Noah Holdings Limited (NOAH) Earnings Call Transcript & Summary

Hello, ladies and gentlemen. Welcome. I'm Melo Xi, Head of Investor Relations at Noah Holdings. It is my pleasure to welcome all of you to Noah's 2023 Investor Day. Today, we have invited our dear analysts and investors as well as key stakeholders of Noah, including our banking and product partners, our media partners, our sales representatives and last but not least, our very distinguished guests. Joining me today is [ Catherine Lin ], VP at Noah International, who will be co-hosting the event with me.

Okay. Sorry. Thank you. So we have an exciting agenda for you this afternoon, which we'll kick off shortly with some management team, providing business updates and outlining our strategy going forward, followed by 2 panel discussion on our innovative product and client service strategy. This will be followed by a Q&A section. After the presentations, we will be hosting a cocktail event where our guests will be able to interact with Noah management, clients and [ RMT ]. So before we get started, I'd like to go through a few administrative details. Today's presentation and the panel discussion will be mainly in English, but some of our management team will speak in Chinese. Please note that the translation will be available both ways. Today's presentation can be downloaded by scanning the QR code on the agendas you were given. For those listening through webcast today, you will have the option to choose either the English or Chinese channel. Today's presentation can be downloaded through the webcast directly or on our IR website.

In addition, today's presentation may contain forward-looking statements, which should be considered in conjunction with the statements in our presentation deck and risk factors included in our SEC filings. First of all, I'd like to provide a brief introduction of Noah. In short, we're the largest pure-play independent wealth manager in China with global operations to serve Chinese high-net-worth clients. We were also the first independent wealth manager to be listed in the U.S. and then in Hong Kong. And we have distributed a cumulatively nearly RMB 1 trillion of investment products since listing. Through our wholly owned subsidiary Gopher, our AUM is about RMB 157 billion. Our core clients with minimum AUM of RMB 10 million is nearly 10,000 served by a global network of relationship managers of 1,375. So without further ado, I would like to now introduce Norah Wang, our Co-Founder, Chair Lady and CEO of Noah Group for opening remarks. Please, Chair Lady.

Let's welcome.

I will use Chinese. I was joking earlier. I need to advertise the shares of Noah. Is that okay? Perhaps you don't understand the true value of Noah shares. We have been underestimated. Some people see more street and investment banks, only the service of our company, but we actually can see a lot going on internally. Wealth Management in the PLC has faced great challenges coming from a number of directions. First, the property sector in the PLC in the next decade. I've seen some data concerning RMB 18 trillion to be managed. If you look at some trust funds or the market leaders, they have already lost RMB 3 trillion. Is this better? So I should stick to this mic. Because of the challenges in the property sector, RMB 3 trillion has been lost together with some trust companies another loss of RMB 3 trillion or so. So RMB 12 trillion has already been gone or lost, but Noah clients at this round of asset protection, we have successfully protected the assets. In 2019, we have totally exited from the property sector. Our average return is about 12% to 16% IRR, which is very satisfactory. In 2019, Noah disposed of all alternative type of assets. So we have this annual gathering, a Black Card event. We would like to welcome all of you to our event. I think many -- a lot of insight and consensus would require time. We exited the property sector in 2019. And today, we see many investment bank and securities experts saying that how come there are so many problems. I think you are acting a little bit too late. You need a long-term adjustments since we were established. We've been around for 2 decades almost. We have experienced the big cycle of China opening up a reform and the smaller cycles in between, we've done some mistakes. But we have never done any leveraged asset allocation. We always focus on our products and investors' interest. We're looking at Internet finance. There are many alternative assets flowing around. And we are surviving very well, and there are clients who are willing to follow us. That is the core value of Noah. The stickiness we have established with our clients. After exiting the property sector, in U.S., we have focused on the core asset type of rented apartments. We have a team in New York, but then perhaps you didn't feel it much. But beginning from 2016, we can see such leased apartments in the U.S. They are taking about 42% of our assets, including Blackrock assets, so on and so forth. This is a project in Florida. I'm showing you on the screen. It is not yet completely leased. But many major REITs have been following us. They want to purchase our assets and the IRR will be more than 20%. So according to Noah's investment team, our research work and in terms of what we invest in, we understand our products very well. So many things have been happening in the financial sector. Sometimes different sectors in the market may not understand other sectors very well. But we are always pursuing what is best and available in the market. We are facing this very complicated situation. And we have war, we have blood being shared around the world. If you want to understand wealth management well, you need to spend a lot of time and energy in the past decade or so, together with many trust companies and financial management companies, it's been hard to compete. Perhaps they have the right licenses, but we have the right capabilities, and that's why we survived. For our core team, every year, we have appraisal exercise, we stand with the interest of our customers. In 2021, we have completed the transition from nontarget to on target. And then we ask ourselves when we switch over to interest type assets, the horizon may be different. So we have exited from many U.S. shares, stocks because we wanted to protect the interest of our clients with the impending interest hike. That was a book called the Big Cycle. Are we going to experience recession and war if that indeed happens, all our assets will be hard hit towards the end of '22. We ran this Black Card Annual Meeting in Singapore. And many people said, globalization is nearly dead, whether free trade will die very soon as well. So looking back, many predictions coming from us actually happened. '23 first half is a big challenge. It's a big cycle for Chinese clients. A country may rise and it may die. And I think every person will experience prosperity and recession at least once in their lifetime. So how do we see the world? What kind of products do we focus on, how do we make money for our customers? As for the second half of '23, we are asking this question. As asset managers, is it possible that we are doing all the right things at the moment. But at the end, we may still lose and fail. There are losses incurred. I don't have a question. I'm just raising the question here for you to consider. There are 3 stages of globalization. First, made in China sold to the rest of the world. Second stage, acquisition, and you can also see there were many major losses. And third phase, just like Nous internationalization, we are globalized. We operate overseas, manufacture overseas, and after some time, such Chinese enterprises will develop very well. I think we can all do it when you set up your business. You are very excited. You keep injecting into our business. We have core teams all around the world. So we are truly servicing all the Chinese people around the world. So for high net value enterprises and families, they have started participation in globalization wherever our clients are we will be there with our presence. And we are going to talk about classification of our clients, 60% are foreign investors and operators but they have been globalized for quite some time. And we will follow high net value clients, and we'll focus on their living styles, their allocation of assets on a global level. We stand ready to serve them. So in the second half, our core value is about allocation of our assets in a strategic manner. I think we always talk about which product, which hedging fund. But I think this year is about strategic allocation of assets with meetings in Shanghai, Singapore and Hong Kong. We are going to Dubai and U.S., and Japan, we will stay close to our clients. In the second half, domestic and overseas asset management strategies will be separated. Domestically speaking, we will stay calm because we need to understand historical choices are more powerful than our individual efforts. And we have to focus on the whole picture, and we need to have asset allocation strategy, which is individualized and rational. So we met with thousands of clients about our strategies in Shanghai and then Singapore. And we have done a lot of safety review-led type of asset allocation. We need to accept uncertainties. Why are there so many scenarios for us to connect with our clients, it is costly and it's stressful. But machines may become very powerful, but the more important is about the trust and interaction between people and personalized relationships. This is why high net worth clients are very important to us. These are the keys to success. After 20 years of setting up this business. First of all, you need performance, you need to be strong in your performance. And the -- we need diversified products. We need distribution channels and you need to achieve a certain scale. In terms of Wealth Management, what is most important is our team. We need outstanding talent managers, and we need to understand the mission of private bank and high-quality services. This is how we are different from foreign banks. We speak Mandarin. Our clients are very close to us. There's a simple example. Why do I choose Noah, but not UBS? It's not that UBS isn't good. I actually got curious as well. The clients said, "They will take 1 month off around Christmas, but you can find asset managers from Noah around the year. And for overseas banks and institutions, they launch many products, and they try to approach you all the time." And they wonder how come Noah doesn't do the same. But I think we don't need to hot sell anything. We are very different. We have globalized strategies. We operate around the world. We have teams in Shanghai and also overseas Hong Kong, Singapore, together with our core teams, we will align our values in relation to our clients, we need to satisfy the needs, we need to create values for them. That is how we move along with our business. We can expand our business. And finally, our organizational chart we would encourage organic growth. And fourthly, it is about globalization of Noah. We moved very early. In '21, we set up Hong Kong office, and then we went to Europe, U.S. Canada, and we've gone to Singapore. And now we are applying for a license in Dubai. Al our senior management, we focus on all these important issues, creating value for our clients. We are client oriented. They are the starting point of our strategies. What are the pain points and demands of our clients, how can we resolve such pain points? Where are the clients? How do they make decisions? What is their buying habit and scenario for the decision-making, where are our competitors? What is the competitive environment? Where are our advantages, what should we do? We need to obtain most of the domestic clients and because we are working against globalization of different industries, sometimes Chinese clients, their needs have been neglected. The English presentation is only translated into Cantonese. So they wanted someone to speak to them in Mandarin, but they were ignored. We have heard them loud and clear, we will stand ready to satisfy them. And also new immigrants, they are quite cautious. They don't really trust the Chinese products and brands. They would prefer overseas brands, but we are there around the clock to tell them how we screen different options and products. And then in Canada, we canceled our office. Many people migrate to Canada without bringing their assets, they could not find good local products for them to invest in. But now their willingness has been enhanced because of high inflation, we set up an office in Australia, we continue to expand our scope and scale because our [ ADRs ] are outstanding, and our clients feel right at home. So they have relocated themselves, but they can feel and enjoy Noah's services any time. And people are worried about geopolitical issues, one bank may require you to be in a process for 3 months or 6 months, but you only need to spend 1 day to start your account with us in Singapore because we can truly meet the demands. In Noah, domestically speaking, we focus on high net worth clients. We have included some legal person type of clients, IFA, EAM and also banks and security traders, how do we connect them? We use different channels domestically off-line channels, international off-line wealth management. We have online international and domestic services and we get referrals from many traders and private banks. So we have a complete chain. So moving forward, in terms of IFA EAM business, we will continue to expand and compared to domestic business, there may be greater room for development. On this point, we have full confidence for our organizational structure and technology structure, actually, it is centered around globalization of clients and the design of their accounts. For our international AR, in Hong Kong, we have almost 100 international AR. Why do they come? Because here, they are not only investment clients. Well, they can actually survive here because of their model. And for MGM when -- well, we also have direct sales clients and also other online management channels. All these are being promoted and implemented so I think we enjoyed a multiplier effect in our business. When it comes to the building of APP, here, you can see one Noah in Hong Kong, Singapore, Dubai, where we have built booking centers. So customers can open accounts all over the world at one stop. So for example, in U.K., Canada, Australia, Japan, we have our people. So there are different ways, different ways for us to deliver customer service. And then we have also this [Foreign Language] app. So as I said just now, with 1 high net worth customer to B, to C, to A, we're in the development process. Our system is rather mature. So if financial institutions are interested, we are more than happy to offer service to you. Finally, I would like to introduce to you our mission, vision and organization structure. First, we are a wealth expert. We are not only positioned as a financial supermarket. So we focus on our customers and then our core management structure, our team only has Noah business but not other businesses. We have been listed in the U.S. for 13 years, 1 year in Hong Kong. Well, in Hong Kong, there has not been much trading volume. At first, I thought that trading volume should be very good. But now I think it seems that the listing cost has been wasted because of not much turnover. Now we have maintained profitability for 52 consecutive quarters. And then we have 0 debt position. So with the current market conditions, good business results and stable cash flow can give us the ability to serve our customers in a very stable way. We are still full of confidence. We have an expansionary development strategy. So when it comes to our management and IT and back office system, we attach importance to them. We have 300 to 400 people in our core IT team, and they can meet our needs any time. So that our app can deliver better experience to customers. For compliance, we think that it is not enough to only abide by the laws. We have to be consistent with the legal spirit. So I think it is very important to be compliant locally as well. Now we have developed for more than 20 years. And for many other banks, this is only 1/10 of other private banks, but this is already a long history for Chinese private bank. When it comes to our core management, well, first of all, we share common goals. We believe that in the future, we need to make many common decisions. So we have to have shared values so that we -- there won't be conflicts within the management team. We need to cooperate in the coming 10, 20 years. Our corporate management team executives can all work independently. They have gone through big battle, so to speak. And then there is also a consistent coherent culture and then our personal aspirations match with one another. And then we attach importance to complementary expertise. There are legal people, science people and so on. So we have different strengths. And then in terms of age, around 40s, 50s. These are our age backers. There are executives who may go into retirement, but then there won't be executives retiring all at the same time. So that won't be the situation. We complement each other in terms of our age bracket. So today, you can see that there are more and more young people in Noah. We deliberately recruit those people in the '80s or in the -- post-'80s, post-'90s generations to join our executive team. For example, Mr. Pan is in the post 80s generation. So okay, the name of our company represents our strategy. Our customers like our name a lot, Noah's Ark. So this represents trust we are on the same boat as our customers. Those who are on our boats are all healthy. And after the flood fades, we can still thrive for a few hundred years. So we have the -- we have deep customer insight. We are very persuasive in terms of our business results. We have digitalized capability. We are able to offer personalized customer solutions to customers. And with customers, we share emotions and sentiments. On the 18th of June, we organized an art piece exhibition, which is really amazing. So we invited artists to make use of technology and AI to turn their art pieces into oil paintings. So we have 9,800 customers, who still continue their investment in orders with Noah. So we have to thank them because we have almost a trust and heart of almost 10,000 people. And then we turn customers' photos into NFT. I think we attach much importance to the relationship with customers. Well, my presentation has been a bit long, but then I would like to say that no matter how we change, our core team attaches most importance to long-term genuine customer value creation. We attach most importance to our fundamentals and our fundamental skill sets. No matter how the competitive landscape is, the most important thing is to create value for customers. Thank you very much. Opening remarks. Next, I would now like to give the stage to Grant Pan, Noah's CFO and CEO of Noah Hong Kong, who will walk you through our business updates and the strategy. [Foreign Language] Mr. Pan is going to use English for his presentation. We offer simultaneous interpretation. If you have the need please indicate to our helpers to get headset.

Thank you, investors in the office and also online. Very happy to see each other. After 2 years, we believe we have the corporate Day in 2021. I don't recall when last year, so we must have not had it or I was locked in the hospital in Qingshan for a month. I was tested positive on the trip back from Singapore, so got locked in, in there for 14 days and actually end up -- did quite a bit of management meeting online. So some of you may have already noticed, my new title, CEO of Hong Kong office. Let me assure you there will be very little impact to compensation expense on the P&L. And I also want to assure you that the finance work will be split by 2 of my very competent deputies, [ Mr. Jason Wu ] and Mr. Connie Chue (sic) [ Connie Chue ], you will later meet. One will be -- one is our 6-year veteran with Noah and formerly Deloitte Senior Manager. And [ Connie ] just recently joined us as the former Treasurer of Link REIT, one of the biggest REITs company in Hong Kong. So we'll be in very capable hands. I'll continue to oversee the strategy also capital strategy for Noah Holdings. So I want to give everybody a business and strategy update once I've managed to flip the page. Okay. There you go. Why we are going global? I think one of the key reasons is because we still remain very optimistic on the market, especially on the ample headroom for high net worth individuals in China. So we'll continue to see different kinds of forecast on the growth of this market. One of the, I would say, I wouldn't be too optimistic or pessimistic, quite neutral stand on this chart is continue to see probably a lower double-digit CAGR on the number of households, estimated to be 4 million households in 2024 compared to 3 million now. And total investable assets are probably slowing down from 2 decades ago, but continue to maintain a 12% CAGR. And reaching about RMB 127 trillion in 2024. And it's a very highly fragmented market. So after 20 years of growth, development, Noah still managed to maintain about 0.3% market share of the total market versus #1 CMB private bank still only have about less than 5% of the market share. So total investable assets being serviced by professional firms of the Chinese high net worth individual is only around 16% to 17%. That means that about 83% of the total market has not been serviced by professional firms. And everybody is asking about the competition status in this industry. But really, many players that we meet are saying that there's not much competition per se because we have a survey on the 2022 Nelson & Noah client survey. Average number of wealth management institutions for each high net worth individual client is about 3. So every wealthy person in China is being serviced by 3 firms. So they don't have so-called exclusive brand loyalty. They really actually when they come to a firm, they have done their own diversification. So Noah, for example, for the past is known for its ability on alternative assets. So when they come to Noah, they're probably going to pick their allocation on alternative assets. So ample headroom. And also I want to share a little bit other than financial data. I want to show everybody a sort of client profiles, high net worth individuals, mostly through our own KYC system, but some of them are also verified by third-party reports. So by industry, as Chair Lady Norah has mentioned, over 50% of the high net worth individuals are in manufacturing, export-oriented manufacturing, trade and Internet industry, Chinese ADRs with very deep U.S. dollar wallets, including cash and equity and stock options waiting to be cashed. And by age, also very interesting. They are growing older. So we started about 20 years ago when our clients are pretty much in my age [Foreign Language]. Okay. Thank you for Norah's complement on my makeup. But they are growing order. Majority of them are actually in their 50s, mid-50s to mid-60s. So over 61% is in 50 to 74 years range. So generation 1 is still the main decision-maker in the household in terms of making wealth management decision and asset allocation decisions. So that means that they are in the mode of being very aggressively pursuing market alpha into looking for more balanced and safe allocation strategy. And by location, we can see that it's also echoing our recent strategy of consolidating our operations to key cities that over almost 70% of our clients are moving are already living in first tier and new first-tier cities versus 20 years ago, they probably were more scattered through Tier 3 and Tier 4 cities. So generation 1 still the main decision maker. And because of their exporting orientation, they are really looking to globalize. We're entering into Phase 3 of globalization. We have an observation that majority of clients are moving from Phase 2, Phase 3 very clearly, including Noah. So Phase 1, and people probably recall the very famous made in China period the beginning of 2000 to probably 2015. That's where actually a majority of our clients made their first bucket of gold. Second phase, rather brief, rather glamorous but also not so successful and probably pay some tuition for their lessons, the outbound mega acquisitions. Chinese business began to acquire foreign brands with mixed outcomes. Some of them are not so successful. Phase 3, we're actually seeing many of our clients are globalizing, including, I think, one of the distinguished factories, they're moving themselves, their family and also their key management teams to oversee locations to conduct true global operations. They didn't necessarily move, but they're spending more and more time on these overseas locations. Which means that their assets and future wealth growth will be on a much higher global growth rate. And we're also seeing that we're looking for a more balanced view and diversity in asset allocation. So in 2009, the asset allocation, almost 40%, 37% is composed of wealth growth. That's #1 goal. And in 2023, a new color actually showed up that 27% is to look for wealth protection, which is in synchronization with our previous CIO view is protect first, then grow. So top 3 challenges from the high net worth individual's wealth management behaviors is 84%, are a little bit concerned with domestic economic dynamics. And over 60% is worried about international geopolitical conflicts, and about half of them are seeing challenges in global financial system, which makes people more willing and feeling more comfortable to talk to a firm from China with the same language and same culture, which means that we are actually looking at local markets for the Chinese nationals or people entrepreneurs who speak Chinese more aggressively. So versus in the past, we were only serving mostly clients from Mainland. And about 70% lower client demand global asset allocation, 45% of them already have overseas allocation and 26% have planned to have overseas asset allocation. Obviously, there's still a little bit -- 28% said they have no need to have overseas asset allocation, which we believe that number will grow in the future very shortly. And also increasing demand for overseas asset allocation among Chinese high net worth individuals. This is very fresh first-hand data. Just from this past October, the first stop of our annual Black Card Conference held in Shanghai. So that's conducted through about 2,000 of our Black Card clients. So they're seeing a lot of more allocation, especially in Hong Kong, about 49% sales. They will increase their allocation in Hong Kong and 29 says in Singapore and some scattered around Australia 10%, for example, Dubai is 7%; Europe, 13%; Canada 7%. Obviously, still a lot of attention is being directed to the U.S. It's a little surprising when people may think U.S. is not the right destination, but 57% our client says we will increase or consider increasing allocation on the U.S. side. So why Noah? We know that the demand to globalize is definitely true and real why we will be the right partner to help our clients. As Norah has mentioned and also mentioned by Mr. Charles Thomas Munger, strong and clean balance sheet, enabling future expansion strategy. So our objective is to conservatively financed and high liquid business. That's by Munger. I think Noah actually fitting the profile very well. So we are at a point that we have a total asset of RMB 12.5 billion and almost RMB 5 billion is sitting in cash and cash equivalents. I know some of you will be asking this question, what are you going to do with that cash? And we are working on some plan as many, many investors have give us feedback on that. So we're working on a plan, including increasing -- at least bring up that topic about the return and also including necessary corporate actions. We have maintained a very healthy debt-to-asset ratio, which seem to be rare these days in China firms. This is actually a general term of debt-to-asset ratio. We actually have 0 interest-bearing debt. So from that standpoint, have 0 debt to debt-to-asset ratio on that and pretty high current ratio staying at 3.2 multiples. Another very big 'balance sheet', is the resilient AUA that we manage for our clients is around RMB 270 billion in this free of RMB real estate and trust products. We started exiting from residential RE assets in the year of 2016 and ended up exiting every category of the residential RE assets by end of 2021. 98.7% of clients actually profitable from the exiting of the RE products. And starting in the year of 2019, we started to exit RMB private nonstandard credit assets cumulatively exited about RMB 32 billion and 97.9%, 98%. And has profited from the investments in this type of assets. And also, we have a deep bench with international background, and many of them are today present in the room including myself, including Jeff Li. Our Gopher International CEO, who will have -- we will a panel for some of them to actually meet with everyone veteran from long-term capital and also Goldman Sachs. And also Connie, our deputy, I'm not going to read every name. I will leave their time for the panel time. But many of our clients are pretty impressed. We had a showcase of management members with international background past day, had them get on the stage. We just wanted to demonstrate to our clients that we're very dedicated to globalization, and we are equipped with the right team with international background. And also, we have a growing and also we have a committed strategy to global workforce to support our future growth. So the total number of overseas employees, they are actually based and work overseas around are 254. If you include the number of employees that actually support international operations is close to 400. The people graduated from QS 100 schools is over 40%. And the ones holding master, PhD and MBA degree is over 45%. So we have a pretty strong team to be able to support our future growth on a global basis. And also Noah actually has a global minded firm since day 1, especially after we got invested in -- by Sequoia China in 2007, really took off on the international path. We were the first Chinese wealth management firm listed on the New York Stock Exchange, literally creating that sector back in 2010, an established asset management business in 2012 -- in 2010 and 2012, we managed to maintain, obtain the license of 001 from CSRC for the mutual fund distribution. And in the same year, started our globalization by setting up our first overseas office in Noah Hong Kong. So that's why when we're doing the Hong Kong listing project, one of the things I actually mentioned to the regulator is that we're not just every other Chinese ADR repatriating. We actually have been a Hong Kong company for 12 years. I think that scored us some points. And also for global operations, we are very compliance-minded although it's kind of expensive. When we do the expansion, you have to actually go meet the requirements by the regulators by obtaining the right licenses. So basically, that means we'll have to put in some capital ahead of actually any real business. So in Hong Kong, we have a pretty full range of licenses. Singapore, we had a mass license obtained in 2021, established office in 2019. And in the process applying for #4 license from Dubai regulator. So I mentioned that. And also, one of the reasons that we believe there we're very client centric is that instead of selling single products we're actually coming up with full solution for the global rise in clients because we have seen many, many pain points they have feedback up to us. Even for things as simple as bank account opening, they're actually quite not used to the speed of things getting done overseas where they are a little bit surprised that people could only communicate through e-mail, that they're expecting the next minute action, reaction from WeChat. Some of the culture difference and really is reflecting some pain points even from the culture standpoint. And that's why Noah has been establishing global operations and also feeding back our experience to our clients by compromising -- by comprising a forward solution to our clients. So that including our CATS strategy, which I believe [indiscernible] will give you a much more comprehensive description. But basically, it's a solution for asset allocation that's balanced between cash management, for growth strategy and it's preservation inheritance, including insurance, trust, heritage strategy as well as global family offices. And one of the reasons that empowered us to be able to provide the solutions is the advantage that we have worked with so many world-leading GPs and fund managers through the 20 years of operations, which we have built very solid entrusting relationships with the world lead GPs and also fund managers to be able to actually select the best and most suitable products for our clients. And also, we are working, obviously, increasing the client experience with the N+ program, I think I can do an unofficial announcement of the N+ program. But many of you probably have been to our Shanghai headquarter. We are one of the -- I believe, one with -- the only private wealth management firm that allocated dedicated 10,000 square meters of space for client's use only. So the N+ program provides clients with quality space for family offices, even for their family and friends entertaining programs throughout Shanghai, Singapore and in the future, Hong Kong and the U.S. And it's actually showing some traction in terms of overseas expansion, and I believe we will accelerate in the very near future. So in the second quarter our overseas clients have grown 13.2% and overseas active clients have grown 140% and overseas relationship managers have reached the number 56 overall, but we're looking at a much aggressive target probably by end of this year and end of next year. We are probably one of the only private wealth management firm that's actively hiring from all of the market. And also increasing contribution from overseas business. Overseas net revenues grew about 100% year-over-year basis. And overseas AUM reached around USD 9 billion for a 16% year-over-year growth. So -- okay, so that shows [indiscernible] picture. But I guess just by giving everybody a true view and a quick view of the globalization. I just want to deliver the message that the globalization trend for our clients is real and imminent and Noah is ready to help them globalizing. Thank you very much.

Thank you, Grant, for the detailed introduction of our strategy and outlook. So next, I'd like to welcome Michael Chen, Head of Product Marketing and International Wealth Management to the stage, who will provide you with an overview of our CCI model and the CIO house view. Let's welcome.

First of all, a simple presentation or introduction. Grant showed you internationalized teams, made in China and made in Noah, I have been working for -- now for more than 13 years. This year, I have been transitioned to the international team. I focus on sales and products. This is, of course, not a brand-new experience for me. Today, I would like to talk about CCI. It is about our capability and our way of what I can introduce to you, the meaning of the 3 phrases. CCI represents, first of all, our Chief Investment Office. They will release monthly or quarterly reports in every half year. It will provide to clients asset allocation, major recommendations. And then CSO, Client Strategy Office is responsible for Insight. We have different types of clients. We will design customized strategies for them. For example, someone wants to enter Singapore, someone wants to move into the Hong Kong market, what should they do. The third one is investment product and solution office. A craft product selection strategy is based on CIO and CSO research and strategies for primary and secondary markets. So these are the 3 offices, representing our 3 types of capabilities. Next slide. I can't move it. All right. After using CCI capability will have to go back to the essence of wealth management. After clients accumulate wealth, we need to resolve different things: investment, career and heritage and a sense of security and they can catch up with inflation, keeping the value and also make investment into new companies or new sectors. So there are 4 major functions here. So in Noah beginning from last year, we provide solutions, focusing all these or 4 dimensions. For example, in terms of preserving wealth, or building well, financial security and liquidity management. We will have firewall products for building wealth or preserving wealth and liquidity management, we have different type of products such as money market and short-term bond funds, fixed-term deposits. And we also have PE team and also strategies in relation to the real estate, infrastructure and so on and so forth. So at the moment, according to feedback from our clients, they feel that Noah product lines are very comprehensive compared to many other competitors. We will match different products with different functions. CCI capability and solutions will be applied into our service flow. In the past, we have raised the 3R service flow. First, AR, it's like an accountant. And then we have SR, solutions. They provide different solutions and then FR, focusing on delivery. So we have 3 roles when we face the clients. And there are 4 steps. First, we address our client needs, help them to set strategic asset allocation plan, what to do in the plan for the longer term? And thirdly, technical asset allocation plan according to what was happening at the moment, and step 4, execution and ongoing support. Our service teams every month, every quarter, every 6 months, they have to follow up with the clients. This is the surface flow. I talked about CCI capability being applied in the 4 steps so that the overall experience of our clients, their feelings will be enhanced. We can also see that in recent 2 years, we have to push forward with CCI transformation for 3 major reasons. Their needs are different now in China. Opening a reform have been going on for 4 decades. So clients focus on different things today compared to from the past, they want to focus more than just wealth creation. So we have to offer something different. We need to preserve and optimize their investment return. Our own focus needs to be different. We used to focus on product and sales. And today, we are client-centric and solutions-driven. We look at macro views. Thirdly, capability. Our core capability used to be product innovation. And today, we are talking about comprehensive service capabilities. So during this transition, we need to inject new service models and new capabilities. Concerning our strategies, what are the results every 6 months to the market and also our clients, we will output our strategies compared to our competitors, so we do it differently. We will focus more on the perspective of our clients, we will have macro analysis, and we will also have a look at the issue of passing on the legacy to the next generations. In late February, we wanted to focus on preservation of wealth because it was the right time when there was a war breaking out. And then in July, we proposed the dual circulation system so that they could perform better with their assets. And early this year, we shared some insights or we had some insights from this expert in Singapore. And we wanted to inform our customers and inform them of asset security issues. So we had a lot of investment outlook sessions. Other than these results, we also have more detailed reports to share. We will release CCI report, CIO report will strengthen our investment advisory work. And on the clients and we will also generate different customized reports for them. So we offer a CSO customer solution and we formulate CCI asset allocation management guidelines so that they can see what is happening at the moment in their portfolio, and they can raise questions anytime they want. And we will also internally and externally convey CIO reports. So these are already achieved results. We also have to focus on 4 major needs. Noah has this global asset allocation system. On our platform, our clients can connect what they do in Hong Kong and Singapore and other locations. So we will focus on their cash management and we will provide deposit, term deposits, cash management. And for the secondary global market, we also have allocation strategies. We have preservation and trust products. And we have actually broken down CATS, asset allocation solution. So that you understand the rationale. Why is it called CATS? Because we have this understanding of the animal of cats, they have 9 lives, right? What does that mean? They live longer, they are more resilient in challenging environments. That's why we call it CATS solution. For example, in terms of global secondary. We have other around-the-clock allocation and then global. Primary, we have a technology-driven trans-cycle and top-tier managers. This is how we do it. And we have security, succession and sustainability as preservation work. That is the foundation. If you're interested in this solution, we have more detailed information. If you can become our member, you can use all these solutions. This is one example, global secondary market. We will focus on 3 major concepts. We hope our customers can get around the clock allocation services. For example, some people have suffered from losses in their market. But if you have CCI strategies, you will have very good return. So in overseas countries, we will focus on hedge funds, 8 or 9 strategies at the core. And then we have to focus on asset allocation. In terms of hedge funds and public funds, we have come up with different portfolios. We may use hedge funds as the foundation layer and combine it with other elements. And once we establish the door leading us into Hong Kong market, we will add to this content. For the global primary private market, we also have 3 major themes: technology-driven, trans-cycle and top-tier managers. So we normally cover longer cycles. We will use leased apartments as a collateral. And we also have ETCP as a traditional way of compensation and PE loans can also be used as part of the mobile profit -- primary market allocation and also secondary strategies. For example, opportunistic securities, et cetera. So these are examples about our 3T solutions in relation to global secondary and global private market allocation. Finally, by means of asset allocation review, well, this year, during the Client Annual Day or meeting, we do not do a lot of product marketing. We focus on customers' own needs. Last night, I worked on asset allocation for a client until late. So there is a segment where customers' needs will be analyzed and then we talk to customers. So it is like a medical check. Every year, you need to have a medical check. The same goes with your wealth planning and financial management. So for example, we will see whether a customer lives overseas without any difficulty, how do they do their education, children's education planning, how do they ride out on difficulties in relation to inflation, for example, so we will do this kind of financial health check for our customers. This is a kind of innovation. Customers enjoy very good experience. After doing this review, clients know whether the asset allocation is good enough, whether they have done enough overseas protection in relation to risk in different regions. So we will continue this kind of exercise for our customers. So that is my presentation. If you are interested, please feel free to contact me and get more understanding about our services. Thank you.

Thank you, Michael. That concludes the presentation portion of today's agenda. Next up is our first panel discussion this afternoon on Noah's global product leadership. Please welcome our panelists, Carl, Andy, Elise, Jeff and Clement as well as our host Melo.

Thank you, [ Catherine ]. Thank you all. I would like to first take this chance to introduce our panelists. So first, with Carl Wong, our Managing Director at Gopher International. He is responsible for managing our fixed income and credit investments and structured products. He has over 25 years of experience -- investment experience in a number of funds, family offices, banks with a specific focus on rate and credit investment. Thank you, Carl. And next up is Andy Yin, is our Managing Director and Head of Global Private Markets. He joined us last year after spending 10 years at CITIC PE and 4 years at Summit Partners, and he's also an alumni of Harvard MBA and Tsinghua University. Thank you, Andy. And I'm skipping Elise Huang because she's currently having a meeting with our clients who will be joining us shortly. But he is -- she is our partner and CEO of Silicon Valley's private equity department and Elise has over 20 years of investment experience in private equity and venture capital in the U.S. and in Asia. And she is responsible for managing our $1 billion of technology investment portfolio. So next is Jeff Li, is our CEO of our Gopher International, who has over 30 years of experience in executive management experience in the financial industry in the U.S. and in Asia. He specialized in hedge fund investment, investment operations, quantitative investment strategies and digital wealth management. Prior to joining Noah, Jeff held various senior positions, including Chief Product Officer at Lufax, and CEO of CITCO China; and VP of Goldman Sachs and many other well established firms. And lastly, Clement Ting is our Head of Global Insurance. He has over 20 years of experience in global insurance and banks and he served as Chief Executive at CCB Asia insurance brokerage and held senior positions at DBS, AIA and HSBC. So thank you all for joining me for this panel. So we have quite a lot to discuss. So now I would like to flip to page -- this page shown by previously by Grant and Michael Chen, really the Noah One account solution, which illustrates our global product strategy. So when we talk about asset allocation, obviously, cash management is a must-have solution for high net worth clients, but product selection and sometimes even bank account openings, as mentioned by Grant, it's very troublesome for a lot of the new immigrants. So Carl, can you provide some insight on how Noah can best serve our clients' global cash management needs in the most convenient way and how technology has played an essential part in this process?

Carl?

Well, thank you, Melo. Thank you for your question. I'm Carl and I am responsible to run the cash management, fixed income and structured product at Noah. Among all the products that I've run, I think one of the product, which really stands out and answer all your questions this year. And that product's name is called discretionary time deposit scheme. In Chinese, we call it [Foreign Language] okay? So the backdrop of this product was very simple. Back in November 2022, we saw that interest going very -- going up very quickly. And on our shelf, we do not have too many cash management products. So this is why we create something which we think clients really need and desperately need for the wealth management. So literally, what we do is we become a wholesaler of time deposit. We aggregate all the individual clients' interest and put it into a big ticket and place it to the bank, okay? So as you can imagine, wholesaler always get a better rate than individuals. This is why they like to place deposits with us and because they managed to get a higher rate. Literally, this product has been running for just roughly around 12 months, and we raised about RMB 1.2 billion, roughly around RMB 100 million per month. The beauty of it is not only getting a good rate, okay? But there is also a second layer of service, which is safety. In each of the deposits we placed through the bank, we actually helped our clients to diversify into several banks from 2 to 4 banks in each of the deposit. So why we do that, right? The answer is quite simple. After what happens in Ukraine, Russia and also SVB, clients are really, really cautious about the safety of the money, okay? So this is exactly why we provide a little bit more safety for them by diversifying their deposit. Perhaps I can tell you a behind-the-scenes story, okay? I was the one who designed this product when I joined Noah. At the very beginning, I set out -- I list out all the criteria, okay? How can a bank can go through our selection process and become one of our partnership bank? Among all the framework, there was something like what are the capital adequacy ratio, what is their credit rating? Are they making money so on and so forth. Very simple. But there was one bank pops up, okay? It's a Swiss bank. It had over 100 years of history, okay? They offer us a 7% 1-year time deposit, for 1 year, okay? At that time, all the other banks was offering somewhere around 4 to 5, okay? Literally, they're paying 2% to 2.5% higher, okay? So we have a big debate because this Swiss Bank actually felt 2 of the exit tax. They did not make a quarterly profit for 2 -- sorry, 3 consecutive quarters. That's one. The other thing is their credit was swapped, the CDS, a measure of their bankruptcy probability has been suiting up very quickly. So these actually raised my alert. I think this bank is quite not feeling good, okay, even though they have a very strong history. So my teammates was like, "Oh, this is Credit Suisse, right? No need to worry." But at the end, I think principal stays. The reason I filtered this bank out from my wait list is client place deposit to Noah -- through Noah, they really want safety. I don't want to give them additional risk by giving them additional 1% return. Ultimately, safety is the first priority of every service we offer. So because of this principle, we did not include that bank on our list. And by March, this bank became history. On top of that, there is also one point I want to mention is technology. Technology really, really helps how our clients enjoy the service and how we can deliver our service as well. If we've done a survey before, so every average Hong Kong person adults, okay? They have 2.63 banks accounts in Hong Kong. So on every single day, you may not be able to get the highest fixed deposit rate in town. But through our deposit scheme, we get in touch of over 14 banks at the same time. So we will be able to deliver you the best rate and through our APP. That's the best thing because if you walk into a bank, open a new account to place time deposit, I can guarantee you, you take 3 hours these days because there are so many mainlanders friends queuing at the branch to open up a bank account in Hong Kong.

I was one of them.

Well, here we go. But if you become Noah's lowest client, once the KYC is done, you can use our app to do all this time deposit, it won't take you more than 15 seconds. Just click and click and you are done. So this is why I think this product illustrates the DNA of Noah, a, we fulfill what clients need. We sought out their problem. And b, we sort it out in a very comfortable way through our technology. And I hope this will continue because this is why we are here.

Thank you so much, Carl. And we would like to thank Carl for safeguarding our clients' safety net portion of their portfolio. So now I would like to turn to Andy for alternative asset investments, which is typically the growing -- main driving for growth investment pockets within our clients' asset allocation strategy. So as the largest private equity fund of fund manager in China, in the RMB private equity market, Andy, can you discuss how our global product team can leverage our Gopher's expertise in the private equity market? And in terms of ecosystem and GP coverage? And also, what are some of the unique differences that we see in terms of product selection and investment strategies in the global marketplace?

Good afternoon. My name is Andy. So as we -- so private market, I'm the Head of Noah's global private market solutions. The private market or more specifically, venture capital and private equity has been the bread and butter for Noah for the last 10, 15 years. As we are expanding globally, a few things I can think of. One is, first of all, the global market on the private side offers that much more solutions. To give you a sense, so the global private market, the total size is around $12 trillion, covering 4 different asset classes, equity, credit, real estate and infrastructure. Historically, in China, what some of our clients have been buying are primarily on the equity side. But credit, real estate and infrastructure are equally important asset classes in the global private market space. So that's one. And within this $12 trillion market size, we're talking about 40,000 different managers and over 100,000 different products. So the universe is much more diversified, it's much more interesting, and it offers our clients when they think about how to allocate their U.S. dollar assets more efficiently and effectively. The global marketplace offers a much more diversified and also, I would say, helpful tools and products to help our clients build a more balanced portfolio. So that's one, essentially more opportunities. And the second is, if you think about the global private markets, I've been doing this for 20 years. The firm that I invested with in my prior life, a firm called TA Associates from Boston was established in 1964. So you can use that as a proxy of how long the history has been for global private markets. And if you think about Chinese VC and PE market, it started around the 90s. So call it, 25-year history versus the market in the U.S., essentially, we're talking about over half a century. So the history is longer in the global market and also through the past half a century and many cycles, we've seen successful, the top-tier managers who have successfully built their ecosystem and successfully build their toolkit and their organizations and their unique capabilities in their target segments. So the certainty and the visibility of a lot of these top managers, future performance is much better than what you can get from the Chinese market. So when you think about investing or committing into a blind pool fund, because the managers have been doing this industry, the tech and the health care consumer, and they have been doing the strategy for the past 30 years, and that they have built all the resources necessary for effects of sourcing, pricing, value creation and eventually exiting an investment. So all of the track record, all of the strong resources and experience they have give you much better confidence in your future returns. So that's second. So the targets for selection and the confidence level is much better. And as we are entering this -- so these are some of the names that we like in different asset classes. And the next page shows you this is how we select the best product for our clients. Essentially, at the bottom of the funnel, what we're trying to do is to build a product matrix for -- to help our clients build a balanced portfolio in their private market allocation. So the top of the funnel is what we -- what I just said, 100,000 different products. So 100,000 different products will enter this funnel. And then we do a CCI 3-step product selection process. Starting from the first C in CIO view, essentially looking at the macro market and looking at cycle timing. And we decide within the equity, credit, real estate and infrastructure asset classes, which ones are the best that we should focus on. Right now, we like credit. We like infrastructure. And then the second step, the second C in CCI is what we call CSO, our Chief Strategy Officer, essentially in every asset class that we like, for example, today is credit. There are many different strategies. So what strategies do we like? What strategies offer the best visible returns and also has the best risk-adjusted return profile. And then after we decide after the second C, which strategy segment we like within each strategy segment, we're talking about hundreds of different managers and products. So the last step, CCI is I, IPS, investment product and services, we select which are the best managers and what are the best products to offer our clients today. And to do that, we have a scorecard. The next page, I think, shows you the -- so this is the mapping. Once we identify the strategy segment that we like, we map out all of the top managers within that strategy segment. So I'm using large cap buyout as an example. So as you can see it, you see many of the names that you recognize. And then after we do the mapping, this is the scorecard, essentially 3 large categories and around 40 different scoring items to really quantify what are the best products within each of the strategy segment that we like. So anything above 80% is something that we think is worth more diligence, anything below that we pass. So that's how we select. So to give you a sense, 100,000 different products coming into the funnel. This year, we're giving our clients 16 solutions, 16 products. So 100,000 to 16. In Chinese, we call that [Foreign Language]. So every 10,000, 1 survived. I don't know -- oh, so this is what our product matrix looks like today. So this year, we have 16, right now, the active ones online are 11. So we call it product matrix essentially, it's a balanced allocation scheme along 3 dimensions. The horizontal is liquidity. Even today's private market -- the good thing about today's private market is even traditional PE credit and real estate strategies have semiliquid structures, so people can buy in and redeem on a monthly basis. And the vertical is risk and return. And then different colors in different asset classes. So we use the 3-dimensional framework to build our product matrix. So for customers that have not invested with global private markets before, they can pick and choose some of these products to start with a pretty good balanced portfolio. And for people who have done a lot, this gives them a sense of where the holes in my portfolio, and they can pick different products to fill those holes. So that gives you a nutshell of how we do business. And the net result is if we do a good job for the last 2 months of this year, we'll be gaining -- given this year, the private market fund raising is down around 30%. The good news for us is we're gaining market share. We are actually growing. Thank you.

Thank you very much, Andy. And I believe Andy is actually one of the most popular executives among -- Noah among our clients. He takes -- as you can tell, his voice hurts by the tens of meetings every day during this client...

One thing I learned, I though working for Noah will be a challenge for brains, but it turns out it's a challenge for throat.

Hope you get better soon. So I guess now I'd like to turn to Elise, who I already gave a brief introduction on. So Elise is our partner and CEO of Silicon Valley's private equity investment. As also shown by Andy, our actively managed VC products has gained a great level of traction among our global clients. So obviously, supported by this remarkable track record. Thanks to Elise and your team. So can you provide some insight into our investment and deal sourcing strategy? And maybe share with us some of the key trends within the technology industry investment?

Sounds great. Yes. Hello, everyone. Great honor to meet you all. Actually, maybe I'll give a little bit background about myself. I started my VC career back in '95 under the VC arm of Temasek, Vertex Venture Holding. So then end of '98 I got transferred to Bay Area, Silicon Valley to hit the direct investment. So after 15 years, I joined a firm called WestSummit Capital. I'm the U.S. managing partner for WestSummit and led some of the very well-known investments such as Unity, Twitch now part of Amazon and Movidius part of Intel. So then around 2016, I joined Noah to start the tech investment in Silicon Valley. So over last 5 -- 7 years, we have grown substantially. Today, we manage about $1.2 billion AUM. I would say, 60% in direct investment in tech and 40% in fund of funds. So that's one of our core strategy. Actually, we built an inner circle with some of the leading venture capital GPs and did co-investment. So far, out of the 70-plus direct investment, we already have 12 exits including 9 IPOs and 3 M&As. So we generate a very decent DPI, including the funds that are raised in 2019, we already returned 86% of the capital to the investor. So we continue to drive the discretionary direct investment fund and also fund of funds strategy. So that's one of the core molds we have, build the ecosystem with GPs and source some of the leading direct investment opportunity. So for instance, this super cycle of AI, we are well positioned to continue back some of the -- all the way from early to growth to pre-IPO opportunities. Thank you. Yes, let's yes maybe share some of the exits we have, maybe the page earlier, you can tell over the last 7 years, particularly last 3 years, we have grown very substantially, on the direct investment side, we have over 70-plus direct investment across enterprise SaaS social platform. We have invested some of the core leading platform like Unity, Epic Games, Discord, Rec Room as well as some of the very well-known brands like Netskope, UiPath in the enterprise sector. Then some of the funds we back are the top large VC GPs in the U.S. So today, we manage about $1.1 billion, soon we will break $1.2 billion AUM. The next page are the sum of the company we invest has achieved exits to IPO and M&A. So even the year -- this year is a tough year when -- actually from last year, we had 3 exits to our M&A. One is a semi company bought by Qualcomm. A larger one is a AI company bought by JPMorgan. So given this tough market, we still achieved some of the DPIs for the investors. So those are the [ NIM ]. Then particularly for the generative AI super cycle, we're also very well positioned because we see the challenge that U.S. facing, one is aging, shortage of labor. So we have invested in companies like Jasper, Tome, which are the leading AI companies in -- particularly with geopolitical race, we see the supply chain become very localized, then we invested in some of the cybersecurity companies like Netskope. We also have a larger company. We invested in semiconductor, Navitas semi which is gallium nitride, [ a SiC company ] world leader in the U.S. that we have sold it through IPO. And particularly in the new demand for social networking and platform, we invest in some of the leaders like Unity, Epic games. Yes, thank you.

Thank you very much, Elise, and thanks for managing a team that delivers such stellar returns for our investors in the U.S. So now I would like to turn to the public market space. As we are all pretty familiar with that we have gained a quite comprehensive coverage of global mutual fund products as well as domestic RMB private secondary products. But it was really this year that we started to expand our coverage within the global hedge fund product space. So Jeff, can you talk about the rationale behind our overall product selection strategy and how we plan to cover these GPs and fund managers? And also, what are some of the key initiatives that we currently have within our pipeline for actively in-house manage products such as to name a few that I know of fund of hedge fund products and also discretionary investment products.

Sure, yes. Thanks, Melo. So as you know that the Noah and Gopher has been quite well known for the alternative investment space, right? So they have been doing private equity management and also the private equity distribution, the fund distribution for many, many years in China and also in overseas. So when I joined this year, when I look at our investors and look at their investment portfolios, and then we look at the overseas allocation, primarily, if you look at that, it's primarily on the China market, China economy and also the long-only equity kind of investment. So which means our investors is not really diversified enough for the global asset allocation. So because of that -- and also we know that a lot of -- or majority of the high net worth individuals overseas have quite a lot of alternative investment exposures. So then we decided to more diversify and increase the allocation for the overseas hedge fund because comparing to the private equity space, the hedge fund offers a lot more liquid right? Most of that is actually monthly liquidity or even some of that's is a weekly liquidity. And also, they pursue the absolute return kind of sources. So that is the main reason for us to kind of introduce and then look at the global hedge funds and the managers and also bringing in the good strategy, good product for our clients. And also, given that this market is very mature overseas, so there is a -- we feel a lot more comfortable to rely on many, many institutional investors who already kind of invested in this fund when we look at 70% of the investment upfront the overseas institutional investors. So for us, actually save a little bit of time for the due diligence, right? So the ODD, RDD, IDD and that will become a little bit easier for us, even though the manager is actually located in -- many of them actually located in U.S. and in U.K. So for that, we actually spent quite a lot of efforts in building up this kind of relationships with them, right? So we talk to the local presence. We talk to the portfolio managers in U.S. And then we actually visit them. We attend many columns and also through our personal relationship with them, we -- luckily we can actually bring in a very top brand hedge fund managers on our platform. So right? So -- and also based on our analysis to really the global economy and also the macro environment and especially the geopolitical risk. And then we kind of decided to pick and choose a lot more so-called the balanced and less volatile strategy to our clients, right, being multi-strategy products, right? So we picked a number of firms here, like Point72, they have a modest strategy portfolio, Brevan Howard used to be a macro manager and then kind of evolved into a multi-manager or multi-strategy kind of a solution. So we're bringing in this more diversified, lower vol and then more steady kind of return would look for -- shift for like the low-teen returns and volatility they are probably around 5%. And then on the other hand, we're also very careful and mindful to our clients' current portfolio in the risk mitigation, right? So you look at the past several years, the rates has been increased dramatically and also in a short period of time. And also, there's wars in Ukraine, Russia and also right now it is Hamas and Israel, there's so many these kind of terrorist event kind of happening. So we feel that certain strategy is very important and critical for our so-called strategic asset allocation. That -- what that means is that the trend following, we actually picked this year like AQR and Winton those are all trend-following strategies, and then this will be excellent components for our clients. So that's also another reason we -- so the whole story behind it is completely driven by our clients' needs. So based on their wealth, the goal, right? So right now, we know that the wealth is more important for the wealth protection and also with some of the kind of your more secure and then kind of a conservative growth instead of in the past, chasing a very rapid growth kind of return. So our strategy kind of changed according to that, right? So that's in the hedge fund side. And then at the same time, Gopher, don't forget, Gopher is the asset management arm of Noah. So its responsibility is for discretionary management. Like we have a primary -- I mean, the private markets, Elise and also Andy for external product selection and also the discretionary management. At the same time, we have like products from Carl for the cash management, and then we also have investment-grade bond kind of management as well. So the whole thing is that actually is to create a more comprehensive solutions for our clients. And fund of funds is actually is the important one for us because given that as a wealth management company, we naturally deal with so many external managers, we actually know how they manage and what's good and bad. And then we actually take the advantage of that and then create our own fund of funds solutions as well, right? So that is the active management of discretionary management and also the product selection side. So briefly.

Thank you very much, Jeff. And we're glad to have you because we're looking forward as the capital market audiences to have more products on shelf for our global markets to drive our further AUM growth in the overseas markets. So thank you, Jeff. So now I'd like to turn to Clement. So as we are all aware of the current global macro challenges and also geopolitical conflicts, high net worth clients have really start to demand more comprehensive solutions in the past 2 years towards wealth inheritance and wealth preservation as an essential product within that toolbox, insurance has really saw a surge in demand among the high net worth clients in the past 2 years. So Clement, can you please walk us through how Noah really help our clients and their businesses to protect against downside risk and extreme scenarios and achieve inheritance planning through our global network of insurance products as well as comprehensive solutions?

Thank you. My name is Clement. I'm working in this insurance industry for over than 20 years. First of all, I would like to say there are many, many research this year and say, where is the asset allocation of the high level of client in China? Honestly, the demographic like Hong Kong, Singapore and U.S. is the most of the high level of clients want to go to the -- for their asset allocation. So in Noah, we have the insurance solution, which provides to Hong Kong, Singapore and also as well as the U.S. We have the YF Life -- as I can say, YF Life, First of all, we have cooperate with most of the remarkable insurance company in the world. And also, we have a strategic partnership with the insurance company, which we have other value added service like the customer experience and value added service to the client. You may say that, why people may choose Noah because one of the main point is our relationship manager in Noah have the -- had to serve the total solution to our client, which no matter into insurance, in maybe the inheritance planning. So we are aimed to give the client a total solution no matter in Hong Kong or in other world, like Singapore and U.S. This is why they chose Noah. Maybe you may not know because in Noah, we have the technology advancement is very main concern and main point to our customer. So we are one of the company -- one of the insurance broker company which collaborate with the insurance company, we can online application on underwriting and online payment through our low-money account, which is approved by our insurance authority and also the monetary authority in Hong Kong. So this is the customer experience, I think this cannot be compared with the other wealth management company and also the bank and also the other FI companies. So what we look for is to provide more and more our insurance solution to our clients. And also, we have some inheritance planning such as the trust service and also the identity planning, which can provide us and provide the customer the whole tool solution. And actually, in Noah, we have the platform called Glory, this Glory we have such kind of insurance, identity planning and also the trust and which we can have -- preserve our clients' wealth and also how to guarantee their list generation, have the money or the wealth to expand, okay? This is what we are looking for and also what we will serve to the high-level client to our Noah customer. Thank you.

Thank you, Clement. And I would like to further remark on that. So I think we were one of the first, if not the very first brokerage channel to be able to offer a fully optimized technology solution for Hong Kong insurance subscription and execution. So I guess that was a demonstration of our devoted resource into technology and also the infrastructure for our clients compared to the other channels. So I would like to thank you all for the very illuminating discussion. And in the interest of time, so I'm thinking that we probably skip the 10-minute coffee break but we have the coffee and snacks at the end of the hall. So please feel free to grab them. And I guess now we'll start to welcome our next panelists, which we'll discuss on client service strategy and also our strategic client center. Thank you. We can do -- we have a Q&A session at the end. Yes. Sure. We can -- yes so we'll reunite after 5 minutes. Thank you. [Break]

We'll proceed to the next portion of the presentation today. Thank you. Please return to your seats. We will begin the next session very soon. Thank you. Okay. Thank you, everyone. We begin the next panel discussion. So after gaining a great level into our global product leadership it is also equally important to gain some insight into how we serve our clients globally. So with the build-out of our relationship management team, expansion plans and uniquely positioned strategic client center that serves our large corporation clients as well as family office and ultra high net worth clients. So joining me today on these panelists are Jade Cui. She is the Head of our RM sales team. Jade has over 15 years of experience in retail banking and private wealth management. Before joining us, she was Head of China Desk at Wing Lung Bank and the product experts in the founding team at CMB Private Bank. Connie Chue is our Deputy CFO at Noah International and also Head of Corporate Group Treasury and Corporate Development. Connie has over 18 years of experience in the financial and real estate sector. And before joining us, she was previously Head of Group Treasury at Link REIT and also investment banking at Goldman Sachs and RBS. Raymond Goh is our Head of Risk Management, Raymond has over 20 years of experience in legal and compliance. He was previously Head of International business development and also General Counsel at CTH Group and General Counsel at China Travel Services Hong Kong. He also served at Baker & McKenzie, Linklaters and also Barclays Capital. Next is Yihao Liu, our Head of Strategic Client Department, also a partner of Gopher Asset Management's private equity investments. Yihao has been with Noah for 8 years, over 8 years, and he was previously Chief China representative at NYSE and also worked in private equity and investment banking department at Merrill Lynch. So thank you all for joining me today. Oh, sorry, last but not least, Ken Tin is our Head of Trust Products and Ken has over 12 years of experience in trust and fiduciary industry and was previously Head of Wealth Planning at the private bank. So now thank you all for joining me. So first of all, I'd like to start with International Wealth Management, which is our main client interface around the globe. Jade, you are responsible for managing the recruitment of our overseas relationship managers, can you discuss about our expansion and also recruitment plan as well as how we're able to really create a synergetic relationship and work stream between the domestic and international sales force? Thank you, Jade.

Thank you, Melo. Thank you for having me, and thanks for this question. Before I introduce our expansion plan in the next couple of years, may I give a brief introduction about what we have done during the past 13 months. As just mentioned, I'm the head of sales in Noah International Wealth Management department. Actually, we have started to build the sales team at almost the same time last year. But from almost 0 salespeople in both Hong Kong and the Singapore office, where we were fully licensed. But up to the end of October this year, we already have 92 sales in Hong Kong office and 10 sales in Singapore office. That strengthens our confidence to keep going forward and to get far away. As to the talent acquisition plan. We plan to have -- we plan to set up a 200 RM team in Hong Kong office, and 100 RM team in Singapore office, and 20 RM team in Dubai and 20 in Los Angeles. There will be a 3-year plan. . And it sounds a bit ambitious, like doesn't it? So how are you going to achieve our goals? We will follow our recruitment strategy composed from -- composed of 3 main programs. First of all, the 1/3 of the graduates -- of the talents will be from outstanding fresh graduates. As Noah International will provide systematic training and an on-job mentor mechanism for all new staff. So we welcome all the graduates from the prestigious universities, colleges, all over the world. And also, at the meantime, we found Hong Kong government provides many good opportunities for us too. For instance, we just participated on Hong Kong global talent carnival 2023 on the weekend before last, and we actually collected over 150 resumes on this [ Board ]. And the second part of the recruitment will be expatriated program. And it's a very popular program for all the overseas companies. And as just introduced yesterday, we have already accumulated human resource of over 1,300 sales elites in domestic market, which we don't want to waste what we're going to do is to screen them and select some of the best of them and bring them to the overseas market to set up their new career path in overseas markets. So of course, they must be qualified in overseas background, vacancy suitability and the very -- they must be very strong, willing to serve high net worth individuals and their families based in Hong Kong, Singapore and other places in the world. And also, they must follow the risk -- they must follow the compliance and regulations in those places. And the other 1/3 of the talent will come from local recruit program. And we think this kind of group talent might be more professional and senior in some specific areas like selling process, KYC system operation compliance. But also, they need to learn the culture of Noah and they need to get more familiar with the characteristics of Noah clients and Noah's team. So finally, I think we will modify our sales team, what kind of sales team? It should be diversified professional and coordinated sales team serving different kinds of clients. And so next point is well, explanation. Okay. Since we have realized the requirement from our existing clients on their global protection, the global asset allocations. The first priority of our sales team is to provide proper wealth management solutions. We are clearly positioning on 3 segments. The first of it is cross-border is a cross-border segment. This is a market in which we have set up a compliant referral model between domestic and international WM teams. Okay. But I think it's a quite important part for our international business. And secondly, we are determined to enter local markets. we've defined this local market as the clients originally from Mainland China well currently based overseas. So therefore, their source of wealth and the source of fund are coming from overseas correspondingly. So we would be a sales team providing global and localized service in the market. And MGM is a very popular program for broadening the customer base. We have -- as I just mentioned, we have over 15,000 existing international clients in our database. At the same time, we provide services to existing clients. We also organize a lot of value-added customer activities, seminars group studies for the new clients referred by the existing ones, member get member program. We hope to offer more opportunities for our new clients to experience the services and projects on our WM platform. So in summary, we started our plan, our sales plan with the increasement of the number of sales and the improvement of service quality and then the rising of the number of existing and new clients, leading to the substantial capabilities of creating new AUM breadth and revenue. It will be a long journey and not easy, but we have picked. So appreciate all the reliance from the clients. And thanks for you all. Thank you.

Thank you, Jade, and thank you so much for your efforts in helping us to build out our overseas RM team, which is crucial to drive our business in the global markets forward. So I guess, all our investors and analysts are highly anticipating your work. So [Foreign Language], Jade. So speaking of expansion, I guess, Connie here is responsible for our corporate development efforts in the global markets, and will be spearheading our global market expansions. So Grant has highlighted this page, where our clients have shown great interest in many of the markets here. So Connie, could you please share with us more detail on what's on your pipeline in terms of new market entrances and what are some of the potential challenges that we might face and how we plan to mitigate them?

Sure. Thank you, Melo. So I would like to perhaps mention that we are on a very great trajectory of growth at the moment for Noah internationally. Not only what Chair Lady d just mentioned, she's basing off from Hong Kong. Grant has moved from Shanghai to Hong Kong as well. We have a lot of senior management moving themselves like to work out from Hong Kong, which is our international office, which we have listed in the Hong Kong stock exchange for the past 2 years, we have been in Hong Kong for over 11 years and have been listed in the states for over 13 years. So I think the foresight from the senior management team to grow like nowadays to firstly, Middle East. So our Chief Executive, [ John Lee ] has been to Middle East for the past couple of months. So we are looking to have an office in Dubai. We have already met with the regulator in Dubai for a couple of times. So we are in the process of getting license, which allows us to do wealth management products. So thanks to all the banking partners that are sitting around here, which they have a global banking network as well. So we count on them in each of the offices. We have to have banking services, legal services, accounting services. So we have a very good network of third-party professionals supporting us in our growth journey. So other than Dubai, we are also looking at Japan. So we really follow what our clients need. They have been telling us that they would like -- they have overseas wishes to have a and also wealth management services to be provided in Dubai, in Japan and elsewhere in London as well. And also in the pipeline is Europe and we have had offices before in Australia and Canada. We will review and see if we can provide services there. So if you can see on the map, there are also Greece and also Germany, been having some products already, -- some teams there. However, we are not doing duplicating all the models from Hong Kong or from our Singapore office. We have a dedicated team of market research and market due diligence team members who are really go to the place and see what's the presence of Chinese high net worth individuals there and to see specifically their needs. So maybe the immigration services and trust services should be applied to Dubai, but not in Australia. So what's best for the clients over there may be different in each of the country. So it's very critical for our market research team to be able to conduct these analysis and represent the management and really growing prudently in the meantime.

Thank you, Connie. And I guess, growing prudently and doing enough market research is what our investors expect us to do as well. So thank you, Connie, for that. And now I'll turn to Raymond as Head of Risk Management department, I can imagine the level of challenges and workload presented to your team as we make new market entrances with different legal system, tax regimes and different regulations. So can you talk about the key role that risk management and compliance play within our global expansion plan?

Sure. Thanks, Melo. Maybe by way of introduction, I should start by saying that I'm Raymond, I've had more than 23 years of experience in the legal and compliance and risk management field. I started out as a lawyer. And maybe just to fast forward a little bit, the risk management and the compliance team in Noah is very robust, made up of many nationalities. And more than half of us have advanced degrees either in low, finance, financial engineering, business administration. So it's not just about knowing what the applicable laws and regulations of a certain country says. Say, for example, we're looking at a project in Greece. We don't just read the law. We speak with the regulators. We speak to our local partners. We speak to our local suppliers, so on and so forth. We try to move beyond the academic discussion and more towards what actually works on the ground. And the only way we can do that is if the risk management, legal and compliance personnel in our team, we actually know what we are doing. And we do because we all came from can I say, Ivy League universities, top universities around the world. And when we look at something, we really think beyond what the paper says. And also in relation to compliance, a lot of -- I would say half -- 1.5 of the compliance team, they actually have law degrees or they're actually lawyers. It's just that they sort of switch over to compliance. So I think that's what makes us different, what makes us special. It's not just about what ticking the box and making sure that if everything in place, it's about trying to figure out what is in the best interest of the company and in turn, what is in the best interest of the clients. And so perhaps I wouldn't have a very long speech, but I think it's more about having a very practical application towards how we handle risk. Risk is always evolving, how we handle the regulations, which is always evolving at the same time, and it's a constant evolving dynamic discussion that we have with the senior management, that we have with the local regulators, with our partners, suppliers, so on and so forth. Thank you.

Thank you, Raymond. So I guess the risk management and compliance department really does what we gave out our clients advice protection before growth. And for our overseas expansion plan it is compliance before expansion. So thank you, Raymond. And now I'll circle back to client service. As we all know, Noah's client universe covers a wide spectrum of client segments and among which there are some large corporations and family offices, that require a team of diverse background of professionals to serve them. So Yihao, you are a perfect example of that. And I believe your colleague shared the same traits. Can you provide a brief introduction of how the team is structured, and how you are able to leverage Gopher's network of GPs and portfolio companies to best provide asset allocation services to our strategic clients?

All right. Thank you, thank you Melo for the question. My name is Yihao. Thank you for having me here today. Actually, I just give a little bit background about the strategic client department. It's actually a fairly new department. As we go along progress in the progress for the past 20 years, larger client, we started to have encountered a number of huge clients, ultra-high clients. And I guess, according to 20/80 rules, I mean in terms of numbers, probably they will be less than 20% in the numbers, but they will contribute more than 80% of the AUM, outstanding AUMs as well as revenues. So I guess it's out of the question that we need to serve this group of clients well and right, right? But when it comes to the service itself, based on a publicly published research report by UBS, that we can find that super ultra high net worth individual clients. Their financial needs, actually, not just their individual investment requirement, but also extend it to their families, their corporation they create or they love, right? So to answer Melo's the first question, so we need to establish a very well-diversified team in order to serve a very diversified client needs, right? So when it comes to very particular needs, we actually have team members from family office background who is a lawyer by training and tax consultant, right? And also like someone like myself, worked at capital markets, private equity investment, et cetera. Yes. So it's a very well-diversified solution. That's what we're trying to provide. On the surface, itself, it is no different from any other people within the firm. We offer clients the wealth management, assets management, the inheritance and also other integrated services, right? But I guess it's on a different level. So the traditional sort of a one size fits all approach, probably is not going to work for ultra-high clients. Yes. So the core value that we're trying to build up here is actually to provide a very deep information exchange platform, where the Melo's second new part of the question will come in play, that we can leverage our GP network because they are in the game, right? They are very close to the industry trend or other developments that we need to bring all those very updated market information to the clients. So information exchange is one. Secondly, we want to provide clients with very -- some very special investment opportunities. This also we can leverage on the GP ecosystem, right? And last, thirdly, we also want to demonstrate -- it's actually like a showroom for Noah's and Gopher's overall wealth management, assets management capability, right? Ultimately, what we also try to create some unique event that only tailored to this very specific group of clients, yes. So again, I guess, in summary, we're trying to give this group of clients to achieve some sense of gain or satisfaction by providing next level type of products and services, mostly services. So yes, I think that will be all for my part. Now, thank you again.

Thank you, Yihao. And for strategic clients obviously -- especially family office and public companies, trust products are -- and services are essential to their needs, especially after our CIO office advocated protection before growth strategy. So turning now to Ken, can you provide a brief overview of our trust products and services as well as how your team plan to create synergies with other business lines and to provide a more comprehensive solution to all of Noah's clients?

Sure, sure. Thanks, Melo. At Noah, our trust arm operates through our Hong Kong and Singapore offices and by 8 entities in total with every one of the licenses is required by the applicable laws and regulations. And we offer a full suite of trust and financial services, including discretionary trust, reserve power trust, employee benefits schemes and company secretarial services. A lot of our team members are qualified professional with abundant industry experience, these expertise and experience are important in ensuring that we provide best advise to clients. At the same time, the structures we manage remain compliant at all time. So for me, I'll take insurance trust as an example. So it works really well with financial products like insurance, obviously. So the fact that the trust arrangement provides extra certainty and confidence in relation to how insurance processes are managed, invested, distributed and use itself incentive prices, the purchase of an insurance policy. I would also like to talk about a bit about ESOP. So with ESOP, we can now serve corporate clients in addition to individual clients, particularly those that lease it, looking to go lease it. And then with the [ fasting ] of shares, the senior management of those corporations naturally become high-net-worth individuals and potentially knows clients. There's a little surprise. This area is highly sort of in many [ ways ] so my last word on lease would be, while trust may not be the most -- be the best product or service in -- while in terms of revenue or profit generation, the fact that it allows us to get really close to clients and the ability to increase client stickiness and share of wallet makes it something to valuable to Noah. Thank you.

Thank you, Ken. And definitely, I agree to that. I guess, aside from a more method to increase our client stickiness, it also has opportunities to bring in more clients through your service through ESOP and some of the other family office clients as well. So I'd like to thank you all for the very amazing discussions we had here today. So now I guess we'll enter into our Q&A session. And thank you all for joining me here today at the panel. Thank you.

So thank you. I would like to now welcome back to the stage our Chairlady, Wang; and CFO, Qing Pan, also Jeff Li, our CEO of Gopher International. So for those of you in the audience, please kindly raise your hand to ask a question. And for those of you watching online through webcast, please submit your questions in the Q&A box. So I guess we'll now take the first question from the floor, and we'll have our colleagues passing the mic. Helen here, please?

Thanks, management for the sharing today. It's really impressive. And this is Helen from UBS. Actually, I have 2 questions, if I may. The first is for Grant. How you are going to use that RMB 4.7 billion cash. And because last year, the 17.5% payout ratio was a little bit disappointing. How should we think of the payout ratio for this year and maybe going forward? And that's the first question. And second question is on potential lawsuit risk because last year, we have seen a claim against potential lawsuit, which was around RMB 99 billion. So how should we think of such risk going forward?

RMB 99 million.

Yes, RMB 99 million.

Yes, those are very straight forward questions. So I guess I will just pass the mic to Grant.

That's how we're going to use the cash. Just kidding, I'm just joking. Yes, I think we have received quite a bit of a question in terms of the capital usage. Definitely understand, I think, the motivation behind the question. And one of thing I think people need to understand, if we don't have enough cash on the balance sheet. And you're asking obvious question, that's probably more worrisome. So one of the things that we are maintaining enough capital to cope with, obviously, increased level of uncertainties both on economy and also going forward, our growth, to support the growth. And two, definitely, like I've said, it's not a diplomatic answer. We're definitely working on a plan. Our quarterly Board meeting is coming up. So working on a plan to have a better use of the cash on the balance sheet. We don't have any potential or clear target for acquisition or merger in sight. So we are not planning to keep too heavy of a capital reserve on the balance sheet. [Interpreted] Anyone, would you like to supplement? Yes, it's very difficult to anticipate or prevent legal claims going forward. But obviously, as a former auditor, understanding the audit technology, we're actually required to disclose and accrue for any foreseeable legal risks. So one thing I can assure you, we don't have any incremental risk or threats in sight. And obviously, like I've said, I think one of the strength, our competitive advantage really to compete in this market is to have a clean balance sheet plus clean AUA. I think at this point, management is very comfortable that we have a pretty healthy AUM, and we don't anticipate any similar lawsuits in the near future.

Hello, HSBC. [Interpreted] I have a request. Our analysts here, we're all colleagues. We can ask Noah and also ask about the industry in general. Yes. Thank you. I think a question for Madam Wang and also Mr. Pan. At the moment, we see AI technology to the mass market wealth management is creating a lot of impact. There's a lot of wealthtech and fintech companies emerging. When it comes to private banking. It is delicate and it focuses on high net worth individuals. It's a very delicate business. And human elements are very important. So I would like to hear from all of you representing the senior management. What do you think about AI's impact moving forward with the business? Diversity of products, investment strategies and content being pushed to the clients and also client management. Are there any changes you could foresee?

[Interpreted] I think in terms of the customers, when it comes to tech and trust, we need both, especially when it comes to complicated products, for example, hedge funds, and primary market, if you don't have people making communications, it's too hard. You can't achieve orders. That's what we see at the moment. We have gone through such a long time. We want human contact more than ever. We have this app. We have online wealth management app. So online, offline, just like retail business, both have to go hand in hand. Perhaps, the products are totally differentiated. I'm not saying that they are totally different clients. We have wealth managers. They bring clients online for complex products. They may need to be consulted by the clients. For the rest, clients can place all this right away. If all the clients have to pay commission offline, then we'll have this very strong rigid cost for overseas operations. It may cause some difficulty. So online offline, represent two different teams in terms of the operation and management and sales. We're also making attempts to see if it's possible to use our existing channels to push for more internationalization. We don't have an office in Australia, but we have assigned some RFA, they are Chinese people, they have their own customers. We are acting as a platform for them. So in a few quarters, we perhaps will be ready to share our experience and development in this front. We have OpenAI, ChatGPT on the back end. They support our sales, especially on the compliance side, it is quite impactful because when it comes to legal and compliance issues and details, our colleagues don't have all the answers right away because so many jurisdictions are involved. If we can use ChatGPT, it's of great help. We're also promoting greater use on internal platforms. I think they are very useful. According to my understanding, jeff is also responsible for Gopher major operations and they are supported by many tech systems, right, Jeff?

[Interpreted] Just now I was listening to HSBC's question. I am online wealth management person, complicated products will be pushed to our clients, but it was difficult, very complicated products. Can you deliver to the customers without people explaining to them, no? So if you just push information to them, it's not very useful. And then ChatGPT supporting the services, it creates great advantages. I think, we have operational use in Gopher and that includes fund operation compliance and technologies create a foundation. It serves as a foundation. So how do you do it? Our goal is to improve efficiency, mitigate the risk, operational risk, which is very important through the use of tech. Optimized workflows can be used to reduce operational risk. And when it comes to manpower or human resources, we can use AI everywhere. We place the humans, where they can create the greatest value. These are our 2 goals. Recently, when we work on big projects, technology is in the projects, but we have not used a lot of very advanced and new AI technologies because there are issues related to big data and so on. But when it comes to improving optimization and also operational risk management, technology is used in areas like compliance, risk management, the same applies. The risk is not only market risk. There are also other risks, for Gopher, it is Noah's asset management arm. It deals with many different types of products and assets. We have primary, secondary and in primary and secondary, there are different categories and in public market, there are mutual fund, hedge funds. So given such very complicated product metrics, Gopher needs to offer solutions, and this is very demanding. There are very high requirements. And technology is indispensable. It is good that we have our own technology team. At the same time, with Noah's wealth management technology team, online wealth management technology team, we are highly integrated. We all work together and prioritize our task to achieve the goals. So for us, technology is a very important core.

[Interpreted] Thank you, Jeff. Thank you. Let's see whether there are other questions from the floor. This gentleman is not coming through. His mic is not working. The interpreter cannot hear him. The mic is not working. Interpreter cannot hear him .

[Interpreted] I am from JPMorgan. My name is Peter. I have two questions. Today is Investor Day and many clients come to Hong Kong to join this annual event. So when leaders communicate with investors these days, what kind of changes have you seen in clients. Do they have new demands, new concerns? Are there any changes in their investment, sentiments? Besides, well, there are 2 panel discussions today. My feeling is that Noah has so many talents, you have very rich products. You use a lot of technology to support your product and client expansion. So looking into 2024 and into the future, among so many products, which will become new highlights, which will become new starts, so to speak? Thank you.

[Interpreted] First question, I can briefly explain first. Now my other name card is to be responsible for branding work of the company. So I was the host of the other session. So for clients who are from Hong Kong, they are encouraged by two points. First, when they see that Noah is getting better and better, they feel encouraged. I think to us, this is really valuable. When your clients endorse your growth, I think this is a very positive feedback. So when we organize this kind of client conference, we can see all the seats being fully occupied. And today, during check-in, customers waited along. Yes, there is inconvenience for them. Some of us flew here from Hunan, Dalian and overseas. Many people come all the way to this event. So we can feel this bonding at difficult times. In China, there are many industry players who are being let down. So I feel proud for all the hard work that we have done. In the past, people were more interested in single products, and now they have shifted to paying attention to solutions. So, there are different sorts of credit allocation and cash and so on. Now our client groups are also changing. I cannot look at them in a static way. I cannot look at entrepreneurs like those 20 years ago. They went for -- in the past, they went for growth and also wealth creation, now they would like to have a more balanced approach. So in the past 20 years, we grew, at the same time customers grew even faster. They became more educated and sophisticated. They become more professional. So they do not only look for return. They will ask you about the risk profile of products and what is the role in their asset portfolio and so on. And then for the second generation, that is their children, they have emerged on the stage. And they also asked a lot of questions about passing down their -- passing on their assets and businesses. So yes, more or less the same points. Our clients are also growing old. They personally grow old and they look at how to pass on the business and wealth to their second generation, and they are looking on how to change old money into new money. When the economy is doing well, then people may be product driven. They are looking at the amount of money that can be made from each product. But then when the macro economy is more pessimistic then clients have uneasy feelings. They are thinking whether the situation is really that pessimistic. They also have pain in their heart. So this time, where it has been a long time since we held our last annual event. Well, from Shanghai to Singapore to Hong Kong, we spent so much cost and money. Clients felt a lot of pain, and they came here for solutions. They asked for solutions, not only simple product-based solutions, but total solutions. So that means our service will have to be iterated and also our service and products need to evolve. So we would like to actually offer better solutions to them. This is a challenging process. For Noah in the past 1 year or so, we did a lot of education for our overseas customers in the areas of risk management, global asset allocation. So as our two speakers said customers no longer only ask for yield from products, they ask for a total solution with so much wealth, how should I allocate my wealth between China and overseas? And then how much between alternative assets and traditional assets. During this annual event, we can see that some clients have taken the initiative to ask for overseas solutions. As we said just now, there are so many uncertainties in the macro environment, there may be the risk of economic recession. And so actually, this ties in with our strengths in alternative asset allocation because alternative assets will see a lot of strength. So when we look at the current market situation and also clients' investment education and their investment risk appetite, I think we can offer them better solution in this area.

[Interpreted] I am Aileen Chen from TAJE Capital. I'm a Korean, so I would like to take this opportunity to ask questions that Chinese wouldn't ask. So over the years, you said Noah has not done any leveraged allocation or mismatch of duration and so on. So I really appreciate you, but I am a foreigner, so from your current position, if you would like to go to an even higher place. Sorry, Chinese is my third language -- further place, then I think it's important to look at some of the things that Noah can do better or might not have done so well. So being an investor, there are a few things that comes to me. One is, I have been following up Noah for 4 years. Every year, when I communicate with your company, there is always a new strategy that you have been very active with. But then in just 1 to 2 years' time, you no longer mention it in your annual report. Now sometimes you talked about Internet finance and factoring. For example, since the annual report in 2014 to B2C 50% to 50% and then our target strategy RMB 30 billion or RMB 50 billion scale. And this year, you talk about globalization or internationalization. So well, of course, compliance environment and macro environment has changed in China, but then it seems that your strategic change is a bit too frequent. So what are the reasons behind? In the past, when you changed your strategies, what were the impacts on your company? Let's say, if there is an employee of your company, well, he needs a goal that is everlasting so that he can achieve his goal. Now there are many senior executives in Noah, and there is always information on personnel changes, and then Ms. Wang, you also talked about being a good wealth management company, you need 3 things: team, how to retain good teams is one thing. So I would like to listen to your views. And my last point is, Grant, talked about cash. And the first use of the cash is for future development and growth of the company. Since 2014 till now, you separately reported your other business from 2014 till for your other business operating loss, the sum is RMB 750 million. This is not a small amount. In the future -- well, I do not disagree with your approach to explore foreign opportunities or overseas opportunities. But then how do you make sure that not bigger loss will be cost?

[Interpreted] I think you are really good. I really like Koreans a lot. I enjoy Korean drama a lot, TV drama. This is one of my entertainment. I think you have made some very good point to us. We also feel painful. I have been in the finance sector in China for 20 years, once every 2 years, there was a financial crisis and strategic transformation. Well, inside Noah, there are some constant principles that is, we are aggressive, we are entrepreneurial. At the same time, well, there are also many changes, as you said. In the past, if you talk about watershed, in the past, Noah was product-driven. Our products help customers to pay attention to trends. So we capture -- we see trends in the market. And we can only seize customers with good products, that is like my religion in the past 20 years. And with that, Noah can grow to this stage. But then when we were product-driven, sometimes our strategies and tactics will experience a big change, as I shared with you earlier. So that's the reason why we made an exit from real estate, and we also made an exit from nonstandard fixed income category. Now, some investors have spent 20 years in understanding Noah's strategy, and they used to have your same question. One day when I had a meal with one long-term investor, we talked about regulatory changes. So if you do not try to ride out the wave and current, if you stick to the same path all along, then you would not have survived. Today, I would say that in the future, we hope to be different. I personally think that there is no more wealth management in Mainland China because basically, they have to go back to single regulation and single product-driven approach. So if you work on trust, then you should focus on trust and insurance or public funds, there is no overall integrated wealth management. This is a change on Mainland China. So regulation is focused on absolute safety and license space. But then for overseas, we will rethink about wealth management. So Chinese people's global asset management. Can we be like UBS or Julius Baer, they have been here for 100 years, so they can do integrated wealth management for customers. 20 years ago, we talked to foreign banks, and they said that the customers did not aim at making profit. They focus more on asset allocation and trust and better financial planning. So if you do business in China like this, you won't have business. But today, when we look back -- 10 years ago, when we look back on what they said back then, well, actually, our customers at that time had not turned into old money yet today, the situation is different. But I'm worried that 2 years later, we will change again. So I think there are some everlasting themes, but then today, we have turned from being product-driven to customer needs driven. So gradually, we are making this transition. Our customers have become a mature 5 years ago, 10 years ago, if I talked to Chinese customers, about this. Well, they would just leave you. They will just walk with their feet. So now we have the opportunities, trends, all these are being intermingled in our strategy. Well, there are always changes, and there are also some constants. In Mainland China, we have developed for so many years, and we are product-driven as our core in Mainland China, but we also look at trends. And then you will realize that your talent, your people, your perspectives will be different. When real estate is good, we hire a lot of people who are familiar with real estate, risk management is centered around real estate. When the secondary market was good, then we hire people specializing in secondary market and PE may be stronger, PE VC will be stronger. Today, we prefer people who are strong in middle office and back office operation. And there are also some good -- Elise, for example, Elise, our in-house managers. And then there are also U.S. talents. So we have people who are strong in different sectors and segments. And then we don't let them expand further. That is my feeling. That's the change that I can feel. I also share the same pain with you.

[Interpreted] Let me supplement. If you look at China's wealth management business and high net worth clients, this is just an early stage. I joined Noah in 2017, and at that time, I already had 10 years of experience in Deloitte from 1999 to 2009. I mainly served wealth management alternative asset investors in the U.S. When I joined Noah, I was very excited because I realized that my clients are generation zero. So they have just created that wealth. They have just got the first buckets of gold, comparing with the U.S. there is a lot of market space that is not filled in China back then. And then when we just started in the industry, there are a lot of changes. And towards the end, not the strongest survive, it's actually those who can best adapt can survive. Just now you made a few points. Well, you talked about a number of principles. There is one unique characteristic, and that is Noah is an independent product creation platform. Well, we cannot work on exclusive agreement because we are an open platform. We have to select the most appropriate products for our customers, not based on our own benefits. We have insisted on this major strategy all along. And then, well, in terms of tactics, there are many choices based on market changes or customer needs, changes and so on. I'm not trying to justify our strategies. But in the future, I think when we do research, I think we can give more thoughts to your point. You have given us some very good reminders from industry stage point of view. I think this industry is still not fixed yet. You just mentioned to B2C, I think they are still very important. Last year, if we did not have 2B business, then I think 2C would be very challenging. Last year and the year before last year, we have made much breakthrough in the corporate business and the scale became bigger and bigger. And then we are quite firm in terms of our customer choice. So in terms of treasury business, it is an area where we can still achieve some breakthrough. For example, we saw some results last year and the year before. We would continue this path in overseas. But then for bank channels, banks will see us as a competitor in China. And then [indiscernible] is not a main regulatory target. But then in overseas and in Hong Kong, we can do it. We have made many attempts to achieve breakthrough in technology, but we find no ways to achieve breakthrough in IFA and banks and so on. In Hong Kong and Singapore, we can do this business. So this is one important point for us now.

[Interpreted] Depends on what you say. Overall speaking, I think, for those who left, they should have left. I've been with Noah for 20 years. People normally just leave me by resigning, I have not fight anyone. Those who have left they have left to do similar business, 99% of them, but no one has succeeded. Why? Because if you have run this business for some time, is it rather natural that someone believes that he has learned enough, he can do better and more so they leave. If we do real estate, I can charge 30% management fee. But if you exit from the asset class, many people objected but I think we have seen clearly the path. And many people left, they gave up. But because of our vision and mission, many senior management said, perhaps you're losing money, you're losing the clients' money. Sometimes there are winters because there are fluctuations in the market and you will lose money. But it's not like we are mistreating our clients. It's just something we couldn't control. So I really love this industry. I'm very happy. Every time I cry it's because someone decided to leave, I've never proactively fight anyone. But it is regrettable. Those who left, no one has succeeded. Someone asked me how come? Well, I think it is because of our industry's nature, you need to know finance. You can't just rely on fintech. You can't just call other people, you need to understand the soul of finance. We understand. And compared to people outside it's different. I don't know if today, perhaps you complain about underestimation of Noah's stock. Some people complain about that. So it's not like Tencent and people will become very envious of other stocks. So some people left for that reason. If you give some stock options, they don't have enough money. And now it's harder to find jobs. So if they're going to leave now, I would say, okay. There are many Hong Kong experts who want to join us, I need greater strength. I have a bigger pool to choose from. So I become more confident. I think looking forward, we want to perhaps return to your original question. As a shareholder, I hope 100% dividend of the profit that is my target, 100% dividend payout of the profit or maybe 50% and some buyback. More dividend, better buyback. So it's better to our shareholders. Our futures will be converted into stocks, whether that's approved by the Board or not, I don't know. But I will submit this report. So a disclaimer, and we will work on that. To answer your question, I think we have already talked about this. If you turn things around, I say, since IPO, the core revenue structure has not changed. For major business, we are very stable for other business. Many strategic opportunities present themselves, we may pursue them in the process. There will be some cost or expenses. Obviously, in the future, we will be bold in writing our strategies. But in terms of execution, we'll be more detail-oriented. We have organic growth with selected core team, people come and people go, but if you look at the core team, the 4 of us, we started the business. And then the 16 foundational team, they are still here. You've been with us for 8 years. So we have a stable core team.

[Interpreted] Beginning from 2014, it's a RMB 115 million loss from other businesses? Is it because you haven't looked into new strategies and you made huge investments. Now if you look at globalization strategy, why don't you do Hong Kong first and then Singapore, do it one by one. Why are you doing it at the same time, in Greece and then Japan and Dubai, why all of a sudden you need to recruit 200 people here and then 100 in Singapore?

[Interpreted] You have disregarded one thing between 2014 and '23. We're talking about 9 years. But in terms of wealth management in Mainland China, there are many phases, eras. This is not 9 years in a very immature market, or sophisticated market. We made losses, but we also made RMB 10 billion profit in the 10 years. So I think certainly you may do something that is not totally in line with your strategies or direction.

[Interpreted] Can I respond? I think your questions are very insightful. Not too many analysts will have the capability of raise such a questions. I think Noah truly changed in 2019. It was this fraudulent case, and we gained a lot of insight. If the fraudulent case was even bigger, we would die. If it was smaller, we wouldn't feel the pain. So we did some deep reflection. We have done remodeling of our products. Otherwise, we would not be around today. We're still here. We're still alive. In 2019, we had some fundamental changes. In terms of strategies, we became more cautious. And we have BLM model to look at the market, our clients, competitors and ourselves. We do analysis by Dubai, Japan, actually, we have an expansion team they have paid a lot of insight, but no immediate decisions were made. At the moment, we focus on Hong Kong and then Singapore and the U.S. In terms of internationalization, U.S. must be included. As for Dubai, we are applying for a license. I think Dubai and Singapore carry clear strategic plans, they would be offshore markets, which represents Plan B for Singapore. You understand why we have to focus on Hong Kong and then Singapore. As for Japan, we are still observing mainly because at the moment, we understand in Japan, there are about 0.5 million Shanghainese. I think we can follow our clients and then see if we can provide services to them. Our strategic division talk to me, we must obtain capability before we do expansion. Otherwise, there will be risk. I totally agree with that. 200 people to be recruited here and 100 in Singapore, we have a formula, active high net worth clients in Mainland China, about 30,000 to 40,000 -- 40,000, among them half of them have internationalized needs about 20,000. We are not doing a lot of local recruitment. Many have been referred to us by international clients. And they come from all over the world, perhaps Spain, and they have natural connections with our wealth management team. We have 70 in our sales team. They can't service so many people, even if we have 100-ish-percent serving 100 clients, then the total figure is only 10,000. It's not enough. So if we can recruit 200 , it will make us more comfortable. And we want a good team to serve our clients. As for Singapore, personally speaking, well, next year, I will be based in Singapore. I've been here in Hong Kong for 1 year to understand this market and the local needs. I will hand over to our Hong Kong team. Next year, I'll go to Singapore. We are looking into this to see how many people we need in Singapore. We can enhance the level of net worth for our Singapore clients, and how can we do screening of clients, that is a major task for the coming year.

[Interpreted] DBS analyst, Edmond. I have 2 questions. First, PVC situation in Mainland China, Noah and Gopher, you have good brands, you are the foundation. In recent years, there are many great challenges in the sector. So would you like to share some thoughts about the prospects? What about your strategic positioning? Is it still the same? And what about product preference among your customers? Perhaps at the moment, they prefer liquid and low-risk products. Of course, we need to follow the first step of our clients. But that may affect your business pushing down the margin. So any impact or what's the extent of impact on your profit? What are the major drivers?

[Interpreted] No need to fill the gap because our valuation is too low. We have good profit at the moment. No, just joking. Profit banking has been developing for 200 years, allowing Noah to develop its business and survive, I think VCP is our important starting point. In the past 20 years, many people gave up on this product, because it's not economical, because you have to sell long-term products with very little commission. But in the past 1 to 2 decades, VCP grew very quickly. If you look at the valuation in Wall Street is very high. So the entire product line will drive Noah's choices, it will promote economic progress. We have a good brand. We have a good reputation. We have established globalized relationships. Today, if you look at domestic asset allocation, in terms of VCP, we are confident. DPI may worsen, but IRR is still acceptable. We have a big team working on our different sectors, our portfolio companies, new energy, so on and so forth. In the process of exiting, we still adhere to the highest quality. For newly issued renminbi-denominated VCP, our clients they like long-term confident. So VCP renminbi funds they have returned to government guided funds, and not too much left in the market. And some flew to the insurance companies, they want to increase their share. We are also doing some institutional clients and tech companies, but some VCP business has been shrinking. But many clients are willing to invest into the primary market in the United States in 3 to 5 years. Overseas VCP can be expanded to a certain scale. That is something we want to do. And then our fees are not low, quite comparable to Mainland China. Many companies because of VCP are most aggregated in the United States, infrastructure, property sector and growth type funds, they used to focus on institutional clients, but today, they want to increase the ratio of high net worth clients to 30%. So they give us very good conditions. They are top-notch companies. So we are competing with other private banks like UBS, but our sales truly know the business. Our teams are outstanding with good product metrics. Hedge funds is the same. We have been in this area for many years. So these are my feelings. And then insurance, the fees are also quite attractive. Do we have any questions.

[Interpreted] In 2017, you launch this REIT Trust, in China there are a lot of stock. Are you exiting all such assets? You won't look at them anymore? And then I am your early stage investor, I've been holding your stock and your asset in renminbi for quite some time. Looking forward, well, beginning in 2017, you started operation in the U.S. It's only been 5 years. Are you able to create good return? Of course, when it comes to USD funds, you open the doors for me. It's great that I know you, so that we can pass on our wealth. We were not able to find any organization like you in the past.

[Interpreted] So this is not an analyst. She is a client.

[Interpreted] You could choose not to answer because you have other investors here, but there is a high level of stock in terms of real estate. If you refuse to look at them, if the sector improves in a few years' time, well, we're talking about huge stockpile and things are quite cheap at the moment, isn't it time to look at them? Not cheap enough, not yet.

[Interpreted] First of all, our real estate team is truly outstanding. They have exited on 12% to 16%, very unique in China. That's why we have kept the team. And we decided to exit because at the moment, it is not the right timing. Things are not cheap enough, but we are proactive in looking at operations. So if you have the opportunity to have a look at [ Hong Zhao ], Plaza, we purchased it because we have exited all real estate. Every building in Shanghai, we understand the true value. If we see something that we like, we have a good feeling about it, RMB 2.8 billion total transaction value is still too expensive. The seller lost RMB 800 million. It was designed by the chief designer by Apple, but still, to us, it's not cheap enough. You need to understand the operation. And at the moment, it's not the right time. I think right now, if you buy at any one point, it is still a high point. This lady is not coming through. This lady is not coming through. Miss Wang is very sincere and genuine.

[Interpreted] Your second question is about return or yield from the funds in the U.S. Yes, U.S. dollar fund. Actually, for U.S. dollar funds, they have gone through 10 years of prosperous period and then if you go in now, are you able to see some good yield opportunities?

[Interpreted] Okay. Let me try to answer. Well, Elise is not here. So I am going to answer on her behalf. When it comes to our layout in the U.S., first of all, there is VC fund and also the real estate fund in the U.S. These are our products there. For VC, we are trying to seize the super cycle. What kind of technology is in this big super cycle? It is AI. So for projects we are investing they are all about the AI industrial chain. For example, cloud infrastructure, computing algorithms. So they are all around this kind of frontier technology. And demand is huge right now. If you look at growth drivers in the U.S., U.S. GDP is mainly supported by their service industry, 80%. In the past, for the development of AI, it did not help U.S. a lot. A lot was done about robotics and more is done on occupation and industry in enhancing effectiveness and efficiency. For our service industry we can see the potential of ChatGPT and OpenAI. This is a very big source of growth in the U.S. If we invest and participate early in this sector, we went in early. So that means there are of opportunities for us because we started early. And we have good understanding of many GPs and there are many good projects. We do active management as well as co-investment and so on. So we cannot promise on results, but I can share with you our tactics. I think in the U.S. finance sector, where we are financed, that is because of our business model. First of all, for leading VC and PE funds in the U.S., we help them do fundraising. This is the core. We want to create value that they can use. Well, I invest in big LLP, and then there are also some follow-on investments models. So first, we raised funds for them. And then we will invest in early-stage VC, then we find teams who are good in identifying good opportunities, they can help in fundraising and then there will be a lot of co-investment and follow-on investment opportunities, we try to do a better job than others. So in the U.S., we're in the mainstream market. This is different from many Chinese funds. If you go to silicon Valley, usually, Chinese still work with Chinese, but we are different. We work with mainstream funds. The only reason is that we can help them do fundraising. We can use fund of funds to invest. And actually, foreigners are fair, they look at how much you can contribute to them. We treasure the these, we treasure this kind of value. And we must have good sales as core. Because at the end of the day, we are actually working on clients. We have to thank our real estate developers who are willing to be our customers.

[Interpreted] Thank you, Noah because you are really good to customers. You give us endless opportunities to learn. I participate in many events every year organized by you. You spend a lot of money. You are willing to invest money in us. Thank you very much. We are so grateful.

[Interpreted] Well, Mr. Pang has a saying, 10% of revenue, 10% of revenue goes to strategic budget. That is 40% of our revenue. We invest in technology, customer interface, we never do advertising. And we also do investment research, customer interface and technology. We never do advertising because for high net worth individuals, they will not be moved by advertising. So that's how we can save a lot of money.

[Interpreted] Let's see whether we have the last question? If not, thank you for coming to our Investor Day. And thank you all for participating in this event. We have prepared cocktail and food on the next hall. And feel free to social and meet each other, including our management team as well. So thank you all. [Interpreted] So next door, we have arranged a cocktail reception, there will be drinks and snacks for you. Please feel free to enjoy networking. And analysts, you are most welcome to open accounts with us, then you will become our customers and you can experience our service. There are many Goldman Sachs people who have opened accounts with us, they are also happy with our service. There are many RMs here. They can do market research right away, and they can support our customers. Thank you. This Korean lady, you have asked very good question. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]