China Pacific Insurance Gr-h Aktie

Good afternoon, ladies and gentlemen. Welcome to the CPIC Group 2026 Interim Results Announcement. I'm Su Shaojun, CPIC Group Board Secretary. It's my great pleasure to talk to the investors, analysts and friends from media about our performance and business in first half of this year and also to listen to your views on us.

To protect the interest of small and midsized investors, we are conducting this event online and offline so as to cover more investors. After the meeting, you can also view this -- you can access the view of this event from -- on our website.

Now let me introduce the executives, Mr. John Qiang, CPIC Group President; and Mr. Su Gang, CPIC Group Vice President and CFO; Mr. Chen Hui, CPIC P&C General Manager; and also Mr. Li Jinsong, General Manager of CPIC Life. Our independent directors will also join this event on offline and online.

First of all, Mr. Zhao Yonggang, our President, will give you an introduction of our performance in the first half of this year to be followed by a Q&A session.

Good afternoon, ladies and gentlemen, friends from the investment community and media. It's a great pleasure to meet you. In the first half of this year in a very complex and fast-changing environment, we stayed focused on our core business of insurance, seized the opportunity arising from China's demographic change, industrial transformation and also application of AI technologies. And overall, we delivered a steady improvement in overall operating profit and sustained growth in competitive strengths.

To give you some numbers, our group operating income amounted to CNY 212 billion, up 5.8% year-on-year. Group OPAT reached CNY 21.1 billion, up 6.2%. Group net profit reached CNY 30.8 billion, up 10.4%. Net assets attributable to parent shareholders stood at CNY 319.2 billion, up 5.6% from the end of 2025. Our new business value of life business grew 12.7% year-on-year, and the combined ratio of P&C business improved by 1.3 percentage points. Our group AuM surpassed CNY 4 trillion mark for the first time and our comprehensive -- our core solvency margin remained well above the regulatory requirements.

We have been improving disclosure of operating profit. And following the implementation of the new accounting standards, net profit has become more sensitive to capital market movement. And OPAT presents a clearer view of the company's long-term operating performance.

In recent years, our group OPAT maintained steady growth. In the first half of this year, OPAT from Life business was CNY 15.9 billion, up 5.9% year-on-year, while P&C business reached CNY 6.3 billion, up 26% year-on-year.

On the issue of contractual service margin, well, CSM is a key financial indicator. It reflects the sustainability of the future profit. Our CSM has continued to grow since 2023, reaching CNY 368.8 billion at the end of the first half of this year, up 3.3% from the end of 2025. By the end of June this year, our group net assets stood at CNY 319 billion, up 5.6% year-on-year. Well, this is achieved on the back of a steady profit contribution and a solid foundation in that in asset liability matching.

We also have a solid capital position. At the end of June this year, the comprehensive and the core solvency margin ratios well above the regulatory requirements. We are committed to shareholder returns with a clearly defined medium- and long-term dividend policy based on -- dividend policy based on operating profit.

Since 2007, we have distributed a total of CNY 130 billion in cash dividends to the shareholders. And for the first half of this year, we optimized the dividend distribution arrangement and implemented an interim dividend for the first time with an interim DPS of CNY 0.42 and a total interim dividend amount of CNY 4.04 billion, further enhancing investors' experience.

Next, I'll talk about the performance of our life business, P&C business and also asset management business. For the Life business, we remain committed to value growth and focus on regular premium business. We saw steady improvement in business quality and operational efficiency. To be specific, the written premium reached -- total written premium reached CNY 190 billion, up -- down 1.6% year-on-year. Regular FYP amounted to CNY 30.7 billion, up 28%. And the 30 months and the 25 months persistency ratio were 96.8% and 94.8%, respectively.

In terms of new business, our NBV for the first half of this year grew 12.7% to CNY 10.8 billion. This was mainly driven by the agency channel. And in terms of NBV margin, it improved by 2.5 percentage points year-on-year to 17.5%.

On the agency channel, we strengthened the systematic capacity building, which includes conducting customer engagement on the multiple scenarios and driving the upward shift in the customer mix and also provide the differentiated insurance and service solutions and also try to build a agency sales force of professional career based digital savvy, younger agents.

To be specific, our monthly average agent head count was 183,000 and our FYP per core agent and the monthly average FYC per agent both achieved double-digit growth. Our AI+ strategy also played a positive role in supporting our agents. For example, we launched the Xiao Lan AI agent to empower our sales agents. Actually, the average number of agents using Xiao Lan was nearly 90,000 and those who use Xiao Lan frequently saw increases in the FYP per agent, FYC per agent, active ratio and the average number of long-term policies. Now these indicators have all improved by double digits.

For the bancassurance business, we strictly implemented regulatory requirement for consistency between filed and actual expenses. Also, we adhere to the value-oriented strategy. To be specific, our FYP -- regular FYP growth from bank channel picked up quarter-by-quarter. Now the number of active bank outlets measured by RP business was nearly 5,000, up 4.9%. And the average regular premium per active bank outlet reached nearly 300,000. We also have Jianxiangjia, health management program for bank channel customers. Actually, the number of requests from Jianxiangjia by mid-tier customers with about 10,000 in the first half of this year.

Pacific Care Home is also a brand for premium retirement community. It also helped to maintain customer relation from the bank channel and nearly 30% of the total FYPs are generated from -- by using this platform. Under the share of mid-tier customers and above increased by 6.6 -- 5.6 percentage points to 34.2%. And the agency channel focused on mid-tier and high net wealth customers. In terms of product strategy, we continue to advance investment innovation in variable products. For example, the written premium for power business reached CNY 65 billion, up 76% year-on-year and the participating business as a share of total FYPs rose to 55.5%, which was up by more than 160% year-on-year.

In terms of the strategy on the P&C side, we continue to support national strategies. In the first half of this year, we achieved a steady premium growth on top of optimization of business mix. To be specific, is direct return premium reached CNY 114 billion, up by 1.4% year-on-year, and the premium growth for the second quarter was 3.6%, much better than the first quarter. And in terms of the auto insurance, because of the decline in new sales -- car sales in China, our DWPs from auto insurance was CNY 53 billion, up by 0.2% year-on-year. Non-auto DWPs was CNY 60.6 billion, up by 2.5% year-on-year.

We continue to focus on quality and profitability to strengthen underwriting discipline and expense management. In the first half of this year, the combined ratio of P&C was 95% down by 1.3 percentage points and of which the loss ratio was 68.7%, down by 0.8 percentage points, and the underwriting expense ratio was 26.3%, down by 0.5 pts. So you can see our underwriting profits grew by 35.7% year-on-year.

In terms of our capacity building, we continue to make efforts in this regard. As we mentioned, the underwriting combined ratio of auto insurance was 94.6%, down by 0.7 pts, and the under expense ratio improved by 0.7%. And we continue to improve precise management so that our auto insurance renewal rate was 79.2%, 2 percentage points better year-on-year. We also continue to accelerate the development of new energy vehicle business. Its growth in the first half of this year was 20.9%, and this total share in -- it was 23.9%, up by 0.1 percentage points year-on-year.

In terms of business mix, we continue to improve business mix and advance the risk reduction system. For non-auto insurance, the combined ratio was 95.3% improving by 2.3 percentage points. And the top 4 non-auto business lines produced underwriting profitability. Health insurance and the liability insurance maintained a healthy growth. To be specific, health insurance recorded CNY 17.1 billion in DWPs, up 10.4% and the liability insurance recorded CNY 13.7 billion in DWPs up by 6.6% year-on-year and the underwriting combined ratio improved by 0.4 percentage points year-on-year.

In terms of asset management, we continue to adhere to the principle of value, long-term, prudent and responsible investment and strictly followed ALM requirements to improve our SAA and we continue to refine our down bell-shaped asset allocation strategy. By the end of June this year, our AuM maintained a steady growth and surpassing CNY 4 trillion for the first time. Our investment assets include -- investment asset grew by 4.4%. And the AuM grew by 6.3%. And of this, equity assets improved by 7 -- was the share of equity assets were 17.1%, up by 0.4 percentage points.

And the core equity investment was 13.9%, down by 0.5 percentage point. And the debt financial assets stood at 71.4%, down by 1 percentage point.

We continue to explore opportunities in alternative instruments such as risk and ABS. And we continue to explore a new model for diversified asset liability matching centering on net investment yield plus. We continue to track the matching of liability costs and asset return across multiple levels. Based on the life numbers, maturity investment yield on the new fixed income investment covered guaranteed interest rate on new policies. The 3-year average net investment yield covered the guaranteed interest rate. Under the 3-year average comprehensive investment yield covered the cost of liabilities, which help us to maintain a reasonable safety margin in ALM.

We also continue to optimize fixed income asset portfolios and increased allocation to long-term government bond. Now the average asset duration of our fixed income investment reached 11.7 years. In the first half of this year, we see structural divergence for the capital market. And the long-term risk-free interest rate stayed at low levels, we proactively seize the structural investments -- investment opportunities and also maintained a margin of safety to manage the downward trends in a volatile market.

The net total and comprehensive investment yields were 1.5%, 2.4% and 1.8%, respectively. The market price of our dividend value equity portfolio experienced significant fluctuations which led to a short-term pressure on our comprehensive investment yield. But on the long run, we can navigate the market cycles and maintain comprehensive -- competitive, comprehensive investment yield.

In terms of credit risk management, our enterprise bond holdings and the financial bond holdings issued by nongovernment-sponsored banks maintained a high debt and issue current ratings, investments in nonpublic financing instruments as a share of total investment further declined. Well, that is the numbers and performance of our core business lines.

To sum up, I would say the international market is quite complex and challenging. In domestic side -- on the domestic side, China is also restructuring its economy. The government is also trying to improve safety, social safety net and the people's livelihood, which will create more opportunity for the insurance industry. We will strive towards its vision of a top-tier insurance service conglomerate with market leadership, international competitiveness and overall strength, and continue to create value for shareholders, customers, employees and society. We are going to further improve the quality and the productivity of the agency channel sharpened the competitiveness of regular premium business of bank channel.

And in terms of P&C business, we will put profitability first, continue to strengthen business quality control, improve catastrophe response mechanism and improve risk reduction so as to have a sustainable growth in terms of risk management and asset management we will uphold long-term thinking persist in ALM and cease investment opportunity to generate steady, sustainable investment return.

That concludes my presentation. Thank you.

Well, thank you, Mr. Zhao for your detailed presentation. Now we will open the floor to questions. [Operator Instructions] First of all we will have some questions on site.

I'm from Guotai Haitong Security Solutions [indiscernible]. First of all, congratulations on your steady performance. I have 2 questions on the liability side, first of all, about the new requirements from the regulators. Now what was your NBV outlook because for the -- you see for the first half of this year, your NBV, I mean, NBV achieved double-digit growth. But what about July onwards with Document 65 from the regulators, we saw some pressures from -- on the market in terms of premium growth. So what is your NBV outlook for the second half of this year and also for next year?

Second question, regarding payment liability structure. Now a lot of the insurance pays a lot of attention to the growth of small. Now your share on par life business is already 55%. We believe given the low interest rates, the too high share of par life is not necessarily a good thing, because in terms of -- well, sometimes, you should utilize traditional insurance to secure low liability cost. So what is your plan for your participating business, because if the customer prefers participate in life, are you going to -- how are you going to allocate and maintaining the balance between par and the balance and the traditional business?

Well, thank you for your questions and your attention. Now first of all, regarding your question around NBV, no I believe, first of all, if we look at the first half numbers, Mr. Zhao has given you a lot of numbers in the first 6 months, I believe CPIC -- well, our second quarter business was better than the first quarter, I believe CPIC is quite unique in this regard.

Now if we look at the first half of this year, I believe we're going to pursue NBV growth from several areas. First of all, continue to improve customer segmentation, secondly, improve product mix, product structure, for example, by promoting protection-type business, for example, this kind of long-term care products.

Well, these products -- well, grew very popular on the market. On the other hand, we will also improve the share of our participating insurance. And also, we focus on developing our team, first of all, our -- well, I mean, back office managers, for example, the building, developing of these managers.

And also on the front line, our agency team also is improving, for example, by becoming more professional, by becoming more digitally savvy, younger, et cetera.

So our agency team is also improving. If we look at the bank channel, we are always improving building this kind of high-quality bank channel team so that we can have more opportunity for the bank business development. We've also improved our refined development -- refine the management. We focus on value growth, we focus on efficiency. And also, we promoted this kind of AI or digital empowered. For example, the AI + strategy is a key priority project for CPIC. CPIC Life is, well, is actively promoting our AI digital strategy.

For example, by improving our processes and procedures. And in terms of claims, settlement, underwriting, we are also adopting AI tools, improving the AI empowerment so that we can achieve further growth in value. And also we've strengthened our risk management and compliance management. So all these factors made it possible for us to grow for the 2 quarters of the first half of this year. But of course, there are regulatory trends, regulatory changes. There are pressures for the next year, for the second half of this year. This is an issue for the whole industry. But on the whole, we are quite optimistic about our business perspective outlook.

Now first of all, in terms of the timing, if we look at the last 3 years, you see NBV grew quite fast for us. These are all double-digit growth for the last 3 years. So we believe we are sustainable in terms of the timing, in terms of the pace of business. And also in terms of our strategies, we are quite balanced in terms of meeting customer needs and keeping up the seasonality or business pace. And if we look at our team, we have -- currently, we focus -- we still have room for improvement in this kind of Tier 1 cities. In terms of bank channel, we focus more on Tier 1 city rather than, well, Tier 3, Tier 4 smaller cities.

So bank channel strategy is different from the agency business. So they complement each other. I mean, the 2 channels. And in terms of the growth model, we, on the one hand, promote agency and the bank channel. And we also now are developing our work site marketing. So I believe based on all these, although we have a quite high baseline, we were still optimistic.

And secondly, in terms of the liability for CPIC Life, we actually set or anchor our liability cost based on our product. For example, we are promoting, participating insurance since the second half of last year, and we saw very good results. Going forward, how are we going to approach this? I believe as a big insurance company, first of all, we need to meet customer needs. And on top of that, we need to improve our liabilities.

So in the second half of this year, in terms of our product strategy for the agency channel, since we'll have more higher end customers, we are going to promote whole life participating products and whole life incremental life. And so for the second half of the year, we are going to meet the different needs from different customer segments. While focusing on participating live, we are going to also balance it with traditional life.

For example, also long-term care products will be launched. On the one hand, long-term care products will be combined with participating annuity, and we are going to launch this kind of government tax sponsored long-term care products and to better serve our customers, we are going to promote CPIC medical insurance, working together, I mean, CPIC Life and the CPIC Health working together to promote the CPIC Blue health insurance products to be sold via the agency channel.

For the bank channel, we are going to focus on value, focus on high-end customers, participating whole life incremental products and also participate in annuity products so as to reduce our liability costs and better serve our customers.

Now let's welcome the next question.

I'm from [indiscernible] Securities. First of all, congratulations on your solid performance both on the life side and the P&C side, you improved your combined ratio by 1.3 pts I have 2 questions. Number one, as Mr. Zhao mentioned, well, give us a lot of numbers on your performance. We're happy to see a lot of good numbers, but we still like to see -- what's your view on your performance so far this year? And also going forward for the industry as a whole, what are the changes and how are you going to respond to these changes. And for the whole year, what's your annual targets? What's your view on the annual targets?

Second question about the new regulatory rules. Actually, on your slide on Page 20 of your slides, we don't see specific numbers on Page 20. Now in terms of the new regulatory KPIs, how are you coping? What's your calculation on these new indicators? And what are -- how you're going to do in terms of the asset side and the liability side?

Well, maybe I'll answer your first question. Thank you for your attention. No, I would say in the first half of this year, we continued to seek progress while maintaining stability and guided by the 15th year plan, we are actually delivering quite stable improvement in our key KPIs. Our overall strength has also improved especially given this kind of a complicated environment, I believe I -- we have demonstrated a lot of resilience.

Now if you want me to comment on the performance so far, I would say we can see 4 features. Number one, our core business is stable. Secondly, we are seeing new momentum. And thirdly, we see better synergy. And fourthly, we see better technology empowerment. Now for our core insurance business, we continue to focus on quality growth. As we mentioned, our Life business, our regular premium growth was very good, up by 28% year-on-year. NBV margin also grew quite stably. And behind that, we would see this product mix and our customer mix also improved.

Now for the P&C business, our combined ratio improved one of our best levels in recent years, now standing at 95%. And we also see new energy vehicle also give us quite steady growth in terms of asset management business.

Now we are sticking to our long-term investment strategy. We focus a lot on SAA. We remained disciplined and remain resolute on our SAA and paid a lot of attention to our ALM. So our investment performance was quite stable.

Now secondly, as we mentioned, we saw this kind of new growth momentum, new areas of growth. Now for example, we are actively promoting technology insurance, green insurance and actually and the premium income from technology insurance grew nearly 18% year-on-year. And we also saw a lot of progress in terms of serving the new production force. And we -- our green insurance premium reached nearly CNY 40 billion.

In terms of the health insurance, we are also developing our presence, expanding our presence, our commercial health insurance new premium grew by double digits. And also, we saw double digit for the coverage of government-mandated long-term care insurance. And our AuM in the first and the second pillar of pension schemes exceeded CNY 1 trillion. So that's the second point.

And thirdly, better coordination and the synergy. That is to say to better develop this kind of cross-selling and the synergy and the coordination, we focus more on in the customer orientation. For example, coordination between life and the P&C subsidiaries and also integration of products and services and assets and liability coordination.

So this kind of a synergy and coordination helped to generate a lot of good results. And of course, we also cultivated our strategic customers, we integrated our insurance, service and investment size. And we developed a series of strategic customers and major projects.

And you can see the number of multi-policy customers and the rate of cross-selling both rose steadily. And firstly, we strengthened technology empowerment to boost the quality and the efficiency of our core business. For example, we are actively promoting AI+ strategy to, well, put in place our vertical domain large models. And we are happy to see the rollout of some of the key projects. For example, as I mentioned, for the Life business, we launched the Xiao Lan agent -- AI agent for -- our sales agent for our life agents. And we also launched the projects to help P&C business to better manage its claims.

And also, we paid a lot of attention to data security. We are the first in China to pass the data security capacity maturity model, DSM and Level 4 certification. So I would say, if we look at the first half of this year, I believe these 4 points stood out. But of course, the industry is developing quite fast with a complicated backdrop. CPIC has maintained a stable growth. We are serving the real economy and the people's well-being. And given this, we do see some opportunities, for example, for life business. We believe our life products has become a very important tool for people for household wealth allocation. For example, variable insurance sold very well. And this also improved the company's ability cost.

Now for auto insurance, well, new energy vehicle insurance supported our premium growth. And this development of a new productive force and the green transition reinforced our role as an economic shock absorber and social stabilizer. On the investment side, structural divergence in the equity market increased the volatility. It will have a notable impact on our profits.

On the regulatory front, tight supervision continued. Well, it is guiding the industry towards long-term, healthy and high-quality development. For the first -- for the second half of this year, CPIC will continue to pursue high-quality growth. We need to focus on 3 areas: number one, we need to serve China's 15th 5-year plan and seize new opportunities. For example, we need to align ourselves with the government's big strategies and also the development of the industries, for example, the technology innovation, green development and shipping safety, et cetera.

On the other hand, we also need to focus on areas, for example, health and elderly care for the key population groups so that we can uncover opportunities in new fields and new models. Secondly, we need to focus on improving the quality and the efficiency of our business, insurance business. For the Life business, for the life side, we need to coordinate product and channel strategy, accelerate breakthrough in key areas and improve customer segmentation to drive sustained value growth and also improve the high-quality sales force and diversified profit sources.

For the P&C business, we need to consolidate our business base and the seize opportunities in key areas. For example, this kind of new areas. And on the investment side, we need to improve long-term mechanism for asset liability coordination and better respond to, for example, regulatory rules, new rules, strengthen our investment research, diversified asset allocation strategy so as to deliver stable and sustainable returns.

And thirdly, we should also advance our 3 core strategies or priorities and build core competitiveness. For example, our big health care strategy, we need to improve product innovation and model optimization. In terms of internationalization strategy, we should focus on improving overseas capability and strengthen our Hong Kong operations. For the AI+ strategy, we should accelerate the R&D and the large-scale deployment of high-value AI applications. This is a new see. This can speed up in digital intelligent transformation and also help to empower our business.

To sum up, I would say we should remain committed to these principles. We should pursue higher quality, better resilience more solid foundation and more breakthroughs for our business so as to better meet our annual targets. Thank you.

Thank you. I'll answer your second question. And maybe I will just add a little bit. Now the new rules on asset liability for insurance business received a lot of attention. I would say, well, it will have a very profound impact on insurance business, asset allocation, asset management. Now this new regulatory document it's like a combination of previous rules, is now very comprehensive.

No, I would say we should focus on 4 areas because, first of all, we focus on the governance of insurance companies. Secondly, it enhances the quantitative indicators. And thirdly, it broadened the evaluation horizon. Now, actually, before the document officially released, we have been actually making preparations for the first coming rules. For example, we studied the preliminary documents. We have been a participant of relevant seminars and the studies for the industry. And we are also trying to revise relevant data reporting mechanism so as to meet the new requirements.

Now given this kind of regulatory indicators and monetary indicators, I would say Life and P&C, we are doing -- both are doing quite well. For example, for P&C traditional account, our coverage ratio was 115% and for Life business, the interest rate hedging ratio is more than 80%. And other indicators, we also scored quite well. So if we look at these indicators, if you want to see the future performance of CPIC, you can look at the stress testing. You can look at the metrics parameters. For example, during the stress testing equity asset reduction, we are for 1 year to 3 years. I believe that's a top order.

But for CPIC, our SAA strategy is already aligned with regulatory requirements. So I believe these indicators will be more under control going forward, especially for the Life business, for the liability side, you can see it's very diversified. And also on the asset side, China's interest rate is going downwards. So we have long been discussing or starting this. Now, for example, we have come up with a net investment yield plus strategy now because the life business has very long liability -- very long fixed liabilities, so we need to take a holistic approach.

We need to consider a lot of factors so that we can come up with a more refined, more consolidated tools, platforms so as to better coordinate assets and liability matching. We believe we should start from the product, we should anchor against the liability and drive asset allocation on top of that. So for SAA, we need to be prudent. We need to be resolute, we need to have diversification and the differentiation.

For TAA, we need to be more dynamic so as to cope with the rapid changes of the market. We need to be disciplined. We need to be controllable so that the long-term investment yield can better cover our liability costs in terms of fixed income, we will remain more timely to seize very fast this allocation opportunities so that our interest bond can give us good results. And we'll also look at the opportunities, these kind of new emerging opportunities, alternative opportunities. We need to consider the valuation and market structure so as to adjust our allocations so that we can improve our long-term returns and also improve our multiple manager approach.

Of course, we will further improve alternative investment in terms of equity investment and other kind of alternative investment. On the whole, based on the new ALM requirements, we are going to improve our internal structure, internal organization with adjusted APIs, evaluation mechanism, et cetera, so that we can meet new regulatory rules.

Let's welcome the next question.

I'm [indiscernible] from Securities newspaper. Now you have -- for the first time, you have an interim dividend. So what are the factors you considered? And what's the overall yearly outlook? And do you have any future plans?

Now as you see this year, we optimized the structure of dividend payout and launched for the first time, the interim dividend, we want to make it long term so that we can improve the cash return for our investors and improve their experience. Now interim dividend is a very important part of our annual dividend payout.

We anchor against OPAT and also consider this kind of solvency ratio and also the -- well, needs of investors so as to decide ratio between interim dividend and year-end dividend. For example, this time, we are going to pay out CNY 0.42 per share. So if we calculate by OPAT, the ratio is 19%. Now this ratio well is comparable against peers. But if we calculate it by net profit, then the dividend rate is 13.1%, now this number is higher than most of our peers.

Regarding the total year dividend. First of all, our long-term and midterm dividend payout policy is quite stable. That is to say, we look at our OPAT. We look at our solvency, we look at our -- look at our business. Secondly, now Life CSM and spread and the P&C profitability are key factors for our dividend payout. I believe these factors will continue to grow stably going forward. So I believe we pay a lot of attention to return to customers to investors. We are confident we can deliver stable long-term foreseeable return to our investors.

Well, let's continue the questions.

I'm [indiscernible] from Zhonghai Securities. Now 2 questions. Number one, the issue of aging. Some other insurance companies are making inroads into elderly care products. So what's your efforts in the retirement and elderly care area? Then second question, on the financial numbers, we can see tax -- your income tax is going down for the first quarter.

Now this is particularly evident for the Life business. So could you tell me something about the reason for a reduction in income tax?

Well, thank you for your question. Now to answer your first question regarding the population aging and our response. As you mentioned, as China's population ages. China is also promoting a health strategy and the people in China are having more and more higher requirements for retirement -- on requirement and elderly care services. Now these present us with more opportunities. For CPIC, I would say we are quite consistent in our big health strategy. For example, 5 years ago, we have -- more than 5 years ago, we launched the big health strategy. And now we upgraded it to the big health and wellness strategy.

And we are actually making it one of our top 3 strategies. In terms of the targets for this strategy, I would say we need to build a integrated health and wellness ecosystem strengthen the synergy between insurance, investment and wellness service and promote joint growth scenario integration and very co-creation, so this is the key target for our health and wellness strategy.

If we look at the first half of this year, I would say we have made some progress in line with our expectations. We continue to enhance top-level design, coordinated management and the talent management at each level, we -- for example, we have trained our people. We have built a relevant mechanism. I would say our health and wellness strategy has saw very good results. And also it has brought a very positive impact on our insurance business. I would say we have made 3 big tools, number one, in terms of promoting the coordination between health insurance and pension business, for example, we accelerated product innovation and iteration for health insurance. Our premium for commercial health insurance policy grew by 16% year-on-year. The number of people covered by government-mandated the long-term care insurance increased greatly. We also seized the opportunities from new health insurance regulations and are developing products such as individual account, medical insurance and participating in health insurance.

In terms of pension business, we made arrangements across the 3 pillars of the pension with a focus on enhancing pension investment returns. For example, the cumulative returns of Changjiang Pensions single fixed income portfolios, single equity-linked portfolios and collective fixed income portfolios have all ranked among the top in the market. And also, we are happy to see that the asset under management for the second quarter -- for the second pillar, enterprise annuity surpassed CNY 1 trillion for the first time.

The second breakthrough is -- was in terms of elderly care and the rehabilitation, for example, our CPIC Home, our -- that is our premium retirement community. Now we have 14 of them in operation. We have more than 3,500 long-term residents and more than -- and nearly 350 of them of those residents are suffering from dementia. We also are actually making progress in terms of light asset projects. We also have this kind of a Bai Sui Ju program. By leveraging this Bai Sui Ju program, we can have smart service devices for data collection and management.

To date, it has served over 100,000 customers. We also have built a direct billing medical network across China, which now covered 1,210 vendor -- medical vendors. And this covered 83 of the top 100 hospitals on the Fudan China hospital list. And the [ Guangci ] CPIC International Hospital alliance has now grown to 158 member institutions.

And the third breakthrough is for the integration between insurance and the service to boost the business and wellness ecosystem. CPIC Life leveraged the elderly care community to enhance high net wealth customer development. For example, for the first half of this year, the number of high net wealth life insurance customers, driven by the retirement program increased by 37% year-on-year. For the P&C side, by utilizing the wellness equals -- by the wellness ecosystem strength our CPIC P&C improved auto insurance claims service. It helped to improve customer experience and also reduced the average claims payout.

For CPIC Health, we utilize the Yi Pei Tong, that is a one-stop medical treatment claims solution. To date, the Yi Pei Tong has served more than 750 enterprises and 610,000 users. Now, I would say for the first half of this year, we have improved the quality of our health and wellness strategy.

And also we can see this also empowered our business. In the second half of this year, we need to deepen the integration. We need to implement our 3 top projects, strategies to deepen the integration of health and wellness service so as to better enable 2-way empowerment between services and the core business so as to better serve our business and also our customers.

Now let me continue to answer your question on the income tax. Now of course, yes, our income tax actually declined. This is mainly because of a decline in life business. Two reasons for that. Number one, as in previous years, for the Life business, it remained prudent in terms of accounting judgment. So because of that, actually, this does not record deferred income reduction, but now the government made -- has confirmed that we should adopt the new standard so that using the new standards, actually, we can claim full confirmation for deferred income -- deferred income, income tax.

So going forward, on the other hand, the government of the company is making investment into government bonds, long-term bonds. So these also add to tax deductibles.

Let's welcome the next question over the phone.

[Operator Instructions] Now we have someone from -- we have a question from Mr. Joe Chan from Credit Suisse.

Well, thank you. I'm from UBS. Now thank you, and congratulations on your good performance. Number one question is about the investment, now we see the market is quite divergent for the first half. And you demonstrated resilience. Now could you tell me something about the market I mean, for example, the third quarter or so far in the third quarter, what was your investment performance? And what about this kind of high dividend stocks and gross shares. So what's your view on that? For example, this kind of growth shares, technology shares, for example.

Second question, you see your actual numbers were better than expected in terms of growth. For example, OPAT. Now could you tell me something about -- I mean, previously, you have been surpassing your guideline -- guidance. Now OPAT -- could you tell me more about the OPAT? For example, by Life by P&C? And what's your overview or what's your out view for OPAT?

Now maybe let me answer your questions you asked actually quite a lot of questions. Now of course, you'll see investment yield is a very important topic for us because it will impact on our net profit. Now CPIC pays a lot of attention to our investment yield. Now for the first half of this year, our investment yield, maybe I'll give you some background. Now we look at the net total and comprehensive investment yields. And therefore, the net yield, I would say, is within our expectation. It was down by 0.2 pts.

Now it was because of a lot of factors, is not unexpected because, for example, maturing of previously high-yielding assets, et cetera. But we manage reinvestment. We have a TAA so that to counter set offset this kind of impact.

If we look at the absolute number, 1.5 non-annualized to return is actually quite is the best among our listed peers. Total investment yield grew a little bit, mainly thanks to TAA contribution, for example and the spread trading spread for stocks and also funds and TPL also made some -- TPL assets also make some contributions. But of course, our comprehensive investment yield faced a lot of pressure compared to our peers. I would say it's more like a real life stress testing, especially for Q2, the stock market was quite divergent. For example, the China stock index actually down -- was down by 14%. That's a very big reduction and also our core equity strategy faced a lot of the adverse influence in a lot of dimensions. For example, our underlying equity is different from the K type divergence and our A + H share strategy is also producing negative effect. Certainly, we are quite active in terms of managing equity where we have more in equity and less on funds -- mutual funds. So this is also divergent from the market trends in the first half of this year.

And fourthly, we are quite prudent in pursuing our investment portfolio. If we look at the numbers, for life business, our core solvency actually ranked #2 among listed peers. So given these factors, these dimensions, these factors, our core equity strategy faced a lot of the stress, but we believe this is a temporary thing is a transitional thing is not for the long term. For the net and the total and the comprehensive investment yield, if we look at the [ NIM ], I believe, in the short term, you cannot be best in all of them.

Currently, we focus, first of all, on net investment yield and also pay attention to total and comprehensive yield. So we believe sometimes it's inevitable that we might have a lagging comprehensive investment yield.

Now the peers have different pictures in terms of investment yields because of a lot of reasons, for example, their business, their solvency, their dividend payout strategy, et cetera. So if we only look at the short term, if we just compare numbers in the short term, we don't believe it is -- is comprehensive enough. It is adequate, it's meaningful.

Now for CPIC, we are mature. We were a patient funding. So we should stick to our principle, we should remain prudent at resolute. Maybe it's a slow ball market, a long ball market. We need to be flexible and disciplined, we should see upon the kind of basal opportunity on the market. See upon this kind of the opportunity generated by transition, market transition.

So for our CPIC, we now pursue multiple asset managers strategy. Now, I believe this kind of a multiple manager approach is quite unique on the market so that our long-term performance can be more predictable and stable. I believe the resilience -- well, the resilience of our strategy is under pressure, of course, this time. Of course, we do see some drawbacks, for example, a lack of electricity for our current strategy in this kind of a K type divergence. So that going forward, we can be more flexible. We can tap into the strength of our internal investment managers and external asset managers. Of course, we all know that starting from July, the market also went through some changes, especially the rotation of the styles for equity.

Now there will be a rebalance between growth and value shares. For each share market rebounded is good for us. And for mutual fund, the herding of mutual fund, the effect of the herding of mutual fund is diminishing. I believe Q2 is -- the negative impact of Q2 is also reducing. So I believe these are quite good news for CPIC. First of all, we now -- as I mentioned, we care most about net investment yield, but that's not to say we neglect or ignore comprehensive or total investment yield.

Regarding the whole year investment yield, we believe the Asian market will become more balanced. And earnings-driven opportunities will be the mainstay. And for H-share, we believe H-share market will still focus more on high dividend payout shares. Now all these environments will be beneficial to CPIC. We are going to look at the -- well, the timing opportunities, we are going to improve to better select this kind of growth opportunities on the satellite strategy.

We are confident we can beat the indicators, beat the benchmarks so as to boost the total investment yield and comprehensive investment yield. Well, I believe that is our outlook and comment on our investment yields.

As you mentioned, the issue about the profit. Maybe I will -- could you repeat your question about the profit. Could you repeat that? OPAT. Now for OPAT. Now the drivers of OPAT is the CSM amortization is a key source and also spread and also P&C's underwriting profitability. Now for the first half of this year for Life, CSM improved by more than 4% year-on-year, and spread is still going up. And the P&C profitability, underwriting profitability also improved by 1.4%. So if we look at the -- more in details for life, including Hong Kong, OPAT was CNY 15.8 billion, for P&C, OPAT CNY 6.2 billion.

If we look at the yearly picture, CSM amortization will continue to grow steadily. That will be a main driver of OPAT. And for some of the regulatory guidance for P&C business, its underwriting profitability will continue to grow, thus contributing to group OPAT. In the long term, we are going to improve the CSM growth so as to make it a underpin of our OPAT although there might be changes in product mix, there will be some pressure.

However, as the industry grow as a whole towards high-quality growth, we believe OPAT is on a good trend. CPIC is first Echelon, first here listed insurance companies, we believe we are competitive in this regard.

Well, let's welcome the next question.

I'm Li Jian from Huatai Securities. Now first of all, my comment on your performance. I believe CPIC is a balanced company in terms of accessibility and the liability side. Now I have 2 questions. Number one, for Life business, your product margin is growing up. This is, well, quite rare among your peers because a lot of the margins, for example, because of the transition towards the power life, margin will be under pressure. But how can you improve your margins? Is it sustainable?

Second question on the P&C side, our underwriting profitability is growing -- is improving loss ratio, expense ratio both improved for auto and non-auto business. Now around the 95% combined ratio, it can -- it be sustainable?

Thank you for your attention. Let me answer the live question. Now in terms of margin, NBV margin are improving. Going forward, we believe we are going to maintain sustainable margin. Now, how did we do that? That's many thanks because -- thanks to several things. Number one, we stick to the regulatory rules regarding the integrity between reported and before filed and actual expense.

Secondly, we continue with customer segmentation. For this year, we can see -- we improved in this regard. For example, we now can very accurately identify different segmented customer. For example, we launched an AI system to -- well, previously, last year, we focused on improving customer experience. This year, we now make -- improved the system to better identify different segments of customers. For example, better identify their different life cycles, life stages, et cetera, so that we can more accurately pinpoint their actual needs and differentiated business development for customers. For different segments, we have different approaches. We can approach them online and then follow up offline. I have some numbers for you. With this kind of customer relation development, we see some changes, number one. For example, we have more customers from big cities and actually premium per customer increased by 3%. And more customers are paying more attention to their protection.

And thirdly, for the issue of product, we are improving product structure. Several things here. In terms of the product format, we are making adjustments, for example, be it traditional or participating life. Secondly, in terms of premium payment, 5-pay, 10-pay. Now these 5-pay 10-pay products are improving in terms of proportion. And thirdly, in terms of function, we are launching more long-term care products.

Fourthly, in terms of the horizon of protection, duration of protection, we are also expanding that. Also, firstly, we are improving the health and wellness ecosystem. The big health and wellness strategy is our top 3 strategies, top 3 strategy for CPIC Group. And fifthly, we are improving refined management. We are trying to improve customer experience in this regard. And sixthly, we are continuing to improve AI or digital empowerment, digital empowerment. So we are going to further improve our NBV and NBV margin from these angles.

Now let me answer your question on the P&C business. Our combined ratio for the first half of this year continued to improve this year, which now stood at 95%, down by 1.3 pts. Now combined ratio, loss ratio and the expense ratio they both improved which is a quite big feed. Now the reasons and I believe there are 3 reasons. Number one, we improved I mean, adjusted our business philosophy. For P&C business, we remain compliant to focus on risk and quality business, we focus not only on volume but more on quality and efficiency. We implement our big targets, for example, by focusing on income and profitability on cash flow. This is something we do on all levels of our business.

Now if we look at the business -- daily business, we did 2 things. Number one, we adjusted the structure. Combined ratio -- loss ratio was 0.8 pts. That is mainly because of we proactively adjusted -- adjusted our business. For example, personal credit guarantee business was terminated. And our risk reexposure for this -- in this regard were basically removed by this year. Secondly, we cut our expenses, cut our costs -- our expense ratio -- expense ratio was down by 0.5 pts. We implement -- strictly implement regulatory requirements regarding integrity between filed under actual expense.

In terms of our business operations, we continue to improve anti-fraud, anti -- and also, we continue to improve the management of our vendors. But of course, unresolved -- unsettled results improved by 3.3 pts. That is to say we have a very good foundation for the overall improvement in underwriting profitability.

And another thing is that we are now improving our risk reduction capabilities. So it's not only our risk management compensation after accident occurred, we now move it forward to make it more life cycle -- full life cycle. For example, we now collaborate with universities and other research institutes to do research on this kind of risk reduction.

For example, we have -- we are now developing a catastrophe reduction engine and by leveraging our own risk radar in the first half of this year, we have served more than 100,000 customers in terms of offering them anti-flood services. So we better reduced this kind of flood risk and offset this kind of impact from extreme weather events.

And thirdly, we are developing a long-term protection mechanism that is to say starting from talent, technology and evaluation. In terms of talent building, we have hired professional talents especially biomedical sphere and autonomous driving, et cetera. So we need to make our people more professional, have a more professional team. At the same time, under the group strategy, we are put in place relevant P&C scenarios, for example, AI application scenarios, claims settlement, AI customer service. I believe technology is playing a bigger and bigger role in reducing costs.

Thirdly, in terms of performance evaluation, we put efficiency first. We focus on compliance and risk management so that we have a better foundation for quality growth. I believe the biggest challenge for P&C company is climate. I mean, climate change, uncertainty of climate risk. For example, our El Nino effect, this round of El Nino effect. A lot of the typhoons in China have given us more risks, not to mention this kind of a storm and other kinds of landslide. I mean, it gave us some challenges, but we are still confident. We will continue with our prudent strategy to address the challenges.

On the whole, I believe we are improving our efficiency and the quality of business. This trend will continue. We hope that with the P&C company can make more contribution to the group as a whole.

Thank you for the questions. In the interest of time, we now end the Q&A session. And before the meeting, actually, we solicited some questions from small and midsized investors. And these questions were already answered previously. For example, regarding the midterm our interim dividend payout and product strategy and also business outlook, et cetera, SAA, et cetera. We have already covered those questions. And if you have further questions, we can take it off-line. And for the online broadcasting, questions will be answered in terms of text messages. If you have more questions, you can contact our Investor Relations team. Well, that ends our meeting. Thank you. Goodbye.

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

Good afternoon, ladies and gentlemen. Welcome to the CPIC Group 2025 Annual Results Announcement. I'm Su Shaojun, CPIC Group Board Secretary. It's my great pleasure to meet you again. Now this year, we are conducting this event in both Shanghai and Hong Kong. It's a face-to-face opportunity to give you a brief account of our performance last year and listen to your opinions and suggestions to protect the interest of small and medium-sized investors, we also have this event broadcast online. And after the meeting, you can watch the playback on our official website.

Next, I'm going to introduce our managers on the Hong Kong and Shanghai side. On the Hong Kong -- on the Shanghai side, we have Mr. Fu Fan, CPIC Group Chairman; and also Mr. Yu Bin, CPIC Group Vice President; and also CPIC Life General Manager, Mr. Li Jinsong. And on the Hong Kong side, we have CPIC Group President, Mr. Zhao Yonggang; and Group Vice President, Mr. Ma Xin; and also Group Vice President, CIO and CFO, Mr. Su Gang; and [ Mr. Chang Hwei ], CPIC P&C General Manager. And our independent directors will also attend this meeting online.

First of all, Mr. Zhao Yonggang will give you account of our performance last year to be followed by a Q&A session. First of all, let's give the floor to Mr. Zhao.

Good afternoon, ladies and gentlemen. It is my great pleasure to be here to talk to you. The year 2025 was marked by profound changes, and we have a complex and challenging environment, both at home and abroad. But China's economy stayed on track and demonstrated strong resilience. Financial regulators in China encouraged the insurance companies to uphold its core values, improve operational efficiency and service quality.

CPIC pressed ahead with transformation and accelerated long-term capacity building. Our performance continued to improve. Our core competitiveness continued to enhance, and we see sustained growth of overall strength. We achieved continued progress in high-quality development.

If we look at the numbers, in 2025, group operating income was CNY 435 billion, up 7.7%. Of this, insurance revenue was CNY 288 billion, up 3.4%. Our group OPAT attributable to shareholders of the parent was CNY 36 billion, up by 6.1%. Group net profitable was CNY 53.5 billion, up by 19%. Our group EV stood at CNY 613 billion, up 9.1% from the end of 2024. The group number of customers increased by 3.5% to CNY 190 million. Group AUM approached CNY 3.9 trillion, up by 9.8%.

On the capital side, we remained -- maintained a solid capital position. Our comprehensive and the core solvency margin under C-ROSS II was 273% and 206%, respectively. The comprehensive and the core solvency margin ratios are all above regulatory minimum requirements. This provided a reasonable capital buffer for sustainable business operation and resilience against the systematic risks.

We voluntarily disclosed OPAT, which is calculated on the basis of net profit while excluding short-term investment volatility and material one-off items. In 2025, group OPAT was CNY 36.5 billion, up by 6.1%. And of this, that of CPIC Life was CNY 28.9 billion, up by 4.8% and others, CNY 9 billion, up by 10.1%, which mainly come from the underwriting profitability increase from P&C business.

Our EV grew by 9.1% from the end of 2024. Contributions mainly came from expected return on EV and NBV. Also, EV movement was also impacted by changes to methods, assumptions, models and profit distribution, et cetera.

By the end of 2025, group net assets was CNY 302 billion, up by 3.7% from the end of the previous year. Since the using of new accounting standards, the company's net assets has increased a CAGR of 9.5%. We know that the changes in market interest rate may have a temporary impact on net assets. But over the long term, we expect our net assets to stay relatively stable, underpinned by steady profit contribution and a sound asset liability matching framework.

We advanced the 5 financial priorities with a pioneering spirit so as to lever -- to improve the economic and social development.

We was -- our MSCI ESG rating was upgraded to the highest AAA level. For technology finance, we support the development of new quality productive force, and we launched product system, including the Kechuang Wuyou. Our total sum assured for technology insurance exceeded CNY 67 trillion. In green finance, we -- our SA on green insurance exceeded CNY 310 trillion. And we actively pursue the issuance of green insurance debt plan, ABS risk with a total green investment exceeding CNY 300 billion.

For inclusive finance, we actually provided a lot of care, issued over 500 million policies under terminal illness, long-term care and inclusive health insurance issued over 70 million agricultural insurance policies with SA exceeding CNY 1.3 trillion.

For pension finance, we -- our CPIC Home has expanded to 13 cities with 15 retirement communities up and running. We admitted more than 3,000 elderly residents. Our hospital under the Yuanshen Rehab opened in Xiamen and Jinmai. We also rolled out initiatives such as the talent enterprise annuity plan in Shanghai Lin-gang and the automatic enrollment mechanism in [ Changan ] new area.

For digital finance, we continue to deepen digital and intelligence operations across various business scenarios so as to improve risk mitigation and enhance our operational efficiency. We are committed to a customer-centered business approach. We saw sustained growth in customer numbers and also customer value contribution. By the end of 2025, we saw growth in the average number of insurance policies of individual customers. The number of customers with 2 insurance policies and above and the number of individual customers holding insurance policies of multiple group subsidiaries also improvements.

Premiums from strategic account business grew by 17.4% year-on-year. We continue to strengthen primary responsibility of frontline business units in consumer protection. Our CPIC Life, CPIC P&C continue to lead the industry in regulatory consumer protection evaluations. We are committed to generating stable, sustainable and predictable return for our shareholders. The Board has recommended a DPS of CNY 1.15 for 2025, up by 6.5% from 2024, pending approval from shareholders' meeting, of course. The proposal underscores our commitment to the shareholders.

Next, we will turn to our business lines. For Life business, we continue to step up systematic capacity building and AI empowerment and also improvement in customer mix. Our NBV and new business margin also improved. For the Life business line, in total, it achieved CNY 211.6 billion in written premiums, up 4.5%. Core agent headcount stood at 46,000. And our -- in terms of number, the 13 months persistence ratio was more than 90%, which leads the industry. And for the agency channel, we continue to focus on empowerment through digitalization.

In terms of business operation, we continue to focus on the procedures and also focus on customer segmentation. In terms of the product offering, we offer customized products and solutions to our customers so that they can meet -- they can satisfy their diversified needs. In terms of the building of agency teams, we focus on professionalism, digitalization, professionalism, so as to develop a younger, more better quality team.

In 2025, for agency as a whole, total written premium for the channel, Life channel was CNY 211 billion, up by 4.5%. Core agent headcount stood at 46,000 on a monthly basis. And FYP per core agent was 64,000, up by 17.1%. In the second half of the year, monthly average FYC per core agent grew by 22%, up greatly from the first half of the year. The proportion of mid-tier customers and above increased by 5.1% year-on-year.

For the bank channel, we cemented strategic partnership with joint stock banks, especially SOE banks. We diversified product and service offering and built professionalism on sales teams and pushed for upgraded customer mix and enhanced digital and AI empowerment to improve operational efficiency.

For the year as a whole, the bank channel achieved CNY 61.6 billion in written premium, up by 46.4%. And of this, regular pay FYP was CNY 17 billion, up by 43%. NBV amounted to CNY 6.7 billion, up by more than 100%. The share of mid-tier customers and above reached 41%, up by 1.8 percentage points. And we saw rapid growth of high net wealth customers and ultra-high net wealth customers.

For P&C business, we put profitability first. We optimized the business mix with marked improvement in underwriting profitability. For the whole year of 2025, CPIC P&C recorded primary premium income of CNY 201 billion. Of this, premium from auto insurance was CNY 110 billion, up by 3% and that from non-auto business was CNY 91 billion, down by 3% as we continue to cut back on personal credit guarantee insurance business.

The underwriting combined ratio stood at 97.5%, down by 1.1 percentage point year-on-year. Of this, underwriting loss ratio stood at 70.4%, down by 0.4 pt. Underwriting expense ratio was 27.1%, down by 0.7 percentage points. Underwriting profit amounted to CNY 4.8 billion, up by 81% year-on-year.

Our auto business strengthened precision management and professional development of distribution channels. Also, we drove innovation in NEV business to facilitate expansion of domestic automakers into international markets. Our underwriting combined ratio of business stood at 95.6%, down by 2.6 pt from previous year. And the renewal rate of individual customers of auto insurance reached by -- reached 78.1%, up by 1.3 pt. And the premium from NEV business amounted to CNY 25 billion, accounting for 22% of the total auto premiums. And also, we took initiative to optimize business mix of non-auto insurance and to focus on the prevention -- system of prevention, reduction, relief and compensation.

The underwriting combined ratio of non-auto business stood at 99.9%. And the -- excluding the impact of personal guarantee insurance, the ratio would be 97%, down by 2.1 percentage points. And the -- our major business lines, we also achieved a turnaround in profitability.

For our asset management business, we persisted in an SAA mark based on profiles of liability and followed and fine-tuned the down bell shaped asset allocation strategy while moderately increasing investment in secondary market assets and alternative assets, including private debt to enhance long-term returns. And by the end of the previous year, the share of debt category financial assets stood at 72%, down by 3.5%. And that of equity financial assets was 16.7%, up by 2.2 pts. And the stock and equity fund accounted for 13.4% of total investment assets, up by 2.2 pts.

Last year, we conducted disciplined and flexible tech TAA. We actually enhanced our proactive management of equity assets and achieved a solid investment performance. Our net investment yield reached 3.4%, down by 0.4 pts. That's mainly due to a decrease in yields on fixed income assets because of the low interest rate environment.

Our total income amount -- investment income was CNY 141 billion, up by 17.6% year-on-year. That's mainly thanks to steep rise in gains from securities tradings with total investment yields of 5.7%, up by 0.1% year-on-year. We always pay a lot of attention to credit risk management. Our enterprise bond holding and the financial bond holding issued by nongovernment sponsored banks have high external ratings. We pay a lot of attention to long-term asset liability management to maintain dynamic matching of asset liability duration.

Last year, both the effective duration gap and the modified duration gap of CPIC Life further narrowed. The overall maturity profile is well structured. This was the performance highlights of our core business segments for 2025. For the year ahead, 2026, we will focus on the core business to pursue progress while ensuring stable fundamentals and improve quality and efficiency. We will foster new growth drivers. We will further improve operational efficiency and also our service capability to become a top-tier insurance company with market leadership and international competitiveness.

Well, that concludes my presentation. Thank you.

Well, thank you, Mr. Zhao, for your detailed presentation. Now we will have the Q&A session. We will welcome your questions from both the Shanghai and the Hong Kong side and also online.

First of all, a question from Shanghai.

Congratulations on your results. Now I have a question. What do you think was your achievement for the 14th 5-year period? And what's your view on the future ahead? What are the opportunities and challenges for CPIC in the new 5-year period?

Well, thank you for your question. Now for the 14th 5-year period, CPIC employers united to overcome challenges and achieve the new progress in high-quality development.

I would say, I would focus on 4 points. First of all, our market position grew further. Our size of business and the capability both increased. Now I will skip details. And secondly, we see our transformation results more evident and growth -- new growth drivers taking place. For P&C business, new energy vehicle grew rapidly. Agricultural insurance reached #2 in market share. And our Life business also saw diversified distribution strategy.

For bank channel, we delivered rapid value growth and the market share of new business value continued to rise. For asset management, we continued to refine our down bell shaped asset allocation strategy and delivered investment performance among the industry's top tier.

Our health and elderly care services also improved. We have delivered an integrated prevention, diagnosis, treatment, rehabilitation, elderly care service market system. And you can see CPIC Home has expanded to 13 cities with 15 retirement communities up and running. Our Yuanshen rehab also opened in 3 cities, and we also rolled out CPIC Doctor, an Internet-based service platform and our services covered 70 cities.

Fourthly, we further strengthened the development foundations. We optimized our corporate governance system and advanced the reform of our Board of Supervisors. We continue to strengthen our risk management capabilities and improved professional management system for selecting, developing and retaining young talent.

Our MSCI ESG rating reached AAA, and we also issued 0 coupon high H share convertible bonds at a premium.

And looking ahead, China's insurance industry is entering a critical phase with both opportunities and challenges. On a macro side, the state prioritized the development of the 5 financial priorities so that insurance can play a better role as an economic absorber, shock absorber and social stabilizer. On the market side, industry upgrading and demographic shifts are creating new needs for risk protection and financial services.

From the technology standpoint, AI presents strategic opportunities for the sector. At the same time, challenges are equally significant. China has entered a new interest rate era so that we need to make corresponding change. Industry competition is shifting from growth-driven expansion to intensified rivalry within a situated market.

Given this, CPIC will adhere to the principle of steady progress while ensuring quality and efficiency. We will accelerate the building of a world-class insurance and financial group with market leadership and global competitiveness. We will accelerate the following, for example, accelerate innovation in technology. We will also expand inclusive insurance offering nationwide. We will also strengthen agricultural support system by expanding and innovating agricultural insurance and rural-related business to better serve rural vitalization and farming communities.

We will new advance the new 3 major strategies: health and elderly care strategy. We will enhance specialized operations in health insurance, build a closed-loop pension finance system and create a full scenario, high-quality and sustainable elderly care ecosystem. And also, we will pursue internationalization strategy, leverage Hong Kong as a bridge pad and innovation launch pad to build an offline, online, so to build an onshore/offshore model.

For AI plus strategy, we will drive large-scale AI adoption across core business scenarios to boost efficiency, reshape processes, optimize customer experience and innovate service models. We will continue to strengthen our core business competitiveness. For life insurance, we will remain committed to value-driven growth, deepen the professionalization and specialization of the agency channel, expand the footprint of the bancassurance insurance channel and enrich our product portfolio.

For P&C business, we will put profitability first, enhance risk protection for new energy vehicle and smart driving and also improve the fundamental role of auto insurance and also improve refined management in non-auto business to improve underwriting profitability.

For asset management side, we will continue to optimize our asset liability management system, diversify allocation strategy, strengthen risk control.

Going ahead, we will adhere to the principle of steady progress while ensuring quality and efficiency. Our goal is to deepen high-quality development and deliver sustainable value creation for shareholders. Thank you.

Well, another question from Shanghai side.

First of all, congratulations on your good performance in 2025. I'm Liu Xin Qi from Guotai Haitong Securities. I have 2 questions. Number one is about the bank business. Actually, during the last results announcement also, we talked about the plan for bank channel for 2025 and 2026. Now how was it going for the bank channel? Did it meet your expectations? And for 2025, how about the new initiatives for the bank channel? That's for the bank channel.

Second, for the capital issue. Now in terms of the solvency ratio, you are much better than your peers in terms of the comprehensive and the core solvency ratio. Now of course, we also see the interest rate is stabilizing in China. Now given this, -- and also we see downward trend for the 75 yield curve. Now how are you going to maintain your solvency in order to stabilize your dividend payout?

Thank you for your question. No, actually, you see during the previous results announcement, I have introduced the 2026 bank channel business plan. Now so far as we can see, it has sticked to the plan. It was in progress, and everything was in progress. If we look at the channel development and also look at the team and look at the other number, the KPIs, well, it's within expectation. For example, for the value of our business, we focus on regular pay, NBV. For example, regular premium business improved by 40%. We also focus on high tech. For example, total gross premium, the share of the customers, higher customers improved by a lot. And RP business, I mean, more than 11,000 outlets can sell RP business from CPIC.

And in terms of improving the mix -- business mix, we continue to improve the mix of our bank channel. This year, we actually established a partnership with all the SOEs -- big SOE banks. And we also updated the relevant management mechanism. Our share in the SOE banks improved by 0.3 pts and also strengthened cooperation with joint stock banks. And leveraging our strengths, we continue to improve refined management of the outlets.

For joint bank -- joint stock bank partners, we see improved balance between the different channels. We are going to accelerate the improvement of product mix. Our product quality, our product offering will be more enriched -- will further enrich. And for annuity business, we improved the promotion efforts. The growth is above 2 digits. For example, service capability also improved. We have seen more and more take on from banks on our service offerings. The utilization was up by 10%. Our business quality continued to be good.

13th month persistent ratio was 97%, up by 2% year-on-year. So we see very solid foundation for the bank business.

Now I will answer your second question. Now for CPIC Group, in 2025, our solvency improved a lot, and that is mainly because of our improved business quality and also because of the matching -- for example, Life company, asset liability matching was better so as to offset the downward pressure on the interest rate. So our solvency improved a lot. For the P&C company, operation profitability improved. This is a big positive contribution. And the company continued to be prudent in its business expansion. We pay a lot of attention to asset liability matching, continue to improve our business mix.

On the whole, we would say that our solvency for Life and the P&C company, they are both very good. And given the volatility on the capital market and the downward trend of interest rate, I believe we are quite good compared to peers. Going forward, we will continue to improve the ALM so as to better reflect the situation -- actual situation of business. We actually recategorized our fixed income assets. For example, previously, hold-to-maturity assets were now recategorized as available for sale.

Now of course, this had some impact on the liability side, but it will give you a better reflection of our solvency and also a common practice in the industry. CPIC Life were among the last -- one of the last to conduct this kind of a recategorization. Of course, it is also the transitional period because we have better profit-making capabilities and also more better ALM. So we can see towards the end of 2025, we have very good solvency.

For 2026, even if we don't consider the transitional period policies, we will be far above the policy -- far above the regulatory requirements. Going forward, I would say we will continue to focus on our fundamentals, refine our management and our solvencies will continue to be accurate, to be adequate. So we can withhold, we can extend the volatilities of the market and provide a very good basis support for business expansion.

Okay. Now we'll move on to Hong Kong side.

I'm from UBS. I'm Zhou Cheng. First of all, congratulations on your good performance in 2025. I have 2 questions. Number one, outlook for 2026 and other on the financial issue. Now I would say 2025, you have delivered a good performance. And also Mr. Zhao have mentioned the 2025, you mentioned you are going to seek progress while maintaining stability. Now could you give me more specifics, any specific plans?

Now second question on the financial business. Net profit and OPAT net profit up by 19%. Compared to peers, it was rather modest. what is the modest growth, especially for Q1. Now for A-share and H-share, a lot of volatility on the share market. So what's your outlook on the profitability side? And OPAT is within the expectation of investors, but well, high vis-a-vis your 3-year guideline. So what's your expectation or your outlook on OPAT for the year as a whole?

Thank you for your question. Let me answer your first question. For 2025, we delivered a solid performance. I believe that's thanks to a clear guidance from the Board. And also, I believe that we've been building up momentum for years, and now it finally paid off. I would say there are 4 aspects to this. Number one, we remain committed to integrating into national strategy. We align with major national initiatives, including the Belt and Road initiative and the Shanghai Development Goals for 5 centers.

We, for example, deepened our efforts for health insurance, expanded our product offering, enriched our elderly care products and services. And we also remain committed to value-driven operations, focused on quality and efficiency, continue to optimize business structure. For Life side, we diversified the channels and strengthened customer segmentation. For P&C side, we improved the business mix and operation. For asset management, we adopted a new methodology in asset liability management and enhanced capability to allocate assets across market and economic cycles.

Thirdly, we remain committed to collaborative growth. We drove customer-centric collaboration by turning business synergy into direct customer value. We continue to strengthen customer segmentation through deeper ecological integration with strategic partnerships delivering notable breakthroughs in recent 4 years. And fourthly, we continue to focus on innovation-driven development. We advanced the digital transformation, the application of large AI models across marketing, claims management, operations, et cetera.

We enhanced operational efficiency and risk control capabilities. We also promoted a younger, more professional market-oriented team to unlock organizational vitality. We speed up product service innovation so as to set benchmarks for areas such as supporting new energy vehicles in global markets. For 2025, 2026, we will aim for higher quality, stronger resilience and a more solid foundation. We will adhere to the principle of steady progress while ensuring quality and efficiency and further advance the 3 major strategies that is health and elderly care, global expansion and AI plus.

With this, we aim to lay a good foundation for the upcoming 15th 5-year plan or to be more specific, number one, we want to achieve a breakthrough for supporting the 15th 5-year plan. We will strengthen core missions, serve the development of modern industry, system and technological innovation and enhance insurance services through people's livelihood. We will continue to deliver distinctive demonstrations of our 5 major initiatives or priorities to align with economic and social value.

Secondly, we will achieve breakthrough in cultivating new growth drivers. We will continue to enhance core business performance, drive up new business value in Life business and the underwriting profitability for our P&C business. We will also build a tighter asset liability coordination mechanism to optimize our ALM framework and maintain robust risk management.

Thirdly, we want to achieve breakthrough in advancing the 3 major strategies. They are commercial health insurance and pension finance. We want to see steady growth in the health premium and pension assets. And this service will more actively support and empower core business. And for international business, we are going to maintain a growing market presence for our Hong Kong-based entities. We are going to also accelerate the large-scale application of AI to build an enterprise-wide knowledge management platform and driving technical innovation from isolated initiatives towards an integrated ecosystem.

Well, let me answer your second question regarding net profit and OPAT. Under the new accounting standards, net profit will be impacted by your business mix, investment and also asset categorization and also your calculation of various assets and liabilities. So a lot of factors are involved, especially given the volatility of the capital market. The -- actually, you will see a lot of fluctuation in the profit growth for insurance companies.

CPIC continue to improve our insurance business quality and to deepen the long-term management of ALM, we focus on improving our investment management. We hope to maintain financial stability across a long period. Now you see -- we see a lot of downward pressure, quarterly decline of Shanghai Stock Index and the Hong Kong Stock Hang Seng Stock Index. However, the quarterly profit of CPIC maintained 17% positive growth, close to the average of the previous 3 quarters.

So you see Q4 profitability didn't drop a lot compared to the 3 previous quarters. Now for P&C side, thanks to the investment and also insurance growth, profit improved by 74% with absolute record high numbers. And for P&C business, you can see we continue to focus on profitability. We continue to manage our business. Our combined ratio improved by 1 percentage point. And if we look at the profits of P&C business, we saw continued asset under investment and investment yield was better than the market benchmark. And for Life side, influenced by the calculation of liabilities. And also, if we look at the calculation method, we are quite prudent. This will impact the profit numbers for the year.

However, if you look at the longer term, the longer-term numbers, the long-term ROE is still quite good compared to peers. On the whole, if we look at the insurance business, CPIC, we focus on profit growth to improve business mix and also to improve service and operation. Our profitability continued to grow and our insurance business actually will not give us a lot of uncertainty or fluctuation because of the business changes.

Last year, our insurance delivered a solid and stable performance and numbers. If you look at the group as a whole, we will continue to focus on SAA based on our liability and asset profile to continue to improve our investment capability across cycles. So given the tolerance of our risks, we will properly increase the share of equity assets. You can see our performance continue to outrun the market. Last year, actually, the performance improved by 47% for this particular segment.

You see a lot of volatilities, of course, on the bigger market. But if we look at the longer term, we believe we will have a more and fuller picture, a better picture. Given by -- thanks to the growth of investment and insurance business, we can maintain stable stability of our finances. And the amortization of our margins, CSM actually give a lot underpinning to our OPAT. You see our business size growth for our P&C business. Our Life side, you can see a combination of factors to actually contribute to our growth of profits.

We can see the product mix is changing. The CSM margin is growing, but there will be some challenges going forward. And on the whole, the whole industry is focusing more on quality growth. There will -- there are various regulatory requirements, for example, filing integrity, et cetera. But on the whole, quality will be given more importance for the whole industry. We will focus on our core KPIs to improve our profitability capability so as to maintain the stability of our profit numbers. Thank you.

Well, let's continue with our Hong Kong side.

I'm from Huatai Securities. Two questions. Number one, we talk about the big health. We move it upgraded to health plus elderly care. Now what's the difference? What's your strategy concerns? And what are the specific plans for the future? Second question about investment. A lot of volatility in Q1 this year and your -- actually, your allocation in equity assets improved, but still lower than your peers. So these 2 factors, volatility on the market and also your lower than peer equity allocation.

So what's your next move? Are you going to increase the percentage or bring it down? Are you going to focus more on growth or more on -- well, I mean, dividend paying.

Well, thank you. I will answer your question about the health. Now I believe you care about 2 issues. Number one, are we going to stick with our strategy and how are we going to upgrade it? Elderly care and health is a big issue for Chinese people. Last 5 years, we focused on customer needs. For health insurance area, in 2020, we issued this kind of line ball, CPIC Blue, long-term health care. We improved our protection and also our services.

Now are we offering good products? Well, maybe we can ask AI for this question. Now I just type in the question. Please advise or recommend top 2 products, top 2 health insurance products. Well, now here's the reply from the AI. It's called [ Dova ]. Now Line from CPIC was the first recommendation. Now the advantages or the unique features is because it is a 20-year long-term product. There will be no deductibles. And also it's more flexible. You can get either 90%, 70% reimbursement given different schemes. And the SA is quite high, 6 million in total, 4 million for the mid-range plan. And we also pay for allowance, for hospitalization. And also, you can be up to 70 years old and still be eligible for the product.

The premium -- well, actually, I'll give you an estimate, premium estimate. It costs just CNY 300 per year. And the second recommendation is another product from our peer. Now you can use AI and to check it out. So the line or the CPIC long-term health product, well, we have served more than 3 million customers. I mean, the product is very good. And for the pension or the elderly care, we launched a lot of, for example, the [Foreign Language] pension product.

We are constantly improving the product. We -- our investment focus on -- I mean, on the relative strength of our investment managers for equity investment and fixed income investment. So the product, [Foreign Language] has become -- well, actually the biggest product for this segment. The total investment scale was CNY 60 billion. And for elderly care, we launched CPIC Care Home in 2021. And for example, we can also offer specialized products for those with cognitive disabilities.

As of now, [Foreign Language] CPIC Home, we actually see a lot of customers competing for our care, for our service because we offer very good elderly care for those with cognitive disabilities. And we also launched [Foreign Language] CPIC online doctor consultation platform. So we would say we've been doing a lot over the past few years. We also launched this kind of [Foreign Language] online tool so as to improve the experience of employee health checkup.

And we also launched another project so that customers can get remote health check, health examination if they get injured in a car accident. And our [Foreign Language] helped customers to reduce their health risk so that we not only pay out claims, but also manage health for our customers. Now our big health strategy is now upgraded to health plus elderly care strategy. We are launching various initiatives recently. For example, we now have this kind of integrated approach. For the group side, we launched an elderly care organization. We have set up organizations on the HCO side level and also branch level. So this kind of long-term mechanism can give better support to business expansion.

And secondly, we focus more on the integration of insurance plus service. We are going to improve the business growth and also enhance service capability. We have launched quantitative targets for the next 5 years. Given the specific features of this nature of this business, we have set up a comprehensive KPI system. And we also look whether -- how we can better integrate the service provider with the insurance provider.

We're going to focus on more specific, more specialized services, focus on more on capability to provide professional services. We focus on light asset model. For example, Home's day health care and long-term nursing care will be a focus. We are also going to improve or promote long-term medical service over the Internet, that's remote service over the Internet.

I believe we need to stick to our strategy. We need to upgrade our strategy. Combined, we can deepen -- further deepen our health and elderly care business so as to better serve our elderly customers. Thank you.

Well, thank you very much for your attention or your interest in our asset management business. We have a lot of challenges, to be honest. You see last year, we see a lot of big trends in China. Macro economy in China, we see quite promising results. A-share and H-share saw very big growth, especially for high-tech companies. Now given this kind of judgment, we believe we improved our SAA and the TAA, improved our -- increased share of our equity asset allocation.

But of course, we need to make it clear that on one side, our investment yield is impacted by the fair value changes of our assets, which is expanding. Now this kind of volatility is becoming bigger. How will it affect our investment yield for the long term? I believe we need more time to refine our understanding. On the other hand, equity, the share of equity investment. Now I would not say we are lagging behind our peers or that others are ahead of us. I wouldn't say that. It's not saying that we are leading others or lagging behind others. I wouldn't say that.

I mean, compared to our peers, we are more prudent in terms of the share of our equity assets. I believe we believe the better yields, be it net investment yield, total investment yield or comprehensive investment yield, CPIC, we are at least better than the market average or peers average or actually near the top of the market, above the average. I believe we can better withstand the adjustment of those investments. So I would say after adjusting -- adjusted for risk, we believe we offered a better solution. We have already set up SAA based on ALM and risk profiles. We have set up this kind of basic model.

We also look at our models and also predictions for the capital market. And under guidance of SAA, we will deliver disciplined and flexible PAA. We will adopt -- continue with our down bell strategy. Going forward, the market and also the macroeconomic trends will be like that. CPIC will, of course, first of all, be aligned or respond to the regulatory requirements and also look at the nature of the long-term insurance funding.

For SAA, our percentages will be based on our liability profile. We will make it more sophisticated. We will share it. We will -- well, we try to share -- take a share of the investment opportunities. For our dividend payout strategy, we believe it is very stable. It is for the long term. I believe it is a good indication. And based on this kind of underlying assets, investors can get dividend payout. So you get a win in this area. And also, you get capital return. And you also get resilience. You get resilience, you can protect the risk if you are investor of CPIC. And also, you see our strategies covers AI and also health and elderly care and some other key areas.

Well, thank you. Now maybe we have another question from Hong Kong side.

I'm Zhao Yao from Morgan Stanley. First of all, it's a question on strategy because CPIC is a group company. And Mr. Zhao also mentioned about synergy for CPIC. Could you give more details? What will be the most important focus areas for advancing group-based management?

And the second question is about the P&C business. Well actually, you also mentioned a little bit. You mean NEV business is seeing faster growth and also better profitability. So this is for the auto business. But about non-auto. Non-auto, what's your outlook for the non-auto business for 2026? And for the NEV business, is there any more risk -- I mean, more risk events for the second half of 2025?

Well, thank you. I'll answer your first question. Now as a listed public company, we believe synergy is always key. We need to turn it to transform our integrated structure into core competitiveness. I believe we have established a core structure framework for collaborative development in recent years.

I would say, first of all, we have a multidimensional collaborative governance structure already. We have built an integrated collaboration framework spanning the group, the branch and subsidiaries. And with clear planning and performance incentives and standardized process, we ensure that collaboration is systematic, driven and actionable. The philosophy of One CPIC synergy for growth has taken roots.

Secondly, diversified business collaboration model continue to expand. For example, for agency channel, we have this kind of multidimensional P&C, life, health and health and elder care service synergy model. P&C and life collaborate in both directions. And also have -- we also have P&C sales and life model. And we also have this kind of deepened integration of P&C and health and elderly care service by leveraging our health and elder care ecosystem, offering customers integrated insurance plus health and elderly care service solutions. For corporate business, we also are building innovative ecosystems.

And thirdly, we have integrated digital operating capabilities. We share product and service resources from standardization towards customization. And we saw deeper integration. For example, we built a one-stop comprehensive service platform for corporate customers so that direct service to the employees of our strategic customers can be provided.

To summarize, over the past 5 years, the number of customers holding policies -- multiple policies improved by 40%. And we have more strategic customers. By the end of 2025, the total number of strategic customers reached 1,040. Business momentum remains strong with insurance, annuity and third-party asset management all growing at rates above group's overall average.

Looking ahead, we will continue to advance towards the goal of integrated service with one interface for one customer. We move from business collaboration to customer-centric collaboration and ultimately, to achieve ultimate strategic synergy, we will play a more active role to deliver more comprehensive risk protection for the real economy and public welfare.

First of all, we will drive synergies through strategic guidance to provide customers with more comprehensive insurance coverage and service so that we can offer this kind of integrated insurance solutions covering the entire industry chain and life cycle so that customer can get better experience.

Secondly, we will leverage digital transformation to enhance synergy using technology to boost efficiency. We will build smart platform. We will share and analyze big data to identify the features of our products and services. We will use AI plus to empower agents and service specialists to enhance their skills and professionalism.

Thirdly, we will strengthen synergies through mechanism innovation, embed a culture of collaboration into our DNA. We will refine a market-driven mechanism for responsibility and incentive sharing across all levels. We need to embed into our culture and turning the group-wide advantage into CPIC's long-term moat or our long-term competitive edge. Thank you.

Well, thank you. Let me answer your second question. Well, first of all, you see for the P&C business, first of all, NEV, new energy vehicle business, last year, our income was more than CNY 11 billion for this segment. It was up by 5.6% year-on-year. I would say the NEV business grow faster than the auto business as a whole. That's thanks to our preparation beforehand and also to better improve our NEV business. We collaborate with automakers. We also utilize our AI, our digitalization. And also, we have improved our team. I would say, for the whole, the cost of business improved a lot.

For passenger NEVs, the profitability is stabilizing. Going forward, I would say the replacement effect of NEV business will continue. We are going to build an ecosystem for the whole life cycle of NEV. Two things in particular. Number one, in terms of improving operation efficiency, we will continue to improve our online application, online claims payment, improve these and so as to have an integrated offering combining application, servicing and claims. Currently, we have covered our main auto brands. We're going to further improve it.

Secondly, in terms of claims management, we will look at the specific brands, look at the losses. For example, the repair of the batteries for NEVs. And for example, how to repair those vehicles being damaged by water, et cetera. We are going to use AI to determine the claims payout. And also, we have got more data from NEVs. I would say these things actually help us to reduce the losses.

Now in terms of building the ecosystem, we are improving different products for smart driving and battery charging. We actually are part of -- we have been involved in the setting of industry standards for NEVs. Also, we will align ourselves to national strategies. And also auto, for example, automakers going abroad, we helped in this regard. We actually exported technology. We helped leading automakers in China to expand in Thailand, in Vietnam. We sold them policies there.

For example, we have provided coverage for 22,000 new vehicle -- new NEV vehicles abroad, setting abroad. Going forward, we will continue all these collaboration and improvements. We also hope that we can better enhance our service capabilities.

Now the second issue for non-auto business, now I would say -- and also you talked about the credit guarantee insurance. Now I would say 2025 -- by the end of 2025, now Chinese regulator, Safra, issued new notices on non-auto business. Of course, we paid a lot of attention to this new piece of regulation. We enhanced the risk management and also strengthened the management so as to better manage non-auto business. As of now, we have already completed the filing of relevant products and the improved optimization of relevant system.

Going forward, we will continue to comply with business to, for example, looking at rate regression and the dynamic adjustment, et cetera. As of the February of this year, our combined ratio, expense ratio improved. So on the whole, I would say this kind of long-term management is better, is conducive to improved competition on the market. So actually, expense driven is now moving towards technology-driven and service needs driven, service driven. So for this year, we're going to focus on new areas and also national strategies so that we can seize upon this kind of good growth opportunities.

For example, low altitude aviation and other kind of emerging areas, AI digital technology areas. And we will also look at the medical opportunities, dual carbon opportunities. So these kind of areas are closely related to people's well-being so that we can expand the areas of our growth. And also, at the same time, continue to improve our efficiency and services so that the quality and efficiency of business can both improve.

Now I would say we expect that for 2026, the non-auto business will see steady or steady growth in terms of premiums income. And for 2025, the credit guarantee business, we actually -- we proactively adjusted the size of the business. We are very absolute -- resolute about the adjustment. After the adjustment, now the assets or risk exposure in question reduced. By the end of 2026, I believe the impact from credit guarantee insurance will be eliminated. For 2026, the impact from this will be very small. It will not impact our overall business operation. So that's just for your information.

Well, thank you. Now let's welcome more questions from Shanghai.

I'm Tong Chengdun from Citic Securities. Well, I would say we're satisfied with your annual report. You actually delivered a lot. Now I have 2 questions. We have seen in your slides, you mentioned a lot about the operation or business of high-end customers. For bank channel, your 41% of customers are high end for the bank channel. Now of course, you talk about private bank, you have a lot of strength in this regard for the high-end customers. But my question is, what's your strength in terms of serving high-end customers? How are you going to further solidify your advantages in high-end customer operation so that it can be a main driving force for your future growth?

Secondly, AI is a keyword nowadays. Now CPIC, you also spend a lot of money in AI. But my question is, what's your plan for your investment in AI? How are you going to gauge the effectiveness of AI? Because it's an open source area, it opens source period now. Now what is the capability of your AI compared to peers or compared to tech giants? Do you have an advantage? How are you going to focus on AI priorities?

Well, thank you for your question on AI and also on the first question, if we look at the growth of CPIC Life, we focus on customer always. And of course, also focus on agents and also our service. We continue to improve our customer mix, customer structure, and I believe we delivered good results over the past few years.

Now to be specific, number one, we have differentiated segments for customers. And for different segments of customers, we have the differentiated strategies so that we can have this kind of sophisticated management. We share a lot of data, we gather a lot of data. We try to use data to identify the business opportunities so as to improve customer value. We offer this kind of high-end club services so that customers can have a better experience. So it's -- we don't want just a one-off transaction. We want a long-term relationship with our customers.

So this kind of differentiated segmented management. Through this, we saw improvement in our customer mix. For example, the share of our mid- to high-end customer improved year-on-year. For agency channel, it improved by 5.1%. And for bank channel, it improved by around 8%. This is especially true for high net wealth individual customers. Of course, we make customer profiles, detailed profile. For example, more of our customers are females. And average age, 45.7% -- sorry, average age, 45.7 years old. And also a lot of our customers came from the kind of big cities. And we also found that customers pay more attention to themselves. More than 70% of the policies were taken for themselves. And that for their families decreased a little bit.

Now going forward, we have further initiatives. To be specific, number one, we will refine our model to better reach our customers. We will look more at the local realities. We will actually focus on the whole life cycle of the customers. Secondly, we will generate a lot of content, generate a lot of tools to match customer needs to improve customer stickiness. Thirdly, we're going to use WeChat to reach customers, to maintain old customers, identify to source new customers. Fourthly, we'll use AI technologies or digital technologies to review the customers, diagnose the customers and recommend and propose to customers all using digital tools so that all these can be recorded, can be checked, monitored on a real-time base -- on a regular basis so that we can generate our competitive edge in terms of managing high-end customers.

Now the second question. We actually invest a lot in AI. This year, our investment in AI actually doubled from last year. And according to our plan, our investment in AI, CAGR combined growth rate will be at least 40%. And if we look at the wider caliber, it will be even higher. Now anyway, first of all, we have already put down the AI structure. We also used DeepSeek and some other DeepSeek -- some other large language models. Actually, last year, we utilized the service for more than 270 million times, and we have already developed enterprise-level AI agent. And we have a capability for this kind of a large LLM model interaction, image interaction, image handling.

And last year, we have also come up with AI applications. Actually, 129 applications using AI, covered a lot of scenarios and also 150,000 agents. For example, health insurance claims and agent coaching and anti-fraud assistant, et cetera, claims investigation, et cetera. Going forward, our AI plus will be one of our 3 major strategies. We have this kind of so-called 633 strategy. That is to focus on 6 main scenarios.

For example, empowering agents, the KPI is agent productivity improvement. Secondly, be integrated into operation into all procedures. KPI in this area is the reduction of management expense or management overhead. Thirdly is the enhancement of customer service. The KPI is NPS improvement. Fourthly is the coverage, protection coverage. KPI is the premium income. Fourthly, expanding investment using AI. Now the KPI is the investment yield effective growth. And sixthly, empower risk management and improve risk management capability. KPI is the total amount of risk reduction.

And also, we would say we need to have a collaboration and synergy and develop our competitive edge. For example, we're going to collaborate with Huawei and Alibaba so as to develop better tools to better train our models and so that we can better utilize our own strengths to develop our knowledge base, knowledge library, to build our technology capability. And thirdly, we are going to develop our decision-making or improve decision-making mechanism. So we are going to -- we can make sure that our planning is up to date and constantly improved. But of course, we also pay attention to security, to the management of risks. The AI application will be managed at a differentiated approach.

We are going to train our people in terms of AI so that our people will possess this capability to use AI. They will become professional in using AI. We have come up with the targets and the plans. We have this kind of AI list for both the group and also for subsidiaries and branches. So this -- we're going to focus on AI so that we can be more advanced in this regard based on our blueprint and the development plan so as to better serve the business of the whole group.

Well, given the time, I believe we only have an opportunity for the last question.

Congratulations on your good performance. Now my question is that you see your -- for example, your NBV grew very fast in Q4 2025. Now what's your outlook for this for NBV growth for 2026? Second question, now you talk about the dividend, for example, your dividend proposal of CNY 1.15 per share this year and also that exceeds both the growth rate of operating profit in 2025 and last year's dividend per share. And you also have -- you also proposed an interim dividend authorization for the first time. So how should we expect the company's dividend policy and capital replenishment cycle to evolve?

For your first question and second question. The first one is about NBV. Now I believe you have conducted thorough research into our company. Now because you talked about the quarterly NBV growth. Now for 2025, Q4, our NBV grew quite fast. If you look at it, it's mainly because of the new business size and also new business margin also improved. That's on the face of it. But we also have some more underlying factors.

First of all, we had a change of thinking. For example, for Q4, usually, that would be a low season, right? It's not a peak season. It's a slow season for most companies. But for CPIC, we made a change of thinking. We focus not only -- we focused on this kind of a smooth effect or the even distribution of -- across different quarters. So we act accordingly. For example, we improved the training of our team after a new product is launched. So this drove up the size of our business.

Secondly, using AI, our agency production improved. The conversion also improved. Thirdly, we continue to improve product mix and manage -- strictly manage efficiency to bring down the expense and comply with regulatory requirements. So that answers the first question.

And looking ahead for 2026, the whole industry -- the whole industry is focusing on quality. The agency channel is the same. We are focusing more on quality. So I believe the agency team will become more professional and using AI, we're going to refine our procedure and processes. And the bank channel also have this kind of a strategic opportunity with better improved product mix, you see bigger share of our regular pay premium business and also high-margin business. And our customers are getting better experience because of the using of digital tools.

And regulatory changes, focusing more on the integrity of product filing so that -- well, I mean, the competition is healthier across the industry. We will seize upon these opportunities. I believe for 2026, the NBV will deliver stable growth for the whole year. So if we look at the drivers, number one, digital utilization. We will improve segmented management of our customers so as to better improve the maximization of customer value.

We have made 2 upgrades. Number one, in terms of positioning, AI will become a tool. So it's not only a tool, but it's more like a procedure to empower the front-end people. So it will become customer-centered rather than function centered. Second, about product, product offering will be enriched. We will transform our products. We'll focus on the good quality of our business. We will focus, for example, on long-term care for disabled people. Thirdly, we are going to have diversified channel distribution channels. For agency, we are going to make it more professional with better digital support. We focus on high performance and improve efficiency.

For bank channel, we will deepen collaboration with banks to develop differentiated or our unique strengths. For example, we're going to accelerate this kind of employer or worksite marketing so that we can improve the source of our business and also quality of business. P&C side, we're going to focus on the quality of our products, the marginal products so that we can have a better new business value.

Now let me answer your second question. We always pay a lot of attention to customer return. We introduced a medium- and long-term dividend policy linked to operating profit. And also, we launched this kind of a new authorization of interim dividend put forward by the Board. Now these measures further refined our shareholder return mechanism, optimized the dividend rhythm and enhanced the predictability of shareholder returns and external uncertainties.

The Board proposed a CNY 1.1 dividend per share. That's 6.5% up year-on-year and above the average growth rate of operating profit by 0.4 percentage points. Now you see the -- this kind of policy can effectively mitigate the increased volatility in net profit and thus dividend uncertainty for listed insurers. This allows investors to reasonably assess potential dividend returns by tracking insurers' long-term development potential. And also management can focus more on building internal growth, strengthen sustainable growth generation, earnings realization, risk control, et cetera.

We want to properly reflect the positive contribution of investment performance and addressing investment concern. If shareholders approve the authorization, the Board will be able to determine and implement the 2026 interim dividend based on company's actual performance in the first half of the year. I would say that interim dividend is an integral part of the company's annual profit distribution. We'll continue to implement our medium- and long-term dividend policies. We will take into account the total annual dividend payout and also business current performance and full year business needs.

We hope that we can build a clearer, more stable and normalized shareholder return mechanism to send a strong signal to the market about our commitment to steady operations. Continuing the general mandate is a normalized arrangement made by the Board. As the 15th year plan formally begins, CPIC must further seize capital market opportunities amid a complex and increasingly uncertain environment. We will refine our market-driven capital replenishment mechanism, enhance forward-looking nature of capital management and strengthen the capital buffer so as to effectively safeguard against the risks from market volatilities.

Last year, we issued HKD 15.6 billion in H-share convertible bonds, leveraging the general mandate mechanism. We believe this will help optimize group's capital management framework and strengthen its long-term strategic development.

Now that's the end of the Q&A. And you see in line with CSRC's guideline #10 on supervision of listed companies, I would make a statement. 2025 is the company's first year building a structured approach to market value management. And also, we approved our first market value management system. We also rolled out in terms of the implementation, we did a lot of work. For example, we strengthened our value creation.

Now actually, Mr. Zhao has mentioned it. For 2025, we remain steady to pursue our profitable growth. We continue to enhance our capabilities and competitive edge. Now secondly, in terms of value creation, we continue to deliver our disclosure. We have a lot of Capital Market Day, roadshow, et cetera, to deliver, to disclose all sorts of information to continue to improve actually disclosing of nonfinancial market -- nonfinancial information. And also in terms of our business performance, we utilize our strategies using well-proven logic to better price our shares.

Now of course, we utilized various opportunities. For example, AI plus and also big health, elder care, these kind of new areas. Now all these are in order to improve our value creation. Now we also actually gathered some information from -- some questions from retail investors. Now this covered the dividend plan, the strategy for life and P&C business and also the equity investment strategy. I believe we have already covered these questions.

Now meanwhile, the short-term stock fluctuation may occur due to various factors. However, we remain steady. We're committed to stable operations and delivering sustainable returns to shareholders. We welcome investors' feedback on our market value management.

Now given the time, we -- if you have some other questions, you can contact our IR team. Now that's the end of the results announcement. Thank you for your participation, and thank you for your time. Thank you. Bye-bye.

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

Ladies and gentlemen, good afternoon. Welcome to the event, the Q3 results announcement Su Shaojun, CPIC Group Board Secretary. Now let me introduce the top management CPIC Group Chairman, Mr. Fu fan; Mr. Su Gang, VP, CIO and CFO of CPIC Group; and Mr. Li Jinsong, General Manager of CPIC Life. First of all, Mr. Su Gang will give you a introduction of the results in the first 3 quarters. Then we'll have a Q&A session.

I'll give the floor to Mr. Su Gang.

Good afternoon, ladies and gentlemen. I'm the CFO of CPIC Group, Su Gang. I'll give you a great introduction on the results of our first 3 quarters. Well, guided by China's new term measures for insurance industry, we played our role as a social stabilizer and safety net while focusing on core businesses. We deepened our reforms to risk switch from our 2 new growth drivers.

And we have seen steady progress in the first 3 quarters. Our insurance revenue was CNY 216 billion, 3.6% year-on-year, supported by insurance performance and investment gains, our net profit reached CNY 45.7 billion up 19.3% and our OPAT stood at CNY 28.4 billion, up 7.4%. In terms of our business lines, for the life insurance, our CPIC Life company deepened its Changhong transformation program while focusing on customer centricity, product service integration and agent empowerment. In the first 3 quarters, CPIC Life's total premium income was CNY 263.8 billion, up 14.2%. Its new business value was CNY 15.3 billion, up 31.2% year-on-year. CPIC Life continued to deepen its diversified channel development. The agency channel focused on customer centricity for differentiated customer development and improve the capability to sell par life insurance, strengthened team building with initiatives such as the CPIC elderly care and wealth planner program to recruit high-quality agents.

Agency also focused on empowering high-performing agents and teams in the first 3 quarters, the agency premium income was CNY 184.3 billion, up 2.9% year-on-year. The share of the mid- to high-end customers grew by 4.8% compared to last year. Thirdly, the business mix also improved. The Power Life Insurance made up 58.6% of the total regular premium new business. Moreover, agency stabilized its total head count with 181,000 agents on a monthly basis on par with last year. The monthly average FYP per agent -- per core agent was CNY 71,000, up 15.6% year-on-year. For the bank channel, we focused on customers' need and customers' need for wealth management and health and retirement. We continue to improve product offering, customer operation and team capacity building empowered by digitization.

In the first 3 quarters of this year, bank channel delivered CNY 58.3 billion in GWP, up 63.3% year-on-year of which regular premium new business reached CNY 15.9 billion, up 43.6% year-on-year. For the group channel, well, it played out its strength to boost the business back employee marketing or the BPE channel and the coverage of the inclusive insurance in the first 3 quarters, if GWP was CNY 16.29 billion, up 12.2% year-on-year, of which the regular premium new business from the BPE module reached 1 up 15.6% year-on-year. for CPIC P&C, it continued to improve its business mix and customer authorization while boosting technology empowerment and AI application. It also made great efforts for disaster prevention to reduce risks and the safeguard of -- safeguard its progress.

For the auto insurance, we continue to improve the big business mix, improve business quality control and innovate NEV, new energy vehicle products and services. For nonauto business guided by national strategy, we've strengthened the basic management and the business development, improved the business mix and risk management. For the agricultural insurance, more products were offered to cover the total cost of China's stable food and the major agricultural products. We also launched innovative products to refine the models and effectiveness of agricultural insurance. In the first 3 quarters, CPIC P&C recorded CNY 160.2 billion in GWP, up 0.1%, of which auto insurance accounted for CNY 50.46 billion, up 2.9%.

And due to our proactive adjustment of business mix, non-auto GWP was CNY 79.74 billion, down 2.6% year-on-year. The combined ratio was 97.6%, down 1 percentage point year-on-year. On asset management, we pursue the disciplined and yet flexible TAA under the framework of a long-term SAA based on long-term asset liability matching. We effectively allocate long-term fixed income assets to extend asset duration and actively managed equity investment by focusing on low valuation, high dividend stocks and delivered solid returns on top. Thanks to our diversified investment strategy.

By the end of Q3, the group's investment asset approached CNY 3 trillion, up 8.8% year-on-year. In the first 3 quarters, annualized net investment yield was 2.6%, down 0.3 percentage points, and the annualized total investment yield was 5.2%, up 0.5 percentage points. Looking ahead, we will continue to pursue high-quality growth, enhance our capabilities to create value focus on the 5 financial priorities of China's insurance -- China's financial market and strive to build CPIC into a world-class insurance with international competitiveness. Well, that ends my presentation. Thank you.

Well, now let's start the Q&A session. [Operator Instructions] We have #1 question from [indiscernible] Securities.

Well, it's a very timely results announcement. And congratulations on your good performance. I have 2 questions actually. Number one is on the liability side. Actually, as we can see, many insurance relied on bancassurance for faster growth and many of them have completed their targets for 2025. But what about the liability side for next year given the high benchmark or the high basis for this year? And you also mentioned on the agency side. You mentioned that your Power Life accounted for close to 59% for the agency channel, new business sales. How about the percentage for bank channel?

Now the second question on the investment side, for the first 3 quarters, as we see the total investment yield is 5.2% quite high. Now what about the future for SAA? And for SAA, what's your view on the equity side? What's your strategy? And what's your judgment? And how about your move for the bond investment? And what's your TIA? Or what's your SAA regarding your allocation for the equity side?

Well, thank you. I'm Li Jinsong from the CPIC Life Company. I'll answer your first question. First of all, on the outlook for 2026. Now 2 points. Number one, for the agency channel or the individual business compared to our peers, our judgment is pretty much the same. We talk to them on a regular basis.

First of all, the regular premium business will give us positive growth. We agree on this. In terms of the percentage, I believe it might grow by 5% to 10% next year. regular premium business growth next year. Maybe Q1 will grow faster than Q2, and Q3 will be a low point next year. For the agency new business value, we also want positive growth. And in terms of the bank channel, bancassurance channel, currently, as we talk to peers and as we talk to bank partners based on our own situations, we believe the total next year, I mean, the next year, the regular premium business will grow at the same pace as this year, maybe at 10%. We believe CPIC Life will grow faster at 20% to 30% and NBV will grow even faster than the [ 20% 30% ] range.

In terms of our main products for Life company as a whole, if you look at the par Life and the variable products, we believe traditional insurance will be -- I mean, as a percentage, it will be smaller than 50% of the total. But of course, if we look at the customer needs and the product diversification, I wouldn't say that -- well, I wouldn't say that arbitrary rate percentage will be good or bad for the company. So this is so much about the business or product mix. We will look at the overall situation and customer needs. To be more specific, the business or product mix will be more diversified. For CPIC, maybe we are the only company that are going to launch unit-linked products for high net wealth customers. And it will be combined with traditional incremental whole life plus home life and annuity products. So we will sell them as a kind of a sort of a bundle.

For bank channel, product offering will be more diversified. For example, we have different segments of customers, for example, including private bank customers and mass bank customers. For private bank, we will want higher-end products. But on the whole, participating insurance will be the main -- within the main products to be coupled with traditional annuity and incremental home life. Now in terms of the share of regular -- share of par insurance in the chain the bank channel. No, actually the -- our share is 27.7% for the par insurance products. And actually, you see we rank #2 among our listed peers. 70%, I mean, in October, 70% of our products are par life for the year -- for the single months.

Now the second question on the investment. I believe the market is having a lot of uncertainty at the moment, and we see a lot of high-level talks both inside and outside China. A lot of the factors affecting the market and also giving us a hint of the future directions for China in the next 5 years. But of course, given all these kinds of very complex situation and the long-term issues, for example, aging society. So the company need to look at our own situation. The profile of our own liabilities, for example, we need to study -- we'll keep doing the research to have a mechanism to match liabilities with assets on a long-term basis. Given our profile of our liability, we will say different insurers will have a different mechanism to match assets with liabilities. Hence, different FAA and the TAA for CPIC Group, we have a so-called net investment yield plus model. We look at SAA and the macro economy and the long-term judgment to come up with our specific investment strategy for fixed asset income, fixed income assets, we would want to be prudent and be the long term.

For example, 10-year treasury bond will be running at a certain range, we believe it will go down at a slower pace. So going forward, we will be more active. We will feed upon the opportunities when the bond -- when the credit bond recover. And also, we look at this kind of innovative fixed income assets, for example, the ABS and the RICs. So these will help us to drive up our investment yield. So if they can, well, offer a sort of a buffer for our net investment yield. For equity side, we need to be prudent we need to maintain our strategy that is to seek high dividend stocks because this strategy allow us to capture long-term high return from this kind of a high dividend payout stocks with promising potential.

So in this way, we can not only get the dividend payment, but also share with the growth potential of those companies. If we look at the last 10 years, this strategy gives us a return much higher than the market benchmark. Also, we are going to have this kind of a satellite strategy. For example, we are going to utilize our CSI style indexes. For example, the CPIs, the CSI, CPIC, [indiscernible] style index, fund index. Using this kind of tools, we can generate positive growth, positive investment yield contribution. So we need to also flexibly adjust our exposure, style exposure. And also, we need to frequently adjust this kind of active and passive strategy we need to balance domestic and international strategy and allocation so as to achieve higher yields on the long term.

Now let's welcome the next question. Next question comes from Guotai Junan Securities.

I'm from Guotai Junan Securities. I have 2 questions. Number one, about assets and the other on liability. Now you have given us a very detailed sharing. Now in terms of bank, you had a lot of newly opened outlets. Now could you give us more details? I mean regular premium grew fast this year. So how much of it comes from new outlets and how much come existing outlets? Now this for 2025. And what about your future prospect on 2026 in terms of opening new outlets, bank outlets?

Second question, on the investment side, now as we know, a lot of insurance companies have increased their allocation on equities. So my question is, going forward, what's your strategy specifically about this kind of high-growth stocks? Now the share of TPL, is it going to increase?

Thank you for your questions. Now let me answer your questions. First of all, the bank channel question. Now in 2025, in terms of the growth, I believe it is a multipronged effort. First of all, the channel is making a great effort as we can see in 2025 in terms of regular premium business, Now this kind of state-owned big banks have made a great contribution. The share of those banks grew by 22% last year to 33% this year. So I would say the growth of outlets mainly come from state-owned banks, especially ICBC, CCB, for example. So that's the outlook.

Secondly, the growth come from the teams, the bank team, sales team, which grew by 20%. Secondly, productivity of those teams also grew by 20% sales agent -- per sales person. So these kind of factors combined gave us a quite rapid growth in terms of the NBV from bank channel, which almost doubled in the first 9 months. What about next year? Now the growth of bank outlets for 2026, I believe that will still be a strategic focus for next year. Because if we look at the pathway for growth, the growth of case size, well, of course, we want that to maintain and the growth of outlets would still come from state-owned banks. There's a lot of room for growth.

For example, for ICBC, in our outlets, the total number of our ICBC outlet only accounted for 5% of ICBC's total outlets. We would want the 5 percentage number to go up to maybe 7% to 8%. So I would believe there's still a huge room for growth, maybe a growth of 30% to 40% in terms of new outlets. And of course, for the state-owned banks, the case size is relatively lower. So in this regard, we would want the case size of the joint stock banks to go up. So case size will remain flat but the number of outlets will go up, definitely. Now in terms of team growth, we believe next year we'll grew by 30%. That is to say the total head count will grew to 6,200 from the 4,600 this year.

Well, the second question about the investment side. First of all, the view on gross stocks, high-growth stocks. Now I believe that we need a high-quality growth. China's growth would rely on the growth of high technology. So we need to balance. We need to have a balance not for CPIC, as I mentioned, we have a [indiscernible] stock-found index. So that is a good tool for us to gauge the different styles so that we can better identify the change of Asia market, the different styles of what is working, what is not working, et cetera. So we believe we're going to look at opportunities especially in terms of science and technology innovation, energy transition, health and medicine and rare resources, et cetera. You'll see our Comprehensive investment yield was 5.4%, up by 0.4 percentage points. So I would say CPIC has already seized upon the high-growth stocks so that our investment return was better than our peers.

Going forward, we need to, for example, look at a more prudent way in terms of accounting treatment. As you mentioned, the share of the TPL -- now TPL share TPL will impact our yearly profit. Now we have a quite good total investment yield and we have got the trading gains and also the fair value change gains -- now I mean this kind of trading gains and the fair value changes made positive contribution to our 5.2% total investment yield. But for insurance companies, the share of TPL need to be prudent. The share of OCI, the increase of the share of OCI is going to be -- is very likely, so we need to have a very balanced strategy between TPL and OCI, so that we can, in the long term, better match liability and assets.

The next question is coming from Morgan Stanley.

Thank you. I'm [indiscernible] from Morgan Stanley. I have 2 questions. Number one on Life and the other on P&C. As you mentioned for 2026, your share of health products will improve, will increase. Now could you give us some more details on what drives the growth in health products? Now are you going to have more new products? For example, previously, you sold a lot of critical illness products.

Now second question for P&C combined ratio is close to 100% in Q3. Could you give us a breakdown? How much of it is because of the catastrophe? And what about other kind of risks and losses?

Thank you. Let me answer your questions. For health insurance products, the share will go up in 2026. That is because we look at the customer needs for health insurance, a lot of big demand in China for health insurance. Also in terms of the Chinese policy, we look at a lot of high-level policies issued from the Chinese government, a lot of it about the health insurance, about long-term care insurance expense. All this policy support will give us more opportunity to further develop health insurance business.

Number one, the release of recent documents, well, it gives a lot of big support to the growth of health insurance business. Because as you can see, over the past 20 years, I will say this year's policy support is the biggest in the last 20 years or so. Secondly, apart from government support, we also have this kind of demand from customer needs. As of now, we have already products for disease medical compensation and disability, long-term care. And we also have this kind of differentiated customer development. We have 2 focus, number one, on critical, this kind of a whole life critical illness for both adults and the juveniles. And we also have this kind of a term critical illness products for medical products, we have this kind of mid-end, high-end medical products and also this kind of medical insurance for clinical diseases, et cetera.

So I would say, we have a quite rich product offering in terms of health insurance. Moreover, in terms of our distribution channels, previously, health insurance sold by agents and they mainly sold CI products. And critical illness products to sell these kind of CI products to mass market. To change that, we were going to make some adjustment for the channel. For 2026, we're going to do more promotion for CI products. We hope to drive the number, the share of sold by agents to 10%. Secondly we're going to start selling -- participating CI products as long as government policies finalized. Also, we are going to focus on group health insurance products in 2026. So that will be another area of focus for CPIC because Chinese government has also made a policy encouragement in terms of long-term care health insurance products. So this will have also some influence on the selling of health insurance from the group channel.

Thirdly, we are going to promote the sales of health insurance through the Internet. I mean the Internet can reach out to a lot of people. Fourthly, the bank channel will also be utilized to sell health insurance because we have a lot of private bank outlets. These customers, they have a big demand for high-end health insurance products. I hope that answers your question.

Now what about Q3's combined ratio?

Now well, some challenges. Number one, new energy vehicle, there's still some uncertainty on that in terms of combined ratio. Now, of course, we are making some innovations to reduce the combined ratio of the new energy vehicle business. If we look at the results, we have profitability for the new energy vehicles owned by households. But on the whole, we are still making a small loss and charge guarantee, date guarantee business also gave us a negative impact at around 2%, 2.5% in terms of combined ratio. So going forward, we will continue to better manage this kind of business quality. But if we look at the whole year, we believe the whole year combined ratio can continue to improve.

Well, let's welcome the next question.

I have 2 questions. Now as you mentioned, next year, health insurance business next year will be sold by agency, but what about your agency head count and the productivity because we know the rate filing integrity regulation is having a big impact. So we would like to know more about your agency channel? So that's number one, question number one. And as you mentioned, our 10-year interest rate is still going down slowly. So what's your bond investment strategy? What's your allocation? Are you going to extend your asset duration to narrow the gap? And you also mentioned that you're using the trading of bonds to increase the investment yield. How are you doing on that front?

Okay. Let me answer your first question. I would say on the whole for this year for the agency channel in terms of the overall growth in terms of total headcount, it's on par with last year, compared to last year, pretty much the same. So in total headcount. If we look at the structure of agency, this year, our core agent the productivity and also income. I mean, in terms of the income that is 71,000 up by 16% and the quality of our new agents also improved in the first 3 quarters.

If we look at the new agents, we see a growth of a number of new recruits. We believe going forward, the total head count would stabilize and remain at a reasonable level. Let me share with you some more specific numbers. As I mentioned, if we look at the core agents, for the first 9 months, the average first year premium is growing quarter-by-quarter. For example, for Q3 per agent first year premium for new business grew by 11%. So I would say on the whole, the per agent productivity is improving. I believe we bucked the trend compared to our peers because in Q1, they are experiencing a lot of negative growth. We grew quarter-by-quarter, but it's not the same for our peers.

In Q3, we actually recorded a double-digit growth in terms of core agents. And the mid-tier agents also demonstrate the same trend. So going forward the next year, I believe you will stabilize in terms of total head count and production and the share of core agents and the productivity of co-agents will both go up.

Let me answer your bond investment strategy, first of all, how should we view the duration gap? Of course, duration gap is a core issue, a core KPI for asset liability matching. Previously, we pursued a down bell investment strategy. So actually, our duration gap is already at a reasonable level. be it adjusted duration gap and effective duration gap mainly look at the effective duration gap. Now why should I say that it's a reasonable level because if we pursue a 0 duration gap, it's not necessarily the best policy to fend off long-term duration risks because it basically eliminate the possibility of getting higher yield from duration from duration gap.

As I mentioned, given the level of interest rate in China, when it goes down invariably, there will be some kind of uptick or recovery. So we believe these are opportunities, pockets of opportunities for us to conduct PAA, be it credit bonds or interest rate bond. So we would set upon this kind of phase of opportunities. Of course, we are trying to explore the various trading policies, strategies for bond assets. So as to seize upon this kind of phase of opportunities. As we mentioned in terms of ETF funds, it might be a good direction for investment so that we can utilize this kind of very good bond investment capabilities on the market so as to make up for own shortcomings.

I have 2 questions. Now the OPAT for the first 9 months or is there any changes for the OPAT? And secondly, about the whole year's dividend payout ratio, what's your take on that? Because you have very good net profit. And for our -- for your core solvency ratio for CPIC Life is going to go down to probably just above 110% in Q4. No, it's maybe because of the low interest rate in China. So anyway, your core solvency ratio -- maybe could you elaborate on that?

Let me answer your first question. As of the end of Q3, OPAT grew by 7.4% year-on-year and actually was up by 0.3 OPAT compared to Q2 or the absolute number of OPAT's 28 billion. Now it's because of we are doing very good in terms of business control and also in terms of risk reduction. And for life, given this kind of given our efforts to control the cost and improve our business quality. Our profitability is improving. We believe it will continue from that the both P&C and the Life will contribute positively to OPAT.

In terms of dividend for 2025, I believe the Board has already announced our strategy. It will be based on OPAT, you will also look at our business performance and also our solvency and also pay attention to the capital market so that we can give investors returns, which is more in line with their expectations.

Now on the solvency issue, let me give you a brief answer. Thank you for your concern. For solvency ratio, core solvency ratio is a very important indicator for our long-term business performance. So we pay close attention to the core solvency ratio number. We have already formulated the plans. We are going to well, not only be supported by the group, CPIC Life will also pay close attention to improve. Let me just add the regulators is refining the plan for [ CROS ] Phase 2. So for CPIC Life, as of now, I believe we are on a positive trend, positive track. Now as you have noticed, we have issued convertible bonds to the [ tune ] of CNY 15 billion. So the group solvency ratio is already still very high. But based on our judgment of the market we believe and also considering the need of a future development, we issued this bond to replenish our capital.

Now we issued this kind of convertible bonds, which is quite convertible securities is quite portion move for the market. And I believe this is also positive for the capital needs for our subsidiaries.

In the interest time, we can only allow for one last question. The last question comes from the Guangdong Development Securities.

I have 2 questions. Number one, on asset and the other on the liability side. As you mentioned, in 2026, the regular premium business will grow by maybe 10%. And in Q3, we see a termination of old products. Now can we maintain growth on top of the high baseline in Q3 this year. Why can it grow? Is it because of the demand from new customers? Or is it because of the team's capability? So that's number one. Secondly, as we can see, for the first 3 quarters, your net investment yield dropped by 0.3 pt. What is the reason? Is it because of the new investment reinvestment? Now what about the future? The future trend for the net investment yield?

Thank you for your question. Now let me just share with you some of our outlook and the reasons for our outlook. First of all, if we look at our business model to promote our agency channel, we are different from peers. Maybe from peers product-oriented or team-oriented, but we focus on product and channel and also customer needs. We focus on 6 factors: number one, total head count. We believe for the grand opening, the total head count will be the same next year versus this year. I believe we will be the same for the whole industry. Second, factories. Whether we can reach out to more customers. Now we believe it will -- I mean, our agents will be able to reach out to slightly more customers next year.

Thirdly, conversion ratio. Now of course, this will take a long term of training and skills, a lot of skills. We believe commercial ratio will grow up slowly. It's not a quick fix. Now the fourth factor is the number of cases sold by agents. This will be a focus for 2026. If we look at our existing customers, we have 90 million existing customers. Upsell will be a focus for next year. Fifthly, take size. Now priority of CPIC Life is to move up the ladder of customer development, the share of mid- to high-end customers is moving up from Q2 and Q3, you can see the share and the case size of our mid- and high-end customers are going up. So we believe case size will grow up quite fast next year.

So of course, the sixth sector is the new business margin. Now I believe 5 of the factors remain flat, stable, and the pad size will go up quite considerably next year. So that is why we believe we can have a 5% to 10% growth.

Thanks, [ Phil], for your question on net investment yield. I believe given this kind of a low interest rate environment, we are taking active measures so as to be able to cross economic cycles. This is a key of our efforts. CPIC pay a lot of attention to the stability of various -- all kinds of investment yields. We need to, of course, maintain stable stableness of a net investment yield, 10-year treasury bond, 10-year interest rate went down a lot in the last 5 years. So the fixed income, I mean, new investments of fixed income assets is, of course, much lower than the existing yield from -- and the yield from existing fixed income assets. To cope with this kind of negative impact, we are taking a lot of measures.

First of all, we are extending our allocation into long-term bonds. Secondly, we are setting up in opportunities for this kind of a rebound and also utilizing ABS and risk, this kind of innovative fixed income type assets. We are one of the few companies, insurance companies that have a qualification for ABS and [ rich ] license. We also have an investment arm in Hong Kong. So given this kind of a diversified investment capabilities, we can maintain our position -- leading position on the market. And our dividend payout ratio is also good, and we remain confident about proper management of our investment assets.

Well, that ends the session for today. If you have answered other questions, please contact our IR team after the meeting. Thank you.