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

Dear friends, good morning. Our presentation -- thank you for joining us for NetDragon Websoft Holdings Limited 2021 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 website 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. Good morning. Welcome to the NetDragon metaverse. So I'm kind of referring to the background that I have. The reason I do that is actually that's going to be one of the theme today. So let's jump to the agenda page, so I can take you through a rundown of what we're going to do today, the agenda page, the next one. So I mean you guys have seen the press release. I'm sure you studied the details. I'm going to hit the highlights, and I'm going to let Ben talk about some financials. But more importantly, if I kind of recap on our last earnings announcement, which is 6 months ago, we did talk about our shareholder enhancement -- value enhancement program. I'm happy to say that we have done a lot. We're going to do more, but Ben is going to take you through the details. So Vin is going to take us through some of the exciting progress that we've made in our education business. And then, of course, Lin Chen is going to take you through a lot of the development in gaming, not only in 2021 but also looking forward. Then I'll come back and talk about the metaverse and why we believe it's the right thing to do for us and why we believe it's our future, why we believe there's a lot of synergies with both our education business and gaming. And then we open it up for Q&A. Next page. I think the numbers speak louder than itself, I don't really need to explain it. So we request a $7 billion mark in R&D. We're growing in all areas, so it sounds like a repeated theme, but it's important. I think you want to see a consistent business. We have been there, we have done that. So next page. Again, I mean, it's actually kind of more of the same thing. Gaming continues to be our engine to generate cash. So again, Lin Chen will take you through the things that we have done and things we're going to go do forward. Very happy with the progress with our education business, especially overseas under Ben's leadership. And he's going to talk about it and also give you some example of the big wins and key wins that we have. I'll come back and really talk about how we see the metaverse and how we position ourselves. We have a 3-prong strategy to deal with that. I'll give you a little bit of detail. And of course, Ben is going to go into a little bit more detail on what we have been doing in terms of value enhancement. So with that, I'm going to turn it over to Ben, whom you should know very well by now. Ben?

Thank you, Simon. Hello, everyone. First, I'm going to go over our financial performance for the year, and then I'll give you an update on our progress in terms of capital market measures to enhance shareholder value. So first, I would like to highlight on this slide that we have achieved 5 consecutive years of growth in terms of revenue, operating profits and net profits. Our revenue went up by 2.3x in 5 years. And in terms of our bottom line, we are close to double our net profits since we turned back to profitability in 2018. And this is achieved on the back of our success in both our gaming business as well as our education business as we continue to consistently deliver exceptionally strong performance in these 2 business lines. Next page, please. Okay. So to quickly go over our income statement. Our overall revenue growth was 14.6% year-over-year as we continue to see upward growth trajectory for our gaming business and also just very strong growth for our education business. Vin is going to go through the details. But in short, we are continuing to see a very strong business momentum for our education business as we had 32.2% growth -- revenue growth for the year, which is actually our highest growth in the past 4 years. And this is achieved on a very strong demand momentum for blended learning in K-12 classrooms around the world and also Promethean solutions really fit right in, in terms of the technology of choice. And then on the cost side, we also executed our business with strong cost discipline at our OpEx items as a percentage of revenue or decreased over year-over-year as we continue to benefit from operating leverage. Okay. In terms of bottom line, we've delivered in 2021, a 27.4% increase in operating profits, 11.4% increase in net profits and also a 12.8% increase in EBITDA line. Next page, please. Okay. On to the segmental financials. First, on the education business. In addition to our strong top line growth, I also wanted to highlight that we've been able to keep our gross margin stable at 30.8% as we were able to overcome our supply chain issues, which has created -- which has increased our materials and logistics costs quite a bit. Again, Vin will go into details on that. And our core segmental loss also continued to narrow to trend down as we saw a reduction of 28% to $412 million in 2021 as we continue to improve our bottom line while we continue to invest in our products and our technologies to capitalize on the blended learning opportunity. And then on the gaming business, we continue to achieve stable growth in both our top line with 6.1% growth and also our core segmental progress with 7.8% growth as we continue to enhance our OpEx structure to streamline our operations. Next page. Okay. And then I'll move on to the next part of the presentation, which is our shareholder value enhancement where I will given a recap and also an update on capital measures to maximize capital return for our shareholders. Okay. First of all, I would like to reiterate our commitment to enhance shareholder value with capital measures to return value back to our shareholders while preserving capital for us to invest in the future. And we've really delivered on this commitment in the past few years by executing a series of capital market pressures. As you can see on this slide, the past 5 years, we've delivered a cash return in total of HKD 1.7 billion via share repurchase as well as our recurring dividends, recurring interim and also final dividends. And then in February of this year, we paid a special 2021 interim dividends in the amount of USD 100 million, which is -- amounts to HKD 1.43 per share. And then in August last year, we also announced a 3-year share buyback to repurchase our own shares up to $300 million, and that is also one of our major initiatives. Our net cash position stands at HKD 4.8 billion at the end of 2021, which we believe will really put us in ample -- very strong position to support future investments to drive our long-term growth. Next page, please. So this chart shows that we're consistently increasing our cash return to shareholders in the past few years, as our annual cash return in terms of recurring dividends and also share buybacks have more than tripled since 2018. And the other thing is that I also would like to update you all that we've been following through on executing the 3-year share buyback program that I just talked about. And since the initiation of this program back in August, up to now, we've bought back a total of 16.2 million shares amounting to around USD 38 million. Next page, please. Okay. This is another chart to illustrate that on a per share basis, our recurring annual dividends has also increased significantly in the past few years from $0.25 in 2018 to $0.80 last year. And then on an overall basis in 2021, our total dividends for the year, including the special dividend amounted to HKD 2.23 per share, and that actually represents approximately 94% of our total profits attributable to owners for the year. And with that, I'm going to pass the stage to Vin who's going to take us through the education business. Vin?

Great. Thanks, Ben. Good morning, everybody. My name is Vin Riera, and I am the CEO of Promethean. We want to go to the next slide, please. So on the next couple of slides that I'm going to cover, we're going to talk about the market growth in the addressable market that we see. This slide does a great job illustrating the growth that we've seen in the market consistently since 2017. You'll see a huge jump in 2020 to 2021, and that's reflective of the amount of funding that came into the market for technologies like ours from class technologies, interactive flat panels, lesson delivery software as schools had to adopt to COVID and adopted hybrid learning and blended learning solutions. This growth has been in 2 key areas. It has been in replacement of technologies that were in front of classroom, either interactive whiteboards or older interactive flat panels, where people replace their technology with newer technology and then just sheer growth in new adoption of technology for the classrooms around the globe that do not have the technology that was an opportunity for us to sell into that. If we go to the next slide, we'll talk about the addressable market and the market opportunity that we have in front of us. What this slide illustrates is the enormous opportunity, again, that we have in the replacement cycle and in the new purchases of interactive flat panels and front-of-class technologies. If we take a look at the size of the market, and we assume that there's 42 million global classrooms and 82% of those classrooms today are not penetrated, meaning that there is no front-of-class device in there, you take an ASP of $2,000, it gives us an immediate addressable market of USD 69 billion. So the opportunity that we have in front of us is absolutely enormous. If you take a look at the chart, what you'll see is if you look at the blue tones, those are adoption rates of either interactive flat panels or interactive whiteboards within those given countries. That represents a replacement market for us. So if you're seeing adoption in those areas, that doesn't mean [indiscernible] imagination, that those aren't areas that we can continue to win in getting business. That's what we consider to be our replacement market. If you look at the sheer amount of white space, that's the opportunity that we have to enter into classrooms to support front-of-class technologies with new adoptions. So when we look at this slide, we're looking at an enormous addressable market of $69 billion. We're looking at a very ample replacement market that's toned with the blue and the white space is just sheer open territory for us. When you think about what we can sell in today, the existing products that we have today, and again, the additional upside that we have by adding new products with our software services, the future for us, there's a lot of green space in the future for us and ample opportunity for us to continue to grow. If we go to the next slide. One of the things I've spoken consistently about as important to us, remaining -- or keeping a market leadership position in the largest markets around the globe and making sure that we have solid footprints and solid relationships in those markets. I'm going to highlight 5 markets here and just speak very quickly to some of the growth that we've seen and some of the key tenets to our success. The U.S. market, again, we're #1 in the U.S. market with 28.7% overall share. The U.S. market grew 71% in 2021, and Promethean grew 84%. So we outpaced market growth in the market. I was very pleased to see that. We saw a huge adoption of our products being used for blended learning and remote instruction. We also saw -- we saw teachers, we saw school districts adopting our products that might have bought products a few years ago, but that technology was no longer current with the technology that the students were using and teachers are using. So that's a consistent story that we first saw in the U.S., and we were able to capitalize it. In the U.K., we are #1 in the market at 23.1% share, and this is our fifth consecutive year of being #1 in the market. We had strong growth of 42% in that market. An interesting trend that we're seeing in that market is we're seeing interest in adopting more than 1 interactive panel per classroom. So we see this market growing not only in the replacement market, but additional opportunity to sell new equipment into the classroom. Within Germany, again, #1 market. You probably don't remember from one of the previous slides, but German market share is only about 40%, which means only 40% of the classrooms in Germany have an interactive flat panel in the classroom. That means that there's significant opportunity to continue to grow in Germany. We have 23% of the market. We're #1. It's now our largest company in EMEA, it outpaced the U.K. from a market growth perspective, and there continues to be significant funding in that market, which is going to allow us to continue to expand and grow. And then France, interesting market in that we're #1. We have 23.8% share. It's the fastest-growing market with a 31% CAGR on market volume from 2020 to 2023. While the fourth largest market in EMEA, the trends in that market are a shift to interactive flat panels. It's primarily been an interactive whiteboard or projector market that represents a huge opportunity for us because the replacement market is even larger for us in that market. And then I'll just call out Iberia. We're #2 in that market. We have a very balanced growth strategy with 20% year-over-year revenue growth. And in smaller markets, and I'm just going to call out Portugal here, there's other ones that we have situations like this, too. We dominate in some of those markets. And in Portugal, as an example, we have 70-plus percent market share. So pretty large markets across the globe and these top 5 countries represent 75% of our 2021 revenue. Next slide, please. 2021 was an interesting year in regards to supply chain and logistics. And Ben touched on that. And I just want to give a little more insight into it. What we started off doing in 2021 had to be adjusted pretty quickly as market conditions continue to deteriorate. And we quickly put in place plans to control our ASP, control our freight and cost -- our freight cost per panel and then manage our gross margins. And it was something that we worked on consistently throughout the year. Relative to ASP, we're able to increase our ASP 5.6% year-over-year to $2,287 a panel. That took a lot of effort. There's a lot of different initiatives in order to do that because we didn't want to be inconsistent with our channel, our customers and our pricing, and we're very happy with that result. On a freight cost per panel, this was another significant company-wide initiative that was focused on throughout the entire year. The market for freight increased 6.8%, and our freight costs only increased by 2.8%. So we outpaced the market by controlling costs on freight. And then overall gross margin was relatively stable given the challenges that we had in the market last year. Gross margin was 32.8% versus 33.8% in 2020. So we're able to control a lot of variables in the business, but that changed constantly throughout the year. Next slide, please. So now I'm going to talk about -- the next few slides are going to talk about customer wins, and there's just going to be some key takeaways on each one of these slides. Relative to this slide, there's a lot of different names on here and there's a lot of different examples, but there's 3 takeaways that I want to give. The first one is we win large districts. And this is consistent, if it's large and it's complex, it's something that we do really well at. Three examples here are New York Department of Education, Miami and Chicago Public Schools. The second thing I want to point out is we went in midsized districts and small districts. And I didn't put small districts up here, but we do win in an awful lot of midsized and small districts. So we're adept at winning in large districts, we're adept at winning in small and midsized districts. And the other thing I want to point out is we're adept at winning at Department of Education. And 2 examples are New South Wales Department of Education and Puerto Rico Department of Education. The key takeaway here is within the K-12 market, we compete and win. And it's not an area that we're trying to find a niche to improve, and it's an area that we're trying to find a way to grow holistically and continue to grow holistically. If we go to the next slide, this is the first of 2 examples. I'm often asked why we win. And aside from a very strong brand, aside from a loyal customer base, aside from lesson delivery software reliability, over-the-air updates for our products, I just wanted to pull out 2 examples and share with everybody why we won. The first one is Lee County School District in the U.S., really, the winning factors for us is what they needed more than anything was comprehensive training and a solid support and a professional development plan with the panel and with the lesson delivery software. This is a market that does -- that will pay for value, and they will pay for additional services and support. And what we did is we partnered with the district to understand what they were looking to accomplish, the time line that they're looking to accomplish their goals and put a solution together that met the needs of more than just providing a front-of-class display with an award-winning ActivPanel. And it made the transition from the incumbent super easy. That's always a challenge for schools that are leaving an incumbent to a new one, and we made it as easy as possible for them. The next example is similar, but brings into a little bit more texture. What Cidari Multi Academy Trust in the U.K. needed was what was most important to them was seamless integration with their existing ed tech across all environments. And it had to be compatible with Google software and devices and they needed to have training on it. And one of the things that we were able to do is when we went in there and listened to what they wanted to accomplish when we work closely with the channel partners and tried to roll this out, again, we're able to put together a comprehensive solution for them that help them feel very confident about the success [indiscernible] and making sure that their end users, ultimately the teachers, were able to operate seamlessly in the classroom. So just 2 more overall examples on why we win and how oftentimes, sometimes just listening to what the customer is looking for and taking our experiences and helping them implement what they want to implement that feels very accustomed to them is a winning solution. If we go to the next slide, we won awards in 2021. And that was great because 2021, we continue to have B7 in the market. We made multiple updates and upgrades to that product. So if you had bought B7 early on in its life span, you've got to see some improvements over the life of that product. But we received awards from Tech & Learning, from Bett, from the AV Awards and EdTech. This was both for ActivPanel and for our lesson-delivery software. So still very well recognized across the market as a market leader and a thought leader in this space. And then the final slide I'm going to talk about what's happening in our MOE business. So MOE is our Ministry of Education business. We also sometimes refer to it as country-wide rollouts. There's 3 examples that I want to talk about today. The first one we've heard a lot about consistently on every single call, it's Egypt. We have a very strategic relationship with Egypt. We spend a lot of time with Egypt, understanding what they're looking to try to do and try to be the best partner as possible to help them accomplish their education goals. And just very recently, we signed a definitive contract with Egypt for 94,000 Promethean panels. We're thrilled with that. We're thrilled with that commitment -- that business commitment that we have for them and they have to us. We're working with them on Edmodo solution in 2022, and we're also looking at expanding new initiatives that includes content and metaverse opportunity. And Simon is going to talk a little bit about metaverse after me today. And then in Thailand, we were able to get a pilot of 3 regions completed. And it had quantifiable increase in learning outcomes. So really, really successful pilot there. And we're moving toward a paid pilot and a solution for them that we can scale nationwide in 2022. And then the last MOE opportunity that I'm going to share with you today is in Ghana. In September of 2021, we signed an MOU with Ghana to develop a sustainable nationwide blended learning platform for the 9.3 million K-12 students. So that's a project that's underway, and we're engaged with, and we're excited to be able to share updates with you. That's it from the education business. I'm now going to hand it off.

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It's actually very timely that Lin Chen ended up talking about the metaverse. So I'm going to come back and really, at a high level, tell everybody what we are doing and what we have been doing and what we are going to be doing in the area of metaverse. First of all, we believe that it's really in our wheelhouse. We see it as a big MMORPG game with a lot of new technology and content into it. And that's our DNA. We've been doing this all our lives. We're going to continue to do it. So if I may, I will kind of put our initiative into 3 different buckets. The first one is actually Lin Chen alluded to is actually is blockchain games. So I'll talk specifically about a game that we have launched kind of and our plan about it. By the way, that's not the only title that we believe that we can take advantage of blockchain technology and the gameplay. So that's why I put the 2 kind of boxes in 1 bucket, which is blockchain games. We are very excited about it. We believe we'll be successful. New verticals is actually how we'll probably describe it as adjacent verticals that is very close to what we do. The first one we're looking at definitely is what we call [indiscernible] metaverse. So we do believe the concept of social learning will be coming and will be here to stay. So with the big user base that we have, whether it's super medium models, we believe we are in a prime position to take advantage of that. So we are in more than just planning stage. We have a lot of initiatives going on right there but I can't give you the details. But for sure, in our next earnings announcement, we'll give you a lot more detail. Because the whole metaverse around blockchain is a new area and is moving really, really fast. So we do believe that we need to stay in the forefront of the technology, the business model and all the innovation. And the fact that we have quite a bit of kind of cash on our hand. We want to use it in the best way that we can. So in addition to enhancing, show the value, we decided to take a more, maybe lack of better term, aggressive investment approach in the whole blockchain area. So we're going to be investing in any of this vehicle that will allow us to, number one, look at the deals and then we get a good returns, plus we can really be in the front of all the new innovation, whether it's technology or business model. The other one is actually we'll be doing some partnerships. By the way, our investment is not only just on software, it could be hardware that enhance our experience in the metaverse. The other one is actually really partnership in people that we can work with and get us into and expand into the metaverse universe much quicker. So that's really the highlight. We have started doing that in the second half of 2021. We're going to speed it up in 2022. So I can guarantee you'll be hearing from us very soon. You don't have to wait until the next earnings announcement. So next page, I will give you a little bit more specific on the game that we have started to do. If you remember, towards the end of last year, we have launched 2 projects with Neopets. Just to remind everybody, Neopets is a well-known game through the gaming community. It's all about virtual pets. It's been around for many years and has a user base of 150 million players that they have played the game. We're talking about million MAU. So we are taking that into the [ crystal ] area because if you look at the game itself, it's actually the battling, the raising of the pets, dressing them up is actually -- got all the element in a blockchain game. The thing that would differentiate us from all the other games, number one, is the first major IP that is actually going crypto, going blockchain, I should say. It's a proven gameplay, a proven community. What we're going to be doing is actually is play earn and is not play to earn. So it's actually, I think a lot of people are very familiar with one of the games, which is around pets but that's a play to earn game. So they do a very different audience base. So we decided to stay with free-to-play premium and also play-and-earn so we can appeal to a much wider audience in gamers. So we have a whole time line developed. We announced the game. We're going to be reviewing more of our progress is actually this week to the community and then also leading up to an alpha launch, I think sometime in June or July time frame in the Q2 end Q2 beginning of Q3 time frame. Okay. With that, I'm going to turn my attention into the outlook for 2022 is actually I'm going to be very pleased. And let's go to the next page. If we can go in and in turn talk about our future in our business, so we're going to have a very balanced growth strategy on gaming, both domestic and overseas, also on the content. And really, I mean, Neopets is not going to be the only blockchain game that we'll be doing. In terms of education, we're going to have 2 areas that we'd be very focusing on. One is really take advantage of the tailwind that we have in terms of blended learning. I'm not going to be people have been -- has told you, we just have to reiterate, we are confident in 2022 and onwards. The way we're doing it is actually we're getting a lot of sockets, if you will, into all the classroom. So on top of that, then we can deploy software and content over our learning solutions. So that leads very nicely in the next point that a lot of people think Promethean is a hardware sale. But if you go listen to win carefully is actually one of the big differentiation for us is our lesson delivery software, so on top of that, we can start monetizing. So that's how the whole game plan all along. Last but not least is the previous 2 slides that I talk about. And not only we will continue our metaverse initiatives, but we're going to ramp it up. We're going to be quite aggressive, but of course, in a very prudent kind of way to take us into a new growth area. With that, thank you so much for the patience. So I'm going to open it up for Q&A.

[Operator Instructions] [Foreign Language] We welcome questions in both English and Chinese. [Foreign Language] Let's welcome our first question. [Foreign Language] Our first question comes from BOCOM, Mengqi. [Foreign Language]

Okay. Let me take the first one. So either Ben or Lin Chen can do the second one. [Foreign Language]

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Our next question comes from CICC, [ Khai ]. [Foreign Language]

[Foreign Language] Vin, actually the next question is for you. So the question is, does the COVID situation affect our education business? But I think the answer is yes, I'm sure you have a good answer on that one. But Lin Chen is going to answer the first question.

Okay. [Foreign Language]

Vin, over to you.

So COVID did have an impact on our education business. We first saw it in 2020 when schools started to go remote. And I think the long-term effects are what's most interesting in that the funding sources that were put in place to allow teachers to teach remotely have carried forward. And as students have gotten new devices and teachers have gotten new devices, and they've invested heavily in different ed tech solutions, software solutions, it's become mainstream for them. And what that's done is it kept them continuing to purchase the latest technology and continuing to upgrade their technology, and that's not a trend that I see changing in the next few years.

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[Foreign Language] I don't even remember all the answers. [Foreign Language]

Okay. [Foreign Language]

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[Foreign Language] are the main growth drivers for the education business.

[Foreign Language] So I mean, did you get the question? The main driving force of our growth, I thought you answered the question previously, but go ahead and repeat.

Yes, sure. Let me touch on it really quick. One of the impacts of the pandemic was that a significant amount of money came into schools to upgrade their technology. And we've seen growth -- traditional growth in the market going back to 2017 is about 8.5% a year. In 2021, we saw 23% growth in the market. And a lot of that has to do with an increase in funding. So I think the funding increases, the adoption of new technology, faster adoption of new technology, faster replacement cycles, faster adoption of front-of-class displays in markets that haven't traditionally had that is what's fueling that. It's one of those things where they started buying it. And then once they started buying and incorporating more technology in the classroom, everything has to be upgraded, and we have benefited from that, and we will continue to benefit from that.

I think the other thing you guys have done is that we also optimize our revenue by selling our higher model. You may want to touch on that a little bit, too.

Yes, that's a good point. That's a great point, Simon. One of the things that we've seen is with the applications on how the products are being used in the classroom. We have 2 levels of panels. We have a great panel that people can buy and use. And then we have one with additional storage, additional memory, additional functionality. And what we found is we saw a big shift with customers that wanted the higher level of performance that wanted the additional storage because the use case has changed. And especially if they were attaching a camera to it, or that there is more interaction that the teacher is having and the students were having with their 1:1 devices with the panel, our premium product was something that met their needs a heck of a lot better. And it was something that we saw the market drawn to, and we just work to fulfill that demand.

Thank you, Vin. Go ahead.

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We don't give forecast on booking. [Foreign Language]

[Foreign Language] [Operator Instructions] Our next question also come from analysts. [Foreign Language]

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[Foreign Language] Due to the time constraint, we would like to welcome our last question. [Foreign Language]. Our last question comes from Jeff. It's very impressive performance on Promethean in 2021, especially on the share gain and the supply chain issue mitigation. There are 3 questions on Promethean what is your expectations on inflation this year? And what will be the impact on its gross profit margin? The second one is, can you talk about our road map on software and expectation on monetization potential? And the third would be what is your visibility on product demand this year in our core market?

Okay. Let's go with Vin.

So I'll do this without giving any guidance. So we have seen inflation impact of -- in 2021. As we take a look at 2022, we're going to take the best practices we have in 2021 and bring it forward to 2022, behave differently to mitigate how we buy and when we buy and when we source our different components. So there's a tremendous amount of things that we can actually do that can impact what we're paying and ways to control our costs. That being said, we can't control fuel prices, we can't control some container prices. We're going to continue to manage that very, very tightly. But just like we did in 2021, I don't see it being any worse in 2022, and we're able to manage through that. From a roadmap standpoint, there are some things that you're going to hear about, but you're not going to hear about them today. You're going to see some releases that will come out at the end of Q2 and into Q3. So you'll hear it in August earnings call. We have had great success with our ActivPanel V7 product that we launched in 2019 with multiple upgrades. That continues to have incredibly strong demand because we've been able to keep that product. We've been able to do upgrades, over-the-air upgrades and software releases on that product that have really enhanced the use case. We are excited that there are some announcements that we'll have in the back half of the year on our hardware offering. What we want to do is make sure that we have -- that we're fulfilling the demand in the market today with the product that customers want and then introducing new things as far as that goes. Relative to software investments, we have -- we've got incubated teams working on software applications for the product, not only in the panel, but in closely adjacent markets. What we're looking for are experiences that enhance the use case for the teacher. And again, I think I'll be prepared to talk about those not on this earnings call, but most likely on the next earnings call. So you'll have to wait for that. But that gives you a little -- you can read through the lines and pick up a little bit on some of the things that we're working on. As far as visibility for this year, I'm going to pull this directly out of Futuresource, which is a third party that reports on the growth in this market. They see growth in the education market in 2022 and 2023. They see growth in other markets coming up. I see long-term opportunity in this market. I think I had my second slide that I presented today, and that's what I'd probably point you back to. It showed the adoption of interactive flat panels, interactive whiteboards and then the white space in the market. And the total addressable market size of $69 billion. I think I would steer you to that to reinforce my confidence in the visibility that we've got opportunity -- we continue to have opportunity in front of us.

Yes. So let me add to that. We are very confident on 2022. So just for you to know, I talk to Vin a lot, but we all talk about our vision for the next few years rather than day to day so that gives you a little bit of the reading between the lines of our confidence level. What I have to really give Vin and his team a lot of credit is because they're generating positive cash flow, net positive cash flow. So we can do a lot of things other competitors cannot do. I mean, he casually mentioned about buying at the right time and all stuff, but that's really very important to maintain, number one, the supply; number two, we can maximize our margin. So it's actually, as far as I'm concerned, Promethean is actually we have all cylinders going. The market is with us, and we have a great operations team. We have a great go-to-market team, and we have a strong, strong leadership up on top. So a long-winded way to say we are very confident in 2022. The thing he was talking in code a little bit is actually a lot of exciting services, SaaS services is actually being in the works right now, so is the best kind of topic Vin and I talk about rather than the day to day, whether you're going to make the number this quarter type thing.

Thank you so much. Thank you, Dr. Leung. Thank you, Ben. Thank you, Lin Chen, and thanks 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]