Good morning, ladies and gentlemen. Thank you for joining us for the 2024 Interim results conference of Ping An Group.

I'm Richard, Secretary of the Board. I'm cohosting this meeting with [indiscernible], Chief of Group's Brand and PR while simultaneously hosting this meeting on site and through webcast.

Thank you, Richard. Management in Shanghai are Mr.

Xie Yonglin, Group President and Co-CEO. Ms.

Zhang Zhichun, Group Chief Financial Officer; and Mr. Benjamin Deng, Chief Investment Officer.

For today's meeting, we'll begin with Ms. Fu Xin to introduce a review of our first half results, and then we'll open the floor for questions.

Thank you, friends of the media. Good morning.

Thank you for joining us for the 2024 Interim Results Conference of Ping An Group. Thank you very much for your long-term standing and support.

On behalf of the management, I will introduce you our business performance of the first half. Please turn to Slide 5.

This is an overview of our overall strategy. I believe many of you are quite familiar with this house picture.

And here, I would like to highlight, be it in the past, present or the future, our strategy has always been clear and in leading. For our business model, we adhere to the Integrated Financial and Health and Senior Care strategy implementation, and we are building an upgraded version of Wells Fargo and UnitedHealth.

And for the first half, we have proactively worked according to such strategy. For the Integrated Finance, we upgraded it from 1.0 version to 2.0 version.

We upgraded from a simple cross-sell model to a customer-centric operating model to provide worry-free money saving and time-saving services. In terms of the Healthcare and Senior care, we also deepened our Health and Senior Care strategy.

And you could see that the contribution from Health and Senior Care services has been increasing to the core businesses, especially the Life business. Please turn to Slide 6.

It's -- business performance of our first half. In review, the market has been complicated, and their challenges and opportunities coexist.

However, our overall operation maintained strong resilience with our upbeat momentum. There are a few numbers to show that.

From the revenue, our revenue up by 1.5% year-over-year to CNY 554 billion. Against such a challenging macroeconomic environment, this result is no easy piece.

Secondly, in terms of the profit, our net profits rose by 6.8% year-over-year to CNY 74.6 billion, showing our business resilience. And our OPAT reached CNY 78.5 billion.

Thirdly, in terms of the ROE, our annualized operating ROE reached 16.4%. This is quite industry-leading.

And this number has shown our high efficiency in capital usage and operation resilience. Next slide for the NBV, you could see that we already reached an 11% of growth.

And what is worth mentioning is that for the past 6 quarters, our NBV has maintained double-digit growth. This has laid a solid foundation for our future business development and profit release.

And fifth, for the dividend, we take shareholder return seriously, and we propose to distribute interim dividend at [ 96% ], which is flattish year-over-year. Next slide shows our business highlights.

I would like to summarize our performance as stable business performance and improving quality. And in terms of stable business, our core businesses, especially our Life & Health, P&C and Banking businesses have shown stable performance.

Despite challenging environment, the OPAT of these 3 core businesses still managed to deliver a 1.7% growth year-over-year. And in terms of the quality improvement, I would like to draw your attention to life business.

There are 3 parts I would like to share with you. First is sustainable health growth of Life and Health business.

The NBV has rose by 11% year-over-year. Meanwhile, I would like to draw your attention to our NBV margin, which rose by 6.5 pps year-over-year, which shows that we realized the double growth in both the size and quality.

This result against such a challenging environment is not easy. And this is a reflection of our past life reform.

The second is the agent force. Our agent force actually stabilized and rose to 340,000 in the second quarter.

And also, the NBV per agent rose by 36% year-over-year. This has shown actually the increasing productivity and increasing income.

The third is the policy persistency ratio. For the 13-month persistency ratio, it rose by 2.8 pps.

And also for the 25th-month persistency ratio, it also rose by [ 3.3% ]. And here, I would like to stress that our persistency ratio has been improving for 4-years in the past, laying a solid foundation for the future profit growth.

In terms of the P&C Insurance business, our core business actually maintained good quality. The revenue has increased by [ 9.4% ] (sic) [3.9%] and overall COR reached 97.8%.

Here, I'd also like to draw your attention to the auto insurance -- auto COR, which has been leading the market for 16-years in a row. In terms of the Banking business, the risk provisioning capability increased with net profit stabilized, increased by 1.9%, CET1 rose to 9.3% and provision coverage to 264%.

It actually up by [ 0.2 pps ] compared to last quarter. So these are the main highlights of our first half business performance.

Next slide. As you see from this spreadsheet, the OPAT from our 3 core businesses actually improved by 1.7%.

There are some negative growth of other businesses. However, the proportion has been very minimal.

So their impact on the group is very limited. Next slide, Slide 9.

This page is very important. This has listed the OPAT of Life and Health business and breakdown.

You can see the OPAT at the right-handed side bottom, it actually up by 1.3%. This growth has a lot to do with the 2 circled indicators, which are the operating variances and others, which rose by 10.2% and also another indicator, which is the investment service results, which rose by 12.1%.

These 2 results are no easy because they reflected our quality improvement as well as our investment capability improvement. And on the left-hand side, you could see our CSM balance as of mid of 2024.

Our CSM balance reached CNY 774 billion, up by 0.8%. And such growth thanks to the new business contribution and the expected interest growth as well as change in estimates that adjust CSM.

So this has ensured the future profit stability. Next slide.

Next slide shows our investment performance. There are a few things I would like to draw your attention despite the complicated market and volatile capital markets, Our CII still reached 4.2% and is actually a growth of 0.1 pps year-over-year, which is industry-leading.

And also, you could see that our past 10-years average CII reached 5.4%, with an average net investment yield at 5.2%, both exceeding our EVs long-term investment return assumption. Slide 11, I would like to share with you a breakdown of our insurance funds allocation.

As you can see, the allocation has maintained very stable. In the first half of this year, I would like to draw your attention to our red circles.

We used a good timing and seized opportunity and allocated into long-term bonds, and we narrowed duration gap with bonds investment accounting for 60.7%, up by 2.6 pps and our insurance funds exceeded RMB 5 trillion, up by 10.2% year-over-year. And here, you can see our fund assets and cash assets actually account for nearly 80% of the total insurance funds, providing very stable return.

We always maintain a very steady risk appetite continue to invest in the value to running through the circles, having the 5 right matches for the right timing, right duration, right product and to be regulatory compliant. Please go to Slide 12.

Slide 12 shows the solvency ratio. You can also see that in the mid of 2024 with the solvency regulation, our solvency ratio is above the regulatory level while at the same time, our LH and P&C, the solvency ratio is actually 2x higher than that of the 50% required by the regulators.

So we do believe our core solvency performance is still going to be maintained at a very healthy level. And Slide 13, let's take a look at the DPS.

For Ping An, we attach this really importance to the shareholder paybacks, and our cash dividends always maintain at a very competitive level. And we have already dispatched the interim dividend, that is CNY 0.93 per share.

So generally speaking, we have an ever-increasing trend of the dividends being paid for 12 consecutive years. For the past 10-years, total dividends have been paid is already more than CNY 300 billion.

And the dividends being paid after listed already been more than CNY 340 billion. On the right side, the parent company free cash being maintained at a reasonable level.

And also in July of this year, we published the convertible bonds USD 3.5 billion, which consolidated our P&L and also continue to improve the cash level of the group. On Slide 14, that actually show us sustainability development of Ping An Group.

As a responsible multinational financial company, we contribute to sustainable development. On the left side, all the stats and information showcase our social responsibility efforts been made to green finance and green economy.

On the right side, we also show the honors and awards, which truly demonstrate the recognitions being acquired from the international community. Slide 15, that is honors and awards.

Many of you sitting here may know this part very well. I'd like to specifically remind you for Ping An Group, we have been ranking #1 world's most valuable insurance brand for 8-years in a row.

This is not easy to be achieved, but also demonstrating our great performance. So to make a brief summary.

As you can see in H1 of this year, we continue to deepen the strategies, maintain steady growth with high-quality development. That's all for our financials.

Coming next I would like to welcome our friends from the media to raise questions, please.

Thanks for madam Fu. So I think business highlights already been built into the slides.

You can read the slides by yourself. I think many of you have already read that.

So here comes to the end of the presentation. Now it's time for us to start the Q&A.

Our Shanghai and Hong Kong venues, please raise question by rotation. Before you raise your question, please identify yourself and the organization you represent.

Making sure you raise no more than 2 questions per turn. Now let's give the priority of question raising to Shanghai venue, please.

Now let's welcome our friends from Shanghai to raise a question. Please.

Hello, I come from [ CCTV Financial News ]. I have 2 questions.

The first question is regarding overall performance. Net profit attributable to the current company was CNY 47.6 billion, grew by 6%.

Your A share stock price also up by 4%. It seems that investors should recognize your performance.

But for the management team, how you're going to comment on your H1 performance, what would be the outlook for H2 of this year? My second question is regarding investment.

Insurance funds, it's -- people just keep an eye on that. How you're going to comment on the return on the yields of the insurance funds?

Is it in line with your expectation? What is going to be in H2 of this year?

A shares are pretty sluggish. Evaluation has been pretty low, how you're going to consider your investment in [ A share ] market?

Thanks for your question. I'm Fu Xin.

I think the evaluation from investors is the very true evaluation. Thank you very much.

We are grateful for investors for your long-term recognition of our performance. As a member of the management team, I reported and discussed with our Board a lot.

If you ask me to comment on the H1 performance of Ping An Group, I think I may use the following sentence to summarize our performance, stable performance with quality improvement and the strategic deepening. What do I mean by seeing stable performance?

I shared with you our 3 businesses: Life, P&C and banking business. The operating profit grew by 1.7%, positive growth.

In a very challenging environment, we believe our growth has been pretty stable and not easy to be done. We stepped our efforts in this process where with ever improved service quality, I think I have already shared with you our business qualities are further improved.

For example, NBV improved by 11% and NBV margin also improved by 6.5%. So you can see with the business scale and the quality all improved.

That should be attributable to the strategic initiatives being taken behind the scene. And the second improvement I'd like to talk about is multichannel reform has been further executed.

In the past, we only have the agent channel. Now we have agent plus bank insurance, community grade channels are working together.

Later may Michael have some additional comments on that. For these all in one channels, no matter from the size from the margin that truly showcases the great performance of ours.

Thirdly, the life insurance reform, 13-month persistency ratio, 25-month persistency ratio being all improved by 2.8% and 3.3%. Such an ever-growing persistency ratio can also help to provide very strong support to the future upgrading variance and the certainty of the future profit.

Regarding how we deepen the strategy, there are some strategic initiatives. For example, an adjustment of the integrated finance initiatives.

We shifted from the cross-sells of the single product to a customer-centric operation and the modality changes, indeed, all the measures being taken by us.

No. Okay.

Let's welcome the second question. Let me respond to your second question, shall I say.

In H1 of this year, our comprehensive annualized return is 4.2% higher than what we saw last year. For this result, we feel it's good.

In line with our expectation, while we have a good performance in H1 of this year. The reason is because we will be forward-looking and be able to do allocations in advance.

We did many allocations for the long-term interest rate bond and also, we allocated in the high-value stocks. So that's the reason.

You know that we indeed have a very stable return or the yield from the investment. We follow a strategy that is strategically committed to running through the circles, being agile and prepare for the running day with a balanced allocation.

This is the principle we have in our minds for many years. No matter we're in a good market or a bad market or no matter we have how many uncertainties in this market.

We're always sticking to such investment strategy. So we are not going to have the so-called the knee-jerk response or stress response.

We have our fundamental and bottom line strategies to navigate the uncertainties and the market dynamics. Well, talking about the stock market.

Many people said it's very hard to interpret the existing stock market. But as I have already shared with you, we have balanced allocation.

We do have the [indiscernible] allocation using the jargon forming our industry. We do have the high yield, high dividend value stocks.

We also have allocations in the growth stock, for example, in high tech and in the new quality productivity sectors. In the past 3 years, I mean, starting from '22 to '24, there are so many fluctuations in the [ A-share ] market in China.

So you say that our overall benefits from the equity allocation is significantly higher than the market benchmark, even if there are some headwinds in the market, but still, our yields from the allocation is still in line with the expectation, placing us in advantageous position. How the H2 is going to be.

We're still going to stick to our fundamental investment principles to balance investment and allocation, taking the strategic opportunities in the market, making sure we have a good resources allocation and making sure we will be able to have a stable and good investment performance for the full year.

Okay. Let's welcome another lady from Hong Kong venue, please.

I have 2 questions regarding the insurance funds investment...

Sorry, you have to identify yourself.

I come in from [ Asian Investor ]. My name is [indiscernible].

I have 2 questions regarding insurance funds investment. I'd like to ask.

First of all, is it possible for you to elaborate on the microeconomic picture of China in H2 of this year? And how the stock market, bond market and property market may look like in H2 of this year and what will be your investment strategy accordingly?

My second question is regarding the overseas market. It seems that the market say that U.S.

is going to further do the rate cut. And the asset allocation worldwide is going to be reshuffled.

That's going to impact the China market for sure. With such a macro environment, how Ping An going to comment on the overseas investment in H2 of this year?

How it's going to impact the China market?

The first question, I think I have already shared with you our allocation strategy and the principles. while I was responding to the first question from our friends media -- media friends.

For national economy, I think GDP growth 5%. If I put myself in the shoes of the investors, I have every confidence, I do believe China can hit the GDP growth by 5% in next year.

There are so many good opportunities we can see. Property market, the dark time is already gone.

There are so many new policies introduced. Property market are in the adjustment stage.

The bottom building is already formed, where the Chinese economic structure is now marching towards green economy, technological development and also new quality productivity development. When we will do investment, we continue to talk to the industry scientists and sci-tech enterprises founder.

I deeply impressed by their momentum. Many of them, you know that they do R&D investment on new quality productivity with very good R&D progress being made.

So that's the reason we are accelerating our research work. We already made some allocation there.

More allocation is on the way in the near future. So you can see in the past, there are some economic momentum that in the bottom building stage, new momentum is in the generation stage.

Chinese economy is going to face some positive growth. We have every confidence in that.

As China's one of the largest insurance company, we will indeed join our hands with the national development, grow with the country's development. In our allocation, we have a balanced strategy.

Our strategy can help us to riding through the industrial circles, prepare for the running day and covering the possible asset class. Overall, for the interest rate cuts, it is a good news for the capital markets.

Regarding how much degree it's going to cut, everyone has a different opinion. Some people consider there will be a 25 pps of cut in September, whether there's going to be another round, nobody knows.

But globally, whether it be U.S. stock markets, Asian stock markets or Chinese stock market, I think such a interest rate cut will be a good or favorable factor.

So we are expecting a favorable policy, such favorable monetary policy will give a boost to the capital markets. Our overseas investments were risks well managed.

And with the interest rate cuts start to be on the way, the value gaining of these assets is very promising.

Next question from Journalist in Shanghai venue.

I'm from the financial news. So for this third plenary session, it has raised guidance on the finance development.

So what's your take on that? And what's your plan for the future, how to deliver high-quality growth?

And second, for the growth or high-quality growth, we noticed that last month, you have issued USD 3.5 billion of CB. What was the consideration behind that?

And how does that has anything to do with your solvency ratio? And what's your future capital plan?

I'll answer your first question. The second question will be answered by Ms.

Fu. So for the third plenary session, it has given really important strategic guidance on the comprehensive reform -- deepening reform and the modernization of China.

We would like to leverage our function of the financial institution and guided by the party organizations. And using the party organizations give us guidelines and promote our corporate culture development.

We would like to be a pragmatic actors of the reform and implement the 5 initiatives. So in fintech, I would like to emphasize on our initiatives on these 5 priorities.

So first, for fintech, we are a financial company. We would like to leverage fully of our insurance funds and the loans from the bank and the investment banking of the securities company, a combination of diversified tools to invest into the innovative and technology companies to give them the capital injection and strengthen the supply chain of the industry.

As Benjamin just mentioned, in the last year, in the -- the first half of this year, we have reached out to some researchers and scientists to do some in-depth research. And we were impressed about how motivated they are.

We will embrace such guidance and implement actively. And we, for all our subsidiaries are actively acting on it.

For example, the bank has lowered the interest rate for issuing loans. And the insurance fund has a massive investment as amount to be invested.

And even Lufax Holding, it has very high and inclusive finance, it has very high loan balance. We have about CNY 500 billion of loan balance that is dedicated for supporting the small business owners.

And for the gig economy workers, we have provided them insurance companies covering 250,000 people with their coverage very high. So as insurance -- as a financial company, we have to do our work to increase the accessibility, convenience and coverage of financial services and to make our financial services heartwarming.

For senior care services, Ms. Fu already explained a lot.

So we have Health and Senior Care services. We focus on the insurance for home-based senior care services and insurance plus premium community-based senior care services.

We have already deployed 64 cities of the home-based senior services and already 120 customers have access to this home-based access. And our premium community-based senior care services has been launched in 6 cities.

And we foresee that by 2025, they will start actual commercial operation. In terms of the digital finance, we have 3 digital projects, digital operation, digital business and digital management.

We have been promoting the development in this brand for 3 years. And we also utilize the AI.

We have increased pay terms as well. According to the newest rank from United Nations, we had -- we rank #2 globally with 1,564 patents application.

And we are ranking the leading position among the global financial institutions as well with our patent application. We're using this technology to lower our costs, increasing the operation efficiency and increasing the risk protection.

We have been always adhere to the high-quality development. And we want to ensure that can be met.

And in terms of the sustainable development, as you could see in the past 2 decades, our total assets, our dividends payout, our tax, our revenue, all of this key indicators have realized double-digit growth. They have been constantly increasing instead of having ups and downs.

I believe you can have a look on our past 20-year data. And second, about the improved structure.

On one hand, we are strengthening our integrated finance. Meanwhile, while deepening the health and senior care services.

There's a huge demand for senior care services in China. On the one hand, we're strengthening integrated finance.

And meanwhile, strengthening the senior -- and senior care and health, this is a very good strategy. Meanwhile, we are also strengthening our risk resistance capability and trying to form that capability that can help us to withstand risks.

Right now, our retail customers has reached to 236 million. And with customers with more than 4 contracts account for nearly 25%, and they have very high retention rates with very low churn rate.

Among our retail customers, 63% of the Life and Health businesses have used our health and senior care services. So it's very apparent that our structure is very sustainable and can support a quality growth.

In our operation, we need to coordinate the growth in both the quality and scale. Our ROE has been between 16% to 18%.

And in the first half, despite a very challenging operating environment, our ROE still managed to deliver 16.4%, showing very good quality of growth. Also, if you look from the customers' demands, we contribute to the Health China and to the aging national policy.

We're trying to build our senior care services strategy. We have served 67 -- we have serviced 67,000 corporates and their employees.

Our home-based out senior care services, as just mentioned, already covered 64 cities and with 120,000 customers have access to home-based services. So in response to the 5 priorities, we are implementing and doing our efforts with best as we can, and we want to be a very pragmatic enterprise in supporting the national policies.

Thank you.

I'll answer your second question regarding the CB issuance. So what are the considerations behind?

There's one key consideration is our business because our business has been growing and it has needs for more capital. As you see, our business has been evolving very rapidly, especially for the financial business.

Our core financial businesses require capital investment. As Mr.

Xie just mentioned about our ROE. If you look at the Life ROE, it maintains at around 30%.

So, this will be our purpose of using the CB capital. So CB insurance is for the business needs and development needs.

So why we are issuing these CB bonds? Another consideration is that we want to face to the future uncertainties and regulatory policies, we prepare in advance and want to prudently do the management on our capital planning.

So from this perspective, usually overseas CB, it has cost advantage and has flexibility in terms of the pricing. So this is a very helpful features of the CBs for us to consider it as our capital injection plan.

Also, we want to maximize the shareholder returns. So we'll follow this principle to do our asset or capital usage.

I want to comment on the solvency ratio. CB is a very special vehicle before converting to the shares, it has nothing -- no impact on our solvency ratio.

Thank you.

Okay. Next question.

I'm from Japan News. My question is regarding the HSBC investment status.

So going forward, on the new management of HSBC, how do you take on them? Also for their HSBC Asia business, do you have any plans regarding that?

Another question. Regarding the bond investments, it seems that there has been some regulatory guidance on the treasury bond investments.

So regarding the treasury bond investment, what's your solution? Or what's your kind of measures and considerations in terms of this part of investment?

Thank you.

Okay. Ms.

Fu. Mr.

Xie, you could add up later. So for HSBC investment, it's a very important financial investment, and it's part of our insurance funds allocation.

It's part of other high-dividend, high-yield stock investment. We will not comment specifically on the HSBC or its management.

Today is Ping An Group's result conference. We would like to get more attention from you on our own performance.

Thank you.

And regarding the bond investments, we haven't received any guidance from the government. Actually, for the bond investment, it is one of our core or it's our core part of insurance funds allocation, it can help the asset liability duration match, and it's one of our cornerstones.

We follow match principles. We follow the asset liability match with the risk preference match and investment return match and duration match.

So this matches are our principles. And investing in long-term bonds assets, it is a must for us to do.

It is also like during the past few years or in the past long history, we would actually excessively allocate on long-term interest rate bonds. This is how we build our solid foundation.

And in the future, we will stick to this excellent asset liability match and the match principles will follow this.

Thank you very much. And coming next, let's welcome friends from the media in Shanghai venue, please.

I come from the China Security Daily. I have 2 questions.

The first question is regarding insurance funds. There are so many natural disasters happened in H1 of this year.

How is it going to impact the total comprehensive cost ratio of the insurance funds? Secondly, we noticed that Health and Senior Care be your key strategy, how it's going to contribute to your performance?

What about the future?

I will hope to respond to the 2 questions. First of all, regarding insurance funds.

Yes, in H1 of this year, due to the weather reason, no matter during the spring festival and there are some snow disaster happened in southern part of China, and also the heavy storm in the summertime, all those natural disasters indeed actually bring huge challenge to the company claim of the property insurance. So that's indeed you see the ratios being rose in this industry, the cost ratio is not only impacting Ping An, but all the peers in the whole industry.

This is indeed also normal for property insurance because property insurance is there to support our clients' customers to take care of the risks during the natural disasters. Looking into the future over the whole year, we can say that for Ping An, our comprehensive cost ratio in H1 of this year continue to stay ahead of the industrial average performance.

We have every confidence for the full year, we will be able to maintain the market leading cost ratio and making sure that we will always be able to have the best underwriting profit. That is responding to the first part of the question.

Your second question is regarding Health and Senior care. A few points on that.

First of all, Health and the Senior care service is indeed -- the second well within our 2-well strategy that is integrated finance, plus health and care. And -- but it's been a part of our key strategy.

We're going to do the promotion of [indiscernible]. Now health and senior care service.

It's been positioned to empower the essential business, especially our life insurance business. As you may see in China, with the future economic development.

As the Chinese demographic structure started to march towards aging population with low birth rate. And you can also see with the wealth accumulation made by people in our society.

People are more interested and demanding in healthcare and the senior care industry. So [ matter ] from the industry trend itself or from the customer need perspective, health and senior care industry are of great potentials.

Where if we take a look at insurance industry, insurance [ plus ] service would be the future trend. Insurance industry is already being shifted from traditional wealth guarantee value propositions and protections to have an extra service being provided.

In that way, we can provide a financial service with human touch, really making sure the customer can have a sense of achievement, improve their customer experience further. Where for the health and senior care service, I do believe it's going to show very good empowerment to our essential business.

In our interim result release, you can see that in life insurance, around 70% of the NBV are actually the customers who enjoy our health and senior care service. So around 70% of those customers really like our health and senior care service, they like our product, so they purchase our life insurance policy.

If you talk about the specifics, people's needs for senior care continue to grow. So that's the reason.

Senior care, you see his contribution to the policy also continued to expand. That is for the customer.

Besides the customer, let's also talk about how we build our team. We have the agent team.

We have the community financial grid team. We also have the bank insurance channel.

We made a great team empowerment because what is needed by the team is indeed, what is needed by the customer. You can also see that for insurance value per policy, it used to be distressed, but now it's been improved by 3.8x.

You can also say the quality of the agents continue to be improved. We have the tiered operations from FVP to QVP to MVP, we have 60% of the agent force.

And in QVP around 57 of them, and around 90% of the MVP, in their sales, it embedded with health and senior care service. So what does it mean?

Our customers, they like our service. So they purchase our policy.

So it's going to be a differentiated advantage to our existing insurance business. I mean where you know that for our high-value customer, from the customer acquisition perspective, we will be able to improve the high-value customer acquisition by another 23%.

So in other words, for health and senior care service, we have already made good achievements, but the potential has not yet been fully released. The home-based senior care service, we only cover 64 cities.

Only 10 cities more than by the end of last year. But for Ping An Group, we have life insurance all over China, there are so many customers who are not accessible to our localized health and senior care service provided by Ping An Group.

We have a great potential to do more in this regard. At current stage, what we're trying to do is to further expand the home-based senior care service to more cities, allow more customers to access to our high-quality service.

We also would like to continue to mobilize the purchasing power from 230 million customers, continue to improve the service, reduce the cost of the senior care service. Then making sure we will be able to -- on behalf of the paying users integrate the best supply resources in the market, providing the best cost-effective service making all the customer of Ping An can enjoy the high-quality senior care service from Ping An.

Okay. We have another gentleman sit in the middle.

I come from Hong Kong Economic Times. I have 2 questions.

Your first question for the National Financial regulatory body and in August, it actually down-regulated the guaranteed returns of the financial products. It's been down by 2 pps-- and also, the participating product, the upper limit also be adjusted.

I'd like to ask you how is being adjusted by Ping An, how it's going to impact your balance sheet, where for the industry-wide, whether they're going to further pressures for reductions? The second question is regarding Lufax.

Lufax once being listed, is market value continue to go down? For the management team, what you have some market value management measures in place?

Or do you believe you're going to prioritize Lufax?

Let me respond to your first question. Recently, indeed, regulator, yes, indeed, actually helped to reduce the illustrating rate of the life insurance industry down 50 pp, no matter for the traditional insurance or participating insurance.

This is a blessing for the whole industry, the same to Ping An because it's good for Ping An Group for life insurance and for the whole industry. Why should I call it a blessing because in life insurance industry, especially in the near future, interest rate are going to continue to drive.

The life insurance in China indeed have the spread deficit issue. Now the regulators stopping on time, help to curb that trend, which can actually help to prevent the spread deficit being further worsened.

This is indeed a positive pricing for the whole industry. Where I can say that life insurance of Ping An, we are a leading insurance company in China with such irregulation, we will also need to be benefited as a market player.

And second point, how it's going to impact the new incremental policies. And I think that, that cost would be reduced further.

Well, at the same time, in order to respond to the changes, we were also going to optimize the product structure. In the past around 70% of the product are the traditional insurance products.

In the near future, participating insurance is going to be the dominant one. It's going to be more than 50% of the total sales.

Well, at the same time, with the feature of the guarantee and always the participating and also the health and the senior care service, we will be able to activate the 230 million users, providing different product metrics according to the diverse needs of the customer, further reducing the debt cost. We'll also maintain a balanced product mix, making sure we maintain a good profitability of the product.

That is my response to the product. Certainly, how the future is going to be, whether you mentioned that illustration rate will go down further.

You mentioned about the world pressure. I think risk going down is not necessarily something bad.

It can help to further reduce debt cost. Where for Ping An Group, we have a diversified, differentiated service advantage.

We have very competitive agent force in the market. We also have a product advantage of integrated finance.

We have 230 million customer base. Regulatory changes, I mean, to Ping An to life insurance and profitability going to be a positive impact.

We have every confidence in the near future life insurance going to have a stable and healthy development, be the profit contributor of the group as a whole. Respond to your question regarding Lufax.

You probably noticed for the past few months, Lufax made a special dividend payout. The reason is because for Lufax, their Board and their management team in order to maximize the interest of the shareholders, they made the special capital planning and took the special dividend payout.

So for Ping An Group, we passively made the choice of stock. Why should we choose to go for the stocks?

The reason is because we are confident on the future growth of the Lufax. Well, for other specific details because it was involving the regulatories of 3 cities in Mainland China and in Hong Kong.

And for specifics, please follow announcement made by Lufax in the near future.

Due to time reason, Final question, let's give it to Shanghai venue.

Management team, I come from Financial. I have 2 questions.

My first question, how management team comment on the life insurance performance in H1 of this year? Mr.

Xie also mentioned about home-based healthcare and the senior care, how the progress may look like? What about the suppliers?

Any specific handpicking criteria for the suppliers? My second question, actually, the new policy has been released in August -- 1st of August.

It's been there for 1 year. How it's going to impact your customer channels, your business and the whole industry?

Let me respond to your question. First question, that is life insurance performance.

How I'm going to comment on it, whether it's good or not. Leveraging our internal criteria, we do have a [ 4:1 ] requirement, compete on market benchmarking with [ PS ] benchmarking with budget and benchmarking with yourself.

You not only need to see the absolute value growth. You should also benchmark your performance with peers, whether you stay ahead of the market average and how you're going to compete with your peers or your benchmark model in the market.

You should also compare whether you are realizing what has been expected in the goals. So for that 4 benchmarks, from the dimension perspective.

For life insurance, no matter from NBV or from the stable sustainable growth of the 3 channels or from the house and the senior care and with a full alliance initiative, I do believe a life insurance business, indeed meeting the target of the 4 ventures. But we are not 100% satisfied because we always hope business can go beyond our expectation.

In H2 of this year, and we believe we are still expecting more performance from life insurance.

Okay. I think we'll conclude today's conference right now.

If you have further questions, please contact our Hong Kong and Shanghai PR colleagues. Thank you for your interest.

Thank you. Thank you for attending our today's conference.

Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]