Thank you for standing by for Fanhua’s Fourth Quarter and Full-Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. All lines have been placed on mute to prevent the background noise. After the management’s prepared remarks, there will be a question-and-answer session. Please follow the instructions given to you at the time if you would like to ask a question. For your information, this conference call is now being broadcasted live over the Internet. Webcast replay will be available within three hours after the conference is finished. Please visit Fanhua’s IR website at ir.fanhuaholdings.com under the Events & Webcasts section. Today’s conference is being recorded. If you have any objections, 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, Fanhua’s Investor Relations Manager. Thank you. Please go ahead.

Good morning. Welcome to our fourth quarter and full-year 2019 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 U.S. 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 are our Chief Executive Officer and Chairman, Mr. Chunlin Wang; Chief Financial Officer, Mr. Peng Ge; and Board Secretary, Lily Lee. Mr. Wang will provide a review of our financial and operational highlights in the fourth quarter and full-year 2019. And he, Mr. Ge and Ms. Lee will take your questions after the prepared remarks. Now I will turn the call over to Mr. Wang. Wang?

[Mandarin] [Interpreted] Thank you for joining us on today’s conference call. Here with me, we have our Chief Financial Officer, Mr. Peng Ge. We’ll begin today’s call by giving a brief analysis about recent market trends, followed by an overview of our fourth quarter and full-year 2019 financial and operation results and our growth outlook in the first quarter in 2020. There will be a Q&A session after the report. In the first part, I’d like to give a brief recap of trends in 2019 in the China life insurance market, which has been under adjustment. In 2019, against the backdrop of escalating trade war between China and the United States and changing macroeconomic situations in China and abroad, China has continued to tighten regulatory supervision to prevent and mitigate risk in the financial industry. China’s insurance industry, especially the life insurance sector, has been undergoing constant adjustment and ratification. As a result, in 2019, China’s life insurance sector reported negative growth in terms of first year premiums from individual regular life insurance business, which is the second consecutive year with such a negative growth since 2018. In the second part, I’d like to discuss with you our operation results in the fourth quarter and full-year 2019, which were highlighted with increasing contributions from our life insurance business to our total net revenues and stronger snowball effect as our renewal business accumulate. Firstly, we delivered solid and healthy growth in 2019 amid the challenges of industry-wide adjustment. Our operating income grew by 36.9% year-over-year to RMB114.1 million in the fourth quarter of 2019, bringing the total operating income in 2019 to RMB469.4 million, representing a growth of 10.2% year-over-year, which is in line with our previous estimate. Secondly, we outpaced industry growth in terms of total life insurance gross written…

Ladies and gentlemen, we’ll now begin the question-and-answer session. [Operator Instructions] And the first question we have is from the line of Xue Yuan from CICC. Please go ahead.

Thank you. This is Xue Yuan from CICC. Thanks for taking my question. I have one question. In the fourth quarter, renewable premiums is nearly three times of APE. So what’s the proportion of commissions contributed by renewable premiums to the total commissions? Thanks.

[Mandarin]

[Mandarin]

[Interpreted] The question is answered by our CFO. And in the fourth quarter, the revenues contributed from life insurance business was about RMB870 million in total. And of which, renewal commissions contributed around RMB200 million, accounting for 22% of our total life insurance revenues. And then in 2019, our total life insurance renewal commissions was about RMB717 million, accounting for 23% of our total life insurance revenues. Thank you.

Thank you. [Operator Instructions] The next one we have is from the line of Debra Fiakas from Crystal Equity Research. Please go ahead.

Thank you very much. Thank you for taking my question and then translating it. I want to ask just one small question first and – about the impairment of the CNFinance Holdings. I want – it’s an accounting question really, I need an accounting lesson. Is the impairment required because of U.S. accounting standards, or is it also required by Chinese accounting standards? And then I have another question also about sales.

[Mandarin]

[Mandarin]

[Interpreted] The impairment was based on U.S. GAAP’s requirements. And basically, based on the assessment on CNFinance financial performance and stock price performance in the past year, and the amount of the impairment was determined based on the – its fair value as measured by its stock price as of the end of 2019.

Excellent. Thank you. And then my other question is about consumer behavior. Do – is the thinking that there has been a permanent change in consumer behavior because of the experiences during the health crisis? Are China consumers going to continue to want to do things more on a – at home and more in a digital format rather than, say, using the services of a salesperson and meeting with them in person. You’ve changed the way you train your sales agents and they’re learning more about how to get consumers or get customers and how to do sales perhaps in a digital format? How important will that be, say, a year from now?

[Mandarin]

[Mandarin]

[Interpreted] I think it’s certain that the epidemic will have impact on the change in consumer behavior. But going forward, I believe that it will result in further classification in customers’ demand and behavior for insurance distribution. During the epidemic, the insurance business in China has dropped significantly. It also kind of proved that Internet is most suitable for selling standardized and low-priced insurance products, while for the large ticket insurance policies or more complicated insurance products, it’s still quite difficult to be transacted over – solely over the Internet. So that’s why we’re saying that online and offline integration is the most efficient and scientific way for distributing insurance. Especially for those savings product, large ticket insurance products, face-to-face interaction is still the most efficient way for selling this type of product. And – but we do agree that the epidemic has resulted in optimization in our way to train and – to train our agents and in marketing. And we believe that it will also help diversify our operational activities in the future. We see it as a kind of addition or diversification rather than a replacement. Thank you.

Thank you very much. That was very helpful.

Thank you for your questions.

Thank you. There are no further questions on the line. I’ll now hand the conference back to today’s presenters. Please continue.

Thank you for participating in our conference call. If you have any further questions, please feel free to contact us. Thank you.

Thank you. Ladies and gentlemen, this concludes today’s conference call. Thank you all for participating. You may now disconnect.