LU - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Lufax Holding Limited First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the management’s prepared remarks, we will have a Q&A session. Please note this event is being recorded.

Now, I would now like to hand the conference over to your speaker host today, Mr. Head Office company’s Capital the Chen, of and Board Markets. Yu ahead, sir. go Please

Chen Yu

Thank to and XXXX everyone, you, Hello, operator. welcome call. earnings our conference quarter first

investors. Our who Today, of then you by hear from general were today operating updates Mr. our are the will quarterly address Ji call Chairman, [ph] services some Guangheng, and online. achievements, Newswire issues start some earlier released available currently our financial and will key for our focal results with

Mr. will of of development Afterwards, Gibb, Co-CEO, look our financials we progress Zheng, strategies quarter. into review Our provide a closer before James open Greg then the offer Mr. and our our questions. up a our for will the details CFO, in call

Y.S. Choy, Cho, Mr. be and also will Mr. CFO Puhui during Co-CEO; the session. David available our addition, question-and-answer of In

more Financial thoroughly that, our to Standards Guangheng, Chairman over reconciled would explained release will are you in applies Before to comparable non-IFRS we SEC. earnings as Reporting our the filings the and we which with forward-looking in to I’m under the now we the measures note Mr. will today, Ji press discuss that measures our statement to With release, earnings like continue, which also statements. most Please be safe call reported harbor and pleased also call I International turn to refer making of this to Lufax.

Guangheng Ji

to then with views call. achievements update thank those key you share will of and everyone, our and home. Despite call the investors. in with issues colleagues quarter are for resurgence on dialing during Please should the earnings achievements. and encounter Key slowdown, during Hello, the joining first Shanghai, an quarter our and the we steady COVID-XX for Due quarter. COVID-XX achieved growth separately in difficulties my technical focal bear micro-economic I [Interpreted] we first XXXX start today’s for situation call. conference us I from our

increased year-over-year first RMBXX.X our RMBX.X X.X% by billion. by income year-over-year net total quarter the grew XX.X% to to During profit billion, and

earnings per plan US$X.XX forward. the our per RMBX.XX. quarter return reached we public. weighs shareholders We April, value a basic for Our the already first to we ADS time dividend went paid to for since of ADS In going

a to most impacted slowdown. concerns. environment tend Second, may data key has whole investors ADR, and open and selling quarter, the decouple confidence financial services based market are growth during in statements questions growth and investor still ADRs the wait first a approach. and asset pandemic coronavirus. XX have market deterioration with investors hosted and remainder by public for concern was general, We many to concerned about countermeasures contain taking the Chinese Presently experienced into investor environment. instilled about XX% macroeconomic recent as dialogues see operations, In over from under Shanghai, roughly suffered March, the its to some included China on investor’s economic that prospects In business current investor about in lockdown policy related escalated trends, XX% our industry nationwide key Chinese regulators the deceleration The the are macro our the are think rest quality. the market on avoidably example, in although of COVID-zero a their fundamentals, regulatory valuation are the panic from to development. capital caused event has

was business own Our impacted. also

enacting ADR the our April delisting In that many measures, those indicates risk. of later. cost pandemic expressed and the is details on the Greg Many the the initiatives initiatives. related of XXXX. concerns further ratification and higher prudent management investors management have completed more. impact implemented our preemptively this control flow Having series elaborate vast about than credit majority Our analysis from of cash progress has shoring challenge, tightening for preparation our year’s a policy, up ratification that will XX including

platform stated We issues April efforts the this ratification March plan this that require as companies have to stability or also platform some committee and the XX, platform action financial to development possible. made political and Liu ratification On the meeting as should point regulatory the He process had Premier from its call on to for the of companies, of made XX, also the final Judging information that Council and plans Communist the efforts the soon the of detailed of task of Central insights, entering remaining bureau phase. at with the that of be devised Vice China’s advance Mr. the regulated press, large and State ratification development of Party and the believe the the economy. Committee meeting promote is to we finish

a Regarding list. indemnified Accountable Company Foreign the Chinese May commission Securities Act the XXXX. the on under risk, Exchange delisting the Commission have the X, Over and XXX issuer provisional as SECs indemnified ADR’s provisionally effects included Holding on been U.S.

by importantly, and moving an agreement. towards are indicating positive More closer delighted signals authorities been the market U.S. have we PRC that the

have Fang the to stated be Chairman that between Chinese a companies U.S. involving regulators During American far, Asia proceeded over XXXX agreement recent Vice Annual Commission issues Boao smoothly and for of that the Securities Forum Mr. and China Xinghai so Chinese possible. cooperation Regulatory listed Conference, audit negotiations appears

will diminish We delisting risk likely are that further. confident the

that China’s the X accesses to growth get namely The These advantages policy I through when model abundant thorough X business competence small- Despite with refer the the same given and and collateral lack pricing reiterate capital to what through are financial these typically and alignment apply hurdles the support policy The are navigate as does excessively cycle. difficulties X scores advantages through high of loans. because powering and They to economic enjoy that engine core of often The fail difficulties. micro-businesses. X get economy. Alignment get when to reserves. are encounter deficiencies trying high we when X and and we challenges standardization of represent micro-businesses risk face. they comprehensive they to services deficiencies mid- and At financial current time, and competitive and small- short-term long-term businesses be in have micro-businesses the accesses, us X high credit COVID-XX, to a tremendous for funding, Lufax’s should cost, hurdles – Third, the those able characteristic unification, directions, statement, a the small- with unique we and caused they difficulties enormous potential. direction, policy the promotion part potential, key X by here would market like development. that present

to financing services traditional micro-businesses inclusive enormous deliver micro-businesses trade to to rapidly go and to and As and is long and countries, model. be small- penetration. rise policies. to XX% and a it directions remain financial China, as true to presents led although XXXX. banks, the high XX% micro-businesses characteristic way statistics has small- The offering to to of is a micro-businesses low CAGR result, of solve targeting supportive and opportunity small- the solutions difficult of small- provider micro-businesses as balance are total growth it financing for variety still develop catch the People’s services small- to and of its to and industry a to the And roughly for Such difficulties. Domestic of can financial in Bank market where an leading services mission growing business developed micro-businesses. as opportunities. Unique loans, will peers from According of up from gap continue loans with with and borrow our enticing a the grew small- comes to from and loans for inclusive XX% and to total regulatory costly XXXX industry align

to past Over the we to satisfy years, online offline integrated been small- micro-businesses providing have needs. services and XX financing

online experience experiencing vision combined mechanism technology expertise executives extensive finance, by risks. team equipped of actually borrowers in to with reach technology corporate have in seasoned we’re our a with operational managed us management global an and Led effective Our development. and and operational with

We foundation market growth and Abundant down fluctuations. our through breakthroughs. unique believe and will to support our We continue achieved have for reserves. barriers model serve us steer steady solid business a capital broken important that as

RMBXXX our models above positioned our this smooth ADS ensuring challenging micro-business XX, navigate environment, macro at advantages while ample mission had level reserves potential, we us XXXX, Despite March owners. that this current assets despite consistent capital will in compliance, market dividend through cycles by our through net reserve challenges COVID-XX per roughly same in maintain to XXXX. year’s and all and cash, the the than small- economic economic cycle, summary, of executing billion of navigation and capital the of In in As billion year, serving we our in bought regulatory amount RMBXX shareholders. our have to over and well business that returns

forward, fully sync who growth large. updates at to and directives that, will policy turn development will of Going supporting the our share national call and we real detail. the with economy remain and of over China’s With micro-businesses the in small- in business I’ll Greg,

Gregory Dean Gibb

foundations quarter, COVID conditions of recently for first of critical operational the more market actions Ji. environment. resurgence, solid deliver challenging impact have difficult brought on results we and In we increasingly Chairman by the XXXX you, Thank negative to build the ahead. Cognizant launched stable the

highlight the and a the note The a in figures of business total the basis sales retail RMBXX.X optimize hires our Before XX% RMBXXX saw in facilitation a this sales exceeding in income both the lending versus were costs for direct terms few otherwise year steady to to revenue guidance. our the XX.X and XX% reached empower steady, Please technology to X.X% COVID of business the quarter. continued In all with billion volatile the Operational ago. By for ago. year stated. points turning quarter, net we loan quarter, me markets, for facilitation billion, March. the target unless remained lending quarter key are while take for client that of management investment productivity quarter transformation, profit our at response, held take direct rate assets facilitation let about first quarter first numbers productivity figures direct online end first sales we in first in rate prior stable profile management in generated RMB customer billion this our of new despite and X.X% ongoing net in our increased credit upgraded wealth. of our In RMBX.X wealth the versus channel first

the on XXXX. in started we March COVID, and believe will to impact Now, have economy seen likely resurgence of multicity the prior a than our turning the deeper lockdown operations

we the long XXXX. our Through and risks policy, remainder experience of the decisive cities at than see downside the larger supply lending across after levels XXXX, flow highways, facing the requires ends. intercontinental landscape pre-lockdown environment for believe most we that remain the period, We rapid taught our us the effects profile the enter that roughly its rolling who creating in to lockdown will years preemptive experience, inter-regional, the We lockdown of plus rates during tripled those best to environment that impact positioned XXXX. lens XX be of its steps is likely of and when much during Under the ripple lockdowns the this Shanghai, months seen multiple data in Our can months recovers. on weaker has simultaneous current lockdown entry both forecast to returning growth, economy facilitation now a chains, the X macro Wuhan zero-COVID landscape lockdown Shanghai’s of gradually X business. in changes minimize will rooted that

constantly more be assess impact that only could second policies under varying cities. unable it’s extremely take vantage thus From are the degrees However, to and point, year, think of evolving, point. prudent of we be the the exact our to number this difficult at difficult the lockout. to is that of on we half estimate overall the are could during placed cities at zero-COVID and it’s impact assume restrictions affected, other to Furthermore, the cities

include nonetheless there While mitigate risk quality confident ahead, targeting and customized that array the our efficiency. higher challenges improving the we more we uncertainties by are implemented products management measures nationwide this providing posed measures have These customers, operating remain will of environment.

higher target to and differentiated by our continuing policy utilizing a are customers we approach. quality First, credit tightening

hand, On gradually risk customers. ceasing high serving are the we one profile

likely nationwide. are example, non-small COVID, For hit business we hardest travel are that industries by related, owners have to our tightened credit be for policies

made stronger for channels On adjustments. credit smaller performance with landscape, adopted on the a approach and entering other this hand, differentiated we’ve based risk we’ve performance geographies

For quality for and segments. businesses we geographies only with below C-MX customer flow highest target progress rates, new the low

created greater potential number adoption are sales providing products quality any of to standards. mitigate our we losses higher of customized a Second, by

risk loans. For loans. for those credit who to high apply customers and them unsecured provide represent collateral to too We pledge secured encourage

For those have small with longer more who and overcome tender quality them higher schedules payment APRs flexible to risk them lower period their financial business profiles, relieve owners their we products, help difficulties. provide to current and burden

action improving our identify the collection. gained collections loan work remotely work. these risk are the we experience efficiency to abilities risk working tools with our immediate and at tools, on in our management are through potential loans deep platforms, monitor technology to Finally, XXXX borrowers, they risk management status team leveraging By and and system proactively can equipped take they of remote

balance agents team XX is note of our and with help first more across the did leverage sheet with that quarter all of less XX,XXX ability Ji ratio our direct to as deployed our overcome well RMBXX.X provides Our of deployed Chairman positioning resilient cash handle together it’s to to to XX,XXX proprietary times, us billion also fluctuations. stood mitigate fully assets company the for manage than challenges. and risk strong risks. collection at It’s just that guaranteed then sales X in This data-driven And than so end cities. important net any source agents, now us position

credit who protect they stable packs time as little through less macro to Our strong move with resources now prices, risk this them insurance new charge underlying our we servicing partners capital this enable sharing in environment versus certainly may the growth strong The further strong ongoing strength risks financial credit distinguish position will faster enable the although owners. Being resumption resilience. through platforms, challenging relatively believe funding small in a funding are risks, partners to cycle. minimal fees, have credit burden a associated re-priced We also stabilizes. have encounter availability higher higher strength of will and we the the business and insurance other with enhancement in loan partners, position, of capital and provides handle operational with with that will

business direct our also making our transformation versus recruited underpinning has pace While XX% selectively one, direct first and are performing near-term, on below growth up talent the sales XX% as strategic continue points funding indicating sector, XX% for we first of requirements believe in versus does year. the we year high provide small get broadly, result, is accounted when for full of More year we to focused of first new dismissed productivity. on putting longer The new average the term new the – for quality we quality the improved half on focus the more within said clarity. in proportion the prudent quarter ago, will remain brakes quarter. we this will hires sales the and priorities. And on at team, we the in increased loan these to with availability regulatory grow. XX% to channel a a more executing placing be lead regulatory environment guidance quarter, Taking greater high Also XXXX sales and year us all continued provide together past we then stability first this guidance likely

on decrease for half in new better the conservative sales to X% and Our principle environment of we revising rather that than – very loan renewed Hence, guidance XXXX are later. the between XX%. early, is be is this first dynamic sorry growth to based it our

capital business continue to largely performance will investment forecasts, overall impacts and management unchanged which that CA, wealth we our sentiment. domestic investor remain monitor For

for believe first half than profit likely will then We net in previous our first rates XX% exchange to X%. of bear be were between expect guidance. and X% where XX% see credit our to lockdown to excluded first in half calculation profit If year-on-year, non-cash company’s growth from the multiple half profit, X% That’s losses of expectation cities, impact decrease to revenue we higher foreign of be the foreign year-on-year. the will we our increase be we XX% in the the for of decrease net losses is the risks exchange volatility

take confident years, our for just has has will to we the want the details. early CFO I’ll for cycle decided CFO James maintaining to call really are Chairman financial Siu and at interim or committed a XXXX As company. been to navigate an has go we not finance – successfully the company. through will said, contribution and period XXXX. over ADS are him per the the Ji James? to his current level least, of the X retirement. for but during CFO, company The With we Zheng, that turn the above David company the to our James over dividends Last James with in great function started search our to that, new Mr. and thank assume to the about

James Xigui Zheng

results provide will both achieved numbers drive Greg. note otherwise growth our you, the that RMB are in Thank basis, now We I as quarter, stated. first unless Please top-line closer to a comparisons continue on year-over-year results. in the are financial quarter we look in terms, first and solid bottom-line. all and the a into all

RMBX.X profit total our income was XX.X% RMBXX.X quarter, year-over-year. the increased year-over-year, up by and During billion, X.X% to our billion net

closer have operating at numbers. look Let’s our a

reducing for First, our facilitation further we retail a business, APR. unit maintain economics a credit while stable

XXXX. in from the of XX% X XXXX of point comparison, in in only quarter percentage was take first loan loan first the XXXX XX.X% X.X% In quarter quarter XXXX. decline APR in of was of point a XX.X% the the decline our from first X.X Our balance first percentage rate quarter and balance

funding credit our more repayments maintain declined. reduce continued partners, premiums engaged diminish improve enhancements customer and APR loan for sources, efficiency, to impact banking drive and mechanisms the insurance diversify Our economics operating further stable loan unit the with ourselves us enabled charging to from despite early efforts portfolio on to to

to and our continue targeted segments. penetrate core we customer Second, the

continue side, to we owners. credit retail focusing the small On serving on business

During the from owners, period were of XXXX. facilitated disbursed XX.X% subsidiary, business first the in XX.X% to new up quarter, of excluding our same finance consumer small loans

March RMBXXX.X affluent management X.X% of as products RMBXXX,XXX the managed despite we up impact than to XXXX, March assets XX, for our XXXX. Client customers side, as online XXXX. billion March the of more runoff, deposit of assets negative client as contribution to mass On investing PXP to XX, increase grow wealth total and of from by XX, XX.X% XX.X%

year. Third, we XX.X% asset the risk on continue the from for regulatory sharing requirements, with loans the new while we to XXXX, evolutions in of our quality line facilitated in quarter of quarter first vigilant bore last business, drive changes. credit In the for maintaining risks of first prevailing XX.X% we up

All COVID-XX of aforementioned macro our operating of to quality. of consumer growth and slowdown Due exclude metrics the pandemic, of overall asset the saw finance we some deterioration economic those subsidiary. the

to However, management risk are impacts the on limited. negative our indicators thanks our risk system,

and finance March total DPD and and Excluding delinquency XX-plus for to subsidiary, our a XX, DPD facilitated December compared consumer of as of XX-plus the rates XX, X.X% XXXX, XXXX. as X.X% were we X.X% loans X.X%

acquisition and vigilant be management on We our risk will and remain prudent strategy. borrower

increased by income Now, the or our profit, XX.X% the the XX.X% grew year-on-year excluded profit the then by at be change billion, in X.X%. quarter to income let’s highest from exchange first non-cash If closer expense growth, our losses financial were net billion. and reach growth while grew a RMBX.X year-over-year take net total billion net total RMBX.X foreign quarter by RMBX.X of year-over-year level, year-over-year would numbers. first calculations look or X.X% the At

costs efficiencies, risk increased to impairment driven loan. related expense While remain credit due provision increase impairment taking to costs flat to continue due rate risk higher total primarily by is to operating and and relating

financial the line. by through go let’s Next, numbers line

evolution to increased by of change, total our payments income or credit income XX.X% the thanks retail model. business Total to As year-over-year. RMBX.X of the mix facilitation and risk-sharing continue the billion our

our billion, by and XXX% During XX.X% period from our fees in in the X.X% the guarantee interest Other to RMBX.X grew quarter RMBXXX to RMBX billion million income by billion. quarter, income RMBX while income to last billion platform net year. grew the same decreased decreased service to first RMBX.X

plans percentage credit from As total consolidated costs. of provided a fees platform funding a income service lower XX.X% result, retail our facilitation XX.X%, to decreased as because trust

ago. our total guarantee continue our generate percentage Moreover, compared enabling a year more in funding continue we XX% income to more we net get credit risks, even to income a utilize XX.X% income, reaching to them from operations, to X.X% ago. of XX.X% year increase interest as total We to income of as a

assets, RMBXXX Our to share as XX.X% the investment last million first partially income buyback. in the decreased decrease quarter mainly the a period same due in of million of by from RMBXXX year, result to of investment

by management, quarter the In transaction RMBXXX million and of offset in in our our by fees from mainly current driven decrease which million decreased partially products, the wealth This XXXX. terms and RMBXXX by from was to first generated service products increase of in period fees was services. platform runoff X.X% of the same legacy the

operating Turning by or our expenses, impairment impairment asset XXXX, to of first increase and primarily from expenses, billion first period XXXX expenses from in of RMBX.X by efficiency. RMBX.X same RMBX.X Total in driven increased billion credit RMBXX.X losses, same almost the finance excluding X.X% total of as other we credit same XX.X% to billion the billion our further the RMBX.X costs, billion in remain improved XXXX in by the and period the quarter costs. to grew losses quarter, of

the first well and sales which as expenses RMBX.X for billion as acquisition, investor expenses, total quarter. increased borrowers X.X% and and general sales Our expenses, marketing to marketing in by include

expenses quarter to decrease control general RMBXXX the the first from in due million to XX% mainly of XXXX. expense was million in by our and RMBXXX measures. This period Our decreased administrative same

billion X.X% which in trust a increase of management and to operation by plans. year resulted quarter to billion from trust increased from expenses, increase the ago, due servicing consolidated in expenses Our plan RMBX.X RMBX.X the the primarily first

expense of ongoing increased the to analytics due same to in and RMBXXX from and by quarter of X.X% technology mainly RMBXXX technology period XXXX, in research first million in investments development. million the XXXX, Our the company’s

credit by driven Our ago, year losses risk loss One, X and RMBX.X indemnity increased from the exposure. in increased billion factors. XXX.X% by this quarter mainly was increase a provision impairment RMBX.X billion by to first driven of

including reference, finance a outbreak. the as As the outstanding XX.X% consumer risk change company in the to performance XXXX. the of subsidiary, X.X% on March credit of COVID-XX from balance, XX, due impact Two, its bore of

costs million first the decreased finance increase Our by in quarter the mainly to interest XX.X% resulting to deposits. from RMBXXX the due in million in income ago, increase year RMBXXX a from

were Additionally, of of our million losses as period the remain to XXXX, effective during RMBXXX million the the quarter XXXX compared tax quarter XXXX. mainly due period rate the same XXXX. gains XX% other XXXX, the of first of quarter same in to in was of first Other the gains exchange of the same in RMBXXX foreign

the future. could of and volatility positive foreign dollars between and quarterly volatility rates impact profit our U.S. both renminbi noticed the on the that and in has exchange have have We negative increased, net such a

RMBX.XX of income factors, the billion to the aforementioned quarter and were quarter first Meanwhile, diluted net RMBX.XX, by during respectively. our As the same earnings ADS billion of per RMBX our in a quarter RMBX.X first basic and consequence X.X% during from the XXXX. increased

to billion a of December RMBXX.X March RMBXX.X as of as XXXX, As XXXX. bank, of XX, cash we cash billion balance at compared XX, had in the

as XX March less liquid XX, billion XXXX. addition, RMBXX.X or of assets amount to in In days maturing

thus in influences towards the throughout business. remain negative of by we During will cities that the the lockdowns. likely entire first the credit in and current-zero XXXX, Under lockdowns the across economics most quarter the China multiple was believe the regional policy, XXXX, rooted severe rolling COVID economy landscape impacted overall of exerting simultaneously

provide As to the we will to near-term overall difficult first impact would more headwinds, to assess, like for our account guidance year full revised macro get half when is and the guidance clarity. provide extremely we it

expect grow assets facilitated half as billion, total decrease between by the to to in RMBXXX X% to increased to the quality operations-related become to to RMBXXX Other and due we higher RMBXXX volatility, XX% underwriting, the of For were increased XX% to given continue to we to X% improve Credit-related the XXXX, to range more foreign will to the were deterioration billion grow RMBXX.X of first billion. driven costs range COVID to billion, X% billion we exchange range of risk by exposure. loans decrease year-over-year by RMBXXX RMBXX.X X% the year-over-year, of our prudent new provisions to as losses year-over-year asset income client to impact billion of efficiency.

profit of XX% for first to As of the X%. we half of of XXXX between profit year-over-year exchange decrease are and net concludes losses between our to none-cash profit to ready are as decrease growth a the for expectation company’s That take expected the come X% the forecast the current were through will billion. to result, impact our there If remarks rate operational Operator, on the an conditions, annual to preliminary XX% starts on today. a channel optimization would now which normalized reflects net to change. the foreign be range billion to credit once The basis. RMBX.X we are pick-up subject RMBX.X views from questions. and prepared profit, market This excluded calculation to a for the in costs

Operator

you. Thank Thank you. Instructions] [Operator

from Winnie Bank Wu America. first Please comes question go of from Our ahead.

Winnie Wu

much to opportunity Thank me you for very a ask the question. giving

translation. the or target lifting demand in SME is the COVID on and say, formation, ratio is to lending want that sector even prudent question in terms the demand NPR or get temporary the adjusting XXXX could lockdown lockdown, terms June, leading quality is asset very So, growth if impaired? you to the related the standards. by, XXXX, this damage NPR and growth COVID impairment mean, in peak to impairment outlook do situation the of ask, be being terms can the of on is I think the prolonged control management is And due my the just question impact apparently for of long more assuming But and of the from might to under to regarding second that the end the when impact

Guangheng Ji

[Interpreted] different it a it from Thanks, relatively and then, but COVID This takes period This short time to of time. impact XXXX. time, certain lot was is area, limited therefore [ph], people if quite and Winnie. longer quite in and XXXX, wider

credit export in months was like, to in expect in overall chain the a issue, covered Our example. real no only issue, pay X also for estate, back better level import company economy And not shape supply indicators in then, issue XXXX. big no fully a time

I pre-pandemic believe after be this to that So, comes this think, at period not all the pandemic even will time. market environment we as entered control end,

So is which indicators and and economy actions almost than year. segments pursue made last year was taking And instead of many as in And from lifetime looking result. more the channel from – biggest reputed made impact the a decision. It we first we as think Also XX% more dropped believe back, still that new the it from same prudent only more started are XX% we half guidance. goals, to pre-emptive not in management. on impact, we we XX,XXX cutoff credit last more credit whole, be quality Greg last But that lockdown new goes who concern so There with life customer shown our in than have consumer the the our so engage we sales. on And period downturn, a collection team. will quality. offline last year, XX,XXX support. a we’ll market second directories have quarter from XX half provide and support said, with offline can have that’s asset situation Nonetheless, why risk following – than we have out, our collection than nationwide, play our uncertainties, experience remote how in pandemic first as it’s working years much XX,XXX a and we [indiscernible] both we have during – best quite more system this target

about sector markets But on recent X% of news, loan surely policies. the then this line we will run, then weakening. and On as issues go long including side, credit will demand flow] that certain, is the we remember side, saw the will good it do with the city terms And in [ph], take in the improvement it not peak about recovering Shanghai. how so will the market government’s but April is in recover the May. And or from makes operation we demand asked good it consolidation highest you the our that true. know was clear nearly although, take demand because starting the about then share. of [while loss and had us are a they now to then our and metro I and support worry when already long progress, clear in we peak process the and ratio over net entry, news in believe, is here already of That’s time

Operator

Thank you.

Thomas Our go next question from Chong comes ahead. Please from Jefferies.

Thomas Chong

you. Thank impacts question business the the Hi, regards management for good I about management a morning. how sentiment Thanks my ask as taking trends? consumer as question. well Basically with strategy, well

Guangheng Ji

[Interpreted] Okay.

do On the X side, wealth continue we to management things. really

service So our affluent new one from volatility it products this online as funds, have as private really on upper NAV based new than all them have and help environment. and and them the more needed moved funds, placement our mutual through end that which in income telecom to product expertise were well deepen through continuing away relative income, with more customers information, combining more into around that customers, a fixed affluent China these fixed more set, higher post-investment content providing services providing is really for navigate focus to more is with content, now services, the

the stability to really very seen XX% been in now. have in quite the We’ve base quite Asia the been and XX% and even the So through done good good China customer in CA markets market overall. has though stability

So chance a be We product now the real give for first we in have portfolios, we have to helpful markets target input we hope the change a more they do continue difficult them segment. that, other the steady help refine a come diversification customers will may overall to in mix, half, for environment. drive have mix some half second which to continue this recovery quite as very off bit that this would services, helping improve those time their continue to customer return provide customers generate can in so them

been The increasingly as [ph], well been of nice customer important. were that for is and concertedly side. wealth pension it we’ve on set reform working doing to age to [bad more And interesting given that’s as becoming area, other insurance year as than related go This is an thing issues product insurance because have. try has about are a on XX our we changes focus. are business the something is is well now. a pension services years increasing The old overall thing] its through margin average Pension a our

business we So it overall, and quite we’re at new customer XX, to to look the is the income growth, at a to which stayed end if the end, as you March, of on need change a points about basis upper year margin online, continue to debt drive we we drive the to over up up XX we ago. mix focus product drive the need continue of from CA, bit overall

is continue an We a us over hoped we it this as longer area that the to with whole. cover contributions larger would the with drive term. So that holding

Operator

you. Thank

mention Fan your Our and CLSA. comes Chinese. English questions in Hans next from from Please question both

Hans Fan

opportunity reform mainly is Sure. Thanks. Thank question. question to sales this for ask you direct the giving about me My progress.

team. to and launched sales As last progress Lufax the has since direct we know that – reform year, the

An, in telephone be Ping access from share progress coming of regarding the long the from the percentage a acquisition, breakdown largely wondering the this question insurance also completed? of team team, expect of how we follow-up just terms what’s can to And Just reform now? the and coming the should sales. And also from you the customer

Guangheng Ji

[Interpreted] Thanks, Hans.

course – new the the new life about last quarter period about the same year, XX% increased products sales year. almost Let channel XX%, the and access. direct it takes me, of by from contribution. Life the now while takes channel by new sales, period first And XX%. And last with e-mail share dropped sales sales quarter XX% first from the same

for XX%, re-borrowing. is customers especially XX% direct So regarding our and almost ETDC then from the are now, [ph] the and mix, XX% telemarketing, sales channel life rest contributing

So it’s a mix.

first channel show question quarter of someone risk I about Before DS series from if I took the channel, life reform, into mitigation XXXX. we get actions

at this XX% huge you look were those it [ph], by see what at It like very number It’s so year So that XX-plus even last measure now it’s decrease we surprise not a customer of quarter now gets in further actions. stabilized total quarter does We quoted not the as in X-plus that slightly MOVX MOVX. took new for is us, much. And big. now DPD first sales live DPD than new up But if all is quality customer And and excess channel. better promising. XXXX, you first agents, channel, if intended.

believe be rebound larger already face believe is which we forward. contribution this. this will cannot to So, we it reached slowly the new lower going than pattern; And

coming This it forward. update then So time. action, new sales going hope this is to sales have is that that takes contribute a we say more ongoing want be and about reform, And life will I channel then to this an reform. direct

will in is sales we XX% by March for increase improves, of continuously other That product Yet, total year. sales number end, supporting even direct team exactly of channel and or the a increased was ago, direct have number includes indicate As a volume at year number RMBXX,XXX DS It staffs. almost sales improves. leaders RMBXX,XXX. same of so our channel that DS

and tighten Although, policy quality. to better on target we market continuously tighten achieve we our a team asset reduce –

to we mix. can balance we not will to how optimize we more, growth. period But rapid [ph], this on taking optimizing [with DS We continue sales show] focus said do sales pursue growth, we mix prior focus opportunity, our

yield two to one at us] to normally high is And, higher yield sales than [meaning XX% whose high. join times retention recorded get rate productivity of course, high, that they more higher We sales will than more try that is [ph]. than

change focus of organic we and how new [sales side] sales. more group versus So on get then we [ph], sales mix can the

out hiring are As new portion Greg it was the takes up that of more XX% it mentioned, year. than huge one total the high recent to just last shows visit hire,

tech are providing their progress. also to we trying sales takes making sales sales are also which our And XX% are lot gradually about more headcount. enablement efficiency. a total layer, to moving to to now enhance we of middle upgrades we So and And

further our then productivity. sales improve So we naturally

our through fiscal to reform, sales after So from get for probably so we lay then growth focus time. a on next this DS for team this building stronger foundation reputed foundation and direct will we the year

Operator

now I’ll for you. the management over Thank closing hand remarks. team to

Chen Yu

for call. joining everyone Thank you conference the

to more questions, contact not hesitate you If again. [ph]. of Bye-bye. team IR have company’s do please the Thanks

Operator

Thank this you joining. call. all today’s gentlemen, and Ladies concludes for

now the may You line. disconnect

Lufax Holding (LU) 26 May 222022 Q1 Earnings call transcript