Huize (ticker: HUIZ) has reported a robust performance for the second quarter of 2024, with significant growth in gross written premiums (GWP), revenue, and a solid increase in its customer base. The company announced total GWP of RMB 1.34 billion and revenue of RMB 218 million.
Huize's long-term health and life insurance products continue to be a driving force, with the company maintaining a persistency ratio of over 90% for the 19th consecutive quarter. The expansion into international markets is also underway, with the acquisition of Vietnam's Global Care and plans to increase international revenue contribution to 30% by 2026.
Key Takeaways
- Total GWP reached RMB 1.34 billion, with revenue at RMB 218 million.
- First-year premiums (FYP) for long-term health insurance and life insurance products showed growth, with life insurance FYP up 5% year-over-year.
- Renewal premiums surged by 42.8%, and the customer base grew to 9.8 million.
- The company launched new insurance products and reported a 22.7% increase in the average FYP ticket size for savings products.
- International revenue contribution reached 11%, with a target of 30% by 2026.
Company Outlook
- Huize aims to reach 10 million customers by the end of Q3 2024.
- The company is targeting entry into two new Southeast Asian markets within the next 12 months.
- Huize plans to continue enhancing customer engagement through AI and omnichannel distribution models.
- Despite regulatory challenges, the company remains optimistic about future industry consolidation in China.
Bearish Highlights
- Regulatory changes, specifically commission rationalization, have posed challenges to FYP growth.
Bullish Highlights
- Long-term health and life insurance policies maintain persistency ratios over 95%.
- The repurchase rate for long-term insurance customers increased to 40.5%.
- The average ticket size for long-term savings products reached a record RMB 77,000, up 23% year-over-year.
Misses
- There were no specific misses reported during the earnings call.
Q&A Highlights
- Analysts inquired about plans for more customized participating products.
- Management emphasized their history of product co-development with partners and the expected rise of participating products in the new interest rate regime.
In conclusion, Huize's second quarter of 2024 has been marked by strong growth and strategic moves to expand its customer base and international reach. The company's focus on long-term health and life insurance products, as well as its push into savings products, positions it well to navigate the evolving insurance market. Huize's management is confident in their strategy and the company's ability to adapt to regulatory changes and market demands.
InvestingPro Insights
Huize (ticker: HUIZ) has shown a dynamic financial performance, with several key metrics that investors should consider. According to InvestingPro Data, Huize has a market capitalization of $35.21 million and has been trading at an attractive earnings multiple, with a P/E ratio of 4.31 and an adjusted P/E ratio for the last twelve months as of Q1 2024 of 4.7. This low earnings multiple may indicate that the company's stock is undervalued relative to its earnings capacity.
In terms of profitability, Huize has demonstrated efficiency with an operating income margin of 4.06% and a robust EBITDA growth of 337.76% for the last twelve months as of Q1 2024. This substantial growth in EBITDA suggests that Huize has significantly improved its operational profitability, which is a positive sign for investors looking at the company's financial health.
From a shareholder perspective, one of the InvestingPro Tips highlights that Huize has a high shareholder yield, which can be an attractive feature for investors seeking companies that return value. Another tip notes that Huize has experienced a significant return over the last week, with a price total return of 30.93%. This recent uptick could be an indication of positive investor sentiment or a reaction to the company's recent performance or strategic initiatives.
While the company does not pay dividends, which might be a consideration for income-focused investors, the strong free cash flow yield implied by Huize's valuation could compensate for this. It's worth noting that there are 10 additional InvestingPro Tips available for Huize at https://www.investing.com/pro/HUIZ, offering a deeper dive into the company's financial nuances and market performance.
These insights from InvestingPro, combined with the company's latest earnings report, provide a comprehensive view of Huize's financial standing and market potential. Investors may find these metrics and tips useful in making informed decisions about their investments in Huize.
Full transcript - Huize Holding Ltd (HUIZ) Q2 2024:
Operator: Ladies and gentlemen, thank you for standing by. Welcome to Huize Second Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. After the management's prepared remarks, we will have a question-and-answer session. Today's conference call is being recorded and a webcast replay will be available on Huize's IR website at ir.huize.com under the Events and Webcast section. I would now like to hand the conference over to your speaker host today, Mr. Kenny Lo, Huize's Investor Relations Manager. Please go ahead, Kenny.
Kenny Lo: Thank you, operator. Hello, everyone, and welcome to our second quarter 2024 earnings conference call. Our financial and operational results were released earlier today and are currently available on both our IR website and Global Newswire services. Before we continue, I would like to refer you to the safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more broadly explained in our earnings release and filings with the SEC. Joining us today are our Founder and CEO, Mr. Cunjun Ma; COO, Mr. Li Jiang; Co-CFO, Mr. Minghan Xiao; and Co-CFO, Mr. Ron Tam. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights, followed by Mr. Tam, who will go over our financial results for the quarter, before we open up the call for questions. I will now turn the call over to Mr. Ma.
Cunjun Ma: [Foreign Language] [Interpreted] Hello, everyone, and thank you for joining Huize's second quarter 2024 earnings conference call. Throughout the year, China's insurance intermediary industry has been undergoing a pivotal transformation, driven by changes in consumer behavior, declining interest rates and the implementation of the unified commissions and fees in reporting and underwriting. Despite these changes, the potential of the Chinese insurance market remains immense. As new regulatory policies gradually take effect and guidelines become increasingly clearer, the industry is presented with both opportunities and challenges. In response to the industry-wide volatility in second quarter of 2024, we proactively adapted to market conditions by offering a diverse product mix, driving innovation in customized products and strengthening our omnichannel distribution capabilities. We also continue to advance our AI capabilities, prioritize serving high-quality clients and expand our international presence to capitalize on regional growth opportunities. In the second quarter of 2024, total gross written premiums, or GWP, facilitated on our platform reached RMB1.34 billion, with total revenue amounting to RMB218 million. [Foreign Language] [Interpreted] In the second quarter, our total FYP facilitated on the platform amounted to RMB650 million. From a product mix perspective, our long-term health insurance FYP amounted to RMB120 million, maintaining a growth trend throughout the year. While FYP of long-term life insurance grew by 5% year-over-year to [RMB380 million] (ph), renewal premiums reached RMB690 million in the same quarter, up 42.8% year-over-year, reflecting our continuous strategic focus on long-term insurance. As a result, long-term insurance premiums accounted for 91.3% of total GWP, marking the 19th consecutive quarter with this number standing above 90%. Moreover, our short-term insurance business also maintained positive momentum with FYP increasing by 33.5% year-over-year to approximately RMB120 million, further reinforcing our diversified product offerings. [Foreign Language] [Interpreted] Huize remains dedicated to serving high-quality customers by delivering superior service experiences. Throughout the quarter, we have launched a number of marketing initiatives such as monthly marketing campaigns, company anniversary, festivals, celebrations and membership day events. We successfully reached more than 70,000 users through these efforts and achieved more than 30,000 sales conversion. We also continue to provide users with professional and efficient claims assistance services. In the first half of 2024, the total number of insurance claim cases assisted by Huize reached 80,000, with a total claim settlement amount of approximately RMB400 million. [Foreign Language] [Interpreted] As of the end of the second quarter, our cumulative number of insurance customers has grown to 9.8 million, with 240,000 new customers added during the quarter. The average age of long-term insurance customers was 34.7 years, with 66.3% from higher-tier cities, maintaining a high-quality customer profile. Furthermore, the average FYP ticket size of savings products reached RMB78,000, up 22.7% year-over-year. Our customer retention rate have also remained stable, with repurchase rates of long-term insurance customers reaching 40.5%, a year-over-year increase of 6.5 percentage points. As of end of June, our cumulative persistency ratios for long-term insurance in 13th and 25th months remained at industry high levels of over 95%. [Foreign Language] [Interpreted] As of the end of the second quarter, we had cooperated with 125 insurance companies. In response to the low interest rate and risk adverse environment, we quickly adapted to meet customers' needs for inflation hedge and asset preservation. In April, we partnered with Aviva-COFCO to launch a customized participating whole life insurance product, Fu Man Jia, which has been widely recognized since its introduction. Building on our deep market insights and operational capabilities, we continue to iterate and upgrade our existing products. In July, we partnered with China Merchants Life Insurance to introduce Xiao Tao Qi No. 3, a child critical illness insurance product. While maintaining the [IP's] (ph) cost effectiveness, we focus on addressing users' refined needs by further optimizing coverage details. In September, we launched the customized Darwin Critical Care No. 10, marking the 14th iteration of our Darwin Critical illness insurance series. This latest version expands coverage to 185 major critical illness and provides more option, coverage plans and additional payment scenarios to address customers' evolving needs. As of the end of the second quarter, customized products accounted for 41.2% of the total FYP, representing a year-over-year increase of 16.9 percentage points and a quarter-over-quarter increase of [18.1] (ph) percentage points. This fully demonstrates Huize's leading product innovation capabilities, as well as users' recognition of Huize's customized products. [Foreign Language] [Interpreted] The company has seen encouraging progress in its international business. Thanks to the implementation of our international strategy over the past year, international business contributed 11% of total revenue in the second quarter, hitting our initial double-digit target. Additionally, Huize's international brand, Poni Insurtech, successfully acquired Vietnam's leading digital insurtech platform, Global Care, marking another milestone in our overseas expansion. This marks not only Huize's official entry into its second international market, but also forms a key part of our mid- to long-term strategy in Southeast Asia, accelerating our mission to build a pan-Asia insurtech platform. Vietnam, as an emerging insurance market, is experiencing robust economic growth and boasts a large, young, and highly-digitalized population base, demonstrating tremendous market potential. We firmly believe that with Huize's outstanding technological capabilities, strong business expertise and extensive experience in the Chinese market, we will create unparalleled competitive advantage for both parties. On one hand, Huize will empower Global Care, driving the digital transformation of the Vietnamese insurance market. On the other hand, Global Care will help Huize expand diversified market revenue and contribute to building a global recognized brand. [Foreign Language] [Interpreted] 2024 has been a year of rapid changes in the market environment; however, leveraging on Huize's unique market insight and continuous operational adjustments, we have remained flexible and resilient in this challenging market. At the same time, our international business expansion has begun to show promising results. Looking ahead, with the official [arrival of the 2% era] (ph) for guaranteed interest rates on insurance, participating insurance products are expected to experience a strong rebound in demand, becoming the mainstream products in the market. We will work closely with insurance companies leveraging each other's resources and strengths to launch and promote participating products that better align with market needs, ensuring sustainable growth under the new regulatory environment. [Foreign Language] [Interpreted] This concludes my prepared remarks for today. I will now turn the call to our CFO, Mr. Ron Tam, who will provide an overview of our key financial highlights for the second quarter.
Ron Tam: Thank you, Mr. Ma and Kenny. And good evening, everyone, in Hong Kong, Asia time zone, and good morning, everyone in New York, U.S. time zone. I guess, to open the discussion here, I guess, the challenging industry landscape is quite relevant to the market for the second quarter. And I guess, considering the high base effects for year-over-year comparisons, we have delivered a pretty resilient set of results for the second quarter, with total GWP facilitated on our platform essentially flat on a year-over-year basis at RMB1.34 billion. Our relative outperformance against the overall intermediary industry's average was largely attributable to the differentiated omnichannel distribution capabilities of our platform model, which covers both online, offline channels, our continued acquisition or the ability to acquire high-quality customers, our industry-leading product innovation capabilities, and an increase in revenue contribution from our international market. From a product strategy perspective, we continue to strategically focus on long-term insurance products, which accounted for over 90% of our GWP during the second quarter. Our open platform model continues to empower our internal financial advisers, our distribution channel partners and also the IFAs in the market with an omnichannel distribution network, diversified product matrix and our proprietary AI productivity tools. We further deepened customer engagement across our direct-to-customer segment, with the repurchase ratio for our long-term insurance products during the second quarter increasing by 6.5 percentage points year-over-year to 40.5%. This metric actually directly underscores our ability to upsell and also cross-sell our customer set and capitalize on the LTV potential of a high-quality customer base. We continue to leverage on our proprietary AI solutions that we developed in-house to streamline operations and to enhance operating leverage and efficiency. In the second quarter, our GWP productivity per employee has improved by 10% year over year, reaching RMB1.4 million per employee. As we look at our operational results, I want to highlight several key achievements that drove our solid performance in the second quarter. Number one, renewal premiums increased by 42% -- 42.8% year-over-year to approximately RMB685 million. As of the end of June, our 13th and 25th month persistency ratios for long-term life and health insurance policies remained at industry high levels of over 95%. And thirdly, average ticket size for our long-term savings products have reached a record high of over RMB77,000 in the second quarter of 2024, which is up by 23% year-over-year, reflecting increased contribution from premium product sales in our international market segment. We continue to pursue a balanced mix between long-term health and savings products categories. The FYP from our long-term health products increased by 29% sequentially to RMB124 million, primarily driven by our customized products with top insurers, including Ping An Health Insurance and CPIC. At the same time, contribution from short-term health and P&C products maintained a stable growth momentum, with FYP from this segment increasing by 33% year-over-year to RMB116 million. FYP from international business also grew by 34% on a sequential basis. Thanks to the improvement in overall take rate of the product mix as well as our strategies in controlling channel distribution costs and the increase in repurchase rate from the direct-to-consumer segment, our overall gross profit margin has improved by 2.3 percentage points sequentially to 31.3% in the second quarter of 2024. Our financial position remains very robust, with the combined balance of cash and cash equivalents of RMB236 million, or US dollar equivalent, US$33 million, as of the end of the second quarter. Our omnichannel distribution platform and proprietary AI productivity tools are strengthening our customer acquisition and engagement capabilities and streamlining our operations. We have added about 240,000 new customers to our platform in the second quarter, increasing the total customer count to 9.8 million as of the end of the June quarter. We currently expect our platform to reach an important milestone of 10 million customers by the end of this current quarter, quarter three. Moving forward, we will leverage our unique customer insights and our AI capabilities to further enhance our product innovation and create additional upselling and cross selling opportunities. We'll continue to empower insurance agents, IFP partners and our distribution partners with an optimized omnichannel platform, rich product offerings and advanced AI tools to support customer acquisition and engagement. We'll continue to capitalize on the long-term growth opportunities in Asia's insurance industry. We further expanded our overseas presence by adding headcount to our international sales force and drove the promotion of premium products to satisfy robust demand for high value customers. Again, total international revenue contribution has accounted for 11% of total group revenues in the second quarter, which is up from 7% in the first quarter. Looking overseas, we'll continue and further allocate adequate resources to strengthen our international brand, Poni Insurtech. Following the acquisition of Global Care, our priority is to replicate our proven insurance technology ecosystem model in the local Vietnamese market. We have already begun to work closely with the local team to accelerate growth by innovating customized insurance products, distribution partnerships, innovating technological advancements to the platform and deployment of our AI capabilities. In parallel, we are actively exploring underpenetrated markets across Southeast Asia to further expand our footprint. These initiatives are expected to drive new growth, diversify our revenue streams and enhance long-term value for our shareholders. We are targeting to enter two additional markets in the next 12 months and to drive international revenue to contribute 30% of group revenues by 2026. In summary, the shifting industry landscape in our home market of China is driving the healthy and sustainable growth of the entire insurance value chain. In the medium term, we anticipate industry consolidation opportunities would emerge, which would benefit leading players such as ourselves. We are confident that our strategies will solidify our position as a leading insurtech platform in Asia, connecting consumers, insurers and distribution partners digitally and efficiently via our data-driven and AI-powered solutions. And with that, we will now open up the call to Q&A. Thank you, and over to you, operator.
Operator: Thank you, management. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of [Amy Shin from Citi] (ph). Please go ahead.
Unidentified Analyst: Hi. I have three questions. The first one being, the guidance -- management guidance on earnings and expenses, we see that in the second quarter this year, actually, there has been some year-over-year increase in the G&A expenses as well as share-based compensation. Full-year wise, how should we think about expenses as well as net profit? The second question is on first year premium trends. We see that in the second quarter this year, there has been some deceleration. This is similar to the industry-wide trend. We also understand there has been some disruption from the regulatory side due to the rationalization of the commission rates in the broker channel. However, is there any reason behind muted FYP growth? And looking ahead to the third quarter, how is the FYP growth trend? The third question is also related to the regulatory trend on the rationalization of broker channel commission. How has the product mix changed for Huize after the regulatory change? Thank you.
Ron Tam: Thank you, Amy, for joining us again. So, to address your first question on the guidance for earnings and some expense items, I think you have rightly noted that in Q2, we have some reversals or upticks in certain expense categories as it relates to our share-based compensation. And the primary reason is that we have issued a new round of options through our ESOP plans in the first quarter. And in the second quarter, our share price has rallied quarter-on-quarter and due to accounting policies for the calculation of the SBC, the expense item has increased in a sequential basis. So, we do expect that to be, first of all, the SBC is a non-cash item. It doesn't it does not affect cash flows. And second, I think overall, the expense ratio should revert to more at the Q1 level of this year going forward. So, that's the answer to your first question. Your second question on FYP trends, I think, in Q2, we have obviously been impacted by the rationalization of brokerage commissions, the regulatory policy. And that's not just the only reason. And the other reason that has an impact on overall customer demand is due to the pricing rate -- expected pricing rate change in the third quarter of this year actually, which has just happened in August 31, whereby the mainstream products that was priced based on the 3.0% interest rate is going to be reduced to 2.5% from September 1st. So, what that means is that a lot of the customer demand has been shifted or pushed back to Q3 from Q2 as people expect that policy to be in effect by August. So that has resulted in a depressed FYP environment in Q2. And based on that and on the back of that explanation, in Q3, we are expecting an uptrend on FYP, especially in the savings product category due to the pushback demand and the overall industry's push for distribution in the month of August particularly. So, that will be the answer to your second question. With regards to the third question on the regulatory impact on product mix, I think that overall right now in this current economic climate in China, consumers are still relatively more -- the propensity to purchase savings products is still very keen due to the declining interest rate environment. The attractiveness of car products, for example, is becoming increasingly attractive from a yield differential comparison perspective. And the lack of good fixed income alternatives or investment product alternatives in the local domestic market should drive the further popularization of par products going forward. So, into the product mix, what we would expect in the coming quarters is the increasing contribution from participating products as people are more educated about the product. And we are actually one of the first online or digital brokers to customize a par product with a leading insurance carrier actually in the second quarter. We have partnered up with Aviva-COFCO, which was just mentioned in the opening remarks by Mr. Ma, that we have come up with a customized par product, which would meet the current market requirements for better returns and, at the same time, helping insurers manage the asset liability exposure in the longer run. So, we do believe that a par product will become mainstream as we move forward in the next [one to three] (ph) years, and as the market increasingly gets more educated about this product and also with offline agents or tied agents promoting this product, this will become the mainstream. In quarter two, we also managed to increase our product mix as it relates to production products. That's on the back of our customized products partnerships with two leading insurers; one is Ping An Health and the other is CPIC. And these two customized products have also helped us deliver a good improvement in the production category. So, overall, that has contributed to, again, a better take rate and to mitigate against the negative impact on commissions as it is brought by the regulatory [trend on rationalizing] (ph) brokerage commissions. So that will be my answers to your questions, Amy. Thank you.
Unidentified Analyst: Thank you, Ron. That's very clear.
Operator: Thank you for the questions. [Operator Instructions] We're moving to the next question. Next question comes from the line of Michelle Ma from Citi. Please go ahead.
Michelle Ma: Thank you. This is Michelle from Citi. I just have one question on the business strategy, because, Ron just mentioned, I think, the company target to enter into two new markets in the near future. Can we have some -- could you shed some light on the new business initiatives? And also, I am trying to understand why we would like to enter into multiple overseas markets in a very short of time -- in a very short time, given the -- each market they have very different regulatory environment, and why not just delve into one market and develop some business and then enter into another one. So, could you shed some light on this? [Foreign Language]
Ron Tam: Thank you, Michelle. Great questions on the strategy on the international front. I think -- I guess, my answer to your question would be, we have been quite encouraged by our initial results. Obviously, in our first international market, which obviously is Hong Kong, and our business in Hong Kong has been tracking quite well, and that has encouraged us to further pursue other markets. Vietnam is something that actually has been in the works for almost one year. Actually, when we closed the transaction two weeks ago, it's almost the first year anniversary of our first contact with the target. And the reason for Vietnam, I think, is quite obvious. It's basically, very much a parallel to the Chinese market perhaps maybe 10 years ago. And I think, we have seen and we have grown from 18 years ago in China to where we are today, and we can kind of envisage the kind of growth trajectory and the business development that would likely to take place in that market because it share a lot of parallels to the Chinese market. We take a very flexible approach as to our international strategy. In Vietnam, obviously, it's a buy and build. It's not a greenfield expansion. It's a M&A transaction where the target is very much similar to our [creative] (ph) business model. It's very much like a Vietnam version of us. And, we believe that the chemistry is very, very aligned. And with our existing and proven product stack and technology platform, we can quickly replicate our business over there. And the transaction size, obviously, is also quite small. And from a financial and risk perspective, it's very much managed. And we have a lot of confidence that the -- that M&A, the integration and the synergies would be very positive for the group. As for the new -- two new markets, obviously, we are looking across ASEAN markets, and likely, this will be the growth markets in the form of Philippines, Indonesia and Singapore. These markets are our target markets right now. And, I guess Singapore would be a similar story to the Hong Kong expansion. We believe that some high value customers will be attracted, and the product connectivity and the product that Singapore can offer will provide a lot of potential for our existing customer base. And then, for Philippines, I think the analogy is with Vietnam, albeit Philippines might be even a little bit more frontier in some ways. But in that market or in all markets that we talked about just now in the growth markets category like Vietnam, our strategy would be to find a strong local partner with existing resources. So, in markets like Indonesia and Philippines, what we'd be likely to do is to form a joint venture with an established local group whereby the local group -- the local partner will take care of the regulatory and the local resources. And from our perspective, we will do what we are very best at, which is to, empower the business with our technology and the product and know-how. So that is really the overall business strategy around the internationalization part of the business plan. We will always start with what we are really good at in our domestic market. We will try to replicate the proven successful formula and to localize it with respect to each local market's culture, each local market's best practices and local regulatory regimes. And in all these growth markets, we will seek a local partner who are very well versed and very well experienced in the local market business dealings. So, I guess, that would be my answer to your question, Michelle.
Operator: Thank you for the question.
Michelle Ma: Thank you.
Operator: One moment for the next question. Next question comes from the line of [indiscernible] from CICC. Please go ahead.
Unidentified Analyst: Okay. Thank you, and congratulations [indiscernible]. And my question, I only have one question, is that does the company plan to introduce more customized products since the industry might go into -- tend to sell more participating products, and introducing more or introduce some new participating customized products, and [so as to revert] (ph) the product mix to the participating products? Yes, thank you.
Ron Tam: Apologies. I couldn't really catch your question. Just the line has been a bit unstable. Could you kindly repeat?
Unidentified Analyst: Yes. Can you hear me now? Yes. My question is, does the company plan to introduce some more customized products, especially participating products?
Ron Tam: Okay, got it. Thank you. I guess, over the past six, seven, eight years, I guess, one of the key differentiating competitive strength that our group has is in the area of co-developing products with our insurer partners. I think, if you look back at 2020 when we just IPO-ed our company, back in those days, we're mainly doing protection products. We're mainly focusing on critical illness products customization. And then, as we move forward to 2021, 2022, the market has evolved into an era of savings products. And we have very much quickly adapted to the changing market environment and customer preferences and we have rolled out endowment insurance, customized products, annuities and so forth. And also for different demographic groups, we have subcategories for the children and for the young adults and even for the elderly, so suboptimal health groups. So, as we move into the new interest rate regime in China, what we can envisage is that the drawing from the experience from the Japan, in similar context, par products will become -- likely become -- we are very confident that the par products will become the mainstream products here. And again, we have already come up with the first customized product in the second quarter with Aviva-COFCO, which is a very much a leading brand in the China market. It's a joint venture between the SOE COFCO and Aviva (LON:AV) Group, which is a UK insurer, and with purchase capital of RMB2.9 billion. So, the strategy right now for us is to always innovate and come up with customized products, which help address the requirements on the three main stakeholders involved, which is the consumer at the end and also the insurers and also the intermediary, which is ourselves. With all three stakeholders' interest taken care of, the product can -- only then the product can distribute well. So, we have, obviously, accumulated very strong experience in this product customization expertise. And in Q2, we have already come up with the first version of the par product, and we will continue to come up with more and more products to address in the changing market environment and consumer preference, and shows that we can make sure that all stakeholders would come out and win in terms of the product distribution.
Operator: Thank you for the questions. With that, I'd like to turn the call back to Mr. Lo for closing remarks.
Kenny Lo: Thank you, operator. In closing, on behalf of Huize's management team, we would like to thank you for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call.
Operator: That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.
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