Dear friends, good afternoon to all of you. Today, in the afternoon, we are having the annual performance announcement for China Citic 2023. Before we begin the meeting, I would like to ask everyone to please switch your mobile phones to silent mode. Because today, during the experimental department part, we will have simultaneous interpretation in English and Cantonese, so you can bring your earphones. This way, you can listen to different channels, channel one will be in Mandarin to English and channel 3 will be in Cantonese. Today, we will introduce our distinguished guest, Chairman Xiguo Hua.

Mr. Zhang Wenwu, Deputy General Manager and Deputy Chairman. Mr. Zhang Wenwu, Executive Director and Deputy General Manager Mr. Liu Zhengjun. Mr. Wang Guoqi, Executive Director and Deputy General Manager. Mr. Xu Zuo, Deputy General Manager. Mr. Fang Heying, Deputy General Manager. Mr. Zhang Xuejun, General Manager of the Finance Department.

First of all, we would like to thank Mr. Zhang Guojun. After I introduce the annual performance to everyone, we will have time for all management to have an exchange, so there will be a Q&A session for all respected investors and friends in the afternoon. Good afternoon, and welcome to join the Zhongxin Group's 2023 performance release. Now, I will introduce to you the performance of Zhongxin Group in 2023. It will be divided into two parts, including the business part and the development of each sector. The first part will share three aspects of performance with everyone. Firstly, we encountered some unfavorable impacts in customer service. However, we maintained stable growth in performance in 2023. Looking at the macroeconomic situation, the world economy has rebounded in 2023, with China's economic growth rate ranking at 5.2% among the major economies in the world. However, there are still challenges such as insufficient effective demand and overcapacity in some industries. Faced with a complex internal and external environment, the company has been moving forward, overcoming all difficulties, and maintaining steady performance growth.

We achieved a total revenue of 368.08 billion. Compared to the previous year, there was a growth of 2.6 percent. We actively expanded into overseas markets, improving the competitiveness of various business development initiatives. On the other hand, we also narrowed our focus on banking. Despite unfavorable factors such as the decline in the capital market and fluctuations in commodity prices, we continued to see growth in operating income. For example, we achieved a net profit of 105.3 billion, with a net profit attributable to shareholders of 57.6 billion. This represents a decrease of 0.5 and 11 percent respectively compared to the previous year. If we compare with the same period last year when CITIC Securities had a one-time gain of 10.3 billion, we achieved growth of 10 percent and 5.4 percent respectively.

On the second aspect, in terms of finance, we have continued to strengthen and achieved an upgrade in the industry. Mr. Li, in the financial field, we have linked up with the real economy in major strategic and focal areas as well as weak links. We have provided financial support. Here is a shift in the industrial sector. Our comprehensive joint profits have increased, and we have separately increased corporate operating income by 4% and net profit by 5.3%. Among them, in the advanced manufacturing sector, we have accelerated the global layout of core products, with overseas sales volume increasing significantly and attributable net profit increasing by 56% year-on-year. In the advanced materials sector, we have ensured the growth in the human aspect of the industry. Within the year, we successfully acquired Tianjin's steel pipe and blue steel group, with operating income increasing by 10% year-on-year. In addition, in the new consumer sector and new urbanization sector, we fully explore the integration of digital communication, agricultural technology, and cultural creativity into the Belt and Road Initiative. However, due to the impact of new energy, the automobile industry, and the downturn in the real estate industry, operating income has decreased by 3% and 13%, respectively.

However, the profit attributable to the parent company has also increased in the previous fiscal year. We attach great importance to shareholder returns, and both our stock price and dividend rate have seen an increase. Our neutral shares have grown by two percent over the past year, continuing to outperform the Hang Seng Index and the equity market value of listed companies under it. Additionally, they have also increased by ten percent since the beginning of last year.

Among them, CITIC Publishing's metals and bank sectors grew by 40% and 67% respectively, and the company attaches great importance to shareholder returns. We have always followed a market-oriented and sustainable dividend policy, taking into consideration the company's funding needs and financial reevaluation. The total amount of dividends per common share is expected to be 0.515 in 2023. With a dividend rate increase to 20%, we will then introduce each sector of our business in detail. The first sector is comprehensive financial services, where we achieved an income of 26.8 million yuan in 2023.

Increasing.

0.5% increase in income to 268 billion, with a profit of 50.5 billion, representing a growth of 0.5% and 5.1% respectively. We have fully utilized the functions of our platform, deepened our expertise in the field of finance, and strengthened our financial technology. We have also enhanced risk management in key areas, such as China CITIC Bank, which has managed to withstand the pressure of narrowing net interest margins.

The denial of operating performance indicates that we have achieved operating revenue of 206.516 billion US dollars, a decrease of 2.6% year-on-year. Profit is 67 billion, an increase of 7.9% year-on-year, in three aspects of operating income structure. In terms of continuous optimization, we have continued to optimize the cost of debt bonds, narrowing the interest rate spread. It is 3 basis points better than the market. In the implementation of the retail first battle, the revenue contribution of the 50 sales banks has increased by two percentage points to 12-14 percent, the second aspect. In terms of risk resistance, there are terrifying bad debts.

For three consecutive years, we have achieved a double decrease in the bad loan ratio. The non-performing loan balance decreased by 0.09 percentage points to 1.18% last year. The ratio decreased by 0.6 percentage points to 649 billion, leading to a 6.4 percentage point increase in the coverage ratio to 207.5%. The quality of assets in the real economy has improved, with total assets increasing by 5900% to 9 trillion last year, including savings and loan balances. Deposits grew by 5.9% and loans by 6.7%, reaching 54 trillion and 55 trillion respectively. Our green loan strategy and emerging fields have maintained double-digit growth.

Following our analysis of the fluctuations in the capital market, we have achieved a business revenue of 83.7 billion, a decrease of 2.6% compared to last year, and a profit of 19.7 billion, a decrease of 7.5% compared to last year. In terms of underwriting, we have continued to provide consistent and proactive services to support the real economy. Last year, in the domestic stock, financing, and securities underwriting markets, we increased by 2.2% and 0.5% respectively. Continuing to maintain our position as industry leaders, we are committed to creating a world-class investment bank and aiming to be the best in the world.

Continue to enhance core competitiveness and third-party trust of Core Trust. We have accelerated the transformation of our business, achieving operating income of 55 billion and a profit of 2.6 billion, a decrease compared to the previous year. This represents a decrease of 23% and 13%, respectively. We continue to optimize the scale of our trust medical institutions and credit business, reaching 2.5 trillion, a 34% increase from the previous year's base, reaching a historical high. The scale of our innovative business transformation has reached 67%. Our various businesses maintain a leading position in the industry, successfully winning bids from many large institutions. In terms of family trust insurance and charity trust, we are also a leader. In response to the new regulations for the second generation in China Life Insurance, we actively comply with the policy of combined reporting. We have achieved an income of 31.6 billion in delayed insurance premiums, with values and assets reaching 38 billion and 236.3 billion, respectively.

Growth in both areas increased by four percent and 13 percent respectively. The first aspect is the promotion of high-value products, focusing on customer health needs, retirement needs, and wealth management needs. Diversified products have been improved to optimize product structure. New businesses grew by 8.7 percent year-on-year, enhancing capital strength. We further strengthened our partnership with Citic Finance and increased investment in Baoshan City in the United Kingdom by 25 billion. After the increase in capital, the shareholding of both parties remained unchanged, but the constraint ratio of funds was effectively improved, and the solvency was also upgraded. What is the situation in advanced manufacturing?

In 2023, our income realized a profit of 50.4 billion, which decreased by 830 million and 56 percent respectively compared to the previous year. Therefore, the profit margin is very significant in this sector. We have continued to promote the globalization of our industrial layout, with overseas income increasing significantly and market share steadily improving. We have also accelerated the upgrade of core technology and are committed to enhancing the competitiveness of key areas, technology, and products. We have also continuously strengthened these aspects, for example, in the automotive sector, sales of car wheels have increased by 10 percent year-on-year, and sales of police vehicles have increased by 20 percent. Historically, overseas revenue accounts for 50% in three areas, including the completion of the layout of overseas production. The aluminum car wheel project in Mexico has begun operations, and the aluminum casting factory for automotive lightweighting in Lecco is also progressing smoothly. This has helped the company's overseas products in vehicles and construction. We have achieved respectively 12 million units and 946 million tons. We have also enhanced the research and development of products to provide integrated solutions.

Thirdly, the financing of stocks is actively advancing. The listing plan of the Shanghai Stock Exchange will further enhance the strength of capital increase and release the value of enterprises. Another is that under the stable growth of heavy equipment business, China Construction Heavy Industries Co., Ltd. has seen its operating income and profits increase by 08% and 164% respectively compared to last year, and China Construction Supply has achieved a breakthrough in key technologies. In terms of research and development investment, we continue to maintain around 7% for the restart of state-owned assets to provide key components and large-scale equipment such as ball, wing, and heavy-load machineries. This breakthrough, secondly, is that our international strategy has made progress in the mining and building materials machinery products and services industry, reaching a 17% increase in orders in overseas markets in Africa, South America, Central Asia, and Southeast Asia compared to last year, reaching a record high of 30.823 billion for the first time. In terms of advanced materials, we achieved 267.5 billion yuan in 2023, with a 10% increase in profits of 12.7 billion but a 2.1% decrease compared to last year. We continue to focus on overseas development of copper and iron ore resources, and strengthen the supply of key strategic equipment resources. We have also completed the mergers of Tianjin, Steel Pipe, and Blue Steel Group, with a production capacity in Germany exceeding 30 million tons, and have improved our product layout with four pillars in place.

The special steel of CITIC Pacific Special Steel. With a lot of measures taken, the revenue increased by 16 percent to 114 billion yuan. The profit was 5.7 billion, a 19 percent decrease year on year, which is still better than the industry average. Looking at CITIC Pacific Special Steel from a new perspective, the sales volume of steel products increased significantly, reaching a production of 5 million tons, achieving a global scale. Leading in wind power, new energy vehicles, and other industries, our steel production and sales volume increased by 56 percent and 20 percent year on year, with a total sales volume of 18.89 million tons for the year. This represents a 24 percent increase year on year. On the second aspect, in terms of key technologies, we have made breakthroughs and obtained a total of 472 authorized patents at the provincial and ministerial levels, with 29 projects in which we participated in the formulation and release of standards, totaling 21 items. Finally, in terms of the results of digital transformation, the achievements are very significant. In this aspect, Xingte Xingcheng Special Steel successfully obtained the world's first world-class lighthouse steel plant in Germany.

Following the completion of the acquisition of Australia Mines by CITIC Limited, the total revenue reached 5.4 billion US dollars, a year-on-year increase of 14 percent. In terms of production, there has been a stable increase in productivity. The iron concentrate production has exceeded 20 million tons for five consecutive years, with an increase of over 95 percent, and exports continue to maintain the leading position among suppliers. However, in terms of land resources, there may be a decrease in iron ore production in 2024 due to land restrictions, with an estimated production of 14 million tons. CITIC Metal became one of the first companies to be listed on the main board of the A-share market in April 2023, and has been actively expanding its business in non-ferrous metals. The achieved revenue was approximately 125 billion.

Year-on-year growth of 4.9 percent, profit of 2.1 billion decreased by 7.1 percent year-on-year. The progress of overseas resources and layout is very obvious, for example, breaking production records in the dried fruit category K K. Dealing with the road blockade issues in the community for the old national copper mining project. Our total mining output is 690,000 tons, an increase of 19 percent year-on-year. Ivanhoe Mines also completed a targeted additional issuance to raise $430 million, as the second aspect. In the non-ferrous trade business, the market share remains above 80 percent, expanding and driving the trade revenue of non-ferrous metals with correct trading and electrolytic copper. Year-on-year growth of 15.11 percent, CITIC Taifu Energy benefited from the decrease in development costs and the stake in the new giant Longtang.

Coal sales have achieved a profit of 10.5 billion, an 11% increase year-on-year. In terms of promoting new energy and transformation, the first phase of the kiss project has a capacity of 1 million kilowatts. In wind power projects, we have achieved a distributed photovoltaic capacity reaching 440 billion kilowatts. The installed capacity of new energy has increased by 15.14% compared to previous year. In terms of new consumption, Mr. Sheng Huisee's consumer sector achieved 351.4 billion in 2023, a 3% decrease year-on-year. Profit was 1 billion, an increase of 94%. In terms of 5G users in Macau, the market has also seen growth. In terms of automobiles, we have also opened up overseas markets. In the new consumption sector, China International Telecom achieved a revenue of 10 billion Hong Kong dollars in 2023, a slight decrease of 1.2% year-on-year. Profit was 1.2 billion Hong Kong dollars, an increase of 3.4% year-on-year. In the history of digital Macau, we have made great strides. In the Macau market, 5G users have exceeded 500,000 with a market share of 75%, ranking first in market penetration. The advancement to 100% has officially entered the era of full public internet access. The second is the steady introduction of data center business expansion. We have successfully implemented internet platforms for large projects, and the entry into Hong Kong's advanced data center strengthens cloud services, becoming Hong Kong's first V M where certified management service provider. China Publishing has suffered from a weak book market with revenues of only 1.7 billion and profits of 120 million, a decrease of 4.7% and 7.7% respectively year-on-year.

Specifically, in terms of business, on both fronts, we continue to lead in the publishing of books for the general public, with an increase in market share of 0.22%. In the toy market, we have reached a market share of 3.25%, ranking first in the management psychology self-help and biography category of books. Children's books and natural science have risen to the second spot in the market. We are also actively embracing the wave of technological revolution, integrating artificial intelligence technology into publishing through the launch of the AIGC digital publishing platform. This platform can improve publishing efficiency, optimize precise marketing, continue to reduce costs and increase efficiency, and see a significant increase in new consumer purchases. This comes in light of the shrinking gross profit margin and weakened impact of food consumption in Hong Kong.

We achieved a profit of 1.4 billion out of an income of 40.9 billion, representing a decrease of 4.4% and 74% respectively in the automotive sector. We strengthened cooperation with children in the new energy sector, with sales of new energy vehicles increasing by 36% year-on-year. We also expanded into the markets of Taiwan and Vietnam for commercial vehicles, with Hong Kong and overseas automotive businesses contributing to a profit growth of 15%. In the food sector, we acquired a 21% stake in Hong Kong's largest coffee and tea supplier, establishing a strategic partnership and strengthening our presence in that area. In the agricultural sector, we benefited from increased sales volume and price of rice and corn seeds, turning a profit of 60 million on April 12 compared to a loss. Our leading position in the seed industry has been consolidated by Longping High-Tech and its development has significantly increased the market share of hybrid rice and corn seeds by 3% and 2.6% respectively. Longping High-Tech's operating performance has improved significantly, achieving double-digit growth in operating income year-on-year and turning losses into profits due to the pressure of abnormal weather conditions and the decline in corn prices.

In terms of the fourth-level upgrade in the area of new urbanization, our new urbanization sector achieved an income of 234 billion in 2023, a decrease of 13% year-on-year, with a profit of 22 billion, an increase of 17% year-on-year. Overall, it is quite comprehensive and good. We have carefully planned for reserves to achieve the solid quality of assets, excluding the impact of reserve provisions, achieving an operating profit of 67 billion, a decrease of 12% year-on-year. In terms of real estate development, it has withstood the pressure of the real estate downturn. It achieved an income of 104 billion, a decrease of four points, and an operating profit of 55 billion. It remained unchanged year-on-year. Overall, the projects are relatively good, such as Lin CBD, Guangzhou Bin Division, these projects all have a good delivery model, and projects such as Wuhan Binjiang Financial City are also among the top rankings. In terms of coordinated risk, we are continuously advancing in Shanghai Azure Shenzhen Center, understanding the assets introduced in five risk projects, including the occupancy rate of sales such as Hongshu Bay Project reaching 85%, engineering construction, and urban operation. Influenced by external operating environment, our income decreased by 13% year-on-year to 34.5 billion, and operating profit decreased by 45% year-on-year to 11 billion yuan. We are making every effort to promote market development, seize various opportunities in the Belt and Road market, and integrate into the national development strategy, achieving a contract amount of 21.3 billion under the severe challenges faced by the industry. We have also completed highlight projects such as the opening of the Dongxi High-speed Railway and the Linqing High-speed Railway, and the completion of Asia's largest semi-underground Futian Water Purification Plant smoothly.

Reverend, the first domestically developed Ningbo ground sinking system is also in operation. Thank you all for listening. Okay, we will now begin the Q and A session. If there are any questions, please investors, state your name and first name, thank you management. I am from Huali Securities. The first question I would like to ask Chairman Xiguo Hua is about the company maintaining stable growth in operating performance under difficult conditions last year. We also see some uncertainties in the company's future. So, I would like to ask for Chairman's opinion on this.

So, regarding your thoughts and arrangements for future development, and the second aspect is related to team building, we have also seen the arrival of Zhang Zong from Tai Hang and several deputy prime ministers. This is related to a personnel change. So I would like to ask, how do you view this personnel arrangement and your expectations for future economic development? Do you have any concerns about the construction of the personnel team and what considerations do you have for future aspects? Thank you for your question. In December of last year, I took over as Chairman of Zhongxin. I feel that this is a great responsibility in the national assembly, so thank you to everyone for their support and concern for Zhongxin Group and myself.

We hope everyone will continue to care about and support the reform and development of CITIC. In the past few years, CITIC has steadfastly deepened reform and development in an orderly manner, implemented the 553 strategy, and achieved very good results. With a bright report card, we will promote high-quality development of CITIC in the next phase, accelerate the creation of a world-class enterprise, lay a stable foundation, expand opportunities for progress, and improve the system. In 2023, CITIC Group will enter the top eight of the Fortune Global 500 for the first time, achieving early development of 108 billion. The three goals in the target are: 1 trillion in assets, ranking in the top of the Fortune Global 500, and a net worth of 100 billion.

The interest rate is.

The Ministry of Finance's assessment. We have also received excellent evaluations for two consecutive years. In recent years, looking back at our best achievements, in the history of Zhongxin, we feel that Zhongxin is leading in reform and innovation. Starting from development, we will continue to carry forward the fine tradition of Zhongxin, adhere to reform, innovate and explore actively, seek new growth points suitable for Zhongxin, and promote progress. We also adhere to the blueprint drawn on the strategic foundation of 553 in the previous stage. Earlier this year, Zhongxin proposed a comprehensive reform and development plan for the future period, namely 1351: three days on the 3rd and five breakthroughs, focusing on three days. We will deepen the implementation of the 553 strategy, aim to build a world-class enterprise, focus on enhancing core functions, improving core competitiveness, adjusting the development direction and focus of the five major sectors, further clarify the main responsibilities of the five platforms, improve the level of professional experience, deepen the integration of operations, increase the intensity of mergers, strengthen internal and external communication, innovate business and service models, fully leverage the advantages of comprehensive management, actively expand forward-looking strategic emerging creativity, and accelerate the divestment of inefficient and ineffective assets. Through three days of promotion, we will promote the optimization and strengthening of finance, achieve transformation and enhancement, and effectively resolve risks.

In the financial aspect, we will continue to improve the quality of comprehensive financial services, focus on the five major aspects of finance, and thoroughly explore the unique paths of financial development in China. China CITIC Bank will fully implement five leading strategies, and two securities companies will accelerate the construction of world-class investment banking. In the industrial sector, we will closely follow the new round of technological revolution and industrial transformation, promote various sectors to reach new heights, break into new fields, and accelerate the cultivation of the second growth curve. Perhaps everyone also noticed last month, when we launched a bold integrated automotive solution in Changchun, aiming to break into the industry with a comprehensive approach, and provide a lifetime solution for the automotive industry. This is also a beneficial attempt for CITIC to create a second growth curve. In terms of risk prevention and control, we will...

We are deepening the construction of a comprehensive risk management system, with binding risks, early detection and correction mechanisms, accelerating the digital transformation of risk management, strengthening the accountability of risk responsibilities, pursuing lifelong accountability in accordance with laws and regulations, enhancing the quality of coordinated risk, establishing a coordinated risk accounting and incentive mechanism, and talent exchange mechanism, achieving five breakthroughs in restructuring. We will achieve new breakthroughs in strengthening the construction of the organizational system, improving incentive mechanisms, deepening technological innovation, and coordinating overseas development. We are also continuously promoting the construction of a strong headquarters, effectively utilizing the strategic leadership and resources of the headquarters for functions such as risk control, and everyone can expect us to gradually introduce a series of major reform measures to focus on differentiation. We will incentivize specialized operations of subsidiary companies, develop differentiated operations, focus on the construction of cadres and talents, address shortcomings in construction, optimize the selection and training of the entire chain of talents, and foster the emergence of practical talents, outstanding performers, and promising talents. In the improvement of incentive mechanisms, we will also improve the evaluation direction of performance based on the comparison with oneself, improvement in comparison with other sectors, comparison of comprehensive contributions with the industry, and comparison with leading levels, implementing the principle of increasing efficiency and salary, and firmly linking the total salary with the contribution of performance.

In deepening technological innovation, we also make full use of the coordinating role of the Group's Scientific and Technological Innovation Committee, the Science and Technology Association, the Digital Committee, etc., to promote industrial innovation with technological innovation, cultivate new models and new business formats through technology, and achieve new breakthroughs. Build comprehensive advantages in technology finance and the industrial three-way cycle. In coordinating overseas development, we also adhere to a higher level, go out with greater strength, and introduce innovative models of cooperation with foreign partners. Deepen cooperation and innovation with overseas excellent partners, trade models, and exhibition trade varieties.

This year marks the 45th anniversary of the founding of CITIC Group. We will firmly implement the spirit of the Central Financial Work Conference and the Central Economic Work Conference of the 19th National Congress of the Communist Party of China. We will strive to achieve the dual goals of striving for stability in both operating income and net profit growth. We must strive to outperform the market, maintain a reasonable level of return on equity (ROE), continue to increase investment in science and technology, optimize profit margins, control non-performing loan rates better than industry peers, and manage asset-liability ratios.

We will maintain the stable upward trend of the Chinese economy and focus on long-term development. CITIC Group will continue to develop in a healthy and high-quality manner, creating greater value for shareholders and investors. This is the answer to your question about personnel changes and team building. We appreciate everyone's attention to CITIC. We recently welcomed two new senior executives, Mr. Zhang Wenwu and Ms. Zeng Qi, which reflects the high level of concern from the central government and State Council for the development of CITIC Group and the importance they place on leadership team building.

Mr. Zhang Wenwu will be present at today's performance briefing to answer questions. Unfortunately, Ms. Zeng Qi was unable to attend due to prior commitments. As we all know, comprehensive finance is the cornerstone of CITIC, accounting for about 40% of the company's revenue and approximately 80% of its profits.

Mr. Zhang Wenwu has a solid professional background in financial meetings, rich management experience, and Ms. Zeng Qi. In the field of finance, she has a solid theoretical foundation and a keen market sense. She has also served in the Bank of China for a long time as an excellent management elite, with very rich financial management experience. CITIC Group. So far, she has been a member of a big family from all walks of life, and is also a member of a big family doing business. It is a good platform. On behalf of the board of directors and the vast number of cadres and employees of CITIC, I welcome everyone to join. I hope everyone can contribute to the development of CITIC, and hope that they will bring their excellent management experience to CITIC, raising the level of operational management to a new level. Raised one.

The new height.

People are the foundation of a company's success and the cornerstone of the company's innovative development. CITIC has always attached great importance to the construction of cadres and talent teams, as well as the development of employees. In order to plan talent for the future from a long-term perspective, we have introduced the overall thinking of reform and development in the next stage of the group, which includes five breakthroughs, two of which are related to the construction of talent and talent teams. Facing new challenges and opportunities in the new era, we will deepen the strategic improvement of talents to strengthen the management mechanism of cadres, enhance the exchange of cadres, promote the construction of an international talent team, carry out training for outstanding young cadres, and broaden the talent development reservoir by improving the basic skills of all cadres. This will allow practitioners, top talents, and promising individuals to excel and ensure the continuity of CITIC's business and the succession of talents.

Recently, we have also opened up selections within the entire group to introduce a batch of functional departments at the headquarters, as well as leadership positions within our company, and successfully implemented a competitive appointment process. This has broken the traditional concept of seniority-based promotion and blaming others. We have boldly selected and appointed excellent young cadres born in the 80s.

In terms of incentive mechanisms, we have on one hand improved the assessment of the operational performance of subsidiary companies, deepened the differentiated assessment of the 112171 period, improved the reward and punishment mechanism, and maintained the scientific and fair nature of the assessment. We focus on the core business to strive for efficiency, continuously streamline and optimize the index system of assessment. We aim to inspire our company and its cadres and employees to be proactive and achieve genuine results. On the other hand, we have also improved the compensation management mechanism, continued to implement the principle of increasing compensation for better performance, and further strengthened the link between managers' compensation and performance contribution. We strive to ensure that limited resources achieve maximum effectiveness. Recently, everyone has also noted the announcement of the company's implementation of the voluntary purchase of stocks by intermediate and senior employees. This is also one of our explorations in incentive mechanisms. We always adhere to the importance of team building and talent development in the face of the uncertainties of the external environment and market conditions. Safeguarding the foundation for long-term and sustainable development, providing a strong organizational guarantee for the creation of a world-class enterprise and a technology-oriented excellent enterprise group. Thank you for your attention to talent protection and incentive mechanism guarantee.

Curious about the next question. Ah, thank you for giving me a nomination opportunity, my name is Chai. Hey, my question is related to a recent hot topic. It is about the market value or capital market released by the central bank. We know that there have been many voluntary stock purchase announcements recently. This is a very good thing. I would like to ask, what measures does the beautiful branch have in terms of assessment, in terms of assessment measures?

Okay thank you, Citibank.

City Bank's friend, regarding the issue of dividends you raised. So, I think, from two aspects to answer. On the first aspect, CITIC Securities has always maintained a stable advantage, with a dividend rate increasing from 2% in 22 to 26% in 23, indicating the company's sincerity in returning to shareholders through practical actions. In this aspect, we are now deeply optimizing policies, because recently the SASAC, CSRC and many other departments have emphasized market value management and strengthened investor returns. CITIC Securities has also been focusing on and researching this area, so we will comprehensively consider multiple factors, including the capital needs of long-term development and shareholder investment returns, so we are reforming market management and have formulated a scientific and reasonable dividend measure. So to maintain our continuous stability, the market management issue you raised earlier is very important.

Ah, in our group, this is a very important job in terms of management work. It is something that needs to be given priority, so I will use key words with a bit of black-heartedness to answer, you are the first one. Starting from 2021, we have begun implementing a plan for reform and incubation, focusing on the three categories of market value, organizational value, and goals. We have proposed many reform measures that can ensure policies are steadily implemented. We have also established a Municipal Administration Committee with the mayor as the group leader to strengthen the centralized and coordinated top-level design.

Keep pushing.

Coming soon. Everyone is paying attention to the management team of CITIC, as well as the team of city management. This exchange. It is a more and more comprehensive start of quasi-litigation. Going to places like Singapore to conduct inspections, going to overseas markets for inspections, we also hear the voice from the front line, which is a good inspiration for our high school, and it will also have a mirror meaning for our management. In the past two years, the group has also conducted a simulation exam for the listing of CITIC Bank and CITIC Securities in the city management. So, this simulation exam will give us an exploration. And it will also give us pressure, but we will transform pressure into motivation in the near future.

The stock price of China Citic Bank has been stable with an upward trend, which is well understood by everyone. In recent years, among the stock banks, our stock price has remained stable. As for our assets, externally, China Citic Bank has institutional advantages, market advantages, competitive advantages, and talent advantages. We will also see the continuous release of advantages along with the macro combination. Therefore, in terms of our starting point, it is relatively stable. The internal momentum also fully supports us in making reforms. The human nature and potential for development in China are also significant factors.

Fasten your seatbelt. Recently, on March 22nd, the supportive policies for real estate have been issued, which is a positive signal. So in the proactive field, we need to pay attention to local risks. In terms of risk differentiation in local governance, we will capture the best signals, so we have made progress in preventing risks in local bonds. Our communication with analysts is focused on how to differentiate local risks in the region, which is what we are concerned about. We have also held the line and prevented the outbreak of major risks. Secondly, in terms of real estate, I can say that this is a warm wind. I explain what is meant by a warm wind. I don't want to elaborate too much, but this provides a good foundation for the next stage of development for China Everbright.

The conditions are, on the other hand, we want to talk about the three major values supported by Huai Zhongxin's trust. Then, Huai Zhongxin's business performance is diversified, and He Wenjie's dividend is relatively high, so the current dividend yield is about 8.3% to 8.4%. So we have avoided a more conservative approach, and also from a fundamental perspective. In terms of value creation capabilities, it has also provided support. Huai Zhongxin's performance is very good, and fundamentally, it is the basis for our market value management. Under a stable performance base, our performance has seen continuous growth over the past three years, especially in the case of a 13% drop in the Hang Seng Index last year. Our stable growth in this situation is very rare. The third point is space, and now our allocation ratio is 0.3 I think. Similar to the company's value, currently we are also summarizing and preparing for the direction of market reform. So we are conducting market value management reform.

The plan of 2.0 clearly outlines the expected dividend, KPI for market value assessment, and the introduction of incremental capital. We need to make new breakthroughs in these aspects. Chairman also mentioned that senior management personnel are involved in this announcement. Jackie Chan voluntarily participates in the shareholding, which is also beneficial for aligning company interests and management interests, further promoting Zhongxin's development to a high-quality level. Finally, we believe that Zhongxin will adhere to the 135 development strategy to drive Zhongxin's value and shareholder returns. Value, mutual improvement, I believe in the capital market. There are inherent laws, and the current undervaluation of Zhongxin's stock price is expected to continue to improve. Thank you for listening.

Okay, next question. Thank you for the management's contribution. Regarding my nomination, I am from Huachuang Securities, and as an analyst, I have noticed that both CEO Zhang Wenwu and manager also appeared at today's performance release conference. This happened at the opening of last year's central conference. This will serve as an important guideline for our development in the coming years. So, in other words, it is crucial.

In terms of the five articles, it involves aspects related to Sinolink Group. It explores the future layout of Sinolink's operation in terms of how it utilizes risk management and capital management. This will support Sinolink in achieving better operating performance.

Okay, thank you for your question everyone. Hello, I am Zhang Wenwu. Thank you for the introduction, Chairman Qihua Gao. I have been working at Industrial and Commercial Bank for many years, and it is also a Hong Kong-listed company. Before this, I often came to Hong Kong to attend roadshows or performance conferences. I would like to sincerely thank the friends in the investment community for their care and support for the comprehensive advantages and brand influence of CITIC, which are highly appreciated by the market and customers. I feel a great sense of responsibility and honor to work at CITIC this time, and I will work together with everyone to promote the development of CITIC Group and CITIC Corporation in a better way.

The first question. As the first batch of foreign financial holding companies in China, CITIC Group will actively develop Chinese characteristics in finance. The holding company will earnestly implement the central government's requirements, effectively aggregate resources and advantages, and focus on the five major areas of finance. We will strive to support the real economy and create greater value for shareholders.

In terms of financial technology, I think there are two aspects to consider. Firstly, in terms of equity, the advantages of the equity of CITIC are very obvious. We have established the CITIC Equity Alliance, which includes up to twenty-something equity investment institutions under CITIC, to promote private sharing, joint marketing, daily risk monitoring, and value-based prevention. After half a year of creation, the newly established fund exceeded 20 billion, and the total scale of equity investment has exceeded 3.3 trillion. On the other hand, we have increased our support for financing of technology companies, promoting the linkage between investment and lending. The current balance of loans in the field of technology finance has exceeded 400 billion, an increase of 21% from the previous year. In terms of financing in the field of technology innovation, the number of companies served has increased.

In terms of the first and the second aspects of the market, in the field of green finance, the subsidiary of Citic is the leader. We have established a special service system for carbon oil and carbon trading, carbon management, and consulting, which is a comprehensive service. In the field of green finance, the subsidiary of Citic has jointly established this special service system. We have formed a financing fund, financial insurance, leasing consultation, and a comprehensive green finance business report. Citic Bank strongly supports the development of clean energy, energy saving, carbon reduction, and environmental protection industries. We have focused on key clients in areas such as photovoltaic, wind power, new energy vehicles, power batteries, and energy storage. This series of green financial services, represented by green credit and green securities, has seen the green credit balance reach 459 billion RMB in 2023, an increase of 37% year-on-year. Citic Securities and Citic Construction Investment have expanded the market size for underwriting green securities.

In terms of inclusive finance, China Citic Bank has improved the mechanism of long-term inclusive finance. In 2023, the balance of inclusive loans exceeded 540 billion, an increase of 22% compared to before, and innovations have been made in revitalizing rural areas through online platforms. They have established a standardized product system covering more than twenty types of products. By enhancing financing possibilities, for example, in supply chain finance, they have extended credit to upstream and downstream businesses, developing orders. Products such as Hejincai, Hetu, and Shangpiao effectively cover small and micro enterprises and can complete loan applications in just a few minutes. With technology as support, China Citic Bank has provided 1.5 trillion yuan in supply chain financing loans to 38,000 enterprises throughout the year, an increase of 3.4 times in the number of enterprises and financing amount compared to 2019. Among them, 26,000 small and micro enterprises, 30,000 private enterprises, and others have benefited from inclusive finance in the manufacturing sector. Additionally, Baixin Bank has served 165,300 inclusive small and micro enterprise customers, with loan sizes increasing by 59% at the beginning of last year.

In terms of pension finance, we have developed a successful pension brand. We adhere to the law of supporting overall planning. We have improved social security pensions, as well as the scale of individual pensions and professional investment advisory capabilities. The pension management scale exceeds 1 trillion yuan, serving over 3 million customers with pension accounts, supporting the success of the pension industry, and increasing support for comprehensive funding structures.

We have built an ecosystem for elderly care services, making the realization of a good life for the elderly a reality. In the field of digital finance, we have been weak in building a decaying system for crystal technology, providing customized, intelligent financial service infrastructure for customers in areas such as artificial intelligence large-scale model wealth management, financial information sharing, and call centers, etc. We have established a reusable basic platform for data sharing and formulated data standards to promote the integration of underlying data. We are ready for asset daily tables and sharing in the exploration of digital and artificial intelligence deep integration on the management application side. Scene A has already reached more than 1,000 interconnected 12 subsidiaries on the A.P.P and launched the Citi Wealth Plaza with registered users reaching 12.5 million. In addition, 132 scenes have been the first to provide customers with access to a panoramic financial management service with full speed access. Meanwhile, China CITIC Bank has accumulated the online presence of 1,314 large and medium-sized enterprises. The People's Bank of China has announced the financial technology strategic technology award for 2022.

Citic has ten projects that have won awards such as the 123 awards in the past three years, with a total of 27 projects approved. Compared to its peers, Citic has a leading position, and in the future, it will rely on its strengths to improve the implementation plan of the five major articles, effectively play a role in serving the real economy and maintaining financial stability.

Regarding the first and second questions, within two years of its establishment, Citic Gold Control has played a role in enabling platforms, continuously strengthened risk control, as well as fine-tuned capital management, forming a virtuous cycle of mutual promotion and complementation between risk management and capital management.

In terms of risk management, we have implemented collaborative management to achieve joint prevention and control of risks, established a governance layer, and a risk management committee of the management structure through consultation with subsidiaries and experts, and formulated a clear division of labor, and an efficient operation of the risk management system.

We have implemented and disclosed risk management in key areas, achieving overall risk convergence. We have conducted comprehensive supervision of the investment and financing businesses of financial subsidiaries, strengthened unified credit and exposure management for large risks, and increased the risk management efforts in key areas such as real estate government financing platforms. Effectively preventing concentration risks, optimizing risk warning mechanisms, and playing a leading role in early identification, warning, exposure, and disposal of risks based on risk preferences. We adhere to a problem-oriented and results-oriented supervision, plug the management gaps in subsidiary companies, and enhance risk management capabilities. We have led the coordinated disposal of major risk projects. Through the development model of integrating industries and finance, we effectively promote the process of risk projectization, achieve win-win cooperation, and promote the construction of risk systems for parent and subsidiary companies. By integrating cross-industry data, we have achieved unified attempts to support comprehensive supervision of risks and promote subsidiary management. We have promoted the continuous digitization and enhancement of capabilities.

In 2023, the main risk indicators continued to improve non-performing assets and non-performing loan ratios, achieving a balance in the steel, real estate, and local government financing platforms. The risk of customer concentration suddenly reduced significantly. Throughout the year, we achieved a total of 34.39 billion through the cooperative risk handling projects, reduced non-performing assets by 20.8 billion, lowered the non-performing loan ratio by 0.29%, and achieved nearly 10 billion in cash recovery. In terms of capital management, we have established a cross-industry capital management platform and focused on leveraging monitoring platforms, optimizing top-level designs, strengthening cross-industry coordination, and enhancing control of key processes. Through forward-looking capital planning and improving capital assessment systems, we have strengthened the mechanism for capital replenishment and implemented measures to build a capital management information system. This has provided a foundation for improving the efficiency of financial subsidiaries in terms of capital, and through supervisory policies, guided financial subsidiaries to refine their plans, strengthen the supervision mechanism, and promote sound implementation. By continuously striving, we have passed on the concept of capital saving to major business operations, built a collaborative platform to coordinate and integrate resources, addressed key challenges in the capital construction process, and promoted targeted adjustments in the business structure of the financial subsidiaries and reduced the consumption of high capital assets.

Improving the cost of capital has enabled us to achieve a capital base of 213 billion in 2023. This increase in capital adequacy level also contributes to further supporting the real economy through finance. Thank you very much for your attention to the next question. Thank you very much for giving me this opportunity. I am an analyst from CITIC Securities. Congratulations to the company for achieving such outstanding results in 2023. With this valuable opportunity, I have two questions. Firstly, in the past year, the real estate market in China has been continuously sluggish and faces ongoing downward risks. In this situation, I would like to ask about the operating situation of our real estate business and the financial risks in the real estate sector. Secondly, in the previous year, it was emphasized at the Central Economic Work Conference to develop productive forces. This has become a hot topic for social capital as well. I would like to ask the leadership to introduce the achievements and layout of CITIC in developing new productive forces. Thank you for your question.

The real estate industry is facing significant pressure in recent years, with sales of commercial properties continuing to be sluggish. However, with the introduction of new adjustment policies and incentive policies in the real estate sector, we have started to see some positive results. We have observed changes in real estate policies, with the central government rolling out a series of policies to stabilize the real estate market, as well as promoting the use of tools such as bond financing and equity financing by financial institutions to support the industry. As a result, we have seen over three hundred cities introducing support policies for the real estate sector. Additionally, the central government has introduced policies for the construction of three new areas, providing us with significant development opportunities. In 2023, real estate sales are expected to reach 11.66 trillion yuan, continuing the trend of decline but at a decreasing rate. Sales of commercial and second-hand properties are expected to reach 14 trillion yuan, with a year-on-year growth of 5.8% at the end of last year. With continuous introduction and improvement of real estate policies, the market has shown a trend of stability after a period of highs and lows. Since March of this year, real estate transactions in key first- and second-tier cities have been more active. From a long-term perspective, there is ample room for adjustment at the national level, and the real estate sector is crucial to the national economy and undergoing a phase of development and transformation.

So the entire industry has hope of slowly stabilizing, so I want to share three aspects with everyone. Among them, the real estate developed by China Citic itself is relatively stable, called Citic Taifu. In addition, Citic Taifu is long-term very stable. We will continue to optimize investment layout, seize market opportunities, strengthen brand building, and complete high-quality auxiliary projects and annual sales. At the same time, in terms of corporate performance, it may not be very good, but our sales are very excellent. In 2023, our net profit reached 2.9 billion. Despite the overall downturn in the real estate industry, we still maintain the development of Citic's Citic City. In this regard, the focus of our work is conducive to changes, we rely on our project management capabilities, as well as the capabilities of the Group's production, to push excess inventory, accelerate capital recycling, optimize our debt structure. Once again, we want to talk to everyone about Citic's real estate, financial risk, which is controllable. The risk can be gradually reduced, as of the end of last year, the balance of Citic's financial subsidiary real estate business has decreased by 25.1 billion from the beginning of last year, which is a decrease of 2.25 percent in the industry. The second point is the continuous optimization of the structure of existing real estate clients to reduce the pressure on the risks of enterprise risk.

In terms of results, they are quite significant. In terms of overall risk exposure, it is relatively detailed. Secondly, China Construction has its own unique core capabilities in preventing and resolving risks, supporting the stable and healthy development of the real estate market, and can leverage its professional advantages in real estate development accumulated over many years. By aggregating financial assets of China Construction, China Trust has unique capabilities in managing assets in a countercyclical manner. Through the injection of incremental capital, we have strengthened our risk mitigation measures, implemented risk isolation methods, and were able to transform risk assets to operational risk assets. Last year, we exceeded 20 cumulative deliveries of renovated affordable housing units, totaling over 50,000 units. We have promoted several landmark projects, resumed production effectively, lowered our non-performing loan ratio, realized our own profits, and helped local governments secure social stability and people's livelihoods. We have also contributed to China Construction's efforts in preventing financial risks. Moving forward, we will continue to adhere to policy guidance. In accordance with the chairman's requirements, we will ensure the orderly operation of China Construction, maintain stable and prudent management, further strengthen risk control in our financial real estate companies, and ensure that risks are manageable.

The third department actively utilizes production. The leaves of the ere plant assimilate to decompose the risk stability. We will also implement a coordination mechanism in the real estate market, focusing on three projects to improve housing demand. We will leverage the advantages and core capabilities of Zhongxin to form a new development model in the real estate sector, promoting stable development in the real estate market. Thank you for building our strength together. In terms of new equity investments, I will share four key words with you about the aspects of production around us. The first one is very important.

Last year, the government has proposed that we must continuously improve the system of technological innovation. We believe that under the requirements of this transformation, we must adhere to the high-quality development of the company through technological innovation, which is highly valued by management. In terms of the first and second groups, there are plans and goals. CITIC Group has planned to build a domestically leading international first-class technology superior enterprise, so there are advantages in both high places and strengths.

In this area, we need to strive to build the ability to become a technology champion, which can achieve green and low-carbon development. We also aim to become the engine of emerging technology development. This year, the company has made advancements in 135 areas, focusing on new sectors, exploring new opportunities, and setting higher and more clear requirements. These efforts to accelerate the development of productive forces are highly aligned. In the third aspect, we have practical experience and achievements. In terms of technology investment, the results have been very significant.

First of all, I would like to talk about some numbers. Last year, the growth rate of high-tech investment was 26%, and the intensity of technology investment increased by 0.34% compared to 2022, reaching 3.34%. It may seem like a small increase of 0.62%, but it is a very considerate improvement. In terms of the company, 34 key technologies have made advancements, including artificial intelligence and a series of innovative technologies, totaling over 1,000. Currently, we have over 9,000 approved technologies, with a year-on-year growth of 21.65%. In the field of green development, we have launched groundbreaking research initiatives.

In terms of pollution, it has been greatly reduced. We have reduced it a lot, and we can also give a few examples to everyone, such as the high-end industrialization of industries. We have separately produced global aluminum wheels and special supply areas. These two grade factories, the lighthouse factory, are the first global industry producers.

In terms of self-service automation, it also represents the highest level in the industry. On February 27th, an integrated solution conference was held in Changchun, Zhongxin Daguo. 7,000 tons of self-service machines were created, reaching an international leading level. The release of these new projects also demonstrates our ability to promote the development of intelligent manufacturing in the industry in terms of strategic new production development. As for the company, further play to our comprehensive strength, there are many new strategic investment platforms, and we also adhere to our commitment to invest in a large number of excellent projects. Continuously improve the management in digital construction, cloud and our large model applications, promote our company to be cloud-oriented, and also increase our coverage. Everyone is also paying attention to the current very popular AI large model ITC attitude of our company.

This is.

Taking the initiative to actively embrace forward-looking and comprehensive development of application security technologies, actively participating instead of being a bystander here. We have also established a dedicated working group and joined the intelligent melody to promote comprehensive advancement, leveraging the company's advantage of diversified industries. The rich advantages of industrial scenes have also become an exploration of City A's AI artificial intelligence platform, nourishing AI big models and applying them in scenarios such as intelligent wealth management, new town industrial vision creation, and more. We will continue to create value for this, with the fourth group of keywords being future-oriented and valuable. In the future, the company will further leverage the advantages of Zhongxin.

To develop new productivity rules and make a contribution to Zhongxin, we sincerely invite analysts and investors to pay more attention to Zhongxin and support Zhongxin more. We support the development of new productivity rules and the realization of a batch of successful reapplications of Zhongxin. We have not yet reflected these advantages in the current financial statements and traditional trade. We are willing to explore and cooperate with everyone here. Thank you. Next, please. Management, here we come, I consult. Thank you for giving me this opportunity, and thank you for the second outstanding development under challenging circumstances last year. I have two questions. The first is about the bank. Last year, our market performance was very outstanding. What do you think are the main reasons for this, senior management? The second is about securities. We have noticed that the regulatory authorities have recently put forward a series of requirements related to the control of issuance and listing. What measures do we have to promote Zhongxin to build a first-class institution?

Thank you for building the investment bank.

Your question about the banking industry in recent years. It faces the competition and also the trend of declining profits and increasing pressure. Therefore, as an entire industry in the banking sector, it is certainly challenging for us. Our performance in this business background cannot be seen as strong. Therefore, we have also received recognition from the capital market, demonstrating our good control capability. I also do not want to waste time, talking about too many numbers, so we...

The reason why I can achieve such good performance is due to various factors. After careful analysis, I believe the reason comes from various aspects, primarily in terms of business performance. In terms of stock holdings, the ranking has been continuously rising. The development of China CITIC Bank has been on an upward trend. The changes in operating income, asset quality, liabilities, and costs have all been performing well within the industry, so this is a very good support.

There is still one of us.

Your strategy is a compound annual growth rate that is very good, nine percentage points higher than industry peers. Therefore, we are much better positioned than in the past. Our non-performing loans have also decreased over the past two years, with steady internal improvements for two consecutive years. With our asset scale and market share rising to the third place, the evaluation by rating agencies such as Moody's has been positive. Moody's upgraded our long-term issuer rating to BBB with a stable outlook, the first time in nearly 12 years. This demonstrates our commitment to value-driven banking and consistently improving returns for investors. One thing to note is that increasing profitability does not necessarily mean increasing revenue. Therefore, I would like to emphasize that this growth is logical and verifiable because we have dedicated ourselves to the paths of managing costs and seeking information asymmetry.

From 2020 to 2022, China Citic Bank's total cash dividend amounts were 12.429 billion, 14.773 billion, and 16.1 billion, respectively. With the steady increase in net profit, the current dividend yield for A shares is 5 to 6 percent, while for H shares it is 8 to 10 percent. Therefore, we have been adhering to a very good strategy. In 2019, we proposed a strong action plan and clarified the three core driving forces of wealth management, asset management, and comprehensive financing. In 2023, we also proposed a bank-oriented approach. On the liability side, we have built on China Citic's strengths. On the asset side, we continue to focus on quantity, price, and quality balance. Our understanding of revenue risk lagging has also strengthened. Therefore, we will neither focus on quantity to make up for quality nor focus solely on maintaining price without considering quantity.

"So I."

Sure, this makes sense logistically. So, we have also unleashed our trading capabilities, including yours.

Go to Sin Chew.

Developing the ability to pay can help us compare ourselves with our industry peers, indicating that we are at a good level. Therefore, looking at the key indicators of the quality of our assets, we have reached the highest level in nearly a decade, and the historical burden has basically been released. In terms of provisions, by the end of 2023, the non-performing loan ratio of CITIC Bank is 1.18%, compared to the end of 2020, we have decreased by 46 percentage points, and the accumulated coverage ratio has increased by 36 percentage points. These key indicators of asset quality are the best in nearly a decade. As for operating performance, we have also adhered to the concept of a value bank, aiming to improve returns.

In the past year, net profit increased by 7.9%. The cash balance last year was 161.1 billion, increasing to 174.3 billion, which is the highest level since the listing of China Citic Bank. The dividend payout ratio is at this level. Therefore, from 2020 to 2022, the total cash dividends of China Citic Bank are 124.29, 147.78, and 161.1 billion, respectively, following the steady growth of net profit. The current dividend yield of A shares is 5 to 6%, and H shares are 8 to 10%, in the context of the increasingly scarce high-quality assets. We have relatively good investment value.

The third aspect. The results of building core capabilities more balanced in the business structure are very obvious. There is a saying that I have, "If you don't see it, it won't develop." Therefore, there is no wasted development in the system aspect. Let's do better.

maintain

The development is low, so we must have a good institutionalized development. Therefore, we proposed the first strategic approach in retail, which summarized the construction of a stable profit level. Around this, we have formulated strong customer actions to build new growth momentum. We have clearly defined the directions of wealth management, asset management, and comprehensive financing as the core driving forces in terms of light capital transformation. Through continuous breakthroughs, the proportion of brown income has continued to increase, demonstrating our positive development over the past three years and laying the foundation for our future.

In the end, I think all of our historical burdens have basically been resolved. So over the years. In fact, over the years, the daily market reports, including those analysts who question our risks, whether we have more bad loans or not. Whether a lot of risks have a big impact on us. Last year, here, we also talked to everyone about it.

One sentence.

We have already explained the historical retaliation and basic expedition last year. Today, I don't want to repeat it again. I think the market's understanding and awareness of us have improved. Based on the latest situation, I would like to talk about the risks in the real estate sector and how we can prevent them. Looking at our assets on the balance sheet, I believe it will be helpful for everyone to understand the situation of CITIC Group from early 2019 to 2020.

At this key time of exposure of risks in the real estate market, we have reduced our real estate loans by 270 billion. Particularly for many large clients, we have increased our provisions. This lays a foundation for future development, and the proportion of real estate loans in the future will not be very high. So if you compare our annual report, you will understand that the LTV aspect is now a bit lower. However, we have also maintained 51.

porcentaje

This is a real estate related report. In terms of the annual report, the non-performing loan rate decreased by 1.18 percent, a decrease of 46 percentage points. However, cumulatively, it has increased by 36 percentage points, which is the best performance in the past ten years. These are performances in terms of historical burdens, and we also see that the pressure of risks is continuously increasing. Therefore, the level of economic recovery is not as expected for the past three years, and the cumulative effects of the epidemic are clearly reflected. The effects of relief policies and others have not been fully realized yet. Therefore, in the current real estate market, it is facing challenges. Additionally, risks related to the clearing of real estate loans and other aspects are also concerning.

There is also some logic, so the reason why China CITIC Bank can achieve this development cannot be separated from the support of everyone, cannot be separated from the support of the entire industry to us, so in the future, China CITIC will play a diversified asset role. We have advantages in business and diversification, and unique resources and strengths to face challenges, so currently China CITIC has good performance in both A-shares and H-shares, with valuation still at a relatively low level, so there is still room for improvement. We have full confidence in this, of course. Having confidence is useless, so we focus on fundamentals. We will also continue to forge ahead to ensure full recovery by 2024, some people say we should talk less, so we will maintain stable and increasing cash, make every effort to maximize dividend ratio, and share the results of operational development with all shareholders. Actively approach investors and communicate effectively in the capital market. Provide timely feedback on all issues of concern to shareholders, and increase transparency of information.

The openness promotes the steady increase of market value. In terms of securities, the China Securities Regulatory Commission has recently put forward a series of policy documents. This involves strict management and strict prohibition of short selling, prohibition thinking, and at the same time clearly defines the overall requirements for building first-class investment banks and investment institutions. Regarding the latest policies and requirements for strict management supervision, we will resolutely comply with and earnestly implement this mechanism to ensure capabilities. Enhancing service capabilities, supporting more companies in listing and financing, and contributing to market development.

Regarding the construction of a world-class investment bank, I would like to say that China's CITIC Group has the most advantages, foundation, and plan to create a world-class investment bank. After years of effort, CITIC's investment bank has achieved good results and has a leading position. Highlighted by CITIC Securities and CITIC Securities Co., Ltd., both have developed steadily. As part of CITIC, we have the conditions to become one of China's world-class investment banks, including our two securities companies. In 2023, we completed equity and bond financing of 4 trillion, helping 67 companies go public. In recent years, these two securities companies have faced industry and market competition pressures, but their business, balanced income diversity, and stable profitability are quite evident financial indicators. CITIC Securities' revenue has exceeded 60 billion for three consecutive years, with profits stabilized at around 20 billion for three consecutive years, maintaining a leading position in the industry. CITIC Securities and CITIC Securities Co., Ltd. have achieved an ROE of over 8 percent.

For several years in a row, the leading brokerage firms have shown a clear advantage in synergy with the fourth-tier comprehensive advantages of the CITIC Group's integrated business of production and finance, providing rich opportunities and resources for the development of the two brokerage firms, especially in asset management and wealth management after the establishment of CITIC Securities. This has provided a unique and valuable opportunity for the development of the securities business and has met the requirements set by the China Securities Regulatory Commission and the requirements for the construction of world-class investment banks.

However, in terms of development philosophy, functional status, internal control, compliance, and internationalization of talent and cultural construction, there are still gaps in our brokerage firm. Therefore, we will focus on the goal of becoming a world-class leader and comprehensively strengthen our construction efforts, introducing a series of measures in five aspects. Firstly, we will implement the development philosophy of "financial reporting for the benefit of the country, financial benefits for the people," to promote both brokerage firms to strengthen their sense of responsibility and mission, further rectify the development philosophy, and prioritize functional development, correctly handle the relationship between functionality and rationality, and contribute to the construction of a strong financial country. We strive to become an important force promoting the stable development of China's capital market.

To promote a series of entities focusing on high-tech, green, low-carbon small and micro enterprises, it is necessary to improve service capabilities for stronger development. Firstly, as a service provider focusing on financing, we need to fully research and prepare for listing and the industry logic of preparing financing enterprises, strengthen our analysis mechanism, and make the capital market thrive. Secondly, we need to construct a complete financial service system, continuously open up incremental and innovative business opportunities. Actively develop innovative financing products such as REITs for public welfare, and form a diverse financial product and service system to meet the needs of all types of investors and contribute to a better life for the people. As managers of social wealth, we need to focus on these three aspects: technology innovation, industry logic for preparing listed and financing enterprises, and risk prevention and internal management. Leading securities firms should set a benchmark for clear organizational structures and equity structures.

Streamline responsibilities, clarify boundaries, and establish a sound incentive and constraint mechanism for information disclosure. It is reasonable to require a well-balanced effective professional ethics and good governance mechanism for the company. Improve the governance efficiency of the company, the second step is to promote the return to the original business of the two brokerages. Improve internal controls. Implement comprehensive management of risk control and compliance, build the brand of CITIC, the third step is to strengthen communication with all parties, and respond promptly to the concerns of regulatory agencies and investors. Strengthen investor protection, stabilize interests, market stability, the third step is to promote the international layout, we will promote the listing of two brokerages. Seize the opportunity of high-level financial openness and coordinate openness and security to enhance international competitiveness and market influence, steadily increase the proportion of international business, optimize layout, support the two brokerages to thrive in the Hong Kong market. Strengthen the layout in the Asia-Pacific and other regions, steadily expand into the European and American markets, improve the layout of major global financial centers, the second step is to enhance the level of integrated management at home and abroad, improve global management efficiency, fully leverage the advantages of domestic and foreign platforms, enhance cross-border and cross-industry service capabilities and resource allocation capabilities, the third step is to support the two brokerages in their investment and financing management, advisory services in cross-border mergers and acquisitions, and other professional services to help them expand globally.

The fourth series strengthens the construction of talent teams, we will promote the cultivation of high-quality and professional international talent teams in two securities firms under it. We will establish a sound mechanism for personnel selection, employment, and talent incentives. Strengthen internationalization, cultivate high-end talents, compound talents, and leading talents. Introduce and continuously stimulate the vitality of the talent team. The second series strengthens the construction of professional capabilities, enhances the M&A team of the two securities firms. Risk management in restructuring, cross-border investment and financing, and other complex transaction aspects, as well as risk assessment. Financial advisors and sales trading capabilities provide customers with a high-quality customer service experience. The third series enhances the education of industry practitioners. Emphasize social morality, professional ethics, and personal character guidance for employees of the two securities firms, cherish professional reputation, and adhere to their professional ethics. In the fifth aspect, we strengthen the corporate culture of China CITIC Group, which has formed a corporate culture mainly based on the 32-character CITIC style advocated by Mr. Ren Yi Renlu. Next, we will further strengthen the construction of corporate culture.

Promoting and practicing integrity and trustworthiness is more important than seeking profits by the end of the month. Upholding righteousness over personal gain is the foundation of a stable, prudent financial culture. We do not seek quick success or immediate profits, but instead focus on innovation grounded in reality and in accordance with the law. By optimizing China's unique financial culture, with a focus on integrity, we are establishing a new corporate culture system that embodies the characteristics of Zhongxin. This includes enhancing guidance on cultural development for the two securities firms. By internalizing China's financial culture and strengthening the cohesion, centripetal force, and constraint of our culture, we aim to ensure that our investment banking sector can reach world-class status.

The construction of an investment bank is not a one-day effort. But it also cannot do without the efforts of one day and night. The Central Financial Work Conference emphasized the need to give full play to the hub function of the capital market and endow it with significant missions. The development of high-quality securities firms in the United States has brought historical opportunities to China. We aim to establish a world-class investment bank. We will fully support the consolidation of the two securities firms, expand their leading advantages, and contribute to the construction of a financial powerhouse and the stable development of China's capital market. Thank you for listening. As for the last question, due to time constraints, the last question, each management team, I am from the private international research of Chen Bing last year, the CITIC Special Steel Plate, after acquiring control of Tianjin Steel Pipe, also went through twists and turns and acquired Nan Gong Group. I would like to ask the top management of CITIC how they view these two acquisitions. And what are the expected impacts on the CITIC Special Steel Plate sector?

Good, thank you for your attention and questions about the two major acquisitions by CITIC. It seems that these are also significant events in China. These two acquisitions are in line with the national strategy and have optimized the layout of the steel industry. Enhancing overall competitiveness conforms to CITIC's strategy and has strengthened and expanded our advantages. CITIC Pacific is building a world-class company in the specialty field. This is part of Germany's development strategy. The impression that most people have is that CITIC's GeSteel is a high-tech company with unique technology. The two successful acquisitions have created the world's largest German company with a production capacity of 30 million tons. I believe that leaving a strong impression on everyone is that CITIC Special Steel's 30 million tons is a very impressive achievement in the process of this acquisition. There was no increase in production capacity, but through the successful output of CITIC's brand, cultural capabilities, and other factors, the Tianjin Steel Pipe, a "old tree", has brought forth new vitality. The high evaluation from the people has left a good impression on us.

We, Zhongxin, are the world's first lighthouse factory in the global German industry. We effectively upgrade the digital capabilities of the industry and jointly promote technological innovation and synergy. We have become the global leader in various aspects such as bars, rods, etc., and have achieved the ability of digital production. So we believe that with the sudden emergence of Zhongxin, we will doubt the national industry and our customers. To make a greater contribution, we also specially invite our analysts and investors to visit the factory workshop of Zhongxin, feel the power of technology, and experience the charm of our Zhongxin management. Thank you for your attention. Today's performance conference ends here. Thank you all for your participation. If you have any other questions in the future, we will keep in touch and answer your questions. Thank you for your attention.