Thank you for standing by for CNinsure’s First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. All lines have been placed on mute to prevent background noise. After the management’s prepared remarks there will be a question-and-answer session. Please follow the instructions given at that time if you would like to ask a question. For your information, this conference is now being broadcasted live over the Internet. Webcast replay will be available within three hours after the conference is finished. Please visit CNinsure’s IR website at ir.cninsure.net, under the Events and Webcasts section. Today’s conference is being recorded. If you have any objection, you may disconnect at this time. I would now like to turn the meeting over to your host for today’s conference, Ms. Oasis Qiu, CNinsure’s Investor Relations Officer.

Good morning. Welcome to our first quarter 2015 earnings conference call. The earnings results were released earlier today and are available on our IR website as well as on newswire. Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause our actual results to differ materially from those projected or anticipated. Such risks and uncertainties include but not limited to those outlined in our filings with the SEC, including our registration statement on Form 20-F. We do not undertake any obligation to update this forward-looking information, except as required under applicable law. Joining us today is our Chief Executive Officer, Mr. Chunlin Wang; and Chief Financial Officer, Mr. Peng Ge. They will walk you through our financial and operating performance in the first quarter 2015, and take your questions after their prepared remarks. Now I will turn the call over to Mr. Wang.

[Interpreted] Thanks to all of you for joining us this morning. I welcome this opportunity to give you an update on our results for the first quarter 2015 and the progress in executing on our O2O strategy. After that, I will provide a bit more color on some of the frequently asked questions by investors. Our CFO, Mr. Ge, and I will take your questions after the prepared remarks. Entering 2015, we remain focused on expanding the influence and transaction volume of our sales and service platform. In an effort to constantly strengthen our leading market position and further expand our market share. And this effort enable us to generate RMB 2.1 billion insurance premium in the first quarter 2015, up 17.7% year-over-year, marking a good start to achieve our full year target of RMB 10 billion in insurance premium. This solid growth was attributable to both strong P&C and life insurance sales. P&C insurance business combining both the retail and brokerage business, experienced 18.7% year-over-year growth in insurance premium, ahead of the 12.6% growth in the overall P&C insurance sector in China; while our life insurance business also showed record growth with over 50% upsurge in new policy sales in the first quarter 2015 as compared to the year-ago quarter. Driven by the strong growth in our insurance distribution business segments, total net revenue for the first quarter 2015 was up 24.3% year-over-year. We are also pleased that the development of our online initiatives has contributed significantly to improving operating efficiency and decreasing cost, as evident by adjusted expense ratio down to 18.2% in the first quarter 2015 from 22.2% in the same period last year. Adjusted operating income excluding expenses incurred by online and mobile initiatives for the first quarter 2015 grew 24.3% year-over-year representing an increase at…

Now, our CEO, Mr. Wang, and CFO, Mr. Ge, will open the floor for your questions.

[Operator Instructions] Your first question today, comes from the line of Andy Nahas from Prospect Fund. Andy, please go ahead.

Thank you. First of all, congratulations on the strong growth. I was wondering what - can you comment on the - give an update on the pricing deregulation for life insurance and auto-insurance? As that becomes more rolled out, what do you think that will do for your growth rate going forward?

[Interpreted] First of all, the life insurance pricing deregulation started in 2013 and after two years gradual implementation it already started to show some positive impact on the market and also on CNinsure’s financial results. For example, we have achieved or we have entered into cooperation with Taikang Life, which is one of the leading life insurance companies in China. And there the revenues from Taikang Life contributed 40% of our total new party sales in the first quarter. And we believe that because of the product innovations driven as result of this life insurance pricing deregulation. And in this year we are planning to hold three products column together with insurance companies. One will be related to the life insurance underwriting and also as well as related to life insurance re-insurance. And we believe that this initiative and also this further product innovation will help push forward further growth of our life insurance business. And for the O2O insurance pricing deregulation, we believe that the reality of the CRRC is to push forward its reform cautiously. And as far as we - a pilot project will be launched in the - on June 1 in six provinces and it will be implemented on a steady pace and we don’t really believe that it will bring drastic changes to the market in the near term. But for the long-term we believe this is a positive policy. And first of all it will help further push - increase the market competition among insurance companies. And we actually believe that insurance intermediaries will be benefitting from this more fierce competition among insurance companies. And then secondly and with the new auto-insurance pricing deregulation, the - currently, the provincial pricing raise enjoyed by the telemarketing and online sales channel will be broken, because one of the pricing structures for insurance companies to set their price is actually - is channeled, so that means that other channels like CNinsure could be one of the channel that can enjoy a better pricing rate. So we believe that that will help the development of our business going forward. Thank you.

Your next question today comes from the line of Henry Guo from Summit Research Partners. Henry, please go ahead.

Hey, thanks for taking the question. So two quick ones, So first is the on the top line, I remember management mentioned in the last conference call that the whole year net revenue expectation is about 30% year-over-year growth. So now we’re approaching the end of May, we should have more visibility, is there any update regarding the net revenue guidance for the year? And secondly, on margin, so it would be great if management can provide some color in terms of the margin trend, how you think about the margin for the guidance of the year. Thank you.

[Interpreted] First of all, we have already provided guidance for the second quarter, for the top line growth of 30%. And we are also confident that we can achieve 30% growth for the whole fiscal year. In terms of the earnings, excluding the investments in online initiative, and we also believe that we can achieve 20% to 30% growth in terms of operating income. Thank you, Henry.

[Operator Instructions] Your next question today comes from the line of Zhu Ling from BBA. Zhu, please go ahead.

[Interpreted] The question is from Zhu Ling and he’s asking the strategic investment by Alltrust, is there any update on the strategy or business cooperation with Alltrust so far?

[Interpreted] We have already entered the agreement with Alltrust in terms of the strategic investments, but the transaction - the completion of the transaction is still subject to regulatory approval. And having said that, actually, I have scheduled a meeting with the management of Alltrust next Monday to discuss our further cooperation with Alltrust in terms of business on further business cooperation. And we do believe that the strategic investment will help push forward and will help deepen our cooperation going forward.

[Foreign Language]

[Interpreted] Alltrust also have high expectations of our future cooperation on this strategic investment - after this strategic investment.

Your next question today comes from the line of Rohit Sah from TCW Group. Rohit, please go ahead.

Yes, Hi. I’m looking at your operating cash flow numbers, and there are some items which I need a more detailed explanation. First one is, in the operating cash flow item, it says changes in operating cash - assets and liabilities minus RMB38 million, that’s up from minus almost RMB7 million last year. Can you explain how this happened, how did you manage to drain RMB38 million in operating assets and liabilities? And within the operating cash flow activity, it is also a negative RMB2 million on investment income. So how did you manage to lose RMB2 million on investment income, I know it’s a very small amount, but still the negative is the problem?

[Interpreted] The question will be answered by our CFO, Mr. Ge. And the first question regarding our cash flow, actually, CNinsure, we don’t have any debt and the liability is mainly because of the difference between the commission receivable and also the commissions payable to sales agents and because of the longer turnover period for the commissions receivable and hence the negative impact on the operating cash flow. And then secondly for the investment income and according to the accounting principle actually we can only recognize the investments from the investment income when received, because the investment income is mainly related to the - our investment in truck products, and also to interbank savings deposits. And we only recognize it when received, and because of the - because of some of the payments of those dues - or interest are paid on a semiannual basis. So in the first quarter, there is less investment income.

Okay. So can you give us an idea of how many account receivable days you have and how many account payable days you have?

[Interpreted] Account receivables. The accounts receivable as of now - as of the first quarter?

No, no, not account receivables, but account receivable days?

[Interpreted] Basically there is settlement periods about two months. So we already received 80% of all the amounts receivable.

Okay. And for account payable - account payable date?

[Foreign Language]

[Interpreted] Basically, it attracts [ph] our accounts receivable.

Okay. And so they roughly match, I mean, there is not a big difference, only a - you got a two-month accounts receivable and a one-month accounts payable, so your working cycle is really one-month account receivable days being more. So that seems - the RMB38 million seems a bit high even if you allow for that one-month extra unless your sales are growing very, very fast?

[Interpreted] Normally, the accounts receivable match the accounts payable. But for the first quarter, because - the big difference was, because it’s also the season to pay the bonus and the bonus for the employees, because the accounts payables also includes the bonus for employees and also the professional fees. And also during this season, we pay our legal fees and audit fees, and so that’s why it caused the big difference.

Okay, okay. So, sure, leaving aside the seasonal issues, should we assume that this negative change in operating assets is actually a leading indicator for your future cash flow?

[Interpreted] Well, basically in the past, because we are quite comfortable and our cash flow was positive. But going forward, it’s also that our cash flow will become negative and that’s because of how the way that we’re using our capital. And in the first quarter, we have acquired some minority interest from our subsidiaries. And we’re going to continue to buy out the minority interest going forward. And then secondly, when we have a year mark huge expenses in - to invest in the online initiatives, you might be - you might notice that actually if we exclude the investment in online initiatives, our operating income actually reported a probably strong positive growth. But yes, indeed the investment in online initiatives will continue going forward and that will have some negative impact on our cash flow. And then thirdly, on the Internet phase it’s possible that we will have some M&A activities going on. And overall, this capital expenditure will have some negative impact on our cash flow. So the cash flow will be negative in the future change going forward.

Okay. I want to turn to the cost of insurance agency business…

Okay.

In the press release that you gave, you said that there was a 26.7% increase in the agency - P&C agency business, and 39% increase in the life insurance business because of increased commissions paid out to sales agents, as a result of increased market competition offsetting the increase in commission rates that we received from insurance companies. What was the commission rate that you were paying before this? What are those now? Now, it says increased market competition, so where are you seeing this competition from which drove you to increase the commission payouts to sales agents?

[Interpreted] The competition mainly come from insurance company, because right now actually, our peers cannot really pose any threat to us due to our scale, and we have better - we have much more stronger - we have stronger bargaining power with insurance companies, but the competition mainly come from insurance companies. And as for the changes in commissions, it can be reflected in the changes on gross margins. Historically, our gross margins were as high as 40% to 50%, but right now it has dropped to around 23%. So basically, reflecting the increase in commission payout to the sales agent in a country two to three years.

There are no further questions on the line. I would now like to hand the conference back to Ms. Qiu for closing remarks.

Thank you for joining us on today’s conference call. If you have any further questions, please feel free to contact us. Thank you.