Good day, and welcome to the Noah Holdings Limited Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Dorian Chiu . Please go ahead.

Thank you, Rocco, and good morning, and welcome to Noah Holdings Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining me on the call today are Ms. [ Nora Wang ] Co-Founder and Chair Lady; Mr. Zander Yin, the Co-Founder, Director and CEO; and Mr. Grant Pan, the CFO. Mr. Yin will begin with an overview of our recent business highlights and strategic developments, followed by Mr. Pan, who will review our financial and operational results. After management's prepared remarks, we will open the call for questions. Before we begin, please note that today's discussion will contain forward-looking statements that are subject to risks and uncertainties, which may cause actual results to differ materially from those expressed in such statements. Potential risks and uncertainties include but are not limited to those described in our public filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange. Nora undertakes no obligation to update any forward-looking statements, except as required by law. Without further ado, I would now turn the call over to Mr. Yin. Please go ahead. Thank you.

[Interpreted] Good day to everyone, and thank you for joining us today. 2026 marks the 21st year since Noah was established. In a market environment defined by continuous evolution and restructuring, our strategic direction has never been clearer. We remain firmly focused on serving global Chinese high net worth and ultra-high net worth clients operating through licensed local entities to provide compliance, long-term wealth management services across multiple jurisdictions. More importantly, we are completing a critical transformation evolving from a wealth management institution primarily driven by product sales into a comprehensive platform, centered on asset allocation, global structuring and AI systems. In 2025, this transformation began to yield tangible operating results. This is not a really temporary business adjustment, but the fundamental reconstruction of our operating model. For Noah 2025 represents an important milestone. Looking at our full year results [indiscernible] quality of our profitability is improving at a faster pace than the stabilization of our revenue structure. For the full year, net revenues were RMB 2.6 billion, broadly flat year-over-year. However, operating profit was RMB 777 million, up 22.5% year-over-year with operating margin improving to 29.8% and non-GAAP net income increasing 11.2% year-over-year to RMB 612 million. Excluding the impact of nonoperating items, adjusted non-GAAP net income was approximately RMB 753 million. What matters most at this stage is not the absolute scale of our profitability but the improving underlying structure. This profit growth was not driven by one-off factors, but by optimized cost structure, enhanced operating efficiency and the ongoing shift in revenue mix toward investment-related businesses. This reflects how our profitability is shifting from cyclical volatility towards structural stability. This is a quantitative change, not simply quantitative growth. From a business perspective, while our domestic and overseas business segments are moving at different paces, they are pulling…

Thank you, Zander. And good morning, everyone, for the comprehensive strategic overview and good day to everyone, who joined us today. I would like to focus on 2 key financial messages. First 2025 delivered strong operating profit growth and structural margin expansion, driven by a clear shift in our revenue mix. Investment-related income increased significantly during the year, while we deliberately reduced our reliance on insurance-related revenue. This reflects our continued transition toward a more investment-led business model, with improving earnings quality and great margin resilience. Second, the Board has approved our dividend proposal, including a special dividend, bringing total payout to 100% of full year non-GAAP net income for the third consecutive year. This reinforces the consistency and visibility of our shareholder return policy. Together, these developments underscore our transition towards a more investment-driven, globally diversified and resilient operating model. For the full year 2025, net revenue was RMB 2.6 billion, broadly stable year-over-year. Operating profit increased to RMB 777 million, representing growth of 22.5%. Operating margin expanded to 29.8%, compared with 24.4% in the prior year. Non-GAAP net income reached RMB 612 million, up 11.2% year-over-year. This improvement was primarily driven by structural cost optimization and enhanced operating efficiency rather than short-term factors. In the fourth quarter, revenue was RMB 733 million, up 12.5% year-over-year. Operating profit reached RMB 258 million, representing a significant increase of 87.3% and operating margin expanded further to 35.2%. This reflects strong operating leverage as performance-based income starting to materialize, supported by a more scalable and disciplined operating structure. During the year, we continued to optimize our revenue structure. Investment products commissions increased by 79.7% year-over-year and performance-based income rose by 78%. At the same time, overseas revenue contribution increased to 49% of total net revenue. This shift towards investment-driven and globally diversified…

[Operator Instructions] Today's first question comes from Helen Li at UBS.

[Interpreted] I have 2 questions. The first question is on private credit risk. How much in third-party private credit product has Noah distributed today? Have you seen any client redemption in this area? How do you assess the overall risk profile of this product? One area of concern in the private credit market has been potential disruptions from AI given that a meaningful portion of the underlying portfolio companies are software firms. Noah maintained the investment team in Silicon Valley [indiscernible] how much direct investment or co-investment does Noah currently have in the private credit space. What percentage of the underlying assets are software companies and what percentage of those could potentially be vulnerable to AI-driven disruptions and how do you view the risk in this segment? My second question is on transaction value and onetime commissions. In the fourth quarter, onetime commission declined sharply year-on-year. Looking more closely at transaction value, both domestic and overseas insurance product sales weakened significantly, how do you see the run rate trend heading into '26? Amidst the recent capital market pullback, how has client sentiment towards investment products evolved? Are clients adopting the risk of [indiscernible] and reducing their allocation to investment products and finally, what's the current [indiscernible] in terms of the investment strategy for the remainder of this [indiscernible].

[Foreign Language]

[Interpreted] Let me do the translation here. First of all, we must emphasize that the company doesn't run any or only own any asset that is related to the product that Helen just mentioned. So what we've been doing at Silicon Valley is mainly invested or partner with some key major name that's their PE product or in some VC funds. And that's why we don't see a much impact of our business because when we review the AUA here, those assets are only representing a low single-digit amount of our AUA. The company has been -- has a concern on the related asset class at a very early stage, that's why we have been advising our clients to have a proper position in a very early stage. And regarding the second question on our commission. So because we must emphasize that being in the wealth management business, we are not a single product sales driven business, but we've been trying to provide a safe and structural services for our clients. So yes, we do see the drop in insurance sales that we also believe that because a lot of our existing clients, they have already had enough coverage from insurance products. And that's why when we've been reviewing our business under Glory, what we've been emphasizing that we are providing a global solution to our clients, but not just selling single insurance products. And regarding the investment incentive among our clients, we don't see any drop in demand. We understand that there's risk in the market. However, we actually see clients, still have a very high interest in investing the wealth, particularly in AI-related products. So we will still keep an eye on that and do the right advice to the client.

[Foreign Language]

[Interpreted] Thank you, Chair Lady. So what we wanted to emphasize that is that Noah -- the company has established for many years, and we have substantial experience in handling different types of economic cycles. So for the recent situation, we were talking about this PE risk [indiscernible] alternative investment product related to social media assets, we can use an example from [Technical Difficulty] product. We look at it as -- I mean, under all the normal criteria is the return should be 5%, now it's over 93%, which is we have seen this situation in China, in Mainland China before, where -- that's why we've been taking early position to advise our clients. Depends on the risk appetite, whether they would prefer to have more midterm risk appetite? Or they are more risk reserve, now that we've been taking advice in an earlier stage. So since the beginning of this month, we've been -- we are advising our RMs to talk to different clients, depends on their asset allocation, and also their risk appetite. And we believe that our clients' experience is still a very prudent situation, and we don't see any [indiscernible] at the moment. And as we mentioned about our experiences within the Mainland market, we also one of our advantage or strength is that we know Chinese high net worth and these families charateristic and what they are vulnerable to and how they would like to treat their investment portfolio. And that's why we've been strictly choosing or strictly been allocating which PE we should go to. And that's why from the very beginning, the company has been providing rather more suitable to what our clients need when selling these type of products. And regarding your second question about our sales and insurance products, I think…

Our next question today comes from Calvin Leon with Citi.

[Interpreted] This is Calvin from Citi. My first question is about AI. Can management share our strategy and investment on AI going forward? And how would this be reflected in Noah's operating or financial metrics? And my second question is on shareholder return. Noah has maintained a high payout ratio in 2025. And looking ahead, what is the plan and considerations on payout ratio and share buyback?

[Foreign Language]

[Interpreted] Let me do a translation here. So we must emphasize that we embrace AI not because this is propaganda, that is the trend currently. But it's really about how it's been able to enhance the efficiency of the company. So in the past, with our analysts when they review our business model, they may use a method to count how many RMs we hire and then just do a multiple and believe that, that is a growth engine. However, under the AI enhanced system. We believe that the -- right now, it's not about how many people we hire, take Singapore offices, for example, we've been adopting this AI method for 9 months now. What we see is our human resources have dropped, but at the same time, AUM has increased by 3x in the past 9 months. It's about efficiency. It's about quality that we've been able to deliver to our clients. And apart from that, with the AI in mind, we may also able to further develop our business by reaching to the EAM on the multifamily office business so that we've been able to provide a system to work with this independent third-party channel, just like what we've done with -- under Glory, we've hired different commission-based broker to do the insurance business since the second quarter last year. And to answer your question, maybe currently, it's not about if we've been able to use a financial indicator to show the efficiency or really quantitative return from using AI. However, we believe that the one key factor, you can look at is how many clients we've been able to cover. The company has a record of over [indiscernible] client on our record. We may not be able to cover all of them in the past. But…

I just want to add up to the information that we actually have, since the repurchase program, we have repurchased about 4.3% of the total shares outstanding. And obviously, we have been very disciplined in terms of execution of dividend policy. I believe that with adding this year's dividend to the accumulated dividend out, the number is already crossed the RMB 2 billion threshold. So that's actually a very impressive return. I guess not just in Chinese ADR, but probably on many of the listed companies. So we are actually giving out about $1.32 per ADS this year. So that's something, as Chair Lady just mentioned, that we're pretty confident that we'll be able to generate the same level of cash flow and continue to reward our shareholders.

And our next question comes from Peter Zhang with JPMorgan.

[Interpreted] Thanks for giving me the opportunity to ask questions. This is Peter Zhang from JPMorgan. I have 2 questions. First is, we noticed that the fourth quarter revenue was mainly supported by the strong performance fee we wish to understand what's the drivers behind? And can this revenue segment to be sustainable into 2026. Secondly, given which management can help to describe what's the quarter-to-date operating trend for Noah, including client activity, client investment behavior, wealth management sales -- product sales volume as well as revenue trend. In addition, the market has been quite volatile in first quarter, we wish to understand whether this has any implication on your equity affiliate income items.

[Foreign Language]

[Interpreted] Let me do a simple translation first. Honestly, it's hard to precisely predict the trend in the future. However, we must emphasize that it's about the structure. We've been focusing in investing within PE in previous years and believe that with this structure, we've been promoting investment products, this should bring carry to the company in the future for long-term growth. And for your second question regarding equity in affiliates, yes, we do still see some pressure during Q1. However, we must emphasize that this is only a nonoperational impact. So it shouldn't be really affecting the cash flow or our operation. And for Q1 operation, if Pan would like to...

Sure. I just want to add a little bit more on the carry. I think Peter particularly mentioned about the Q4 carry income, 2/3 of the carry actually came from an exit from U.S. dollar-denominated funds in Silicon Valley. And the rest actually came from the domestic products, from the RMB private hedge fund. So I guess that's a pretty balanced return. But obviously, as Zander just mentioned, it's quite difficult to forecast a particular timing of carry, but we are seeing that the AUM accumulated rather good opportunities for continuous return performance fees, hopefully. And yes, I think for the first quarter, obviously, you cannot share too much information about the first quarter actual operations. But we're seeing, I guess, at least the stabilization of client sentiment toward investments, and two is, obviously in terms of the tension, I guess, especially Mid East, people are a little bit more risk-averse, and they tend to actually put items or investments in more liquidity position and a more diversified portfolio. And that's exactly our point of view that we'll try to market to our client diversify across asset classes and also regions.

And our next question comes from [ Yumin Tang ] with CICC.

[Interpreted] My first question is that we noticed a meaningful expansion [Technical Difficulty] operating margins. Could management provide some color on what the notable increase in our operating margin and moving forward, how do you view our capacity to maintain effective cost structure and my second question, what were the primary drivers behind the significant widening of investment losses from equity in affiliates in the fourth quarter?

So yes, I want to just give a little highlight on the operational margin. Obviously, one is as a result of continuing optimization in terms of cost of, obviously, human resources related in terms of salary and bonuses, especially in mid-back office streamlining, as we just discussed the utilization of AI as well as the continuing streamlining processes. So as a result of the reduction of headcounts, the total actual cost related to staffing decreased about 10% with the help of obviously, carrier income, we're seeing a pretty healthy margin. And 30% is actually the operational margin we always try to aim for. So that will continue to be reflected in our strategy in 2026. And also in terms of your question on the affiliated equity performance. We're obviously seeing a lot of pressure in the fourth quarter, but hopefully, it will be able to stabilize in the first quarter.

Thank you. That concludes our question-and-answer session. I'd like to turn the conference back over to the company for any closing remarks.

Thank you. And thank you everyone for joining us today. And if you have further questions about the company, please feel free to reach out to the IR team here and have a good day, everyone.

Thank you. That concludes today's conference call, and we thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.