchange, with a **10%** RMB depreciation against the U.S. dollar resulting in a **US$5.2 million** decrease in cash and cash equivalents as of December 31, 2021[468](index=468&type=chunk)[469](index=469&type=chunk) - Interest rate risk is not material as all company borrowings bear a fixed interest rate[470](index=470&type=chunk) - The business experiences seasonality, with life and health insurance sales typically stronger in the first quarter and travel insurance sales higher in the third quarter[471](index=471&type=chunk) Part II [Item 15. CONTROLS AND PROCEDURES](index=159&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) This section reports on the ineffectiveness of internal controls as of December 31, 2021, due to a material weakness in accounting personnel, and outlines remediation efforts - Management concluded that the company's disclosure controls and procedures were not effective as of December 31, 2021[480](index=480&type=chunk) - A material weakness in internal control over financial reporting was identified due to a lack of sufficient and competent financial reporting and accounting personnel with U.S. GAAP and SEC reporting knowledge[117](index=117&type=chunk)[483](index=483&type=chunk) - Remediation efforts include recruiting qualified financial personnel, implementing U.S. GAAP training, and planning additional resources to strengthen financial reporting[483](index=483&type=chunk) Part III [Item 18. FINANCIAL STATEMENTS](index=164&type=section&id=Item%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's audited consolidated financial statements for 2019-2021, prepared under U.S. GAAP and audited by PricewaterhouseCoopers Zhong Tian LLP Consolidated Balance Sheet Summary (as of Dec 31) | (RMB thousands) | 2020 | 2021 | | :--- | :--- | :--- | | **Total current assets** | 1,008,355 | 1,420,684 | | **Total assets** | 1,335,976 | 1,857,454 | | **Total current liabilities** | 556,566 | 1,222,241 | | **Total liabilities** | 867,293 | 1,496,541 | | **Total shareholders' equity** | 468,683 | 360,913 | Consolidated Statement of Comprehensive Income/(Loss) Summary (Year Ended Dec 31) | (RMB thousands) | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | **Total operating revenue** | 993,319 | 1,220,222 | 2,245,016 | | **Total operating costs** | (631,368) | (816,353) | (1,690,757) | | **Operating income/(loss)** | 1,639 | (25,911) | (114,411) | | **Net profit/(loss)** | 14,968 | (18,292) | (107,717) | | **Net loss attributable to common shareholders** | (25,383) | (21,492) | (107,666) | Consolidated Statement of Cash Flows Summary (Year Ended Dec 31) | (RMB thousands) | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash provided by/(used in) operating activities** | 118,024 | 137,666 | (175,917) | | **Net cash used in investing activities** | (6,927) | (31,078) | (80,926) | | **Net cash (used in)/provided by financing activities** | (14,079) | 383,053 | 141,891 | | **Net increase/(decrease) in cash** | 97,056 | 479,621 | (119,964) | | **Cash and cash equivalents at end of year** | 249,327 | 728,948 | 608,984 |

Financial Data and Key Metrics Changes - In 2021, total gross written premiums (GWP) facilitated on the platform increased by 66.2% year-over-year to RMB5 billion, while operating revenue increased by 84% year-over-year to RMB2.25 billion, meeting the revenue guidance provided for the full year 2021 [5][17] - In Q4 2021, total GWP facilitated on the platform increased by 90.2% year-over-year to RMB1.99 billion, and operating revenue grew 1.5 times year-over-year to RMB980 million [6][20] - The average ticket size of long-term insurance products increased from RMB6,684 in Q3 to RMB9,593 in Q4 [6][19] - The company achieved a net profit of RMB19.8 million in Q4 2021 [21] Business Line Data and Key Metrics Changes - GWP for long-term insurance products accounted for 97% of total GWP, with first-year premiums (FYP) accounting for RMB3.1 billion or 62% of total GWP, up 99% year-over-year [6][17] - Renewal premiums accounted for RMB1.9 billion or 27.8% of total GWP, representing a year-on-year increase of 30.5% in 2021 [17] - Savings insurance products contributed approximately RMB1.2 billion of the first-year premium in Q4 2021 [7] Market Data and Key Metrics Changes - Approximately 67.1% of long-term insurance customers were from higher-tier cities, with an average age of 35.3 years [6] - Persistency ratios for long-term life and health insurance in the 13th and 25th month sustained at an industry-high level of 94% [6][19] Company Strategy and Development Direction - The company is focusing on user-centric strategies, high-tech and digitalization, and online-to-offline (O2O) integration to enhance service capabilities [5][10] - The acquisition of Shanghai Senhao Insurance Agency is expected to reinforce competitive advantages in both online and offline service capabilities [9] - The company plans to deepen engagement with existing high-value customers through cross-selling and upselling opportunities [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tightening industry regulations and macroeconomic conditions, indicating that the next two quarters would be a period of adaptation [21] - The company aims to improve its overall corporate cost structure and operating efficiencies, with a focus on cost reduction [21][32] - Management expressed confidence in the long-term growth prospects and announced a share repurchase program to enhance shareholder value [22] Other Important Information - The company published its first ESG report, highlighting strategic initiatives and accomplishments [12] - The company has cooperated with 109 insurance partners and is expanding its offline presence [9] Q&A Session Summary Question: Product mix for first-year premium and written in Q4 - The increase in the take rate for premium was due to a larger contribution from first-year premium policies, which accounted for 71.3% of the fourth quarter GWP [24][25] Question: New product strategy in light of regulatory changes - The company will focus on online savings products and has already launched new products in response to market demand [25] Question: Business plan for Senhao Insurance acquisition - The acquisition will enhance offline service capabilities and facilitate online-to-offline integration [28] Question: Technology export and revenue outlook - The company is beginning to export technology to other insurance companies, which is expected to generate new revenue streams [28] Question: Profit margin sustainability - The company expects challenges in the next two quarters but is focused on cost control and improving profitability [32]