Weimob Inc. (2013) Earnings Call Transcript & Summary

[Audio Gap] reinforce our industrialization strategy. And then in the future, growth will be very sound. Our second strategy is ecologicalization. That is about WOS. But as we all know, the past 2 years, in relation to WOS, we made a lot of investments. Last year, there was a loss of RMB 1 billion. In the past, we did a lot of R&D work and investment onwards. And starting this year, we can see that WOS has led to some changes to us. First of all, last year, we started to lower cost and improve efficiency. Comparing with last year, there is a contraction of R&D expenses, but iteration speed was not affected. Overall speaking, efficiency is greatly enhanced. New product development speed improved almost 70%, number of work orders decreased 46% and [ automated ] testing coverage improved significantly. So this year, for our efficiency and capacity, there is a big improvement. So we think that WOS can help us enhance our effectiveness and efficiency. And externally, for our ecological working partner, but that is for Weimob Cloud. In the first half for 3-party ecosystem, there is 247% year-on-year growth in revenue from 3-party ecosystem. Key customer penetration raised 76.3% on Weimob Cloud, that is 76% of key customers go through Weimob Cloud to do different types of developments. Weimob Cloud experienced 37.6% year-on-year growth of customer unit price. So for our core brand benchmark customers, they are using Weimob Cloud. The core ground layer is WOS, the PaaS platform. So in other words, there is a lot of personalized application and development on that platform. We serve so many ecosystem customers. So to our WOS ecosystem strategy, I think it plays a very important role. Then, WAI, Weimob AI. So in May this year in Beijing, we announced Weimob WAI. And the ground layer is ChatGPT, so including Tencent, Baidu, third-party model, and we also have open source model. For products, we use [indiscernible] model. And based on the open source model, we are working on more enhancements. So overall speaking, some very good results have been achieved. And for WAI, well, there are very good external reviews. In terms of product recommendation or product promotion, advertising, copywriting, enterprise WeChat and so on and also live streaming, copyright. Well, commodities, recommendation copywriter, 15 minutes becomes 1 minute, advertising copyright in Little Red Book from 45 minutes down to 10 minutes. Then we can have 70% usability, that is 70% of generated product titles can be used. WAI will be on WeiMall and also our Smart Retail and so on. So we believe that SaaS business this year can maintain a good growth. These are some critical reasons for remote marketing and also advertising. This year, we achieved strong growth. First of all, the economy recovered. Last year, there was COVID-19. As a result, many enterprises did not place advertisement. After the pandemic, many enterprises resumed placing advertisements. So that's why there is quite a good growth. Besides, the most important reason is Video Accounts. Last year in the first half, there is commercialization of Video Accounts. Video Accounts brought about a lot of direct benefit to Weimob. Growth generated by Video Accounts made a big contribution. At its peak for Video Accounts, it contributed to 20% or more than 20%, almost 10 million single GMV and it exceeded 20% of the overall Video Accounts growth. So the growth generated by Video Accounts is very obvious. Commercialization of Video Accounts is still in its first stage only. In the future, there is still room to dig deeper. So growth in this regard can be regarded as rather certain. The third thing is cultivating deeply into the industry. So for marketing advertising business, well, there is deeper cultivation and more regional development. This year, we have achieved quite good results in the industry. Video Accounts, [indiscernible] mobility, lifestyle services, health care and so on. In all these areas, we achieved quite good progress. For the overall industry, they brought to us quite good growth, which became quite a good driving force. And finally, multi-brand development, apart from the Tencent ecosystem, we are also on Kuaishou and Little Red Book. They generated more than 200% growth for Kuaishou growth. Overall speaking, is 412%, Little Red Book 232%. So we think that this year with the multi-brand layout, a lot of contribution can be made to our overall growth. For Weimob marketing business. Well, I have not analyzed the external parties in an in-depth way. There are still a lot of growth potentials. First, mainly on Tencent platform. In the future, if we can open up multiple platforms, even overseas, Facebook, TikTok and so on, then I think future growth we'll see huge potential. This year, we became Google's and Apple's service provider. And for Facebook, TikTok, we think that future growth will be very significant. So the above is my analysis of the business highlights. Finally, I would like to talk about business outlook. So let me make 4 points. Just now, I already covered some content. This year, the macro environment will still be challenging but for Weimob, what kind of position or what kind of stand should we take? In the past 1 year, we lowered costs and improved efficiency, we achieved quite good progress. Through refined management and operations, we realized that our efficiency is enhanced a lot. So for our organization and operating efficiency, they are quite satisfactory. In the second half, we think that we should be able to achieve a breakeven and next year, we hope that we can have profit for the whole year. And then the loss can be halved in 2025. SaaS single product should be profitable whole year profit, if SaaS single product is okay, then profit can exceed like RMB 500 million. So starting next year and the year after next year, that's our financial target. Addressing in the second half, the target should be achievable. Next year, there shouldn't be much problem. For the year after next year, it depends on single SaaS product profit. I see a lot of opportunity in that including Key Customer and also AI and WOS. I think there are many opportunities. Then our business outlook for the second half of the year. Well, we have just had a strategy meeting. And the most important thing is industrialization strategies. We should dig deeper into our Key Customer to implement industrial strategies. For industrial strategies, just now I made some brief remarks. In terms of our organization, there will be some changes and adjustments in order to implement the industrial strategies better. In the past, it is just a department work, but now it is on company level, industrial strategy. So in the future, there will be a unified industrial and business analysis unified industry sales, marketing and also production and operation. So there will be some organizational changes to tie in with the industrial strategies in a better way. Besides in each industry, we will deepen vertical industry solutions. For example, fashion clothing, we will identify some industries with highlights and will go according to changes of the economic cycle. We will pick those industries that will more easily accept our digital solutions. So during economic downturn, there are industries or customer groups with purchasing power. So we will dig deeper into industries. So industries development, we will have unified industrial strategy. And in the second half, I think industrial strategy is the most important thing. Second, AI plus SaaS. We have already announced WAI. So AI plus SaaS is an unprecedented historical opportunity. So through the SaaS scenario plus our AI, automation capabilities in the future, we can help merchants enhance efficiency over a large scale in the future for -- let's say, if we have 100,000 customers, half of them buy our WAI, then 1 year, RMB 5,000 a year. This is quite a -- not a small income contribution. So we have a lot of business expectations in this regard. Number 3, we will intensify the WOS ecology and achieve mutual promotion of ecologicalization and Key Customer development. In the past, we often talked about ecosystem and this year for our half yearly strategy meeting, this term "ecosystem" becomes even more important. In the past 3 years, we mentioned the moving up market strategy. In the coming 3 years, the ecologicalization strategy will be of equal importance. In the past, we talked about ecosystem as well. But internally, many products have not been clearly defined. So in the future, we will embrace our working partners and ecosystem even more. We hope that through our working partners and ecosystem strength, we can solve a lot of key customers' problems. Right now, key customers face a big problem, and that is how to very quickly satisfy demands and needs. So if we only rely on standardized products, it would be very difficult. We think that the function of ecosystem is of critical importance. So in the future, we will attach even more importance to ecosystem. So in the future, for the WOS ecology, we will invest more resources and efforts and profit so that we can build this ecology with our working partners. Finally, multi-platform layout to expand more commercial feasibility. I just mentioned that we will move more towards Kuaishou and Little Red Book and overseas brands. We will expand our layout to achieve more commercial feasibility. That is my analysis of our first half results. Now I will defer to Mr. Cao, our CFO, to present financial performance.

Thank you, analysts, investors, good evening. So 2023 has been more than halfway through. In the first half, macro environment is about growth after the pandemic. In the beginning of the year, there was a restart of the economy. People were optimistic. After that, benefits were realized after the pandemic. There was then some volatility. And then there was macroeconomic stimulus. So if you look at life daily life related industries, there is also gradual recovery. Even though in different industries, the pace of recovery is different for different customers, but we can certainly see that economic consumption is gradually recovering. Under the new normal post pandemic, the most obvious change is no matter whether we're talking about capital markets and enterprise system selves, we do not only emphasize the high investment and also scale growth, while enterprise development goes back to a more rational and stable way. Not only quantity is emphasized, quality is also important. And we go back to the basics and that is to create profit for shareholders. There are a lot of changes that have not changed. To a certain extent, after the pandemic, they have been strengthened. After the pandemic, benefit from traffic is disappearing. More and more merchants attach importance to refined management and operation and repeat purchase. Private domain becomes more and more important. And then at the same time, there are turning points and aging population development, so software and digital use enjoys advantage in product utilization. When we are implementing ecosystem buildup and other strategies in the short run, consumption and retail are recovering for the medium to long term, our SaaS and Smart Retail growth potential has not changed. The prospect is even clearer. In first half 2023, our results returned to increase. Our revenue was up 34.5%, Subscription 706 million, up 21.4%, Merchant up 58.3%, advertising, gross billing 70%. Now for Subscription and Merchant revenue, they grew to a different extent. So for precise marketing, after the downturn in 2022, starting last year, there was a rebound and gross income continued its high growth for recovery after the pandemic. For the first time, Merchant's advertising expenses was first to recover. And then there is online, offline store operation, and there are a lot of medium to small stores coming out after the pandemic. For mid- to large-scale stores, they are still affected by the pandemic. Number of stores and digital budget is being under strict control. So in the first half of this year, there is rebalance. The share is 58.3% in terms of Merchant revenue share and then 40% Merchant revenue. So Subscription versus Merchant [indiscernible] . In 2022, by organizational enhancement, cost control and efficiency improvements, personnel or manpower decreased. So there is down 26% in cost. There are some expenses being capitalized. So if you look at the total salaries down RMB 230 million or 23%. In the second half, we will continue to strictly reduce costs and improve efficiency. On an annualized basis, salary costs can come down further RMB 160 million. This will be realized mainly in 2024 in the middle of the year total assets. RMB 8.09 billion and overall financial position is healthy. Now let's take a look at the details. On revenue side, after the pandemic, consumption recovered on the C end and then it passes on to the B end. In the first half this year, we resumed growth. Overall revenue as such as now, was up 34.5%, on half-on-half 29% up, SaaS subscription revenue, up 21.4%, RMB 706 million. SaaS business growth in the first half sees both opportunities and challenges. After restart of the economy, number of opening of small- to medium-sized stores resumed normal. For store closure because of the pandemic in the first half of this year, there is still deferred impact. So if you look at turnover, it's up 0.8%, that's the churn rate. But on half-on-half, it's down 1 percentage point. And then as a result, number of merchants at the end of last year was 90-odd thousand and it went up to 100,090. Then for mid-to-large merchants, churn rate is low. For Smart Retail, is up 44%. As a result, ARPU was up 26%. The first half -- because there are store openings as a result -- well, there is cost control and also release on marketing and digital retail. And there is still some room for improvements in the future. During economic recovery, we believe that there would be some upside. For advertising market, there is strong recovery in the first half. Gross income, up 66.1% -- 70%, half-on-half, 20%. Revenue up 58.3% and and 120% half-on-half for Merchant Solutions in the first half of this year, grew fast. That is because of economic recovery. In terms of consumption, retail and greater health care, there is recovery in demand. So for Tencent Video Accounts, it is a new channel of advertising traffic, it grew well. And so there is additional growth momentum. When the advertising industry demand resumed, for channel competition in the second half, there is change. Discounts came down significantly. Revenue improved, so gross profit margin in the first half also rebounded. Overall Group's GP margin in the second half 2022 was at 52.2%. It went up to 67.5%, up 15 percentage points. Subscription GP margin, 58.5% in the second half of 2022, is up to 66.1%. Merchants GP margin, 33.6%, up to 69.4%. Subscription gross profit margin, it is affected by capitalization of R&D and also hiding impact. If these are excluded, in the first half, Subscription gross margin was more or less the same as in the past, 85% more or less. Starting 2022, we started to cost control and improve efficiency and deferred impact of organizational optimization. And we are going to start a new round of cost control and efficiency improvement. So we think that these expenses -- R&D expenses will be kept at RMB 530 million. So as a result, Subscription GP margin will continue to rise. In first half 2023, we narrowed the loss significantly. If we look at 3 metrics in 3 different past periods, we did a comparison. So net loss in financial statements, RMB 659 million, RMB 1.26 [ billion ]. And then in first half 2023, it narrowed a lot to RMB 470 million. But then for financial statement loss, it also included a partial payment to staff and also convertible bond exchange loss and gain impact. These are not really related to business. These are accounting adjustments. If these impacts are excluded, then adjusted net loss in the past 3.5 year period, RMB 567 million, RMB 981 million loss. It decreased substantially to RMB 254 million. If you look at free cash flow in the first half of this year, outflow increased to RMB 776 million. However, because advertising business in the first half of this year increased fast. It used RMB 220 million of funds. In the past half year, there is inflow of RMB 170 million and RMB 280 million. So for advertising, it is about changes in capital. So for non-advertising business in the past 3.5 years, it is RMB 832 million, RMB 576 million and so on. So it is narrowing. In the first -- in the second half of this year, we'll continue to control costs and improve cash flow. So what are the reasons behind the loss narrowing? First, Subscription revenue in the first half of this year was up 21%. Gross profit margin was up 5 percentage points. All these led to an improvement in gross profit. For Merchants advertising gross income, was up RMB 1.8 billion. So this year RMB 7 billion, last year RMB 4.2 billion, is up RMB 2.8 billion. So for advertising rebates, last year, first half, it is at a high 6.9 points, this year is a 5.7 points. On a half-on-half, 5.7 points, there is a big improvement. However, comparing with first half last year, 6.9, it is still down 1.2 points. With these 2 factors, Merchants Solution gross margin up 1.05. For these 2 segments, there is a 2.1 -- RMB 210 million gross profit contribution. So for stock cost is down. It doesn't include the stock option. There are also expenses increased by RMB 10 million, mainly above channels. So comparing with 2023 -- or comparing first half 2022, we made additional provision of RMB 76 million exceptional provision. That is after excluding the catering, food delivery company, we made a provision. As a result, in the first half of this year, net loss was RMB 250 million. The main driver is revenue led to gross profit growth and then staff optimization led to cost savings. In the second half of the year, where macro economy continues to recover, consumption and retail remained healthy, then the loss of the group will continue to narrow. In the second half of this year, we will achieve a breakeven. In first half this year for adjusted loss of RMB 250 million, if we start from there, the one-off provision and impairment is excluded recurring losses RMB 178 million. Then for Subscription and Merchant's revenue, they will maintain year-on-year growth. There may be gross profit increase of RMB 109 million. For personnel optimization, we just started a new round and annualized total salaries will come down by RMB 160 million and then after capitalization of R&D being excluded, there will be some savings. So per quarter impact, RMB 30 million. There will be some compensation to be payable. But for 2024, there will be impact for other expenses when manpower is reduced, if we talk about business travel and accommodation, this cost will also come down by about RMB 20-odd million. Based on all these improvements and enhancements in the second half of this year, adjusted operating loss will be kept at within RMB [ 15 ] million. So it is a very small amount. We may even achieve a breakeven. In the second half of this year, if it develops in this way, the loss will not exceed RMB 300 million in total. In 2024, we will achieve profit. So assuming -- well, usually, at this point in time, we will not give the whole year 2024 guidance, but based on this year's development and also continuous improvement in external environment, Subscription revenue next year, we'll see a 15% to 20% growth. This is possible. If growth is 15% this year, RMB 1.5 billion Subscription revenue next year, it will give and RMB 105 million gross profit, advertising gross billing 15% growth being assumed, then gross profit will increase RMB 130 million. This gross profit increase together with the new rounds of personnel optimization this year and next year, there will be cost savings of around RMB 100 million. So next year, we have confidence to achieve overall profits. So this is on the financial side. and our analysis of our results and future outlook. That's all in my part. So I will now leave more time for analysts and investors to ask questions.

Okay. Thank you, management. We will start Q&A now. [Operator Instructions]. First question is from CICC.

I have 2 questions. First of all, congratulations on the very good results given the very difficult environment. My first question is, in the first half of this year, consumption, retail was somehow weak. And when it comes to Key Accounts, you are still implementing the moving up strategy and for new brands, the number is smaller than before. So if you consider this backdrop for existing customers, how much more room and potential is there for you to dig deeper. With your key customer strategy, it is very effective. In the second half of the year, what strategies do you have to develop key customers? My second question is about Smart Retail, you just mentioned your industrial strategies for Smart Retail. So you are doing video, selling furniture, building materials, cosmetics, fashion and so on. And you are also doing community, retail and other vertical products. So regarding industrial strategies, is it true that it is a necessary condition for fast growth in Smart Retail. What kind of capabilities do you need for that? In the future, if Smart Retail driving force is from industries, then can you let us know. Regarding industrial strategies, what kind of progress have you made sales efficiency. And in the future, if you look towards these industries, how big room is there for growth? Thank you.

I think you have asked some very good questions. They are also important points, important directions for us down the road. Just now -- in fact, I have covered many of the points already. Let me give you an answer. Given the challenging macro environment for our key customers' potential and also our second half of the year strategies, first of all, for existing customers, they still have the opportunity for us to expand our service scale. In the past, we helped our customers to complete their operation digitalization and moving online. For example, for fashion customers, we help them migrate to the cloud and open cloud stores. So these are our past products. In the future, we want to see how to help these enterprises to do online operation and digitalized operations. So digitalization of operation and digital operation. Digital operation is they have already -- some customers have already digitalized. We want to help them do member operations, private domain conversion and so on. And this year, OneCRM product was launched, to Balabala, and so on, these are very important key customers. For Balabala, the number of members exceeded 10 million. They are using our product already. So for existing customers, they have the ability to buy more of our products. They should have quite a lot of demand. So at present, how can we achieve more cross-selling among existing customers. This is one potential opportunity with existing customers. Secondly, now we realize that more and more top customers. Attach a lot of importance to unification, unified demand as we -- for our retail group customers where they have many brands. This year, [ Peaseburg ], [ Embry ], [indiscernible] and so on for these brands, they have the need for integrated products, integration. So that means companies like Weimob is expected to help them move their stores on to the cloud and also shopping guide and some other products, for example, WeCom [indiscernible] so they hope to treat Weimob as an operating system. Then there are other smaller products on Weimob that can be further developed. For integration, there is not only the need for integration, but also many customers' brands have many, many programs. Mengniu have more than 130 mini programs. So integration of multiple ends and also back office integration, application integration and so on. So many customers said that they have this need and Weimob can help these key customers satisfy their integration need. The third point is right now, there are many super top customers. For example, Mengniu in the past, they invested a lot in IT. They hope that they can pass on their capabilities to the third party to lower cost. At the same time, they hope that they can also improve efficiency and they can satisfy business needs. So this year, we realize that many such top customers are willing to hand over some of their IT to us. So I think in the future, this also presents good opportunity. Just now I talked about existing products and we want to dig deeper into the [indiscernible] customers. For example, for fashion, for womenswear, there is still big room with the [indiscernible] at customers. So there is still a lot of room for us to cultivate. Overall speaking, the environment is full of challenges. But to us, perhaps we will have heavier workload. We need to -- we will have even harder time. But then for opportunities presented to us and future growth, there are a lot that is worthwhile for us to do. Then for strategies in the second half of the year, just now I briefly went through them. First of all, we will continue the industrial strategies. Our internal organization guarantee and also dig deeper into the industries and also industrial expansion, for example, WeiMall customers in fashion. We want to develop more with supermarkets and convenience stores, small stores and big chain. And then we also will pay attention to economic recovery and put in place some necessary or appropriate solutions. We will embrace ecology as such as now, customers' customization needs can be satisfied by means of WOS and also in-depth collaboration. And then we will also develop the super top customers. We'll see whether WOS platform can be opened up for the super top customers. For these customers, they are really interested in our WOS. They asked whether our past capability can be handed over to them. So for these super top customers, they will be a direction for us to make an attempt. And then to answer your second question, is it a necessary condition when it comes to industrial strategy, industrial strategy will be a critical path for Smart Retail to achieve sustainable growth and fast growth. Industrial strategy will be very important for future Smart Retail developments. It is a critical pathway. For industrial strategies, what kind of capabilities do we need? First of all, we need to have enough abstract generic product capabilities. This is achievable on WOS. Number 2, adequate open ecology capability. Again, this is achieved by WOS. Number 3, there should be enough customer reach capability for top customers, [indiscernible] customers or tail end customers internally with IBU, GBU, CBU corresponding to top [indiscernible] and tail-end customers. So we do have the capabilities to serve all these types. And finally, we need unified production sales, marketing capabilities or integration. We also have the strength. Finally, regarding [indiscernible] of the industry, I won't elaborate too much because in my presentation, I made the point. So we will find our strategy in a big industry, for example, fashion, footwear, jewelry and fashion, there is men's, females and also kids wear and female fashion, there are top ways, tail end customers. So we will be more refined in our operation for Smart Retail, I think there are a lot of driving forces for sustainable growth. That's all.

Next investor, [indiscernible]

Thank you, Mr. Sun. Thank you, Mr. Cao for allowing me to ask questions. Congratulations on the strong results. I have a few questions. Let me ask them one by one. First question, AI. Just now Mr. Sun said that in May, you launched [indiscernible] model product. And you share with us in detail how many customers are now on the WAI product in the future for commercialization pathway, what is the outlook at present? How big is the scale of the team for this product? And how much are you going to invest in the future in terms of capital and manpower? That's my first question.

Okay. In May, we launched WAI. Overall speaking, it is in the internal testing stage by merchants, 200-odd merchants are using WAI right now. Basically, they are mainly key customers. So basically, these companies have been active in using WAI. And for example, video live streaming selling and so on, these are commonly used scenarios. For scale, right now, our scale is not very big because the ground layer model, but we have not invested too much yet. So our R&D team has a dozen or so people. For application scenarios, there are the corresponding product people, for example, CRM. I want to add a friend circle sharing to a certain product than there are some shopping guides people to do the work. So we don't have too many people right now for the time being in the future. We will focus on 2 areas in terms of recruitment. First, we need people, operating team with industrial know-how. Actually, for copywriting or product recommendations, it all depends on the scenarios. We need to see -- we need to have more professionals to beef up the team besides we will focus on industrial big model. On one hand, we will take a look at ourselves to see whether there are big model talents. At the same time, we will work with some leading big model companies to develop together the industrial big model. Why do we want to do industrial big model ourselves because if we use existing big models, then for our core competitiveness and also our own training and so on, it will be difficult for us to achieve core competency or competitiveness. In the future, there will be the use of multi models. ChatGPT, Tencent, [indiscernible] , Baidu model can be used. But then for short format, some shorter precise copyright for example, [indiscernible] and also some special content. We have a lot of data reserves. And if we do the training ourselves, the outcome will be better. So we will work on marketing big model for certain industries. We are now preparing some talent reserve. So perhaps in the coming period, we will also announce our own industrial big model. Now we are based on open SaaS work and together with [indiscernible] open SaaS big model, we are conducting some researches for special vertical industrial big models, we may develop them ourselves. So industrial ones together with generic big models, they will be used in our business scenarios. For future prospects, now we are testing the water. When it comes to the fees of like RMB 4,800 per year, customers find it acceptable. But if you exceed a certain volume, if I charge based on additional volume, it is still acceptable. If half of our customers can be converted, then gain from commercialization may reach RMB 250 million. It depends on our own products, especially for key customers. I mentioned 400,000 that may be for medium to medium size. And then there are also AI -- industry-specific AI fees will be based on utilization. That is also one potential. It is difficult to estimate commercialization gain, but then that's a rough idea. Management, in relation to Video Accounts, your consumption of Video Accounts in the second half of last year, growth was around 300%. For Video Accounts potential, what do you think. In this high-growth area, how much share can you grab? For Video Accounts last year, we started commercialization. Growth is very fast. First of all, all along. We are the top service provider for Tencent. So our strength in many areas are quite apparent, our operating capability, our products, [indiscernible] technology. These can achieve good results in relation to customers' investments. So we are able to achieve quite a lot of benefits amidst the rapid growth in the market. Our share of Video Accounts is big in Tencent, 12% to 13% share. Video Accounts may account for a bigger share, almost 20%. And for Video Accounts, well, they are in the initial commercialization stage. In the future, there is big potential. I think Video Accounts in Tencent will be such that we will see quite good growth. In the coming 1 to 2 years, there will be quite good growth. For the specific share, our share is already quite high now. We are not striving for an even bigger share for Video Accounts, we hope to achieve sustainable healthy growth that is already satisfactory.

Okay. My last question, management, regarding the second half, what is the outlook for advertising business in the future. In the advertising business, which are some new growth directions that you will identify?

In the second half for advertising growth, I think there is already some certainty for single day consumption, it is very stable now. It is climbing up gradually. In April to May, we exceeded RMB 40 million, now RMB 50 million already, it will continue to go up in the future. In the second half of the year, I think the results will be quite certain and now we want to go for higher quality customers and revenue. So customers which will give rise to a bigger gross margin. For gross billing, it is no longer a very important metric. Overall speaking, we hope that growth in gross billings will be a secondary target. Gross profit, we look for those customers with bigger room for gross profit. Overall speaking, I think, #1 will be video accounts. #2, industrial strategies and industrial deeper developments. Now Smart Retail, Advertising can also become industrialized. I think there will be many new industries coming out. For the Advertising industry, when the macro environment is not good, it should be affected theoretically speaking, for us. Some industries may not be doing good, but there are -- there must be some positive industries. For instance, some industries are suffering high-end customers or export-driven customers may not be doing well. Domestic sales customers may be doing better. So as long as we can reach IR, well, customers still have their advertising budget. So there will be customers reaching the required IRR. We will select those potential customers based on economic cycles. For example, F&B, traveling or tourism and so on, these are doing quite well. We'll find new opportunities in various industries. In some customers and industries, there may be some which are affected, but there will be new industries emerging. So for advertising, we want to stabilize growth. And one core factor is to keep on identify those industries with sustainable growth, and we should find more channels and platforms. This year, Kuaishou grew fast. In the regional layout, growth was fast, so Kuaishou will be an important channel for us. In the long run, I believe that for the traffic channel, our traffic channel is still Tencent, domestic Kuaishou and also Little Red Book will be for future internationalization. So room for development is still wide. I believe future growth in the long run for advertising business will see sustainable positive growth. Because of time, we will conclude the session here. I would like to thank you for your participation in today's conference call. On behalf of the Weimob management team, if you have further questions about Weimob, please feel free to contact IR team. Thank you.