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Edited Transcript of YIN earnings conference call or presentation 30-Aug-19 12:00pm GMT

Q2 2019 Yintech Investment Holdings Ltd Earnings Call

Sep 11, 2019 (Thomson StreetEvents) -- Edited Transcript of Yintech Investment Holdings Ltd earnings conference call or presentation Friday, August 30, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Raphael Qian

Yintech Investment Holdings Limited - VP & CFO

* Wenbin Chen

Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO

* Yvonne Young

Yintech Investment Holdings Limited - IR Director

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Conference Call Participants

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* Jared Zhang;China Securities Index Co., Ltd;Analyst

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Presentation

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Operator [1]

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Hello, and welcome to the Q2 2019 Yintech Investment Holdings Limited Earnings Conference Call. (Operator Instructions) Please note this event is being recorded. I now would like to turn the conference over to Yvonne Young. Please go ahead, ma'am.

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [2]

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Thank you, operator. Hello, everyone, and welcome to Yintech's Second Quarter 2019 Earnings Conference Call. Our earnings release was released earlier today and is now available on our IR website. On the call today from Yintech are Mr. Wenbin Chen, Chairman and CEO; Mr. Raphael Qian, CFO; and myself, Investor Relations Director. Mr. Chen will review our business operations and company highlights, followed by Raphael Qian who will go over the financials and guidance. We will all be available to answer your questions during the Q&A session that follows. Questions can be asked in English or Chinese. If you ask your question in Chinese, please translate into English yourself afterward, or I may have to do the translation.

Before beginning, we would like to remind you that discussions during this call contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties and factors that may cause actual results to differ materially from those contained in any such statements. Further information regarding potential risks, uncertainties or factors is included in Yintech's filings with the U.S. Securities and Exchange Commission. Yintech does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

During the call today, we will be referring to several non-GAAP financial measures as supplemental measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. GAAP. For information about these non-GAAP measures and reconciliation to GAAP measures, please refer to our earnings press release.

I will now turn the call over to Mr. Wenbin Chen. Mr. Chen will give his remarks in Mandarin. I will translate for him. Mr. Chen, go ahead.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [3]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [4]

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[Interpreted] Thank you, Yvonne, and thank you to everyone for joining today's conference call.

In the second quarter, we remain focused on strategic priorities of growing our core business and executing with excellence. This, combined with strong client engagement, led to the strongest quarterly financial and business growth for our core business since the fourth quarter of 2017, despite the series of headwind we faced in the quarter, including a challenging mix of geopolitical, economic dynamics, Asia market volatility and weaker-than-expected investor confidence amid the unsettled U.S.-China trade tension.

Our net commissions and fees generated from 5 core business under commodities and securities services reached RMB 309 million, representing an increase of 41.8% year-over-year and 25.4% quarter-over-quarter. Revenues from commissions, interest income and other revenues were RMB 329 million, a 21.9% higher than our high-end guidance. Trading losses were RMB 40 million, up 42.9% to 60% lower than -- higher than our previous guidance.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [5]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [6]

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[Interpreted] In the second quarter, we continue to optimize our business and enhance our bottom line. Our ongoing focus on driving efficiency while managing our spending in a disciplined manner enable us to further improve ratio of expenses, drive operational leverage and ultimately improve earnings.

We are encouraged to see our net revenues from 5 core businesses are increased by 41.8% year-over-year and 25.4% over the last quarter, whereas our total cost and expenses increased by only 4% and 7%, respectively.

Our net loss attributable to ordinary shareholders from 5 core businesses represented a substantial decline from the first quarter, and we nearly break -- broke even for our core business on a non-GAAP basis.

Please refer to GAAP and non-GAAP reconciliation in earnings release.

Now let's turn to our business progress in the quarter.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [7]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [8]

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[Interpreted] Firstly, our commodities services business. Our Gold T+ D and futures commodities both grew and contributed to the trading volume of RMB 489.8 billion, an year-over-year increase of 20.8% and quarter-over-quarter growth of 55.3%. Net commissions and fees reached RMB 175 million, representing a year-over-year and Q-over-Q increase of 33.9% and 41.3%, respectively.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [9]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [10]

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[Interpreted] I'm sure many of you might have noticed that the spot gold price moved beyond the many years price range and reached a 6-year high since the end of May. In view of the current concerns over the slowdown in the economic growth and the further quantitative easing of monetary policies of the major developed economies in the world, the geopolitical uncertainty and the continued heat up in trade disputes, we believe that gold will gradually return to its currency function, and we are expecting a medium- to long-term bullish market for spot gold. As such, we have engaged more efforts on providing professional financial support to our clients, helping clients make investment gains. Since June, there has been no significant increase in growth of new clients or the activities of old clients. The increase in client assets in June as compared to May increased by 24% and that increase was even more significant in July and August.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [11]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [12]

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[Interpreted] Now moving on to the securities services. In the second quarter, the client trading volume of overseas securities brokerage was RMB 81.8 billion, an increase of 80.6% from the previous quarter.

Net commissions and fees of securities services were RMB 134 million, an increase of 53.5% year-on-year and 9.3% Q-on-Q, mainly attributable to the strong growth of the overseas securities brokerage services.

Commissions of overseas securities brokerage increased by 204.45% year-on-year and 70.8% quarter-on-quarter. The quarterly ARPU is more than fourfold of the industry average, primarily due to our expertise and professional service as well as a strong marketing capabilities.

We believe there are also our core competitive advantages (inaudible). Compared with the emerging tech-driven online brokers, many of our middle and senior management team members are senior investors themselves. They also have engaged in the financial advisory industry for many years. And as such, they have a very deep understanding of the market and individual investors. This provide us the capabilities to seize the opportunities ahead of the market dynamic and deliver effective services to help clients increase their asset value.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [13]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [14]

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[Interpreted] In terms of the financial advisory and investor education services, we actively respond to qualities and help the investors to equip the risk professional investment knowledge and capabilities, such as the financial report interpretation services we provide to our clients.

While investing in building up our own investment research system and improving our financial analytical capabilities, we have also invested in a large number of capital in purchasing the research report of well-known brokers and well-known securities firms and interpret it to investors in an easy-to-understand way to help them gain knowledge, on one hand, and protect its risk and identification capabilities, on the other hand, with an aim to be the client to transform into professional investors. At the same time, we have developed innovative financial videos for a variety of financial products, delivering the right investment ideas in a relaxed and pleasant way, enabling investors to gain companionship and enjoyment while acquiring knowledge. Every day, we are actually practicing the concepts of making investments simpler, and more professional and more interesting.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [15]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [16]

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[Interpreted] Now moving on to our asset management business. We are pleasant to see that our strategic deployment on asset management and our prioritization of solid performance over pure scale and commercialization has paid off. In the first quarter, our asset management company contribute -- continued to gain industry recognition from a number of well-known institutions. For example, in the performance evaluation ranking among thousands of PE companies with AUM of RMB 1 billion to RMB 2 billion, our asset management company won the series of recognition by Wind for its outstanding performance in the first half of 2019, including the top 10 of best performance PE companies, the top 20 Tech (inaudible) strategy PE performance and the top 20 PE performance with point-oriented strategy, maintaining its continuum of remarkable achievements in the first half of 2019. Throughout the first half of the year, our asset management business generated a total revenue of RMB 147 million.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [17]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [18]

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[Interpreted] We have been committed to the combination of financial research and technology core innovation and its integration into our products. At present, we have more than 100 patented technologies and has established a team of 430 young talents, with an average age up to 28 years old, most of whom are from Tier 1 financial technology and Internet companies. After 8 years of accumulation of experience, we have formed the team of first-class technical experts in the field of call center systems, secondary market data collection and distribution, market analysis terminal, quantitative indicator model, trading system construction [literature] and has -- In term of our customer-oriented mobile terminal product, we have launched a more than 10 apps covering stocks, futures, gold, Hong Kong and U.S. stock for users and the buildup for our mobile Internet traffic metrics. The MAU of our app is around 470,000 to 650,000, plus the Internet marketing tools, such as VTech. The total MAU is more than 1 million. We have continued to invest in R&D, strengthened our innovation of financial technologies, driven by cutting-edge technology, such as AI, Big Data, 5G, et cetera, we'll continue to refine our products and services so that more users can enjoy fast, timely and full-scale investment services.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [19]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [20]

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[Interpreted] In addition, under the current market conditions, maintaining asset-light business model and effective capital management remains one of our top priorities as we aim to maintain appropriate liquidity to support anticipated business expansion. As of the end of June, our cash and short-term investment available for corporate use increased to a healthy level of RMB 1.86 billion and our total liabilities to total assets were merely 23%, leaving us a substantial room for further organic expansion, exploration of M&A opportunities and the investment in innovation.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [21]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [22]

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[Interpreted] In addition to our investment for growth, we continue to return excess capital to shareholders in Q2. This includes USD 250,000 of share repurchases, in line with our plan to complete our USD 20 million authorization over roughly 1 year. As of the end of Q2, we repurchased 18.4 million shares or 3% of our total shares outstanding.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [23]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [24]

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[Interpreted] Looking ahead in the third quarter, our strategic focus is to guide clients deliver and take advantage of the favorable market opportunities. While sustaining our business growth, we'll implement full dimensional customer-centric strategies, from asset mechanisms, management, technology, R&D and products to improve service quality, drive business goals, efficiency, at the same time ensuring full compliance and superior risk control. We believe this initiatives will help us to capture greater market opportunities as investor sentiment and industry recovers.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [25]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [26]

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[Interpreted] With that, I will now turn the call over to Raphael Qian, our newly appointed CFO, to discuss our financial results for the second quarter and to provide guidance for the third quarter. Mr. Qian joined us 0.5 years ago and has had an in-depth understanding to our company's strategy, financial situation and business. We believe his participation will help the company achieve the next stage of goals. Mr. Qian, please.

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Raphael Qian, Yintech Investment Holdings Limited - VP & CFO [27]

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Thank you, Mr. Chen. I'm very excited to join the company and looking forward to working with Mr. Chen and the team to deliver the next phase of growth. Hello, everyone. I'm glad to speak with you on today's call.

We delivered another quarter of strong business and financial results. If excluding the trading gain and losses which is more volatile with market dynamics, we did an apple-to-apple comparison with our core business on Y-o-Y and a Q-o-Q basis, and we are very happy to report that we nearly achieved the breakeven. We grew assets and invested to drive growth while still delivering operational leverage. As a result, we are pleased with these results and we will continue to focus on executing our strategy.

Let's now review our Q2 business results in great depth.

We finished the quarter at CNY 289 million in total revenues, up by 10% sequentially, driven by the strong demand our commodities and securities services.

If you look simply at the net commissions and fees generated by our 5 core product lines, which was CNY 309 million, representing an annualized growth rate of 41.8% and 25.4% from the previous quarter. This comprised 56.6% of commodities-related business and the 43.3% of security-related business.

Total customer trading volume was CNY 571.6 billion, up by 39.8% year-over-year and 58.5% from the previous quarter. 85.7% of which was from commodities and the rest was from securities.

The effective fee rate from commodities and overseas securities brokerage services for the quarter were 0.036% and 0.053%, respectively, within the reasonable range of movement if you compare year-over-year and quarter-over-quarter.

Now turning to our expenses, they were CNY 328.1 million, an increase of 4.3% year-over-year and 7.1% from the previous quarter. However, if you compare the growth of revenues from our core business to advanced upscale was clear to see as we demonstrated a strong growth in our total net commissions, which increased 41.8% Y-over-Y and 25.4% Q-o-Q. As a result, our net loss attributable to Yintech for the quarter was CNY 55 million compared with net loss of CNY 48.5 million in the same quarter last year and the net income of CNY 69.2 million in the previous quarter.

Non-GAAP net loss attributable to Yintech for the quarter was CNY 42.1 million compared with net loss of CNY 31 million in the same quarter last year and the net income of CNY 85.6 million in the previous quarter.

Diluted loss per ADS for the quarter was CNY 0.76 compared with diluted loss per ADS of CNY 0.66 in the same quarter last year and the diluted earnings per ADS of CNY 0.92 in the previous quarter.

Non-GAAP diluted loss per ADS for the quarter was CNY 0.58 compared with non-GAAP diluted loss per ADS of CNY 0.42 in the same quarter last year and the non-GAAP diluted earnings per ADS of CNY 1.14 in the previous quarter.

As of June 30, 2019, the company had CNY 1,858.2 million, equivalent to USD 270.7 million in cash and short-term investments compared with CNY 1,753.2 million as of March 31, 2019.

Now we are talking about the business outlook.

Based on the information available as of the date of this press release, Yintech provides the following outlook for the third quarter, which reflects the company's current and preliminary view and is subject to change.

Revenues from commissions, interest income and other revenues will be the range of CNY 380 million to CNY 400 million, while revenues from trading gains and losses will be in the range of negative CNY 10 million to CNY 30 million.

This concludes our prepared remarks for today. Operator, we will now open the call to questions. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And the first question comes from [Lily] with JPMorgan.

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Unidentified Analyst, [2]

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This is [Lily] with JPMorgan. So I have few questions regarding your asset management business. So from the introduction, I know that this business is relatively new to your group. So could you please introduce more about it, your asset management business? For example, the statistics of your products and your current AUM. And also, I'm quite curious about your target and plan on this new business line going forward.

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [3]

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Thank you, Lily. Let me translate for Mr. Chen first. (foreign language)

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [4]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [5]

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Thank you. Let me translate. [Interpreted] Currently, we have launched 13 products with the total AUM of RMB 1.4 billion, and including 8 loan-only equity products with the size of RMB 500 million, and then 3 convertible bond products with the size of RMB 800 million, and then 1 mutual strategy product, 1 [gold] product with a total size of RMB 100 million.

To note, we launched the first T+ D product in July 2018. We believe we are the first mover on this product among the similar competitors in China with a relatively large team and with the good performance, as we introduced earlier. While in the meantime, we are -- we highly emphasize on compliance and risk. And we pays a lot of attention and effort on refining our management on increasing our AUMs and also on maintaining a sustainable performance for all of our equity and convertible bond products in order to better serve our clients. So our [profit] for the asset management business is, for one, maintaining a sustainable performance growth, and for two, is to create absolute return for our clients.

[Lily], did we answer your questions?

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Unidentified Analyst, [6]

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Yes. And thanks for the detailed and clear answer.

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Operator [7]

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And the next question comes from [James Chung] with JC International.

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Unidentified Analyst, [8]

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Congratulations for a great quarter. I would like to have a question for Mr. Chen. Given the macro backdrop has been quite volatile over the past few months as you cited in your call, I was hoping to hear your perspective on how you are feeling at this point in the year about the market? And how it's going to impact your business? What are the underlying opportunities or risks to you?

And I have another question to Mr. Chen about your expenses. It is good to see your OpEx percentage decrease substantially on yearly and quarterly basis. Can you give us some colors on how you're going to manage your costs going forward? And do we expect the same level of cost decline? What are the normal run rate for you? As many internet securities brokerage firms spending heavily on acquiring customers, what is your strategy then? Do we expect some significant pickup on spending in line with your anticipated growth rates, especially when market is trending more bullish?

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [9]

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[James], thank you very much for the question. That's a very good one to ask. Let me translate for the benefit -- let me translate first for our Chairman and CEO. (foreign language)

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [10]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [11]

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Okay. Let me take a moment to translate for our investors. [Interpreted]

Well, yes, as you just now mentioned and also I cited in my speech just now that we have witnessed the high volatility of the overall market from both political, economic and capital market perspectives. And then secondly, we have seen that China is on transitioning from the -- from highly emphasis on speed to emphasis on quality goal. This is a very significant transform in China. So based on the macro international environment and also China's economic transitioning, we think that in the future, the market will continue to experience the high volatility.

And then how this is going to impact our business and as such, our macro backdrop? I'd like to share my understanding with you for our 5 of the products as well as the opportunities we see under this market conditions.

And as you know that we have 5 product lines, including spot commodities and securities services. Under the spot commodities, we have a spot gold commodities and futures gold commodities. And then under the category of the securities services, we have 3 products, including securities advisory services, asset management business and overseas securities brokerage services. So as you can see that among 5 of our product lines, 4 of them are transaction-based business. So that means we will be impacted by the market dynamics. But then we don't think that the high volatility or the dynamics of the market is a negative point or the risk to our company. In fact, we see more opportunities than the risk because, if you look at our spot commodities, investors, especially our investor can trade both China and overseas commodities product, so the investors can seize some market opportunities to long and short. So under the various market conditions, investors can long -- can short the spot commodities and also the overseas securities, while dollars in the whole market, investors [can definitely long] and that will benefit our securities advisory services. So nevertheless the market dynamics, we will see the opportunities and we will guide our clients to seize the opportunities.

And why we can do that? Because, as we introduced, we have established a 3,000 employee team in the company and we have a flexible business model that we can accommodate the market conditions to flexibly deploy our resources among the 5 product lines to take advantage of the market dynamics, to seize the greatest opportunities and to guide our investors based on the market conditions to gain profit on their assets investment. So we can definitely leverage the market conditions to make the greatest of profit for both our investors and the company.

And then I think the next question is for Mr. Qian about our expanded outlook.

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Raphael Qian, Yintech Investment Holdings Limited - VP & CFO [12]

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Okay. Now I will help to answer your second question. As you have seen, net commissions and fees from our core business have increased over 40% on a year-over-year basis, whereas our total costs increased just only 4%. Obviously, the personnel cost occupies a major part of our total cost. However, in this quarter, the personnel cost increased by only 5% on a year-over-year basis. The main reason is that the number of our staff has become stable since the end of Q1. And we have set a relatively flexible or dynamic strategy to transfer our focus or internal resources among these 5 product lines to coping with the highly uncertainty in the local and the global market. And we have taken a number of measures to control the personnel cost which will show a slow increase in the next few months. We believe we could achieve a considerable growth in our core revenue without a great increase in the number of staff. This will help lower the cost of revenue ratio and eventually contribute to the net profit margin. Okay.

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [13]

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James, I'm sorry, yes, James, are you online?

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Unidentified Analyst, [14]

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Yes.

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [15]

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Did we answer your concerns and your questions?

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Unidentified Analyst, [16]

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Yes. Very much. That's very helpful.

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Operator [17]

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And the next question comes from Jared Zhang with China Securities Index.

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Jared Zhang;China Securities Index Co., Ltd;Analyst, [18]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [19]

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For the audience, I will translate into English. [Interpreted] Just now the question is from China Securities Indexes from Mr. Zhang, and his question is that -- congratulations for the company for a great quarter for both Q1 and Q2, and also, the company give us strong guidance for Q3. And he would like to know the revenue mix for Q3 for our core business and how the company's -- how the outlook for these 5 products are going forward? Our CFO, Raphael Qian, will answer this question.

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Raphael Qian, Yintech Investment Holdings Limited - VP & CFO [20]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [21]

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Let me translate into English first. [Interpreted] Thank you for your question. We -- as you can see that in Q1, we recognized a total of CNY 309 million revenues from net commission fees from both spot commodities and the securities. The commodities contributed CNY 174.8 million and then the securities services contributed to CNY 134.2 million revenues. As for Q3, we guided RMB 380 million to RMB 400 million. We do not give a specific revenue mix for our 5 product lines, but I can share some color on the split among these 2 product lines. The commodities will take up 60% to 65%, whereas the securities will be 35% to 40%. Thank you.

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Jared Zhang;China Securities Index Co., Ltd;Analyst, [22]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [23]

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Yes. (foreign language) Hello, hello?

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Jared Zhang;China Securities Index Co., Ltd;Analyst, [24]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [25]

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Okay. (foreign language)

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Operator [26]

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And the next question comes from [Jay Wong] with Industrial Securities.

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Unidentified Analyst, [27]

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(foreign language)

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [28]

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(foreign language)

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Unidentified Analyst, [29]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [30]

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I'll translate into English first. [Interpreted] So this question coming from [Jay Wong] from Industrial Securities. His question is about the earnings outlook because Mr. Qian mentioned in his remarks that we nearly achieved the breakeven for our core business, and he likes to know whether the company will maintain this profitable growth in the future or we see any -- how is the business trending forward?

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [31]

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(foreign language)

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [32]

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Okay. Let me translate. [Interpreted] Thank you for your questions. As you can see from our Q3 guidance, that our core business deliver a strong growth quarter-over-quarter and we see that -- we believe that we will maintain this trend going forward.

In the second quarter, if excluding the trading gains and the loss, we basically, as I mentioned in my early remarks, that achieved a breakeven for our core business. In the third quarter, we think that we can make some profit from our core business slightly (technical difficulty), but this is not our target. With the industry dynamics for the Asia market and the spot gold trending more favorable, as we can see, we believe that the potential of our business can be truly presented. This is the first one.

And secondly, even in the worst-case scenario that the market dynamics maintain what we can see now, we think that after more than 1 year of investigation, and also the business model discovery among our 5 product lines, and also, on our emphasis and our continuous investment in research and improving the quality of the service to our clients, we have delivered a greater and faster growth potentials of our business relative to our peer companies. So we think that this year or 2019 is still a year for preparation for the favorable market conditions we anticipate. And the next year, we think that we can gradually deliver the revenue scale we expect.

And then the third point is that we think that the 5 product lines we target have a promising future, and these are the niche business areas we covered, different from some other areas which have high competition. And the focus for our company next is to serve better of our clients, as I have introduced in my remarks just now, and to satisfy our clients, to make our clients -- to keep a high retention rate for our clients. And if we can achieve this, I don't think the top line growth and bottom line earning is a question to us because we have accumulated years of experience and competitive advantage which are clear to see to our peers and also our team. Thank you.

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Operator [33]

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And as this is all the time we have questions right now, I would like to turn the floor to Yvonne Young for any closing comments.

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [34]

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Yes. Thank you. Thank you, everyone, for participating in the conference call for Yintech's Q2 earning. If you have any further questions, please feel free to contact me at the contact details at the end of our earnings release. We would like to speak to you in the next call. Thank you. Operator, you may now disconnect.

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Operator [35]

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Okay. Thank you. Yes. The conference has now concluded. Thank you for attending today's presentation. And as mentioned, you may now disconnect your lines.

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Yvonne Young, Yintech Investment Holdings Limited - IR Director [36]

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Thank you. Bye.

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Wenbin Chen, Yintech Investment Holdings Limited - Co-Founder, Chairman & CEO [37]

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(foreign language)

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]