NetDragon Websoft Holdings Limited (777) Earnings Call Transcript & Summary

Dear friends. Good morning. Thank you for joining NetDragon Websoft Holdings Limited today for our 2020 Annual Results Presentation. [Foreign Language] Our presentation PPT will be broadcast on the live streaming platform. The PPT is also available for download on our company website at www.nd.com.cn under the Investor Relations tab in IR Webcast section. [Foreign Language] Before the start of our presentation, please allow me to introduce the management who are joining us today. [Foreign Language] Dr. Simon Leung, Group Vice Chairman and Executive Director; [Foreign Language] Mr. Ben Yam, Group CFO; [Foreign Language] Mr. Lin Chen, Group Senior VP; [Foreign Language] Mr. Vin Riera, CEO of Promethean. [Foreign Language] Now let's pass our time to Dr. Simon Leung to host our presentation today. [Foreign Language]

Well, thank you. Well, good to be here. We have not been together for a while now. So it's great to get together once again to go to [Audio Gap] in 2020 and also our quick outlook of this year. Unfortunately, because of the COVID situation, we have to do it virtually. So that's why we decided to make it very formal. We're wearing a jacket. All kidding aside. So we have the team here is actually with technology. We have Vin in Seattle and Lin Chen is in Fuzhou and Ben and I are in Hong Kong. So we're going to get together virtually. Because we issued a press release last night, I'm sure you guys have a chance to get it, study it. So what I'm going to do and the team will go do is actually is to keep it at a high level. And then we go into Q&A. So with that, I'm going to start with my presentation. So I talk about team. The agenda is actually, I go through the highlights, and trust me, it's going to be highlights. Vin will talk about the media more in the sense of plan that we name, Lin Chen will talk about gaming, Ben will go through the financials. I'll talk a little bit about 1 of the programs that we've embarked on last year, which we will continue for a long time to come, which is actually a country rollout, and I will do a high level outlook for the rest of the year, and then we'll go into Q&A. Well, I just have -- want to kind of bring everybody back to last year, it's a very interesting year. I've been around for a long time, but I never kind of seen a year like that. I do remember, I think it was about February last year. I was sitting in Vancouver, talking to Vin about kind of the year and say, "Wow, I mean I said you COVID coming, blah, blah, blah." So we did a lot of work to kind of get ourselves ready just in case we have a down year. So the results surprised all of us in a very good way. So let me kind of go through the results and then we can talk about everything else. Yes, we're quite happy with the result. Of course, we can always do better. I mean revenue, we had over CNY 6 billion, almost USD 1 billion. Actually, the 1 I really like is actual operating profit, which is actually RMB 1.1 billion, and our net profit is actually close to RMB 1 billion. One of the metric I should have put on is actually my thought is actually is our cash generation. We generated RMB 1.3 billion of cash. Last year, that brought us to a very strong cash position. So we are sitting on about $4 billion of cash, which is about USD 700 million of net cash. So we -- you know our performance in revenue and earnings. Gaming is -- that's a kind of repeat the theme in a down year in the sense of the economy, we continue to grow exactly for the 10th consecutive year. I've been here 6 years. Every year, we grow and we grew in a very tough year. The other thing that is actually really encouraging is actually we've been promoting this idea is actually we want to enable learning whether you're at home, whether you're in the classroom or whether you're on the go, which is actually mobile. We talk about ecosystem. We talk about a lot of things before. But at the end of the day, it's really all everything about blended lending. So we see that the market is actually coming to us last year because of COVID. I think it's coming to us regardless. But I think [Audio Gap] COVID actually are fastened the pace to which we benefited. And we talk about the country rollout. We will talk about more like a case study on what we are doing with Egypt and what we are doing with some of the other countries. So let me kind of very quickly talk about Blended Learning, and I did. But just to confuse you, I put up a very complicated map. Just to tell you, this is actually something we have been pushing for the last 5 years. Under a different name, we call the ecosystem, but now we can officially blend it into our Blended Learning solutions. This will also see all our products actually coming together under 1 vision very clearly, including Promethean, Edmodo, those 2 big kind of companies that we have. So a lot of synergy between those 2 companies. And then we are leveraging that to support our customer, whether you're a teacher, whether you're student, whether you're parents. And whether you're a single school, whether you're a district in the U.S. or a country. So exactly, the role is actually very clear for us in terms of Blended Learning. So with that, I'm going to turn it over to my friend, Vin. He take you through a lot of the good things that happen with median -- actually more with Blended Learning. Vin, take it away.

Great. Thank you, Simon. Good morning, everybody. My name is Vin Riera, and I'm the CEO of Promethean. 2020 was definitely a dynamic year for Promethean. The traditional way that our products were bought and used in a classroom setting evolved rapidly. We saw districts adopt hybrid learning environments where teaching learning takes place in the classroom or remotely. We saw blended learning environments with some students in the classroom and some students working remote. In each of these use cases, we have positioned our interactive panels and lesson delivery software as an essential and adaptable tool for educators around the world. Promethean continued to be -- you can go back to the previous slide. The market leader. Perfect. Thank you. Promethean continued to be the market leader in 2020 with 24.6% market share. Our volume growth rate of 16.4% reflects the market acceptance for interactive flat panels in a classroom setting as well as remote learning or hybrid learning environments. Our customers continue to purchase our products as their students return to the classrooms. Regardless of the learning environment, our front of class device shifted to become an integral part of the hybrid learning experience for students that remained remote. Our market leadership in 2020 is a reflection on the company's ability to embrace the shifting market dynamics of remote and hybrid learning. Next slide, please. In our top 10 markets where we are either the market leader or close second, we offer at least 2 products in each market. Our value nickel offering allows -- our value nickel offering or our premium cobalt or titanium offering. Having product differentiation allows Promethean to compete at the middle to high-end of the market. Our philosophy has and continues to be to offer a product that enables us to lead the market that is designed for use in the classroom and can be sold through our global distribution channel. Our approach to market leadership is to do so thoughtfully. So our growth in any given market is always balanced with our ability to do so profitably. This enables us to sell our products to customers that are seeking a product designed to be used in the classroom and hybrid learning environment. While discussing market share, there are 4 different markets that I want to highlight on this slide. The United States is our largest market in terms of overall size. The U.S. is large and growing market that has significant installed base of schools using interactive whiteboards that are now transitioning to interactive flat panels. This allows Promethean numerous opportunities to upgrade our existing customers to interactive flat panels as well as compete per share with net new customers looking for new hybrid learning solutions. Education technology and funding in the U.S. was strong in the first half of the year and then significantly increased when the CARES Act was announced. The CARES Act as an economic stimulus bill passed in response to the economic fallout of COVID-19 pandemic. This increase in funding will carry into 2021. Egypt is the second largest market and represents an important part of Promethean and NetDragon's business. The business that we do in Egypt is done at the country level instead of with individual schools and as part of a broader initiative with Egyptian Ministry of Education, Promethean and NetDragon. This is an exciting part of our business and represents an offering that we believe we can replicate in working with ministries of education in different countries. The U.K. market is our third largest market where we have 26.1% share. The majority of the business that we do is transitioning schools from IWBs to IFPs, either with our legacy customers or competitive wins. The U.K. market was the first to adopt front of class solutions and is a region where we gain insight into replacement cycles in our more mature markets. The last country I want to mention is Germany, where we're currently the #2 provider in the market. The 2 market dynamics that will drive growth in Germany are digital pack funding source, which is a multiyear, multibillion-dollar funding stream for education technologies and the rapid adoption of interactive flat panels, where nearly 60% of the classrooms do not have any type of front of class device. Our strong brand and key wins in this market will help propel our growth in 2021. Next slide, please. This slide shows the continued growth of interactive panels over the last 5 years. This year-over-year growth highlights the strong demand for our products in the past, and you can see it carried throughout 2020. Promethean embraced new and innovative ways to market and remotely demonstrate our products as well as found new ways to train our customers and share best practices on hybrid learning techniques. As Promethean worked with our customers in the early stages of the pandemic on implementing hybrid learning environments, we never stopped building pipeline, and that pipeline ultimately converted to orders in late Q3 and Q4. Next slide, please. This slide shows the strong revenue momentum in 2020. As you can see, our year-over-year revenue growth rate was at 5.6%. However, our second half revenue growth rate half-over-half was 8%. This increase in the second half speaks to the demand of our products during the year where our customers sought out new and innovative ways to educate students, both in and outside the classroom. The second half growth illustrates how the market adapted to the change in Blended Learning and continue to buy interactive panels as part of these newly implemented solutions. Next slide, please. Although materials drive the majority of our COGS spend, we do prioritize efforts to reduce costs in several other areas of significance, including freight, warranty and warehousing. In 2020, we drove operational excellence across these categories in 3 ways. First, we improved our data to understand and identify spending drivers. Next, we established benchmarking to understand what good is. And third, we develop programs to specifically generate savings within these categories. For example, we strengthened our freight and warehousing procurement process to establish long-term partnerships while increasing competition and market visibility. The end results, we brought in a new ocean freight partner, drove cost down on our ground freight and created a scalable cost structure for warehousing. Looking at our warranty operations, we experienced lower failure rates due to COVID-19, which in turn provide a temporary improvement in warranty costs. We work with our manufacturing partners to drive quality improvements, allowing us to optimize the cost to provide warranty services to our customers. In other words, deciding between buying a warranty or self warranty, a product based on lowering costs over the long term. In all, these efforts created operating leverage with cross -- with costs growing slower than revenue. Promethean's commitment to continually enhance our operational efficiency and control cost was an important factor in our year-over-year margin improvement in 2020. Despite our year-over-year increase in revenue and volume, Promethean recorded an overall reduction in freight warranty and warehousing in 2020. These efficiencies helped us improve our margin from 30.1% in 2019 to 33.6% in 2020. Next slide, please. Another key differentiator for Promethean is our network of global channel partners that we've been working with for years. Recently, we added focus and resources to recruiting new resellers throughout the world. In 2020, Promethean successfully added 100 new resellers to our network. All of the new partners added to the Promethean distribution network commit to our onboarding and training program. As our new partners are trained and their knowledge grows on the Promethean products, I expect the sales pipeline growth to follow. Promethean ended 2020 with over 1,000 distributors and resellers covering 105 countries worldwide. Next slide, please. In 2020, we successfully transitioned from a company that sells interactive flat panels with lesson delivery software to a company that's part of a blended or hybrid learning model. Our product value proposition puts us in a unique position to capitalize on the Blended Learning environment. Promethean shifted our resources and focused on connecting with our customers and prospects with virtual sales and marketing efforts. Our seismic shift from being face-to-face to virtual is similar to what the education segment experienced in 2020 moving from classroom instruction to hybrid learning. Many of the best practices that we developed last year will carry forward for years to come. Let's move on to why customers buy from Promethean. Next slide, please. We are able to make the shift to hybrid learning because we have the right brand equity, the right product value, and we sell our products at the right price. I want to start with brand equity. Promethean has been in the education market for over 20 years. School administrators, teachers and resellers know our product, and we've been part of the educators' technology journey for the past 2 decades. When our customers had to change the way they teach due to the pandemic, they trusted and they relied on Promethean. We design our products to be engaging for the teachers and students, and that engagement carries forward with virtual instruction. That means we focus on how teachers use our panel and lesson delivery software when teaching their lessons. There's a real value that we deliver to our customers in every panel that they use. Finally, we honed our skills at creating an innovative interactive panel for the education segment that has unique and intuitive features and functionality that deliver at the right price point. Creating this experience for our customers in the education market is part of Promethean's DNA. Next slide, please. In these last few slides, I want to share with you the reasons why customers do business with us and share a powerful case study on why a large school district in the U.S. chose Promethean as part of their hybrid learning solution. Next slide, please. In Q4 of 2020, Promethean commissioned Forrester Research to do a total economic impact study. One of the important outputs is reflected in this slide. Not surprisingly, Promethean's interactive panels increased teacher satisfaction, which in turn has a positive impact on student attendance, retention, test scores and graduation rates. This study was beneficial for Promethean as it confirms that teachers like our products. And when teachers have the tools and resources that they can depend on, they have a positive experience. In turn, that positive experience resonates in their teaching and the way they engage with their students. Next slide, please. We have numerous examples of where we've successfully implemented hybrid learning environments for our customers in 2020. The case study I want to share with you is about a large school district that we won in Q4 of last year. We're working with this top district in the U.S. that needed to implement a hybrid learning environment across 230 schools, supporting 155,000 students in a Blended Learning environment. Our goal is to support the teachers instructing students that were remote. The solution was to have the teacher use our interactive panel with a video camera capturing the lessons and then streaming those lessons to students on a district provided one-to-one device. In this hybrid teaching model, students in the classroom and students that were remote could have similar learning experiences. The incumbent provider was not able to find a way to configure the camera nor did their panel have the processing ability to allow the camera to function properly. The Promethean's panel unique capabilities and our company's expertise in working with schools to implement complex applications propelled the district to shift vendors and begin placing orders with Promethean. We project nearly $18 million in revenue from this district this year. I expect we will implement solutions like this one across the globe in 2021. Next slide, please. In my final slide, I want to share the areas that Promethean will continue to focus on in 2021. Promethean will build on our global K-12 leadership, meaning we'll leverage our unrivaled brand recognition and trust that we've established in the market at a global scale. We will continue to grow our sales channel and enter new markets while developing new business opportunities in emerging markets by leveraging our long-standing partnerships. Promethean will also stay on track to expand market penetration by evolving our hybrid learning applications that resonate with teachers across various learning environments. We'll also continue with our robust digital and virtual marketing efforts to maintain our market leadership. Finally, Promethean will capitalize on the accelerated trend of Blended Learning due to COVID-19, a trend that we expect to carry on well past the end of the pandemic. We will continue to align our products with funding sources and lead in the pursuit of lower country-wide tenders like we do with Egypt. Thank you for your time today. I'm now going to turn the call over to Dennis.

[Foreign Language]

Hello, good morning or good evening. This is Ben, and I'm going to present to you our financials for the full year. So first of all, as Simon mentioned in the very beginning, 2020 has been a year of challenges and opportunities. And I think if you translate that message into the financials, while we believe the opportunities will enable us to grow in a much faster pace in the coming years, I would say that the challenges do have some impact on the revenue growth in 2020. And as you can see here, if you can turn to the next slide. As you can see on this slide, our revenue growth of gaming was 4% and education was 2% for the year. And for the investors who have been following us for quite some years, this growth rate is lower than our typical rate. But I would like to point out that this is actually something that Vin had also mentioned is that our second half revenue in 2020 has sequentially increased at a much higher rate. In fact, if you look at our education business, the overall revenue in the second half increased by 14.7% compared to the first half. And our gaming revenue in the second half also increased by over 8% half over half. So overall, that's a momentum that we are pleased to see. And we do expect that, that momentum will continue to carry forward into the new year. And then if you look at the cost side of the equation here on this slide, we've also continued to manage with discipline and operational excellence. And we've seen our gross margin percentage increase in Promethean as a result of robust cost management, and that translates to a higher rate of gross profit growth here at 8.2%, as you can see here, which is higher than our revenue growth rate. And on top of that, we have been managing our costs very effectively on the OpEx level as well. As you can see, the sales and marketing expense and also the general and administrative expense on this chart here decreased as a percentage of revenue in 2020. And then in terms of the bottom line, the net profits increased by 18% over 2019. And then if you look at EBITDA and also non-GAAP operating profits, these also saw a significant year-over-year increase. And then cash flow continues to be strong. Our operating cash flow increased by 13% to $1.3 billion. Simon also mentioned this in the beginning. And then we also maintain a very strong financial position as our cash -- net cash amounts to close to $4 billion at the end of the year. Next slide, please. So now on to the segmental financial highlights. Again, the highlight of the year for both businesses would be the sustained revenue growth despite the challenges. And with effective cost planning and management, which enabled us to keep costs under control, both on the cost side and also on the OpEx side. And then specifically for the education segment, I also wanted to highlight that, as you can notice here, our core segmental loss for education increased by over 10% during the year. And a big part of that is actually due to the increased server hosting cost that's actually related to substantially higher user trials for our Edmodo platform, which in turn, is because of the COVID-19. And also, as you can -- and also, especially in Egypt, where we have started to implement a countrywide rollout. As we have talked about before, we have seen significant increase the MAU and DAU in various countries and especially in Egypt. So the way we -- we look at it in terms of the segmental loss increase is that there's a bit of mismatching, right, between the timing of cost and also the revenue, especially for Egypt. Because while we saw our hosting cost increase last year, because of the user traffic, we're actually expecting to see our Edmodo revenue to come in this year. And Simon will talk about -- will talk more about this in the country rollout part of our presentation. And then the other thing to note here on the core segmental loss is that, as you can see on the bottom right box here on this slide is that our second half core segmental loss narrowed significantly to slightly above RMB 200 million, compared to RMB 377 million in the first half, and that's attributed to our continued cost management efforts and also higher revenue, high gross profit in the second half. And as I look forward kind of to the new year in 2021, we do expect this narrowing of core segmental loss to continue in 2021. So I think the second half core segmental loss, as you can see here, $208 million would be a good benchmark to kind of forecast in 2021. And I think that's the end of my part of the presentation, and I will pass it back to Simon, who's going to take us through the country rollout as well as the outlook.

Okay. Thank you, Ben. Before I do that, I really do want to make a couple of comments on kind of -- on the cost side of the equation for our education business. In addition to managing the cost and everything, we also managed to cover the tariff issue because if you remember, so there was a tariff imposed on all the product going into the U.S. So Vin and his team actually has done a marvelous job in managing that and then continue to drive up the margin, so which is actually a good thing. The other point I want to make on the education business actually is in terms of market share. While we continue to go after #1 in the market, but we won't do it at any cost, which is actually something that Vin and his team are very good in doing. It's actually -- while we're increasing our market share, we don't allow our margin to get impacted. So that's why we see year-to-year growth in terms of margin. And if you really take the business and separate into 2 is actually the developing market and the developed market is at -- developed market is actually margin is actually very healthy while we're going after the market share, for example, in Egypt or in Italy. So it's actually congratulations Vin and team in doing a great job on that one. So with that, I want to go into country rollout very quickly. I'm very conscious of the time. It's actually -- you heard us talking about is actually the vision, the Blended Learning vision for the entire country or the entire district. So basically in Egypt, we're working with them on many different projects to really help them to revamp the entire education system. Case in point is actually I really got to admire Dr. Tarek Shawky, who's the Minister of Education in Egypt. He took advantage of COVID. I mean may not be a good -- doesn't sound good, but it is actually revamping the entire education system using basically all our platforms, both hardware and software. So here just give you a snapshot of that. We're in the middle of implementing it, and we are also looking at what we can help them in terms of learning after school. So that's why you see our online tutoring platform on the bottom left. The also -- the other thing which is quite important. We also work with partners to address the issue. You see Zoom being there. And also we're working with Microsoft Teams, by the way. I mean it's actually Office 365. So we are -- we have a lot of wonderful partners that we work with. The next page is actually just a repeat on. With our vision, we can support a school, a district or a country. So it's actually, we are quite flexible in terms of how we can support them. This one is just a pictorial kind of ready to tell you. We -- based on what we do, we can build up a very interesting SaaS and subscription and licensing model going forward. And also we work with partners to bring in revenue opportunity for us based on the community we build. And if you look at the countries, we work with the likes of Egypt, Thailand, Ghana, which is in Africa, and Russia and also districts in the U.S., Miami -- by the way, Miami is actually 1 of the largest, if not the largest school district in the U.S., which we have a lot of presence in. So this is just talk about growth because it's actually once you start work in country, you start building it up. So this is actually where the SaaS revenue -- recurring revenue concept will be very powerful. This is actually different stages of what we do. So give you a view of we're not just working on 1 country. Okay. Let me go to outlook very quickly, and then we'll go into Q&A. We are very confident about 2021, both in the PC business and also in the education business is actually -- we're seeing a lot of funding going into education because of Blended Learning. So that's why we see the market momentum is actually with us. So we also see a lot of synergy between our businesses. So we are taking a look at how we can leverage in our different businesses and maybe even integrating the businesses to get better synergy out of it, both from a go-to-market standpoint and also from a -- from a cost standpoint. And is actually -- a country strategy is actually 1 great example. There are other companies are working together. So the last but not least is that we will continue with fiscal management. In this one, we'll continue to focus on generating cash. Of course, the P&L is 1 thing. But I do want to say and tier up is actually -- I did talk about integration. I did talk about synergy. We're going to take a look at our cost structure of our education business very closely. Actually, we have started that late last year; you will see some result. I'm not in a position to take you guys through it. But I think the results will be quite encouraging for our investors. With that, I want to make 1 final comment. It's actually when I look at our stock and we look at our P&L, when I look at our balance sheet, I think we are very undervalue at this point. So with $700 million of net cash with a market cap of USD 1.4 billion. So a lot of good news for the investors. With that, I'm going to stop and we're going to open it up for Q&A. Thank you for your patience.

Thank you very much, Dr. Leung and the management. Now it's time for our Q&A session. [Operator Instructions] [Foreign Language] Now we will also welcome questions in both English and Chinese. [Foreign Language] Let's welcome our first question.

No question?

[Foreign Language]

Okay. [Foreign Language]

Okay. Next?

[Foreign Language]

[Foreign Language]

[Foreign Language]

Lin Chen, [Foreign Language]

Okay. [Foreign Language]

[Foreign Language]

[Foreign Language]

[Operator Instructions] [Foreign Language] Our next question is for Promethean. Investor would like to know more about the volume and the ASP and the future trend of the Promethean product.

Vin, I think that one for you.

Yes, absolutely. So let's break it into 2 different areas. From a volume standpoint -- here we go. Thank you. We did approximately 130,000 units this year in volume. One of the things that's interesting and a trend that we've seen is when customers are using our products for Blended Learning, they're buying our more premier product, which is our titanium product. And what we saw is we saw a higher mix shift of titanium product this year than our lower end products, which is very, very encouraging. We've even seen in the market where customers have recently bought lower end panels from competitors that had to replace some of those panels with our panels as a result of that. So I guess that addresses both of your questions.

Yes. Well, that's going to also reflect to what I was trying to say earlier in the meeting. It's actually what we want to do is actually we're going to balance is actually the ASP and the market share and also the margin because -- I mean we don't want to go into the price wall. That also goes to 1 of the chart that Vin has, our brand equity and the value and everything. So we will grow our volume, but not at the expense of our ASP nor at the expense of our gross margin.

[Foreign Language]

Lin Chen?

Okay. [Foreign Language]

We're getting a lot of background.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Lin Chen?

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] Our next question is also from our webcast platform. It will be on Promethean. Analyst would like to know what is the new product pipeline for Promethean in the next year. And also is there any order on hand we can disclose? Thank you.

Vin, over to you.

Yes. Yes, great question. So we do have new product on the horizon. We will release new products for the -- in 2022. What I should mention, though, is our existing product -- because it's a connected device, and we have the ability to do over-the-air updates, we've done over 20 enhancements this past year. We continually upgrade and improve the product and keep it very relevant in the market. The technology is at the point now where when we launch a product, we can leave it in the market for a little bit longer because we can continue to enhance it before we launch a net new product. But you will see a new product in the market from Promethean in 2022.

Yes, actually, I couldn't resist adding because I did -- Vin did give me a sneak preview of our new product. I'm very excited about the 1 coming up is actually very different. Actually you'll be excited. So the other thing I would like to say, I mean it's actually -- it's actually -- we could be kind of in a sense of getting guidance a little bit, but Vin is a very busy guy in Q1. So I'll leave it at that. When it comes to -- because the order kind of question. We can't go into detail, but he has not been sleeping for the last 2 months, so.

Thank you. Thank you, Ben. Thank you, Vin. So we would like to welcome our next question. [Foreign Language]

[Foreign Language]

[Foreign Language]

Lin Chen?

[Foreign Language]

[Foreign Language]

Thank you very much. Thank you, Dr. Lin. Thank you, Ben. Thank you, Lin Chen. Thank you, Ben. This successfully conclude --

Can I make a closing comment? I thought -- so first of all, thank you so much for joining the conference. So just to kind of repeat, we are very confident about 2021, both the gaming business and also the education business. You know our gaming business quite well. That's why a lot of questions around there. On the education side, we truly believe and we are very confident that we can make progress, both on the top line and the bottom line perspective. So with that, it's actually -- I think we have very good stuff to invest into if you look at our balance sheet, let me repeat myself on this one. So looking forward to talking to you guys soon in the near future. Thank you.

Thank you very much. Thank you, Dr. Leung. Thank you, Ben. Thank you, Lin Chen, and thank you, Vin. This successfully concludes our presentation today. Once again, I would like to thank you all for joining us. If you would like to communicate with the management further, please contact us for one-on-one meeting arrangement. Thank you, and we wish you all, have a great day. [Foreign Language]

Okay. Thank you, guys.

Bye-bye.

Bye.