OneConnect Monetary Know-how Co., Ltd. (OCFT) Q3 2022 Earnings Name Transcript

OneConnect Monetary Know-how Co., Ltd. (NYSE:OCFT) Q3 2022 Earnings Convention Name November 10, 2022 7:00 AM ET

Firm Members

Danielle Gao – Head-Investor Relations

Shen Chong Feng – Chairman and Chief Government Officer

Luo Yongtao – Chief Monetary Officer

Tan Bin Ru – Head-Southeast Asia Enterprise

Michael Fei – Chief Government-Hong Kong Digital Financial institution

Convention Name Members

Timothy Hsia – Goldman Sachs

Operator

Howdy everybody and welcome to the OCFT 2022 Q3 Earnings Launch. My title is Emily and I will be coordinating your name in the present day. [Operator Instructions]

I’ll now flip the decision over to our host, Danielle Gao, Head of Investor Relations. Please go forward.

Danielle Gao

Thanks. Howdy everybody and welcome to our third quarter 2022 earnings convention name. Our monetary and working outcomes had been launched earlier in the present day and are at the moment obtainable on our IR web site. Immediately you’ll hear from our Chairman and CEO, Mr. Shen Chong Feng, who will give opening remarks and Q3 enterprise highlights; afterwards our CFO, Mr. Luo Yongtao, will supply a more in-depth look into our financials after which in question-and-answer session all administration staff will probably be obtainable. We’ve our Head of Southeast Asia Enterprise, Ms. Tan Bin Ru; and Chief Government of Hong Kong Digital Financial institution, Mr. Michael Fei; and our Head of Technique and Product, [indiscernible].

In in the present day’s convention, our administration staff will make statements in Mandarin or in English. For these in Mandarin, a consecutive translation will probably be offered. If any discrepancy, administration assertion in unique language will prevail. Except in any other case acknowledged development fee of all of the matrices referred to the year-over-year development versus the identical interval of final 12 months and the foreign money is an RMB. Earlier than we begin, let me shortly cowl the protected harbor statements. As we will probably be making forward-looking statements, which can contain the variety of dangers and uncertainties, that might trigger precise outcomes to differ materially. Please word that we could current each IFRS and non-IFRS monetary measures.

With that, I’m now happy to show the decision to our Chairman and CEO, Mr. Shen Chong Feng. Shen Chong, please.

Shen Chong Feng

[Foreign Language] Howdy, everybody. I am Shen Chong Feng. Thanks for taking the time to dial-in OneConnect’s 2022 Q3 earnings launch. [Foreign Language] Earlier than I start, I might wish to announce the personnel change first. Throughout in the present day’s board assembly, the board permitted Dr. permitted Ye Wangchun’s resignation because the Government Director and appointed Ms. Fu Xin, the Chief Working Officer as Director of the Strategic Growth Middle of Ping An as a Non-Government Director. The board thanks and appreciates Dr. Ye’s contribution to the corporate throughout his tenure as Government Director.

[Foreign Language] Worldwide complexities, implications from COVID and macro uncertainties perpetuated into the third quarter. Regardless of these challenges, OneConnect staff overcame difficulties when all out and achieved stable efficiency in Q3. Income within the first 9 months up by 13% reached RMB3.22 billion. [Foreign Language] Macro economics and the pandemic proceed to weigh on the expansion of elements of our enterprise, together with some implementation tasks and utilization or quantity based mostly merchandise. In different phrases, we see declining utilization in lending merchandise and auto insurance coverage ecosystem merchandise.

[Foreign Language] Aside from this product, we did word the sturdy improvement from different options. For instance, choices from Gamma platform, particularly AI buyer companies, preserve this sturdy development momentum within the first half of 2022 in each buyer quantity and income. Abroad enterprise, which incorporates Ping An OneConnect Financial institution in Hong Kong registered a development fee greater than double final 12 months’s.

[Foreign Language]

As an vital initiative, in our stage two technique, OneConnect has continued product integration and improve by launching new choices. In digital insurance coverage, we launched a digital administration platform for all times insurance coverage brokers and [indiscernible] company with a worldwide high 60 insurance coverage firm making use of our merchandise to its enterprise in South Africa. As for digital banking, we have now built-in retail and SME lending methods and constructed a local platform based mostly on a unified expertise structure. On high of that, we proactively adjusted our product portfolio phasing out tasks with heavy customization and low RI, in addition to enhancing product standardization.

Over the quick time period that is on the expense of some tasks and development fee. However trying ahead, this efforts will additional cement OneConnect’s competitiveness in our core merchandise and generate helpful returns.

[Foreign Language]

Subsequent, I will temporary you on enterprise improvement on this quarter.

[Foreign Language]

So please come to Web page 3 of our slide.

[Foreign Language]

This 12 months we’re nonetheless on the second stage of our improvement that’s broadening buyer engagement the place we concentrate on Ping An Group and monetary establishment clients, in addition to combine merchandise and construct Gamma Platform.

[Foreign Language]

Now we’re at Web page 4. We stay dedicated to “One Physique and Two Wings” in stage two, which suggests we proceed to concentrate on monetary establishment clients whereas increasing ecosystem and abroad enterprise.

[Foreign Language]

In Q3, complete income reached RMB 1.07 billion. Premium plus clients elevated by 9 year-over-year to 163. Operation effectivity improved considerably. Margin of internet revenue attributable to shareholders narrowed markedly by 13 proportion factors to detrimental 12.4%.

[Foreign Language]

Subsequent flip to Web page 5. As “One Physique and Two Wings” technique takes root OneConnect achieved better protection of monetary establishment clients within the first three quarters.

[Foreign Language]

Digital banking merchandise, together with digital lending, AI Banker App, deepened our engagement with Huaxia Financial institution, Financial institution of Ningbo, Financial institution of Suzhou and lots of different clients enabling them of their digital infrastructure and accelerating utility of residence developed expertise.

[Foreign Language]

In digital insurance coverage, we initiated a relationship with many insurers within the first 9 months DaJia Property & Casualty Insurance coverage, Liberty Mutual, Tk.cn Insurance coverage, and JinTai Insurance coverage to call only a few. These model names exhibit our rising penetration amongst insurance coverage corporations.

[Foreign Language] By way of Gamma platform, upgraded eight merchandise together with AI buyer companies proceed to make new market breakthroughs as you’ll be able to see from tasks with Financial institution of Qingdao, Financial institution of Beijing and Financial institution of Chongqing, et cetera.

[Foreign Language] Standardization of excessive development margin merchandise is the important thing to OneConnect’s future as a enterprise and repair supplier. As you’ll be able to see on Web page 6, AI buyer companies leveraging OneConnect’s distinctive benefit of enterprise plus expertise and incorporating numerous monetary eventualities and main applied sciences now spans a variety of features together with good customer support, good mortgage utility, good advertising and marketing and a sturdy platform. Discover data base 1600 AI service eventualities, over 200 high quality assurance fashions and over 3 million AI gross sales teams underpin the product, boosting AI adoption fee to as excessive as 94%.

[Foreign Language] By the top of September, third-party income development in AI customer support doubled on a year-over-year foundation. Premium-plus clients additionally expanded considerably, it’s clients are additionally fairly looking for, internet enlargement fee for premium-plus clients within the first three quarters exceeded over 100%.

[Foreign Language] Subsequent, please go to Web page 7. Abroad enterprise stays a key initiative in our one physique two win technique as we proceed to strengthen worldwide presence in Hong Kong and the Center East.

[Foreign Language] Senior OneConnect Financial institution is the primary digital financial institution in Hong Kong to concentrate on SMEs companies. We’re additionally the one one to make use of alternate information for modeling, which suggests related and extra exact, lengthy approvals for SMEs and gained as recognition from Hong Kong MA and Hong Kong MC. POB is dedicated to digital monetary inclusion. Account opening will be performed on-line and inside at some point. Of the shoppers, we serve, 30% are first timer, mortgage candidates. Income development in 2021 ranked first amongst digital banks in Hong Kong and income proceed to indicate sturdy development momentum within the first 9 months of 2022, rising by twofold year-over-year.

POB additionally enjoys nice model title within the trade, evidenced by awards from famend monetary information shops together with Asia Cash, Euro Cash, and Hong Kong Financial Journal. The financial institution ranked forty fifth within the International Prime 100 Digital Solely banks rating, high 1 in Hong Kong.

[Foreign Language] Our credit score reference service – a companies company in Hong Kong, Ping An OneConnect CRA additionally went effectively and we formally acquired a license for CRA enterprise this week. The corporate is predicted to launch enterprise in 2023 to offer three varieties of services, particularly conventional credit score reference companies, revolutionary credit score reference companies, and cross-boundary companies, for instance, issuing cross-boundary credit score reviews. As all the time, we intention to ship differentiated, numerous and accessible credit score reference merchandise and repair fashions contributing to the institution and enchancment of credit score reference system within the Larger Bay space.

[Foreign Language]

On the identical time, we have now broadened our presence within the Center East. On September, we introduced our collaboration with Abu Dhabi International Market to empower the event of the SME Financing Platform. The platform goals to advertise monetary inclusion within the area, enhance transparency and decrease working prices for SMEs.

We formally launched our UAE subsidiary in Abu Dhabi International Market this October to offer digital companies with main applied sciences corresponding to cloud computing, synthetic intelligence to empower monetary establishments within the Center East and North Africa of their digital transformation journey.

[Foreign Language]

Additionally on Web page 8, moreover, we’re additionally joyful to announce that our model new life insurance coverage product made advances within the worldwide market as effectively with the brand new digital and environment friendly all-in-one platform for all times insurance coverage brokers, which spans a variety of insurance coverage companies, from digital advisor expertise and gross sales assistant to buyer insights. We fashioned a strategic partnership with a worldwide top-50 insurer to empower the digital transformation of its life insurance coverage brokers in South Africa.

[Foreign Language]

On Web page 9, as I discussed within the opening remarks, the way forward for OneConnect life in product standardization, throughout the first 9 months, we proceed to enhance our merchandise by standardizing features and accomplished over 60 updates. In digital banking, we built-in retail and SME lending methods and constructed a center platform based mostly on a unified expertise structure.

Upgrades in Gamma platform contains information center platform enchancment, and the AI functionality enchancment in AI buyer companies. We’re assured that standardized merchandise will enhance OneConnect’s total profitability.

One other a part of our efforts to execute this key initiative in Stage 2 technique, i.e., product integration and improve is to proactively regulate our merchandise – of our tasks. We face our tasks with heavy customization and low ROI, in consequence, we see improved ROI in Q3.

[Foreign Language] Whereas COVID outbreak resurges throughout China, we’re just one month away from the top of 2022. For OneConnect, the macro surroundings and pandemic as present enterprise development beneath stress. Nonetheless, this doesn’t undermine our confidence in our future, which stems from recognition by the market and our clients who nonetheless product competitiveness and the expansion in financials that our staff has labored arduous to ship. We consider this exterior challenges are solely non permanent. As a younger tech firm, we are going to stay agile and stay dedicated to enhancing third social gathering income and changing into worthwhile.

[Foreign Language] Subsequent, our CFO, Luo provides you with an in depth replace on our financials in Q3 and the primary 9 months. Luo, please.

Luo Yongtao

Okay. Thank, Shen Chong. Good night everybody. Subsequent I provides you with an replace on our monetary leads to Q3. Whole income in third quarter reached RMB1.07 billion, and the third social gathering income stays regular at RMB0.35 billion. Premium plus clients or clients with income contribution over RMB1 billion – over RMB1 million was up by 9 clients to 163. Internet loss this quarter was RMB0.13 billion with the online revenue margin at detrimental 12.4%, which improved considerably for 13 proportion factors from detrimental 25.3% in Q3 2021.

Let’s begin it from the highest line. Income remained steady at RMB1.07 billion within the third quarter and elevated by 13% to RMB3.22 billion within the first 9 month of 2022. In Q3, the income improve was pushed by operation help implementation and others. Nonetheless, this was offset by the income drop from enterprise origination and danger administration with out from pandemic curves and our steady part out of low worth tasks as a core initiative in our second stage technique.

I provides you with extra colours on income development drivers later. Income combine by buyer tax stays quickly identical on this quarter in comparison with the identical time interval final 12 months. Income from third social gathering clients reached to RMB351 million, identical as Q3 final 12 months and accounted for 33% of complete income.

As a result of COVID impression, income from enterprise origination, auto insurance coverage, declare merchandise and home implementation enterprise energy part out of low worth merchandise additionally lowered our income. Aside from the companies talked about above, we nonetheless achieved steady enhancements. Contributions from Lufax grew barely by 5.2%, from RMB113 million to RMB180 million, representing 11% of complete income.

Working help enterprise contributed a lot of the income development. Income from Ping An Group reached RMB599 million within the third quarter, and made up 56% of the full income. The general contribution from Ping An Group remained regular. The utilization volumes of some transaction based mostly merchandise decreased, for instance, P&C declare associated merchandise and banking lending merchandise. This was offset by customer support help enterprise and new launched tasks to satisfy the enterprise necessities.

Shifting to income combine by enterprise sort. Implementation income accounted for 19% of complete income reached RMB202 million from RMB189 million in the identical time interval final 12 months, which was pushed by the continuing digital transformation in Ping An Group and our new abroad life insurance coverage enterprise enlargement.

However, implementation income from home third-party clients dropped because of the pandemic journey restrictions and our steady part out of low worth tasks with excessive buyer personalized necessities.

Income from enterprise origination was RMB94 million in comparison with RMB115 million for a similar interval in final 12 months, primarily because of the decreased mortgage volumes on account of pandemic curbs and macro financial system.

Income from danger administration was RMB105 million this quarter versus RMB113 million for a similar interval final 12 months, primarily because of the decreased utilization volumes of PUC insurance coverage declare associated merchandise which might be extra inclined to COVID management measures.

Income from operation help rose to RMB294 million from RMB280 million for a similar interval within the prior 12 months, primarily benefiting from the rising product utilization charged by stock-based charges, particularly varied varieties of enterprise for buyer companies.

Income from cloud companies platform stays regular this quarter with income contribution of RMB294 million, barely dropped from – sorry RMB297 million barely dropped from RMB303 million in the identical interval final 12 months. As talked about in earlier earnings launch, our Cloud Providers enterprise has entered right into a inventory stage and the income is remained at a steady stage, which is topic to precise utilization volumes of our purchasers.

Third quarter’s income is in keeping with firm’s expectation. Each implementation and different income was up by 19.2% to RMB78 million from RMB65 million this quarter accounted for 7% of complete income. Such enchancment was primarily pushed by the sturdy development of digital financial institution enterprise in Hong Kong as a key half to our technique within the Nice Bay space and abroad. POB income saved enhancing a number of instances quicker than our total enterprise.

Let’s flip to the income combine by product sort. Gamma Platform, a strategic focus for innovation or the largest chunk of our income, which accounted for 49% of complete income within the third quarter. AI customer support, core banking methods and different initiative companies saved presenting outstanding development. Income development from Abroad Insurance coverage enterprise contributed to the rise of digital insurance coverage income with an approximate of 21%.

In the meantime, digital banking makes up 28% of complete income, and the POB accounted for two%. For the income combined by product varieties within the 9 month of 2022, digital banking, digital insurance coverage, Gamma Platform and the POB contributed 28%, 19%, 51% and a couple of% of complete income respectively. This quarter, we proceed to decide to our stage two technique the place we concentrate on potential from Premium Plus clients. The whole variety of Premium Plus clients continued to develop this quarter by 9 clients to 163 with most of them being our present clients, the rise additionally testifies our success in conserving engagement with present clients. We’re joyful to see that increasingly more Premium Plus clients are utilizing a number of merchandise from a unique product strains.

Gross revenue was RMB375 million within the third quarter, and our gross margin of 35.1% stays in regards to the flat stage on the identical interval final 12 months. On non-IFRS foundation, gross margin was 38.4% in comparison with 42.2% in prior 12 months. This was a combined outcome brought on by various factors on one hand with product integration and improve being a key initiative in our stage two. We proceed to optimize our product technique, enhancing ROI and product standardization and proactively part out tasks requiring heavy customization.

However, utilization quantity of merchandise with comparatively increased development margin corresponding to P&C declare associated merchandise and mortgage merchandise in danger administration decreased because of the intense macro circumstances. We’re happy to see that we’re effectively on observe to our breakeven goal as we made good progress in loss discount this quarter. Initially, our analysis and improvement bills got here to RMB287 million from RMB323 million.

As a proportion of income it amounted to 26.9%, in contrast with 30.4% within the prior 12 months. We continued to implement our second stage technique on merchandise integration. Our merchandise on total standpoint, a increasingly more mature progressively. On the identical time, we commit to enhance our improvement effectivity by optimizing our trailing constructions.

Wanting ahead, we’ll hold spending most sources on analysis and improvement to improve and develop merchandise to strengthen our competitiveness available in the market. Gross sales and advertising and marketing bills for the third quarter of 2022 decreased to RMB94 million, in contrast with RMB131 million within the prior 12 months. The proportion of income decreased to eight.8% from 12.3%. The advance was benefited from enhanced gross sales functionality and efficiencies. We managed to additional cut back our complete gross sales label value whereas remaining income development. In the meantime, extremely communication, advertising and marketing and journey associated bills additionally decreased in contrast with the identical interval of 2021 partially because of the COVID true coverage.

Relating to basic and administrative bills, they got here to RMB167 million which means from RMB170 million in the identical interval in final 12 months. As a proportion of income is decreased to fifteen.7% from 15.9%. However some one-off expense included. We handle to lower basic and administrative bills by varied stringent value management measures. Benefited from all of us, our internet loss narrowed to RMB133 million from RMB270 million in a identical interval final 12 months, and the margin improved by 12.9 proportion factors from detrimental 25.3% to 12.4% proceed to ship double digit enhancements.

On this web page yow will discover a comparability of prices previously three years and the primary 9 months in 2022, which exhibits clearly the trail in the direction of breakeven by midterm. We’ll proceed to implement increased ROI product necessities and part out merchandise, that are lacking our requirements. We may also preserve stringent value self-discipline to chop the expenditures. With all these measures we’re assured about breakeven with regard to our marketing strategy.

I wish to reiterate the important thing focuses of OneConnect in 2022. Third social gathering income development and price self-discipline in the direction of path to profitability. Because of the present circumstances, we’re nonetheless going through stress on each complete and third-party income development. Nonetheless, we do consider that the expansion will get better as soon as the COVID management measures ease and micro state of affairs depart. We are able to additionally see the product integration and optimization will additional enhance our income development and revenue enchancment.

Lastly, we summarize key monetary metrics within the third quarter and the primary 9 month, in addition to changes in gross margin for references. Thanks.

Danielle Gao

Thanks. Operator, we’re prepared for questions. Please open the road.

Query-and-Reply Session

Operator

Thanks. Our first query in the present day comes from Timothy Hsia with Goldman Sachs. Please go forward.

Timothy Hsia

[Foreign Language]

I’ve two questions. The primary one is about trade. Can administration share some colour on how the administration staff seems to be on the IT spending of the monetary trade together with Ping An and third-party clients. And likewise in that larger trade context, how ought to we have a look at the trade IT spending into subsequent 12 months? And the way that can impression our income development?

And secondly, on the abroad enterprise, I see that our abroad enterprise has progressed in numerous enterprise strains and in numerous areas. Can administration share our technique by way of our enlargement on a excessive stage and the way ought to we take into consideration income contribution for subsequent 12 months? Thanks.

Danielle Gao

Thanks, Timothy. Shen Chong take your first query and Michael and Luo Yongtao [ph] take your second query. Shen Chong, please.

Shen Chong Feng

[Foreign Language] So I will reply your query in regards to the improvement of monetary establishment and the trade.

[Foreign Language] The market surroundings and the pandemic have put the enterprise improvement of banks beneath stress. So over the quick time period, some monetary establishments could reduce their IT funding to decrease prices and enhance effectivity.

[Foreign Language] Wanting ahead, over the mid to long term, we do see market calls for from banks. So banks are beneath enterprise stress and want to spice up their working – operational effectivity, primarily from danger administration and operation help.

[Foreign Language] And we see nice digital transformation demand from the next areas.

[Foreign Language] So firstly, banks have calls for in danger administration capabilities from expertise purposes, digital operations, information safety and adoption of residence developed applied sciences.

[Foreign Language] And these are additionally the important thing focuses of our R&D funding in digital banking and Gamma Platform

[Foreign Language] Throughout financial downturn, medium and small-sized banks are extra in want of a head to [ph] digital transformation.

[Foreign Language] And meaning small and the medium sized banks want enterprise plus expertise options.

[Foreign Language] Thanks.

Danielle Gao

[Foreign Language] We are able to hear you. Sure, we are able to hear you.

Tan Bin Ru

Sure, okay. I will take the query on the Southeast Asia or the abroad query. Proper. So I feel Southeast Asia, we have now positioned as a area that has greater than $2 billion development potential and in Southeast – within the subsequent two years with the financial getting into into doubtlessly recession. Really you see Southeast Asia because the one vibrant spot that has the very best GDP development or that area having 5% – greater than 5% GDP development. So we proceed to be very bullish about Southeast Asia development. Immediately, we’re servicing greater than a 100 clients and over 20 international locations. The income ticket measurement may be very constructive as a result of the gross sales is in U.S. {dollars}, and the power to cost the identical resolution in U.S. {dollars} is brings us way more revenue. After which going into Q3, in truth, in Q3 this 12 months we began two collaboration.

One is the PISMO collaboration, in order that we mix what is sweet from the East with what is sweet from the West by way of [indiscernible] banking. So on this collaboration, we began launch in Q3, we’re foreseeing good outcomes coming doubtlessly subsequent 12 months. And in Q3, we additionally launched the ADGM entity. We really had the entity earlier on. It is simply that we did the product and the precise entity launch with the Dry Tech occasion, which is the FinTech occasion in Abu Dhabi final quarter.

So at this second, I feel we’re seeing ok development. Q3 development is superb for us. We double Q3 in comparison with year-on-year. For proportion of income, I keep in mind we began off initially within the earlier 12 months single-digit to the income, after which we had been within the early teenagers. As of this quarter we’re about 20% of exterior income of OneConnect and we proceed to see the expansion – proceed the expansion.

Michael Fei

All proper thanks. Let me speak in regards to the Hong Kong enterprise, I feel the abroad enterprise for OneConnect we have now two elements. One is the Southeast Asia, which Shen simply described, after which the Hong Kong. In Hong Kong, we even have three completely different settlements. One is the expertise companies for monetary establishments in Hong Kong. I feel that is similar to, we get to explain the market, our aggressive ag et cetera. So I can’t repeat that. The opposite two dietary supplements of our enterprise, one is the digital financial institution, the opposite is the fairly reference company enterprise. We’ve two very variable license in Hong Kong. So for POB, I feel, Mr. Shen had already launched in his predominant presentation that we proceed to be probably the greatest performing digital banks among the many eight. I feel the explanation for that was that initially, we have now a really completely different positioning. We’re completely different from the remainder of seven that we devoted to serve SME.

Now, the second benefit is that we had OC at our financial institution. So we had quite a lot of the applied sciences, we had quite a lot of the lendings that we are able to really borrow from OC and [indiscernible] as that increment within the Hong Kong market.

I feel as a subsequent step, we are going to proceed to concentrate on the SMEs. We’ll proceed utilizing main expertise to assist SMEs within the Hong Kong market and progressively to develop to a broader complement on the availability chain across the GBA Space. We’ll associate with increasingly more partnerships to utilizing different information to fill the SMEs. For those who had been within the FinTech Week final week, you’ll have seen that throughout the Hong Kong MA formal launch of CDI, Industrial Information Interchange, POB is definitely one of many first, really we’re the most important contributor of CDI utilization in Hong Kong. So we anticipate to proceed to maneuver on. We proceed to develop very quickly. Our income proceed to enhance our bottom-line.

The second license, helpful license we had is by the reference company. We’re one of many three corporations that introduced the license earlier. We formally acquired the license earlier this week from Hong Kong Banking Affiliation. So we’re beginning to do the preliminary information loading, which suggests we are going to get all the information from the varied banks and we estimate to launch our formal companies within the second half subsequent 12 months. I feel that is additionally very – we had been very optimistic about this one as a result of, I feel, given the increasingly more nearer connection between DBA between Mainland China and Hong Kong for OneConnect, I feel, one of many mainland based mostly corporations that has a license in Hong Kong, we’re uniquely positioned to leverage our sturdy expertise management and our expertise within the mainland and attempt to join the non-public info in Mainland China with Hong Kong. In order that we are able to present extra holistic, I needed to reference AI report back to the banks. And likewise I feel our expertise benefit with RR not simply to offering reviews, however we may also be capable to present danger service, danger of administration companies, [indiscernible] companies, et cetera, to the banks or the monetary corporations utilizing our report. I feel as a complete, we’re very, very optimistic in regards to the development of our enterprise in Hong Kong.

Timothy Hsia

Thanks.

Operator

Our subsequent query comes from Tien [indiscernible] with Orion Securities. Please go forward.

Unidentified Analyst

[Foreign Language] I may also do the interpretation. The primary one is the finance query in regards to the money and what’s our present money place? And second one is after [indiscernible], what is the greatest change over the last one 12 months? Thanks.

Shen Chong Feng

Sure, thanks, Tien, and our CFO, Luo Yongtao will take your first query.

Luo Yongtao

[Foreign Language] I’ll reply your query about our money place. In order of the top of September, we now have round 23.7 billion of money, round 420 million is at digital financial institution PAOB and the remaining is with our different entities.

[Foreign Language]

And we see important enchancment in our money management measures. Firstly, we have now narrowed our losses remarkably, and this has profit our money place

[Foreign Language]

Secondly, we additionally enhance, elevated our efforts within the assortment of account receivables. Consequently, we see decreased date of account receivables and shortened account age.

[Foreign Language]

On the identical time, our different mergers in money administration have all paid off.

[Foreign Language]

So with ample money place and sound enterprise operation, we’re assured that this money will probably be sufficient to maintain us to midterms. That’s after we attain breakeven.

[Foreign Language]

So I’ll reply your second query about what has modified over the previous 12 months.

[Foreign Language]

I’ve three predominant messages. The primary is that our merchandise are extra targeted.

[Foreign Language]

The second is that we have now broadened engagement with our clients.

[Foreign Language]

The third change is that we see lowered the fee and improved effectivity. Consequently, we see important enhancements in our operational effectivity.

[Foreign Language]

Wanting ahead, we stay dedicated to our second stage technique that’s broadening buyer engagement.

[Foreign Language]

And obtain product standardization, gross sales standardization, in addition to supply standardization.

[Foreign Language]

In order that OneConnect will stay dedicated to our goal of enterprise, of attaining enterprise plus expertise.

[Foreign Language]

Thanks.

Operator

These are all of the questions we have now time for in the present day. So I’ll hand again to the administration staff for any concluding remarks.

Danielle Gao

Thanks everybody for becoming a member of this name in the present day. Is there any query, please really feel, be happy to contact our IR staff. We respect your curiosity in following us and looking out ahead to talking with you once more. Thanks.

Operator

Thanks everybody for becoming a member of us in the present day. This concludes our name. It’s possible you’ll now disconnect your strains.

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