Hi, good morning, everyone and welcome to Noah's Fourth Quarter and Yearend Conference Call. I'm Melo Xi, Director of Investor Relations in Noah Group. The Presenter today -- joining us today are Ms. Jingbo Wang, our Co-Founder, Chairlady and CEO and Mr. Qing Pan, our CFO. Before we start, we would like to kindly remind you that during today's call, we may make four looking statements based on our current expectation of the business. Please keep in mind that these statements are subject to risk and uncertainties that may cause Noah's actual results to differ from these statements. We do not undertake any duty to update these statements. For discussion of some of the risks that could affect results, please see the safe harbor statement section of our 6-K filing. We also refer to certain non-GAAP measures and you'll find reconciliations in our 6-K report made available on the Financial Report section of Noah's Investor Relation website. Also, please know that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any Noah or Noah affiliated products. This call is copyrighted material of Noah and may not be duplicated without consent. Also, we will appreciate for you to change your display name to first and last name, plus your institution name. With that, I would like to welcome our Chairlady and CEO; Ms Wang Jingbo.

For the agenda of today’s conference call, I’d like to start by discussing the macroeconomic landscape, an update on our globalization strategy. Then report on Noah’s overall performance and development of various business segments in 2022. Mr. Pan, will then present financial information for the year and conclude with the Q&A session. Year 2022 was an extraordinary year with an extremely complex global macroeconomic environment. The extreme market gyrations caused by the Russian and Ukraine conflict during the first quarter, Shanghai-like lockdown during the second and the rapid Fed rate hikes spanning almost the entire year has by far exceeded our expectations. In other words, we have seen the most drastic drop in investor confidence in decades. Domestically, the Chinese lockdown index reached its highest level twice since the first outbreak of COVID-19 in 2020. Frequent lockdowns severely restricted economic activities with the household savings rate reaching its highest levels since the beginning of the outbreak and consumer confidence hitting rock bottom. Turning to the global market. Since the subprime financial crisis in 2008, prolonged quantitative easing and abundant liquidities have led to a significant level of global asset inflation. With global supply chains severely disrupted over the past three years by the raging pandemic coupled with the impact of surging commodity prices due to geopolitical conflicts, we have seen the most acute global inflation in decades. In order to contain inflation, the world’s major central banks led by the US Federal Reserve moved quickly to raise interest rate at the fastest pace in almost 40 years. The sudden quantitative tightening measures and escalating risk rate of return led to huge losses in risk assets with the both equity and bond markets experiencing their worst year since 2008. The significant shift in investor sentiment led to a decrease in preference…

Thanks, Mel, and thank you, Chairlady. Welcome investors, analysts. Looking back at 2022, obviously, undoubtedly a challenging year. The United States Federal Reserve has raised interest rates by cumulative 425 bps to 4.4% as of the end of last year, the rapidest hike in decades. Coupled with geopolitical conflicts and ongoing increasing global inflation rate from 4.7% to 8.8%, creating volatilities in both the equity and bond markets. Consequently, the MSCI World Index, S&P 500 and MSCI China Index have all dropped 18%, 19% and 21% throughout the year, respectively. In China, the prolonged COVID-19 restrictions during almost the entire year of 2022 greatly affected economic activities. With the China effective lockdown index, a third-party index that measures the level of COVID-related restrictions reaching highest level twice since 2020. The Chinese household savings rate declined significantly from 30% pre-COVID up to 37% by end of that year, while the Chinese consumer confidence index hit a decade low. Capital market activity and investors’ sentiments also became more conservative, evidenced by a 50% year-over-year increase in new issuance of mutual funds across the board. Meanwhile, Noah has been investing to improve our research capabilities to counter this adversity and our CIO office published investment outlook for 2022, at the beginning of last year, recommending the strategy of preservation before growth to our clients. Looking back at the capital market fluctuations, our recommendation helped preserve clients’ assets and our dedication and efforts on enhancing investment abilities paid off. As a result, although 2022 was a tough year, while still achieved increase in number of core clients, up 18% year-over-year. That’s diamond and black card clients and Overseas AUM also increased by 15% year-over-year. Due to stricter cost management measures and higher operational efficiency, Noah’s operating margin grew from 27.9% to 35.1%. On top…

Thank you, Grant. So, if you have a question, please kindly press the raise hand button in Zoom and now I believe we have Helen from UBS. So, moderator could you please turn on her microphone. Thank you.

Okay, let me translate my question. This is Helen from UBS. Two questions if I may. One, for insurance product distribution since the fourth quarter 2021, the growth momentum was very strong. Insurance products since it’s the key driver for one-time commission fee. It’s been five quarters since the fourth quarter of 2021, so what’s the insurance product penetration rate for existing clients? Do you think that strong growth momentum could persist this year and next year? If not, what type of progress this might breach that revenue gap? And could you please give us more color on transaction value outlook this year both in terms of growth outlook and product mix? And my second question is on Gopher AUM. I noticed that, back to 2015 to 2016 private-equity products were a major driver for transaction value and this product may enter the redemption period very soon I guess, so what’s the impact on Gopher AUM? Will Gopher AUM decline in the next one to two years? And was Gopher’s product strategy this year and in the coming two to three years? Thank you.

Thank you, Helen. I’ll supplement some data points and also do a quick summary for which our Chairlady has mentioned. So I guess, we do look at this allocation of product mix from a slightly different angle that basically we don’t necessarily just voluntarily put out a product mix or recommendation to our clients without understanding the clients’ need. So, throughout 2022, the sentiment of the entire market is actually preservation and risk averse. So, the demand from insurance products actually grew across the board in the market. We are not manufacturing any insurance products. So basically, just having insurance brokerage and are responsible for picking the right products for our clients. So, as mentioned by Chairlady, the coverage of penetration rate, especially in the diamond black card clients was relatively low. 21% for overseas insurance products and 24% for the domestic one. And the contribution to the total revenue by interest-related revenue for 2022 was 77%, slightly higher than 60% in 2021 as well. So, we still believe that still abundant room to grow in terms of insurance products if the clients still considers that insurance products becoming a very fundamentally and important layer of the asset allocation strategy. In terms of Gopher’s AUM, domestically, we believe that our fund-of-funds portfolio will benefit greatly from the registration team in Asia spot market that provide more exciting opportunities for these portfolio companies to become IPO companies and provide better exiting routes for this type of funds. And in terms of the secondary market, public security products within Gopher, we actually also invest heavily into the R&D team, we have a team about 40 people and focus on the macro and also mindful researchers on different kind of stocks and strategies for multiple strategies to the fund. And for overseas, we are investing heavily both in budget and talent actually for 2023 to make sure that they will meet the demand for our clients, especially for overseas allocation of more products for public market type of products that in the past the market probably provides a lot of volumes. But we weren’t able to provide too much on the US dollar-denominated public markets and we’re assembling a team to focus on that selection and believe that we will be able to provide more on that type of products for our clients. Helen, back to you.

Thank you. Crystal clear.

Thank you.

Thank you, Helen. I believe we have Chia Yao from Morgan Stanley, also raised his hand. Operator, please. Hello, Chia Yao.

Let me translate the first question is the market volatility we’ve seen in the fourth quarter 2022 and in both equity and fixed income markets. So, I was wondering how does the reaction from Noah’s clients in the fourth quarter and what reaction Noah has been taking to stabilize the AUM in fourth quarter last year? And second question is on the outlook for 2023 and in terms of the client demand and the revenue opportunity for Noah. Thank you.

So, thanks Chia Yao. I think those are great questions. And also we want to stress that the strategy in terms of recommending our clients to preserve first then pursue growth opportunities didn’t start in quarter four last year. Actually, we published the CRO report in the first quarter when we sensed very highly volatile market of the entire year. So actually, a majority of the allocations, which is mentioned in the market actually and also consistently our client’s strategy are highly liquid products, including money market funds, including the US dollar-denominated deposit type of funds towards the end of last year when the Fed actually raised the interest rate very quickly. In terms of overseas, we have about over USD1.1 billion AUM for clients to put their money in the actual deposit type of products. And we’re seeing actually a very good increase in the fourth quarter alone, that’s about USD1.6 billion raised in that single quarter and in the face of very complex market situation, Noah actually never pushed any product that we don’t even believe in. So, we still try to recommend the more conservative and safe strategy for our clients to actually place out. We’re actually seeing a huge influx of repatriating funds last year. As mentioned in the press release, we seen probably around 1,000 clients either reactivate long-time dormant accounts or repatriated back to Noah from other platforms. I believe that clients are very impressed with Noah’s strategy that we actually didn’t have any exposure AUM or AUA to real estate type of products to the non-standard credit products and we have a very clean and light AUM for our clients. In 2023, we continue to hold a very conservative view especially for our clients. But probably will more emphasize the provision of supply of oversea assets for our clients to carry out a global allocation strategy and we’re putting a lot of effort of budget actually in developing our oversee businesses. We believe that the opening up of new tier, or new corporate clients overseas, the high net worth Chinese individuals overseas, will actually provide very strong growth, driving practice behind the incremental revenue in 2023 if you well. Thank you, Chia Yao.

Thank you, management. That’s very clear.

Thanks.

Thank you, Chia Yao. We also have Peter from JPMorgan. Operator, please turn on Peter’s microphone. Thanks.

Let me translate. Noah’s rapid sales and Gopher’s AUM -- AUM in fourth quarter. How does Noah differentiate from leading banks in China when it comes to strategy and product? In 2023 there is talk of release of exits saving China, how do you think Noah will benefit from this trend if any? The second question is do you expect mostly over risk from SVB and CS right down? And 2023 is going to be volatile. So, how does Noah position for this? Does Noah offer investment products like issuance to your clients? Thank you.

Thanks, Peter. Great questions again. Yeah, we actually don’t have, didn’t have any AT1 or CoCo bond related products. I guess part of the reason is because we’re still relatively small in terms of providing USD and offshore products or clients. Likewise mentioned, in the past that we focus pretty much product maintenance capabilities in oversee offices. In the US we have two investment teams. In Hong Kong, pretty much made back office for the US dollar asset management. And in 2023, you can probably look at years zero for our oversee piece of business and plan to actually really increase the number of relation managers in Hong Kong to probably 100 compared to what we have is about 20 professionals. And Singapore team is from zero basically, from scratch to 20 and where in the process actively hiring talents in those two places. And looking at opportunities potentially to be able to actually access the local market to serve the Chinese nationals in those nations, including in the US and probably other positive destinations where Chinese immigrants are conventionally will go and work. In terms of wealth management, for the past eight months focused pretty much on US dollar products and also spend quite bit of time in the investment and establish global insurance platform and we’re moving on to the primary market and secondary market product, both denominated in the USD. And just to supplement on the numbers, when you mentioned that the growth in the fourth quarter, I think still benefit greatly from products that we have in the Silicon Valley. We raised about more than USD1 billion in the fourth quarter alone that actually fit the clients’ need for more exposure to a deeper and probably more stronger market in terms of oversee products. And the focus for 2023 is to expand the interfaces where we can reach out to our clients in different ways, including for example, institutional clients that was grouped, the online platform and also including direct sales or direct distribution from Gopher Manager, especially the screening of the global products and to be able to actually put them into a portfolio for our clients. And in terms of domestic development strategy, we focus on continued to heighten investment in both branding, talent, in large cities, first tier cities. But in terms of the -- probably third tier cities we used to have network and branch office. We are looking at consolidating these offices into the nearby top cities. One is to obviously control the cost efficiency and two is actually to ensure that we’ll provide better quality service to our clients as you would probably understand that majority of the high net worth individuals will probably gradually move to the nearby big cities for better life quality. So, we also wanted to make sure that our service team is also there to be able to serve our clients. Peter, back to you.

Maybe I will add one more question about the investment sentiment. So, in 2023 do you see improvement in investment sentiment in your client’s end. How does this compare to the 2022 or 2021 level?

So, Peter, I think just to supplement, obviously the fourth quarter we were benefited quite a bit of I guess heightened interaction with clients. We actually held a pretty big client conference in Singapore towards end of December, actually before the official open up of China market last year, about 300 clients flew over to Singapore and also we held very large conference last week in Hong Kong and about 600 clients came over and joined our conferences and we’re providing views from different GPs, our own GP and also economists just to share the outlook of the capital market for clients. So, we’re able to actually interact I guess at a better quality and better interaction frequency with a client. And in terms of sentiment, we actually published a whitepaper with PwC for 2022 high net worth individual sentiment index. This first year we’re doing this whitepaper and I think it’s actually a great way for us to understand what people are thinking, especially the very unique group high net worth individuals in China, mostly actually are private business owners and entrepreneurs. It seems that obviously, after the reopening up, alleviated quite a bit, but I think the overall sentiment towards investments in wealth management as eloquent will continue to be conservative. It was R&D type of products. But we think that they probably were looking -- continue to look to further diversify their asset allocation across the board. Also, in the product mix. Peter?

Thank you, very clear.

Thank you, Peter. We have no more -- we have no further questions from the audience. So with that, we would like to conclude this quarter and year-end earnings call. For our most updated financial reports, please refer to the financial statements section within our Investor Relations website. So, thank you all for listening.

Thank you very much.

Thank you.

Bye.