First Financial Holding Co., Ltd. (2892) Earnings Call Transcript & Summary

Hello, everyone. Good afternoon. Welcome to join us for First Financial Holding First Half 2020 Webcast Investor Conference. We will start with our presentation, including first half snapshot, financial highlights and operating results. Then we'll invite Ms. Annie Lee, our IR Head, to proceed the Q&A session. [Operator Instructions] Today's presentation material is on our IR website and this webcast window. Also, we will provide 1-year replay service of the webcast meeting for your convenience after 2 hours of today's meeting. Now I'd like to turn over to Mr. Keith Ke to begin today's presentation. Keith?

Thank you, K.C. Please turn to Slide 5. Let's take a quick review of group's performance in first half 2020. First Holding released accumulated TWD 8.76 billion earnings with 11.6% Y-o-Y decline in first half. However, the outcomes of second quarter do narrow down the decline gap from first quarter. As of the bank's performance, stronger loan demand in second quarter and mark-to-market treasury gains both lifted the profits, despite overseas headwinds continued. Other subsidiaries' positive net income also helped to boost the group's earnings. As we said, loan demand looks pretty good, especially for SME and the mortgage sectors. Each had 8% and 6% growth Y-o-Y. Low rate environment supported mortgage market, people preferred to buy properties rather than rent houses under this low rate environment. On the other hand, back-home CapEx lending also underpinned the SME loan sector. Global outbreak of coronavirus has changed the lifestyle and accelerated the development of IT and the communication sectors. Conference call might replace general meeting in the future, even the life was back to normal. We believe that Taiwan expertise in IT industries might be benefited by at least just through 2021. The world is still in chaos. The performance of overseas branches are still unclear as well, especially for U.S. and the Europe area. FX loan growth declined in first half, and it is difficult to recover soon. Group has already redeemed the possible downward trend and adjusted full year projection. We will mention it later. Let's move to financial highlights. Please turn to Slide 7. This slide shows the group's key figures. Most of the figures still show contractions comparing with the same period last year. Please take those figures as reference. Now please turn to Slide 8. This slide shows a breakdown of group's net income. Total net revenue was down by 9.8%. On the other hand, bank's net credit charge increased to 26%, both combined to close to the bottom line with 11.6% decline. Next slide displays the net incomes of major subsidiaries. Despite bank unit was down by 12.6%, however, securities and insurance both catch up in second quarter and turned the results to positive Y-o-Y growth. Okay. Let's move to operating results. Please turn to Slide 11. On this slide, it shows the group and bank's net income and ROAE. After a huge setback in first quarter, group gradually catch up and reported TWD 8.8 billion earnings with 8.1% ROAE. Bank posted TWD 7.9 billion net income with 7.9% ROAE. Please turn to the next slide. On Slide 12, it provides a breakdown of bank's earnings structure. Cumulative net revenue of first half reached 22 -- reached TWD 22.2 billion, which was 6.1% decrease Y-o-Y. As of the breakdown. Net interest income was flat. Fee revenue slid 1.4% Y-o-Y. Gains on investment declined 19%, was still the main reason to impact the total net revenue. Please turn to Slide 13. Total loan book increased 6.9% Y-o-Y to reach TWD 1.84 trillion. Quite similar to previous quarter, mortgage and SME loans were still the sectors to support loan growth. Mortgage had a 6% growth Y-o-Y. SME was even better with 8.1% growth. FX loan continued to shrink with 7.8% decline. However, overseas loan book still maintained 1.6% positive growth. Please turn to Slide 14. This slide shows the Q-o-Q trend of loan book. Please take it as reference. Let's take a look at bank's LDR, spread and NIM. Please move to Slide 15. LDR shank to 74%. NT dollar LDR dropped to 78.5%, while FX LDR also decreased to 59.9%. Loan-to-deposit spread further fell to 1.44%, while NIM decreased to 0.99%. Both of the figures reflected the NT dollar and the U.S. rate cuts in first quarter. Please turn to Slide 16. This slide shows the breakdown of Q-o-Q trend of NT dollar spread and FX spread. NT dollar spread dropped to 1.24%, while FX spread also fell to 1.92%. If these spreads were quarterly average, the figures would seem more shaky comparing with the previous page, the cumulative spread. Okay. Please turn to Slide 17, deposit structure. Total deposits increased largely with 12.7% growth. NT dollar deposit grew by 15%, while FX deposits increased to 6%. This also explained why LDR dropped on previous page. On the right-hand chart, it shows the NT dollar CASA rates stayed stably at 67.4%. Please turn to Slide 18. This slide shows the loan book concentration, and here, we listed the major exposures to specific industries. Please take them as reference. Please turn to Slide 19. This slide presents the mortgage book. Top-left graph shows the mortgage yield and LTV ratios. Mortgage yield dropped hugely to 1.35%. New mortgage LTV ratio slightly dipped to 65%, while average mortgage LTV ratio improved a little bit to 45.9%. The bottom bar chart show -- displays the monthly new mortgage lending. New mortgage lending in second quarter stayed pretty similar with the level in the same quarter last year. Please turn to Slide 20. Let's take a look of the fee income. Total net income was TWD 3.64 billion in first half 2020, which was 1.4% decrease comparing with the same period 2019. Wealth management fee income stayed flat Y-o-Y. As of the breakdown, we would see bancassurance fee income was replaced by mutual funds fee income. As of the nonwealth management fee, loan-related fee income increased 20%, while FX fee income dropped 16%. And next slide shows the Q-o-Q trend of fee income. Please take it as reference. Please turn to Slide 22. Total operating expense decreased 2.8% Y-o-Y. CI ratio was back to a relatively normal level of 44.6%. Let's move to asset quality. Please turn to Slide 23. On this slide, top chart shows the coverage ratio and the overall NPL ratio. Coverage ratio dropped to 404%, mainly caused by some individual write-offs, such as Powertech energy. NPL ratio increased to 0.29%. Both figures shows that the bad environment of global situation has impacted our asset quality. Bottom chart shows the breakdown of NPL ratios. You can see large corp. NPL ratio rose from 0.02% to 0.59%. It's also mainly due to the new influx from Powertech energy. Let's move to Slide 24, the overseas profits. The pre-tax profits of overseas branches over total profits was back to 45.8% since the mark-to-market gains from OBU book was gradually back. Top-left pie chart shows the profits breakdown. Greater China, which includes OBU and Hong Kong, occupied 62.3% of total overseas profits, which almost doubled from last quarter. North America occupied 11.1%, while ASEAN occupied another 16.7% of total overseas profits. Please turn to Slide 25. Group CAR parked at 123.3% (sic) [ 123.18% ]. Banks CAR and Tier 1 were also stable at 13.4% and 11.4%, respectively, in first half 2020. Okay. This is the presentation today. I will turn back the microphone to K.C. and Annie for the QA session.

All right. Thank now, Keith. Now it's the QA session. Since we have a lot of questions today and investors are from Singapore or from India. And now I'd like to start with the first question from [ Vikram Raghavan, Moon Capital ]. [ Vikram's ] first question is about our outlook of the fiscal year 2020 regarding loan growth. And can any talk about the -- our fiscal year 2020 outlook about loan growth, NIM, fee income, operating expense and credit cost? Let's separate -- let's take separately. First of all, the loan growth, Annie?

Okay, I'll start with our projection for loan book this year. After a very slow growth in the first quarter, fortunately, we rebounded from the trough and started to expand our lending in the second quarter this year. And we know that -- in Taiwan that we witnessed very strong momentum for the repatriated CapEx here. So the -- also bundled with the bailout plan implemented by the government that's secured by the insurance -- credit insurance fund sponsored by government. So in the first half, we booked a relatively strong loan growth at about 6%. And we would see this momentum would sustain throughout the second half of 2020 in view of the relatively strong demand for the new CapEx from the overseas Taiwan business as they relocated their supply chain to Taiwan in order to avoid a higher tariff between the U.S. and China trade war. For the whole year of 2020, we would see our loan growth can maintain at this momentum to grow at around 6% based on still very significant CapEx demand for the whole loan book. And in terms of the structure of the different segments, the corporate lending would remain quite resilient to grow at around 6% to 6.5%. And for the domestic real estate market, thanks to the guardian angel of low rate environment that the demand for investments in the real estate market remain relatively strong. So we would see the mortgage lending would maintain its strong demand to capture this opportunity that people can enjoy actual low rates and to actually acquire new property for themselves, for the homeowner-occupied investment. So we would see the mortgage lending will continue its momentum to grow at -- also at around somewhere 6.5% to 7% after we posted nearly 6% first half growth. However, when we look back to the once very strong FX lending in the past couple of years, we see that the fall in demand in the overseas market, particularly in the major cities around developed countries, would damp the strong demand for our corporate lending. So we would see our FX lending will remain flattish after we booked a relatively weak loan book in the first half that the demand for FX lending would remain flattish that shy away from its once very strong demand in the past years and due to the historical low market rates that the NIM contraction would sustain. However, we'd see that our strategy not to compete very aggressively in domestic market for NT dollars lending help to stabilize our NIM contraction. So we would see our NIM would stabilize around 0.97% to 0.96%, about 10 bps -- 9 to 10 bps lower than that we have in the last year. We don't see that the Central Bank here would further chop rates anytime soon. So we would see this NIM contraction may stop here for a while unless the contraction in the economy becomes quite imminent or very evident. Otherwise, the trough should stabilize here. So when we -- going forward to the fee revenue, frankly speaking, that the low rate environment provides a good basis for people to try to enhance their return for the very ample liquidity here in the domestic market. Therefore, we view that the very strong demand for the mutual fund investment that we actually booked nearly 23% for the -- for the first half represent the demand that people would like to put their money, place their money from the low bank deposit to the mutual fund investments, which can be justified by the very strong equity market performance here in Taiwan and around the world. However, the once very popular insurance -- bancassurance products seems to -- I mean the -- it becomes not so attractive anymore due to the new regulation imposed by our regulators because they're not -- the insurance products no longer provide very attractive yield than the -- than it was before. So the -- what we call the deposit substitute effect vanished in the bancassurance products. And also, the regulators would like to divert this savings-type insurance products to more protection-type business model. Therefore, the bancassurance business would become more normalized that the growth rate would -- not so strong like it was before. However, we are also quite happy that the strong loan demand did help to boost our fee income from our loan-related business. So the loan-related business fees actually rose up nearly 20%. All of this would show that the good things from wealth management where the fast -- I mean the falling opportunities from bancassurance offset it with each other and strong loan demand would also help to build the gap well behind by the wealth management opportunities. So for our whole year's projection for fee income, we would see a much no contraction around just 1% something, but we will manage to boost our sales of mutual funds going forward in order to maintain this momentum throughout the whole year. And the last thing would be the operating expense. Okay. So for our OpEx, the only thing that can help us to lower our costs for our SG&A will be the head count cost. Due to the falling projection of our bottom line this year, we would see our bonus would shrink for the whole year. So the OpEx would remain not so high as we did last year. So the OpEx would maybe shrink and just less than 5% to 6%, slightly lower than that. Because the head count cost represent quite heavily up to 65%. So the only way to chop the OpEx will be to lower the bonus related to the performance of the whole head count. And in terms of the credit cost, yes, credit cost for this year would remain somewhere around 25 to 26 bps, the net credit cost, after we still project some write-back from our disposition of collateral in domestic markets. So in that sense, the credit cost should be stabilized at the 26 bps. I'd also like to highlight that we still foresee some overseas NPL with the surface, but we would manage to provide precautionary provision against these exposures and that would help to stabilize the whole credit cost based on our prior projection for this year.

Okay. I think one thing that maybe [ Vikram ] is also interested in, that's our treasury gains. Can Annie talk about our treasury gains for the fiscal year of 2020?

Things comes with the narrowing gap between U.S. and Taiwan interest rate that did not help us to earn much from the swap gains last year. So for this year, the treasury gains did shrink by nearly 18% to 19%, nearly 20%, mainly attributed to the falling opportunities for this swap transaction. That would represent up to about TWD 1.2 billion every year. For this year, the narrowing gap between the interest rate did not help that much. So the excess liquidity being placed to the interbank market that would not generate very, I mean, aggressive spread would damp the treasury gains for this year. So for this year, the treasury gains would not be so, I mean, attractive anyway. And another issue is that due to the low rates in the financial markets, our trading books or investment portfolio for the fixed income did not perform that well like we did in the prior cycles. And these 2 major reasons will be the main drag for the treasury gain. So we would see our treasury gains would contract by about 20% this year. We're already over the peaks.

Okay. Let me summarize the result of our outlook. For the total loan book, we project a fixed total loan book growth for the fiscal year, and including corporate lending will be 6.5%. And mortgage will fall between 6.5% to 7%. In terms of the FX lending, we remain flattish projection. As for the NIM projection, we expected 0.97% at the end of 2020. And for the fee income, we have had so far the flattish projection for the whole year. As for the CI ratio, we projected 46% same as the prior fourth quarter. And for the credit costs, we projected 25 to 26 bps for the whole year. And a follow-up question from Chung Hsu of Credit Suisse is, when do we expand into trough? And what was the NIM in July? So that's another follow-up question for the NIM of July. And when do you expect NIM into trough?

Until the end of this year will be the trough of our NIM.

Okay. I guess, Chung, we have answered your question. And for the NIM of July?

No. Maybe lower because we booked around 0.99% to 0.98%. So NIM would go below 0.97% or same as the end of second quarter. Okay. I mean for the second half of this year will be the trough of NIM.

Okay. Another follow-up question is about the guidance and about credit costs in the second half. Can Annie give us more color about our overseas NPL formation about the new NPL? That's the question from Jemmy Huang.

Well, for the NPL influx in the overseas market would surface starting from late of second quarter because we know that the lockdown measures were implemented quite seriously in the major economies. So a lot of these borrowers, they cannot service their debt due to the sudden stop of the cash flow, particularly for the investment in some tourism-related sectors. So our exposure to -- in some cities like in U.S. or in other Europe countries, the borrowers did not have the ability to service their debt. We actually had one exposure in London where the borrower is a health care company that we would -- capital requires this lending as appeal in the third -- sorry, in the second quarter, yes, but we would charge-off the exposure in the third quarter this year. This would be one significant NPL, which is amounted to around USD 30 million, and we would -- we plan to charge-off at least 60% to 70%, that will be around USD 20 million. That would be one significant NPL in the London office. And there is still some -- a lot of overseas NPL mainly came from U.S. markets as the economy, I mean, shrink quite drastically, and that would impact the exposure there. But up to now, the NPL ratio for overseas market remains content because we have the capability to sufficiently provide our provision against this exposure. The NPL ratio for overseas lending was up from just 6 bps to 35 bps from first quarter to second quarter. However, we would manage to charge-off all this exposure follow the service of NPL. So that would not impact the asset quality of our total loan book. And the good thing is that for domestic exposure, thanks to the bail-out plan, I mean, sponsored by the government credit insurance fund that the domestic NPL remains stable apart from one legacy exposure from Powertech that we would charge-off nearly 70% of the total exposure. So in the sense of asset quality, up to now, it seems content, I mean, we're content for the moment. The cost ratio still remain up to 400% and the total NPL ratio still contained below 0.3%. So we view this as a still controllable situation.

Okay. Thank you, Annie. And we do have another question. It's about repatriated capital program from [ Vikram ]. [ Vikram ] is concerned about the outcome of this repatriated capital investment in 2020. Do you think that how much and what's the scale of the repatriated capital investment here that the First Bank has been had?

Up to end of July, we have accommodated nearly about TWD 42 billion application for new lending for this repatriated CapEx investments, and we see this just for 0.5-year statistics. It will gradually accelerated further because the relocation of supply chain would sustain. And also, the rates remain quite attractive for this repatriated investment plan. So we would see the whole projection of the repatriated capital investment will be up to, I see -- I must say, more than the size that we have now at TWD 40 billion something. And we would see the acceleration of our loan demand from this portion would become a significant flow of future loan demand going forward, and we would be quite optimistic to see that, that will be followed by the working capital or other investment plans for the wealth management and so on. So this long-term CapEx program would gradually translate into other long-term investment plan or loan demand would help our loan book to expand quite healthily. Yes.

Okay. Another follow-up question is about our fee income revenue. And since [ Vikram ] had just -- the Slide 21 shows that our Q-o-Q from revenue trend. Actually, he's asking what's the reason that he saw the decline in mutual funds, discount revenue and growth in bancassurance reaching revenue? However, I think that we need to explain something to [ Vikram ] that the Slide 21 shows the Q-o-Q growth for the mutual fund sales and for the bancassurance sales for the growth in bancassurance is only Q-on-Q. If you added in year-on-year, you will see that actually the bancassurance shrinked by 23%. And actually, the mutual fund sales increased by 23% Y-o-Y. So that's just the indication -- the difference in indication. Okay? And the next question is about our mark-to-market loss or gains that Peggy and [ Vikram ] is worried about. Can Annie talk about unrealized gains on our mark-to-market bond portfolio?

For our total loan -- or our fixed income for the full, the actual mark-to-market gains or loss, we still suffer some underwater results that the gains are still 20% lower than that booked in the final -- the end of last year, which was because that the demand for the investment-grade bond portfolio did not completely rebound or recovered. So the -- this mark-to-market gains is still below the level that we booked last year. But because this bond portfolio, most of them would be investment grade. I mean all above BBB or single A or above rated. So we're not worried about the risk of this bond portfolio. We still have to wait for when the market rebound and the mark-to-market losses for the gap would gradually be filled after the market become more normalized. Up to now, we still suffer about 20% less than the gains that we had last year.

Okay. And the next question is about our fair value through P&L bond position, about the average rating and duration. I think we need to provide this information after the webcast. So far, we don't have that within our hand. Okay. Peggy just wait. We will call you or email you. And the second follow-up question is about the second half that is there any major default cases will happen in the second half? Annie?

I just mentioned that only one syndication loan may declare before this, which is a health care company, and we will charge-off most of the exposure, up to 70% of the total exposure in the third quarter. Otherwise, there is no significant delinquency in the overseas lending book up to now.

Okay. And we have another question from Mr. Jemmy Huang of JPMorgan. Jemmy hopes to know that if we have written off Powertech, why the NPL ratio is still going up or you only rolled out part of the exposure?

For Powertech exposure, we had up to TWD 1.5 billion, and we charged off 6.3 -- 603 -- TWD 630 million in the second quarter this year. So there's still about TWD 900 million left behind. And we charged off another TWD 300 million in July this year. So the legacy exposure of Powertech is still on our NPL book. We will have to wait until August that most of the exposure of Powertech will be off, less than TWD 500 million. So in the end of second quarter, there is still more than TWD 900 million exposure for Powertech. Yes.

Okay. Okay. And we have another question about our overseas profit from Chung Hsu. Chung hopes to know, can Annie talk about how our overseas profit actually increased in the second quarter, but the absolutely number and as a percentage of First Bank's profit before tax is when FX loan actually contracted?

For the total overseas pretax profit in the first half, which was amounted to USD 152 million, USD 1-5-2 million. The profit contribution from -- actually, from Greater China, we bounded only the profit from U.S. contracted. So these 2 continents offset each other to make more neutralized results. And earnings from ASEAN countries continued to grow, the Y-o-Y growth up to 13%. In the sense that the overseas markets still helped to boost the overall profit. It now represents nearly 45%, right, for the -- 45% still represent a significant source of our growth.

Okay. Another follow-up question from [ China Live ]. [ Ms. Wong ] hopes to know that how do you expect that overseas profit target for the fiscal year 2020 to 2021?

Well, somewhere around 40%, 40% to 40 -- around 40%, something because the domestic rates still remained low. But overseas countries, especially the ASEAN countries or Greater China had already stabilized, and margins are still a bit higher than that in domestic markets. So we would see the foreign countries' branches would continue to generate decent profits for the whole company.

Okay. And we have another question. It's about, can we repeat our OpEx guidance? Yes. Our operating expense guidance is -- for the fiscal year is around 46%.

Yes. CI ratio, 45%.

45% to 46%.

Higher than that of last year.

Okay. And we have another question, it's about our credit card fee income outlook from [ Tina Chen ]. [ Tina ] hopes to know that the -- when do we expect NIM to be trough? Okay. This one has been already answered. And credit card fee income outlook?

Sorry, not very promising. Maybe slightly lower than last year's level. Actually, the credit card until July -- let me check, July. Actually, to contract about 20%. So we don't view the fee from credit card would become very aggressive this year. Still 20% lower than the level that we had last year.

And we have another question from [ guest ]. He's talking about that we saw the deposit increase is still higher than loan demand growth. And what's the reason or the rationale behind the situation? And do you think that how do we justify the excess liquidity about LDR target or treasury scale and your investment portfolio and strategy or something?

For the deposit growth, it is pretty much linked to the macro situation that particularly when huge fund be treated from the bancassurance product that used to be quite attractive source for the excess liquidity. But starting from this year, the regulators imposed stricter restriction that the insurance company cannot deliver money via a higher guarantee yield that they have to prepare for the IFRS 17 preparatory program. So this excess liquidity flow back to banking system and parking at the demand deposit account to try to shift to some other investment products like equity investment or even property investment. So this would be the reason behind the very high growth rate of deposit growth, particularly for the NT dollars because the rates -- deposit rates for U.S. dollars has lost its appeal that the rates no longer attracted the deposit turn to park their money into U.S. dollar deposits. So we would see that in the downturn, like at this moment, the deposit growth would remain quite solid because most of the liquidity would choose to temporarily park at the bank system and to seek for good opportunity that they can invest further. We would view this as good chances or opportunities to introduce products for -- like mutual funds or new type of fixed-income products to these depositors to help them enhance their return. So you can see that a lot of trust company -- investment trust company would launch new type of fund to -- in order to attract all this liquidity to help them locking future growth sectors and help them capture the future gains in the market. This can be translating to a higher mutual fund fees in the future. So we still remain quite optimistic that our management -- wealth management business will become quite attractive going into the second half of this year.

Okay. And another question from Mr. Jemmy Huang is about our swap revenue, swap gains. How much of the investment income decline was due to swap revenue? Also, from [ Ms. Katherine Kuwenta ], she's also asking, is swap transaction around TWD 1.2 billion or TWD 2 billion for a year usually?

So for last year, our swap gains was up to TWD 1.2 billion. For this year, this golden opportunities vanished due to the shrinking gap between U.S. dollars and NT dollars. And apart from that, because the appreciation of NT dollars also damped the demand of this life insurance company that they quit to engage with swap transaction, and they preferred to provide more FX reserves. So that's why the falling demand of swap transaction was also the reason that our swap gains dropped so significantly.

Okay. And another question from Kate is that, with the earnings decline in the first half, do we expect any dividend cut or dividend payout ratio declining? Or do we expect to maintain the similar payout ratio as before? Annie?

Normally, our payout ratio would pick on our earnings every year. As we would see revised down earnings projection this year, the dividend payout ratio would not be so aggressive like we -- this year, up to more than 70%. But I must say that a payout ratio above 60% is still a norm for us, but we will also admit that a very aggressive dividend policy for this year might be quite challenging anyway. But 60% above the dividend payout ratio is still affordable for us, 60% above.

Okay. Maintained a similar level for payout ratio. Okay. There is another question from JPMorgan, Mr. Jemmy Huang. Jemmy hopes to know that we used the target coverage ratio to be at the least in line with industry average. Will this still be -- still the same target by the end of this year?

We would manage to catch up with our peers anyway. And this is also, I mean, a good tool to safeguard our asset quality. So yes, we will do our best to hike our cost ratio. But maybe not as high as 500 something. Yes.

Okay. And we have another question from [ Tina ]. [ Tina ] hopes to know that what's your major concern, which industry or area is First Bank's major concern about the credit cost?

Industry-wise, I mean, for the tourism sector, and this sector will be the area that hit hard anyway. But fortunately, most SME in Taiwan, they tend to be quite resilient. So up to now, the NPL ratio for SME remains stable, only the large corp. that we mentioned become insolvent. In terms of geographic risk, I suppose the U.S. or like the Europe, maybe U.S. will be the major area that will produce risk for the moment because a lot of analysts project the GDP contraction for U.S. market will be somewhere around 20% something. So that would impact the debt service level of that region. So -- and not to mention that we're having a presidential election maybe 2 months later. So U.S. market would be the area that the risk may surface further in our view.

Right. And we have -- we need to repeat the credit card guidance for 2020. Yes, [ Katherine ], it's 25 to 26 bps, correct. And what number is the 46 represent? Okay. 46% is our CI ratio projection for the full year. And also, we have another last question. After the exit of Beijing Prudential Life, what's First Group's strategies and investment plans on M&A cases for the future? Annie?

If we view the, I mean, development plan as a whole for the holding company that we are too concentrated on bank units. So we would be quite proactive to enter into any opportunities that can grow our nonbanking business, including insurance and so on. So I must say that any initiatives that will help to complement our business and enlarge the scale or introduce new, I mean, expertise would help to improve the efficiency of the whole management team would be our target that we would enter into any potential M&A business. So we would seek further opportunities to join future M&A programs or deals that would help to grow our business or our scale further. So that will be our main strategy for the holding company's structure.

Okay. I think that's all the questions of today. So Annie, would you conclude anything or we just stop our meeting today.

All right. I guess most of our analysts or investors had get their answers from our discussion earlier. Thank you for joining us in today's meeting. We would see next quarter and check whether we had seen a real rebound for the whole performance of our business. And we shall see you or talk to you next quarter.

Okay. Wishing you all as well with you and your family in this difficult time. Bye-bye.

Bye-bye.