Good evening and welcome to Noah Holdings' 1Q '20 Earnings Conference Call. All participants will be in a listen-only mode. [Operator instructions] After today's presentation there will be opportunity to ask questions. Please note this event is being recorded. I'd now like to turn the conference over to Mr. Grant Pan, CFO. Please go ahead.

Thank you, operator and good morning and good evening to all the investors and analysts on the call. Chairlady, Wang and I are very happy to report to you about our first quarter performance. First let me hand it over to Chairlady, Wang, to share with you the performances of Noah for the first quarter in 2020.

For today's agenda, I will first share my views on the micro economy and briefly summarize Noah's overall performance in the first quarter of 2020, the developments of our business segments and the achievements and challenges during our transformation. Our CFO. Mr. Grant Pan will follow with a detailed discussion of Noah's financial performance in the first quarter. We will conclude the call with a question-and-answer session. It is fair to say that the COVID19 pandemic since 2020 has pushed wealth management institutions in China to accelerate the transition to provide more proactive and customized asset management services and expedite the supply of net value-based products. Our industry is constantly transitioning from product-driven and product sales oriented to investment advisory oriented, providing clients with effective asset allocation services. The COVID19 pandemic started wealth management industry with new methods and brews, contactless services, live streaming, online solutions, intelligence processing have become critical elements for every institution. As Noah has shifted our focus from providing private credit funds to more standardized products, we're able to enhance technology and innovation in our wealth management business and empower different operational aspects including new clients in China development, product services, investment research services and in risk management with digital technologies such as big data and artificial intelligence during the COVID19 pandemic over 99.5% of Noah's clients have been completing their transaction entirely online. Next, I will go over our wealth management segment, asset management segment and operational efficiency in the first quarter. Starting from the first quarter of 2019 Noah seized the distribution of single counterparty non-standardized the private credit products and fully entered the field of standardized products. Now I'm delighted to report that our transaction value has reached RMB23.19 billion in the first quarter of 20 up 76.1% quarter-over-quarter. The transaction value of standardized products including mutual funds, equity and bond funds achieved an increase of 496.3% year-over-year and was up 96.9% quarter-over-quarter. Excluding single counterparty non-standardized private credit products, the transaction value has increased by 287.5% year-over-year and was up 88.3% quarter-over-quarter. We're pleased to see that standardized products are well received by our clients. Thanks to their continuous trust the gross of the AUM of standardized products at Noah has exceeded our expectations especially in consideration of the severe impact of the COVID19 pandemic in China we're quite satisfied with our achievements so far. In the first quarter of 2020 Noah's net revenues reached RMB746 million down 5.4% quarter-over-quarter and our GAAP income attributable to shareholders reached RMB256 million up 119.6% quarter-over-quarter. The reason for the slight decrease in our net revenues was due to the decline of revenues from others businesses under the impact of the COVID19. In the first quarter, net revenues from our overseas segment reached RMB208 million down 16.1% year-over-year and down 12.7% quarter-over-quarter accounting for 27.8% of the group's total revenues. In the first quarter of 2020 the number of our active clients reached 15,831 up 4% quarter-over-quarter. Among the active clients, 12,756 were mutual fund clients up 9.2% quarter-over-quarter. In the meantime by the end of March this year, the number of black card clients reached 880 up 16.1% year-over-year. In the first quarter the transaction value from black card clients increased by RMB4.25 billion AUM reaching RMB78.85 billion accounting for 48.8% of the group's total AUM. Noah's clients generally have high incomes or have the potential to earn high incomes with excellent educational background and a dedication to long-term study of investment and wealth management. Their reception to our transformation to standardize the products has far exceeded our expectations in the past several months. They understand the micro cycles, accept the concept of asset allocation and are willing to increase the proportion of standardized products in their portfolios. Changes in the industry and client demands are also driving the development of our relationship manager team. Starting from this first quarter, we have been applying a new relationship manager compensation scheme, comprehensively relating relationship managers bonuses to clients. This policy demonstrates the shift from the sales driven towards focusing on the maintainers of outstanding AUM and highlights the consultancy value provided by relationship managers. In the first quarter of 2020, the turnover rate of our elite relationship managers dropped to 1% from 4.1% in the first quarter -- in the fourth quarter of 2019. Faced with new market conditions, relationship managers need support from a professional one-stop service platform. We have formed a skilled triangle asset allocation team, consisting of product experts, firm managers and experts for integrated services to provide our relationship managers with strong middle office support in various key aspects in their business activities. Affected by the global pandemic and mandate travel restrictions overseas, in the first quarter of 2020, revenue from our insurance business decreased by 51.8% year-over-year and down 22.5% quarter-over-quarter. We're currently actively planning for the upcoming quarters. On one hand, we have launched the service reservation system and on the other hand, we have initiated the mode of providing integrated services online. Since the last Chinese New Year, we have conducted over hundred online courses and roadshows as well as a considerable number of high-quality live streaming sessions online. For example, the Noah at-home initiative has helped to acquire nearly 1600 new high net worth clients for our mobile app Micro Noah. T In terms of asset management as of March 31, 2020, Grofers AUM stood at RMB161.7 billion down 5% quarter-over-quarter and down 5.5% year-over-year. As a result of our voluntary early redemption of private credit funds resulted in a net decrease of RMB971 billion in AUM. If we exclude the impact of private credit assets, the AUM of private equity, public securities, real estate and multi-strategy funds increased slightly up 0.8% quarter-over-quarter and up 7.1% year-over-year. The AUM of our overseas segment reached RMB26.4 billion up 6.9% year-over-year and up 6.5% quarter-over-quarter accounting for 16.3% of the group's total AUM. We understand that our high net worth clients are paying increasing attention to asset allocation capacity. We have officially taken into consideration this diversified growth of Gophers' AUM when implementing the strategic targets of the group. In the era of standardized assets, the wealth management industry has embraced a new paradigm driven by asset allocation. Under such circumstances, Gophers positioned itself as an asset management company that focuses on multiclass asset allocation and pursues absolute returns. On the public securities front its flagship fund reported an excess return of 30.31% by the end of the first quarter since its launch. The absolute return of Gophers' flagship inhabitants private equity fund was 17.16% by the end of the first quarter, which was 5.72% higher than its market benchmark. In terms of the ECPE and real estate funds, our focus for 2020 will be on secondary PE fund Series 5 co-investment PE fund, US funds invest in data industry, real estate flagship funds and US rental property fund. We will continuously improve our management and the capability of direct investment. The wealth management is gradually shifting from product students towards AUM and asset allocation driven. To adapt to this market change, we have more detailed requirement for the services our relationship managers provide. We administered responsive mechanisms and organizational policies to ensure the quality each step of our operations. When serving clients, we have always been adhering to the principle of being kind, responsible and reasonable, helping them retain and retain their asset value more scientifically basing on our understanding of their needs. The way we understand our clients is to put ourselves in our client's shoes and place their interest in the first place. Following the market moves and acting in accordance with rules, laws and regulations, in 2020 Noah has established a client-anxious committee to evaluate any new project before its launch from the client's perspective based on the client's needs and long term interest. In the case of client complaints and disputes, the committee will make impartial judgment. For the asset allocation of high net worth clients at Noah there will be also a professional team to review the portfolio and remind relevant relationship managers and clients of any issues. As we enter the era of standardized products to better serve our clients, we must improve their online offline experience. I believe that technology will fully empower and support the wealth management industry in the coming years. As such we will conduct more data research and utilize AI-based investment advisory and open product platforms to unlock more channels for portfolio management, cost reductions and efficiency improvement. Therefore, Noah has been actively improving the user experience on our mutual funds app Fund Smile and establishing AI-based investment advisory system. In the second quarter of 2020, we also plan to launch the new version of I-Noah which will be our standardized product platform overseas. Based on the existing model of relationship managers providing consultation services, we will further develop our business layers. This means serving ultra high net worth clients via the VIP center and investment advisory while reaching more potential clients online by optimizing payment efficiency, offering more high-quality content and supplying diversified products with dedicated to constantly improving our client experience with us. The wealth management industry is quite special. When the returns of our product or investment don’t meet client's expectations even if the investment account for less than 1% of our RMB700 billion accumulated transaction value, for those clients who are affected it's 100%. Therefore, we fully understand when client complaint and voice their dissatisfaction. Compliance and risk management are the lifeline of wealth management institutions. Noah will always keep this in mind and behave more provincially to ensure the compliance of transactions and diligence risk management. For some assets occurred in the past, we have established a special nonperforming asset team to deal with them through market forces and by normative and legal means. In this process, we have been constantly communicating with our clients and providing updates on the progress. This process turns out to be quite effective and now a majority of the risky projects have been successfully managed. At the same time we're continuously working on investor education and promoting the formation of a more mature market, letting clients understand that investments are not deposits, it has risks. While we don't offer implicit guarantees, it does not mean that we're not -- it does not mean that we're irresponsible. We adhere to the principle of being kind, responsible and reasonable and are committed to creating value for our clients. We're grateful for the trust of our clients. Now what transformation means, we're returning to the mindset of respecting common sense in the market, as well as raising our awareness of potential risks. Looking back, we have experienced several economic cycles in the past 15 years, especially the COVID19 pandemic makes us realize more than before that we're now in an era with a combination of volatility, uncertainty, complexity and ambiguity. It requires more wisdom to secure certainties among so many uncertainties. For Noah, it means we must pivot around our high net worth of clients and provide them with integrated services including wealth management, asset management and other services such as insurance and lending. In 2020, Noah has launched a new governance structure and process system aiming to create a new corporate culture and incentive plan. In addition, we will focus more on monitoring the market developing insights, reaching strategic consensus and implementing strategies. We give up the previous management meeting decision-making mechanism and fully adopted the mechanism of decision-making by committees. We have set up committees of strategy, technologies, human resources. client interests, auditing and discipline etcetera and employees at execution level who are not spending members of our committee are also invited to join, so as to ensure a more comprehensive review of our operations and to improve the quality of decision-making. The appointment of management is subject to their qualification and KPI performance. We have also formed a multilayer relationship manager compensation scheme based on client's different behavior patterns to promote the development of the VIP center and self-service investment platform. 2020 marks the 10th anniversary of Noah Holdings listing on the New York Stock Exchange and the 15th anniversary since Noah's establishment. I'm really grateful for the trust and support our clients and shareholders have placed with us, allowing us to come such a long way with all of you. In the future, the team and I will continue to do our best to honor the trust given to us and to create value for our clients, shareholders, employees and the society.

Thank you, Noah for sharing and let me walk you through the more detailed financial performances for the first quarter. We entered the year 2020 with a strong start despite the COVID19 situation that has literally shut down the nation for an extended period of time. Especially as part of the transformation strategy, we see very positive signs and the strong growth in the distributions of standardized products. First of all we are on track of or as a matter of fact stronger-than-expected trends to meet the guidance of $8900 million profit target for the year. As we ended up with a non-GAAP profit of $256 million reaching the milestone one-third of the way. Operating profit margin improved to 34.3% as a result of scrutinized management of total costs and expenses. Against all the odds the transformation, the pandemic situation that have made the first quarter seemingly very difficult quarter for sales. I’m most proud of - which is also the biggest highlight of this quarter that comes from the total transactions value distributed in this quarter that went up strongly to $23.2 billion or 76% growth from the last quarter. Driven by group of resilient Noah team of relation managers and management members on the back stronger performance of Chinese stock market in the first quarter. And showed signs of resilience of our investors even during a very difficult quarter. Let me caveat here that our first quarter is usually strong. And we’ll continue to face challenges that caused by mainly the travel bans and economic pressures that gradually effects as the year goes on. Revenue vise considering the major disruptions to the overall economy by the unprecedented, the pandemic situation, we're also delighted to see that recovery in one-time commission from last quarter that went from $160 million from the fourth quarter of ‘19 to $211 million in this quarter increasing by 33.1%. The growth can be attributed to largely the increase in total transaction value as mentioned previously. Comparing to the first quarter ’19, one-time commission were down by 34.7% as the travelling restriction hinders the sales of higher margin oversea insurance products which in turn affected the total CAG rate of the revenue. But at the same time 46% of the total standardized products about $10 billion had the durations longer than three years which provides our clients a healthier allocation of the assets that would offset short-term fluctuation from the volatile stock market. And at the same time provides us with assets that would generate more recurring fees for longer periods. But then again like everybody else the COVID-19 situation, especially restrictions on traveling and off-line gathering did have and will continue to impact part of businesses. Especially the oversea business where some of the service is the products would require client’s physical presence. For example, the oversea insurance products as we have mentioned earlier. More important to quantity and distributed transaction values, we’re excited to see a clear switching in product mix that’s in line with our transformation to standardized products. In the first quarter last year $22.1 billion out of the total transaction value which is $28 billion about 79% with the single counterparty credit products. And standardized products at that time only took about 11%. Now after two quarters, three quarters transformation, the mix has cleared switched the standardized public products now to except about 82% of the total financial products distributed this quarter. Obviously, we cannot yet claim final victory in terms of strategic transformation as distributions in public securities had a lot to do with the stock market performance. And happened to be very strong, is just our market this quarter which may not sustain for the rest of the year, but apparently, we are very encouraged to see that initial sign of success that indicated our clients confidence in the - as well as the increased level of activity from our clients. We’ll continue to feel the pressure in the following quarters depending on the timing of the relaxation on the traveling bans, for example the originally scheduled May 8th lifting of mandatory quarantine upon arrival in Hong Kong area have been extended for another month, now scheduled for June 8th. Obviously, we didn’t just sit around obviously to wait for miracles to happen, our team are actively helping our clients to plan ahead and have large several hundreds of three orders that would be readily converted once the travelling is allowed for the oversea insurance products. Management fee increased a slightly year-over-year based on the growth of AUM comparing to a your-ago went from $419 million to $450 million a 7.3% growth year-over-year. Although we had a 3.4 decrease sequentially from last quarter in 2019 mainly because the generations of some backend loaded management fee from the existing, from the exiting of single counterparty credit products in the last quarter. We had also again recorded another $20 million of performance fee occurring in this quarter mostly arising from public security funds. This is the 23rd consecutive quarter that we had recorded and we anticipate more to come in the following quarter. Another area that sees a more direct impact by the COVID-19 situation, revenues arising from lending and other services that are decreased 71.5% year-over-year and 50% quarter-over-quarter. The operations of which typically requires interactions with governmental branches such as notarization services. And administrative services which was not back in full function during the quarter. Revenues from off-line classes offered by education have also seen greater challenges during this quarter. Our OPEC, operating expenses in our cast, in the first quarter is witnessing a significant improvement both from year-over-year and quarter-over-quarter perspective. For the year-over-year it went down about 28.1% and quarter-over-quarter down by 52.1%. They are resulted from two reasons mainly, first one is both internal and client-oriented conferences have been moved online through web-based platforms that led to less travelling and lodging expenses. Although we anticipate that these expenses will increase in the future once the restrictions on travelling and also on gathering is relaxed. We’ll continue to explore and invest our IT infrastructure post more client events online. And secondly, anticipating a challenging year ahead of us, we had also carried out several cost cutting measures non-essential areas proactively. For example implemented temporary two-week non-pay leave in the first quarter. And a result of the nearly 10% swap in comp and benefits in the first quarter. Although the NPL was a temporary measure and has been restored to normal level by now. We’ll continue to closely monitor expenses and costs to prepare for windy days ahead of us. In addition, we had also asked our regional heads to apply for relief on rental expenses throughout the nation that had cut our overall rental expenses for office space for several millions. When it comes to balance sheet, we continue to strive for leaner balance sheet and further improved our asset debt ratio to record low of 18.3% while maintaining a 4.8 multiple current ratio. We believe that maintaining a healthy level liquidity to fuel rather strong recovery during this difficult time which also allows us, the capabilities to further invest in longer and strategic initiatives such as technology and online platforms and explore for new business opportunities. The wealth management segment realized a good recovery in this quarter and its operating profit that was impacted, last quarter was impacted by significant one-off expenses. And this quarter has recorded $%166 million contributed to all most 65% of the total operating profit this quarter. Stronger this quarter’s profit also comes from our asset management segment that recorded $93.5 million that is 37.8% growth year-over-year and a 3% quarter-over-quarter growth. The increased level of profit margins for that segment is also demonstrating a very disciplined operation of the segment. And is also showing effect of the still economy. Speaking of the asset management segment we do see decrease in terms of absolute amount of the total of about $8.5 billion but if we do take into consideration of the massive execution of single counterparty credit products of about $9.7 billion. The rest of the asset classes recorded a total increase of nearly $1 billion that’s mostly driven by PE and RE real estate products, Lenovo is conventionally strong with. However the growth in the standardized products; manufactured by Golfer was disappointing in the first quarter as the few of the standardized and balanced fund products did not launch as scheduled. We expect that's adjacent to improve quickly in the following quarters as these products have already been manufactured, packaged and scheduled to distribute in the second and the following quarters. As mentioned earlier the learning other business segments experienced more direct hit by the COVID19 situation and recorded an operating loss for the first time since it went profitable in the third quarter in 2018. We’ll continue to seek ways to improve the sector, and most likely we will be conducting the more feed type of business as assistance to the banks and trust companies using the technology, experiences and know-how that we have developed in this sector. All in all we're pleasantly surprised by the soft start in this quarter, and we should really thanks our clients for their confidence in us as evidenced by the growth in number of active clients, also in the number of flat card AUM and also in the macro transformation to standardized and diversified asset management. And thanks to our team for the resilience and courage they have shown in this global pandemic. We’re obviously fully aware of the challenges ahead of us due to delayed effect on economy, as rising of unemployment rates, on exports that may affect many of our clients who are honest in the export manufacturing businesses. But we’re also confident that we’ll continue to deal forward our transformation to modern financial institutions, best equipped with technology as well as great products and services to our clients. Operator we’re ready to take questions.

Thank you. [Operator Instructions] Your first question comes from Stephanie Poon [ph] from City. Please go ahead.

Hi good morning management, thanks for taking my questions. So a couple of questions for me, the first is regarding your transaction volume of the public securities, clearly it’s a very strong rebound to your Q. So just want to understand what are the key drivers here? Will you be able to provide us a breakdown by the catalogues products for something like mutual funds and hybrid funds, how are they doing, respectively in Q1. Maybe compared to the previous quarter. And also want to check on the trend in Q2 so far, so as you also mentioned earlier Italy depending on the Asian market performance. So we do see that the Asian market is recording battle normalizing – in terms of the level of GDP. So, how is the trend in Q2 so far, and how sustainable do you think this strength in Q1 would be? And the second question is – I see on your on registered high end growth. So we see a very strong number of new registered clients in the first quarter was strong by four times Q-on-Q So can you provide more colors on the underlying risk that represents IPO that some organic growth. And also like how sustainable you think that is? And lastly you want to check on the lending business, so we see there’s the provision for recorded loss in first quarter. So first can I check on what was the number in the fourth quarter last year? But just apparently it’s a big increase on the year-over-year basis. So want to understand that what are the drivers and maybe what are the underlying NPL trend of the lending business that you're having here, that’s all my questions, thank you.

Thank you Stephanie give me a second to translate question and share with management.

Okay, thanks, Stephanie. For the first quarter. Yes, we actually had put out quite a bit of the online conferences and especially during the shutdown period, we actually do have very live sessions for the clients get online and we're actually able to experience a pretty higher level of activities or interaction with clients compared to the conventional way, even during those several weeks we probably had about close to 600,000 of hits and visits during that session. And we’re able actually to launch quite a bit of standardized products on the back of obviously good performance, also from strong fund managers that were actually able to package a product that has a longer duration actually about RMB10 billion out of the total RMB23 billion with duration of longer than three years. So in terms of Q2 trend so far, I think you brought up a very fair point. The standardized products do have a little bit of correlation with the Asia stock market. But at the same time, we're also offering more balanced funds and type of products for our clients. So we're not just pushing the clients to the equity market, but also a more balanced allocation of the product. So we'll be mixed between probably equity and bond and standardized products. So we'll see how the Q2 went but we do have a good alternative for our clients other than just equity security products that ties to the stock market performance.

[Foreign Language]

Yes, just a few more comments from our Chairlady, first of all not just because of the performance for the stock market, we did do a quite a bit of preparation ahead of time. So we're actually able to put together a good roster of outstanding fund managers. So we're actually able to launch good products in a relatively short period of time. And two is that, we're moving quite a bit of offline conferences to online including our traditionally held offline Diamond Conference in hotels, we actually moved them online, able to actually get in a lot new clients through the sessions. And third is really the change in the demand of our clients that lot of them have experienced risks or some non-ideal experiences from so called non-standardized credit products in the entire industry. So, their demand and appetite is switching to a more balanced allocation of assets instead of concentrating their asset allocation in one class, especially the volatile class. And we also want to stress that other than in addition to the standardized products, we're still maintaining pretty good level of distribution for the BCP products, and even from the standardized products about RMB10 billion is with longer duration which obviously the assets that we help our clients to allocate or put together has better quality and actually allow them longer period to process. And obviously we'll see a slight depression on one-time commission as for the standardized products do have a lower feed rate than the oversee insurance products, as I've mentioned. But we do believe that having the longer-duration pipeline assets for clients will generate more recurring fees for us. So that's the first question, and second question in terms of the growth in registered in the number of registered clients, yes we do have a pretty strong traction as we have mentioned before, when we do move to conferences and also the interactions online, we're actually able to see a very much higher level of activity interacting with our clients and we're actually able to with the help of enhanced IT infrastructure, we're actually able to track and also retain some of the clients traffic better than we did before. So that's mostly attributable to the number of new registered clients and also through the distribution of standardized products actually easier to help the new clients to actually get to us. And for the third question, in terms of lending business, we do have a provision but that is basically a statutory provision that was required by the auditors when you have the lending piece on your balance sheet. In terms of that particular business, we’re seeing a transition especially from industry and regulators standpoint that we wanted to go light in terms of, we do have mostly using technology also databases in terms of open the banks and trust companies to assess the quality of collateral, especially properties for their clients. And we have been experimenting and actually seeing some initial co-operations with a couple of trust companies that will actually be able to provide more or less a service type of fee type of services to these institutions, instead of servicing the loans ourselves. So we'll be seeing a slight change in business model in that particular area.

Thanks for the very detailed answer. So maybe just want to follow a bit on the last question. So in terms of provisioning level, is that like stable versus the previous quarter like do you see any increase in the underlying risk, I guess also because of more challenging macro environment here. And as you mentioned about the shift in the business model to the company like what would the revenue model looks like going forward? And how would the future revenue model differs from the previous model? And also want to go back to the first question that you mentioned just now you have over RMB10 billion of transaction value that is coming from the three years over three year duration process. So can I assume that that is all from the hybrid funds that you're -- I think you’re stepping up efforts on selling more hybrid funds this quarter, which has a more favorable fee rate. Just want to confirm on that?

Okay. for the lending piece of provision that was quite stable, obviously the shutdown of the nation actually delayed a little bit. Some of the loan refunding as some of administrative branches of government was actually literally shutdown for a few weeks actually, but we don’t see massive worsening of provisions from the particular assets. In terms of transitioning, the fee is more or less like 1% to 2% on service fee that will be charged on the back of the loans that the trust companies or banks when they do issue loans to the investors. So basically our service will be helping them screening these investors as well as especially the assessment of the world. So I will Noah to supplement your question on the hybrid funds or the longer duration funds.

Yeah so the majority of the first quarter is still equity type of funds in the first quarter and the hybrid fund like I mentioned before are mostly manufactured by Golfers will be launched in the second quarter and the following quarters.

Thank you. The next question comes from Ethan Wang from CLSA. Please go ahead.

Hi management. Thank you for taking up my question and congratulations on the first quarter results. I have two questions. The first is on the competition landscape of mutual funds specifically. So we know that Noah did very well in the first quarter but actually this space was quite crowded with all the financial institutions and payers like money and added pay. So when on stay at home during COVID19 and they opened their app, they have lot of choices. So just want to understand why they need to turn to Noah rather than Other Pay where they can just select hundreds of funds with simple tab on the phone. They just want to understand our position, strategy position in the space. And my second question is one-time commission rate of the wealth management segment. So Chairlady just mentioned and was suggesting that the first quarter the one-time commission rates went down because of what standardized product the rate was lower but I remember from the last call that when we're shifting to bond or hybrid I mean for hybrid standardized products may be the one-time commission rate was low but for equity types it was higher and we saw that in the third and fourth quarter last year, actually the blended one-time commission rate was quite good. So the first quarter was lower. I just want to understand the specific reasons behind that and our returning to more maybe lower commission rates kinds of mutual fund product. So just wanted to get more details on that. And my third question is on the general and admin expense for wealth management segment. So we understand that last year, especially in the third and fourth quarter we booked some legal fees may be related to the Camsing incident in this segment in the general and admin and other operating expenses, but we saw that this level of expense came back to the normal level in the fourth quarter. So shall we assume that the legal expense on scene of the past or is a seasonal thing where we should expect them to come back in the fourth quarter every year maybe. So that's my question. Thank you.

Thank you, Ethan. Give me few seconds. So in the past, obviously, our firm specializes in alternative products if you will, so on VCMP, some of even the single counterparty credit products but still credit alternative products. In the future we believe positioning will be about 80%, 20% allocation between standardized products also as alternative investments. So we are actually, like I mentioned entering into a bigger playing field, probably with more competitions. But still we're at a very different competitive position as compared to Ali or Tencent, some of the retail type of fun platforms. For example still the starting point for the investment, a threshold for clients mostly it's around RMB1 million and the average AUM for our clients in the mutual funds is about 310,000 for clients, which compare it to probably a few thousands on the retail mutual fund app you have mentioned. So even for the mutual fund purchasers that we have been serving mostly professionals and also have a pretty discipline investing in mutual funds as part of the allocation strategy where even seeing some management or professional set, they might purchase mutual funds from other platforms still come back to Noah to get more comprehensive and complicated type of products like fund to funds or even alternative investment VCMP type of products. And you can let me take you through the next two questions. The first one is for the take rate. You're right. For the standardized products we have mentioned, that actually does come with a pretty good fee rate as comparing to standardized bond funds that we have mentioned before. So basically the standardized products that have been distributed this quarter is usually between 100 basis points in terms of commission revenue, but blended commission rates was higher in the last year that we have mentioned that the higher profit margin that's contributed by the oversee insurance products, which also the revenue is accounted for within the commission revenue actually do have a lot to do with the overall blended take rate. As you would imagine, actually doesn't account for a lot of the transaction volume. But the revenue actually comes in with a pretty higher margin. But as you would imagine the first quarter, especially probably for a brief period in January, people weren't able to travel overseas for the last two months in that quarter. So that actually does have impact on the overall take rate, so which is about 91 basis points as compared to close to 110 in the past. But we have always been telling our investors that the fee rates especially that blended take rates do fluctuate between 80 to 120 basis points range depending on the mix of the products that we would be distributing in the quarter. In terms of the general SG&A expenses for the wealth management segment, yes, this is the actually ideal level that of expenses are profit margin that we're looking to maintain for the wealth management segment. And the legal fee doesn't actually have a seasonality in the last two quarters, especially right after the Camsing incident that there was quite a bit of one-off initiative legal expenses when you first engage your law firms and you first probably pursue your losses for the first time. So you do have a little bit of a down payment if you will or initiation fees. So the legal fees especially in the third and fourth quarter last year was probably is a little bit disproportionately higher. And in the future, I would believe that this level of expenses for wealth management is about normal, it will fluctuate but it shouldn't fluctuate too much. I hope that answers your question.

Yes, okay.

Thank you. [Operator Instructions] Your next question comes from Yuan Xue from CICC. Please go ahead.

[Foreign Language]

[Foreign Language]

Okay, operator. Is there any more questions?

Thank you. There are no further questions at this time. I will now turn the conference back over to you Mr. Grant Pan for any closing remarks.

Okay, thank you, operator. And thank you our investors and analysts. If you do have further questions, we also have scheduled one-on-one conferences, feel free to contact us, if you want to speak more. Thank you very much for your time.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.