Gaotu Techedu Q4 2023 Earnings Call Transcript

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Provided by Quartr
February 27, 2024

Key Takeaways

  • Gaotu delivered Q4 net revenues of RMB 761.1 million (+20.9% YoY) and gross billings of RMB 1.3 billion (+28.1% YoY), with operating cash inflow of RMB 491.5 million and full‐year 2023 cash inflow up ~5.5× YoY.
  • Gross billings for non-academic tutoring grew triple-digits YoY, driven by refined products and diversified customer‐acquisition channels—including live streaming, short-form video and selective offline efforts—that lowered unit costs.
  • The company expanded its offerings by investing in AI-powered personalization, launching offline bootcamps and learning centers, and partnering with major publishers on comprehensive textbook series to boost retention and learning outcomes.
  • Gaotu strengthened its talent pool—over 70% of postgraduate entrance-exam tutors hold master’s degrees—and advanced social responsibility initiatives, including a rural school principals forum and a RMB 10 million donation to youth education.
  • For Q1 2024, Gaotu guides net revenues of RMB 908–928 million (29.4%–31.2% YoY growth) and expects full-year 2024 to deliver further top-line expansion and margin improvement via diversified products and efficient operations.
AI Generated. May Contain Errors.
Earnings Conference Call
Gaotu Techedu Q4 2023
00:00 / 00:00

There are 6 speakers on the call.

Operator

Good day, and welcome to the Gautu Tech EDU Inc. 4th Quarter and Fiscal Year 2023 Earnings Conference Call. All participants will be in listen only mode. Star then 1 on your touch tone phone. To withdraw your question, please press star then 2.

Operator

Please note, this event is being recorded. I would now like to turn the conference over to Ms. Katherine Chen, Head of Investor Relations. Please go ahead.

Speaker 1

Thank you, operator. Good evening, everyone. Thank you for joining Gaotu's 4th quarter and fiscal year 2023 earnings conference call. My name is Catherine, and I'll help post the earnings call today.

Speaker 2

Xiaotu's earnings release for the quarter was distributed earlier

Speaker 1

and is available on the company's IR website at ir.gauthu.cn as well as through PR Newswire services. Joining the call with me tonight from Gaotu Senior Management is Mr. Larry Chen, Gaotu's Founder, Chairman and Executive Chief Officer and Ms. Shannon Shen, Gaotu's Chief Financial Officer. Larry will first provide the business highlights for the quarter.

Speaker 1

And then afterwards, Shannon will discuss our financial performance in more detail. Following their prepared remarks, we'll open the floor to questions from analysts. Before we begin, I'd like to remind you that this conference call will contain forward looking statements made under the Safe Harbor position of the U. S. Private Securities Litigation Reform Act of 1995.

Speaker 1

These forward looking statements are based upon management's current beliefs and expectations as well as the current market and operating conditions, and they involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control and may cause the company's actual results, performance or achievements to differ materially from those contained in any forward looking statements. Further information regarding this and other risks is included in the company's public filings with the U. S. SEC. The company does not undertake any obligation to update any forward looking statements, except as required under applicable law.

Speaker 1

During today's call, management will also discuss certain non GAAP measurements for comparison purposes only. For a definition of non GAAP financial measures and reconciliation of GAAP to non GAAP financial results, please refer to our Q4 fiscal year 2023 earnings release published earlier today. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this conference call will be available on Gaotun's IR website. It is now my pleasure to introduce our Founder and Chairman and Chief Executive Officer, Larry.

Speaker 1

Larry, please.

Speaker 3

Good evening and good morning everyone. Thank you for joining us on Gautou's Q4 fiscal year 2023 earnings conference call. I would like to take this opportunity to express my gratitude to all of you for your interest and support of Gaotu. Before I start, I would like to remind everyone that all financial figures discussed today are quoting RMB unless stated otherwise. During the past quarter, we continued to bolster our core business strengths while simultaneously pushing the boundaries of new initiatives.

Speaker 3

We observed a notable uptick in demand for high quality educational products and learning services, And we remain focused on addressing this demand by enhancing our product offerings and the channels across key business lines including non academic tutoring services, traditional learning services and educational services for college students and adults. Investing in emerging technologies such as artificial intelligence allows us to acquire a more profound and holistic insight into the fundamental needs of users and students, enabling us to provide precise and personalized offerings and services thereby elevating user experiences and improving learning outcomes. Our deep industry insights, exceptional organizational capabilities and well established teacher recruitment and training system have provided a robust foundation for the sustainable development of our business. Now, I'm pleased to report our results for the Q4 of the year and share our expectations for future business endeavors. Our net revenues increased 20.9% year over year to RMB761 1,000,000 exceeding our expectations.

Speaker 3

Our gross BIM grew 28.1 percent year over year to approximately RMB1.3 billion, indicating an accelerating growth trend compared to prior quarter. And we expect this growth momentum of our business to continue. In the Q4, our cash flow from operating activities was RMB491.5 million and our net operating cash inflow in the full year 2023 increased by approximately 5.5 times year over year, a strong testament to the ongoing improvement of our operating efficiency. As of December 31, 2023, our deferred revenue reached over RMB1.2 billion, laying solid groundwork for our further growth in 2024. Our cash balance, which includes cash, cash equivalents, restricted cash, withdrawal cash balance on 3rd party payment platforms as well as short and long term investments totaled over RMB4 1,000,000,000 ensuring lasting and stable support for our business development.

Speaker 3

I will now discuss our business highlights from the 4th quarter across four aspects. First, we are diligently focused on both our educational products and services to boost learning efficiency and optimize the overall learning experience. Throughout this process, we remained laser focused on user needs and potentials and expanded our range of products and services as needed. We established an integrated onlineoffline offering by launching on the ground food camps and learning centers. To give an instance for our educational services for college students and adults such as such an offline exam private food camps can better address students' needs in areas such as postgraduate entrance exams, and then stable service exams and overseas study preparation.

Speaker 3

In addition, through collaboration with renowned publishing houses such as foreign language teaching and research press, we developed textbook series that have achieved the major break throughs as a comprehensive educational solutions covering instruction, learning, practice, assessment and evaluation. Certain of these publications are currently used as textbooks by several major universities and high schools in China. For our traditional learning services, we saw a significant increase in retention rate during the 2023 full semester compared to the same period last year, thanks to our ongoing efforts to refine cross content and improve with regulatory authorities at all levels, seeking guidance on relevant policies and compliance and integrate and iterated our educational products and learning services core gimmick. 2nd, we continued our efforts to explore diversified customer acquisition channels and enhance operational efficiency. Leveraging our high quality content and efficient operations, we have expanded into innovative channels, including live streaming and short form video platforms as well as offline avenues establishing our competitive edge in these channels.

Speaker 3

In the live streaming space, the substantial overlap in scale size between online tutors and the live stream house gave us a competitive advantage in customer acquisition. We have grown to be a leading influencer on Dou, particularly in certain educational categories for college students and adults. Meanwhile, we actively expanded our offline channels to boost regional brand visibility. The comprehensive channel mix not only ensures sustained business growth, but also allows us to engage with customers through diverse channels, gaining insight into their needs, fostering deep interactions and bringing down customer acquisition costs. As a result of some matters, our customer acquisition efficiency remained at a high level in the Q4 demonstrating the success of our enhanced investment in customer acquisition.

Speaker 3

3rd, we leveraged our organizational capabilities and talent pool to drive consistent business growth. We believe that education is a process of outstanding teachers positively influencing students. Therefore, one of GoTo's most crucial strategies to enhance organizational capabilities to systematically nurture top tier educators at scale and to high standards By cultivating a team characterized by our passion for learning resilience and strong co season, we ensure the effective and efficient operation of our organization. While the booming business has resulted in rapid organizational expansion, we continue to maintain a consistent standard of hiring the best in class instructors and the tutors in the industry. Taking our post graduate entrance exam prep business as an example, the percentage of our tutors with a master's degree has increased to over 70% positioning us at the forefront of the industry.

Speaker 3

Teachers with first hand experience in postgraduate entrance exams can provide students with a full support including professionally, psychologically and emotionally therefore enhancing the overall effectiveness of the past preparation. 4th, we remain committed to fulfilling our social responsibilities and activity to create social value. In the Q4, we organized the goal to help project the rural primary school principal's online forum in partnership with the China Youth Development Foundation. Over 600 Zulu Primary School Principals and teachers from 11 provinces attended the event engaging in insightful discussions on Zulu Education in the area of artificial intelligence. In addition, we donated RMB10 1,000,000 to the China Next Generation Education Foundation aiming to improve family education and the mental well-being of young children and adolescents.

Speaker 3

We will remain steadfast in our commitment to our original educational aspirations, striving to enhance equity and accessibility in education. We have full confidence in Gautou's prospects for 2024 and for the future and for the further future, we are prepared to devote our full efforts to executing on our strategy with a robust tenant pool, a highly cohesive organization and a strong cash flow, we believe that we can achieve promising top line growth while enhancing profitability by consistently delivering top notch educational products and the revenue services, thus generating long term value for both our shareholders and the society. Thank you very much. This is the end of my prepared remarks. Now I will pass the call over to our CFO, Shannon, to walk you through the financial and operational details of the quarter.

Speaker 2

Thank you, Larry, and thank you, everyone, for joining our call today. I will now walk you through our operating and financial performance for the Q4 fiscal year 2023. During the quarter, our business entered a healthy phase of rapid and sustainable expansion. We witnessed accelerated growth in the gross billings of our core business lines, while our new initiatives also demonstrated promising growth potential. In the 4th quarter, net revenues increased by 20.9% year over year to RMB761 1,000,000, topping the upper end of our guidance by 10.6 percentage points.

Speaker 2

The better than expected performance was driven by the surge in gross billings, which increased by 28 0.1% year over year to approximately RMB1.3 billion. Benefiting from ongoing improvements in operational efficiency, our net operating cash inflow reached RMB491,500,000. Well, our cash, cash equivalents, restricted cash, reservable cash balance on 3rd party payment platforms as well as short and long term investments exceeded RMB4 1,000,000,000 laying solid groundwork for the long term growth of our business. Next, I will walk you through the progress we have made during the quarter. Learning services contributed over 95% of net revenues.

Speaker 2

Breaking it down, more than 70% of total revenues came from non academic tutoring services and other traditional learning services, representing over 35% year over year growth and solidifying this segment's role as a key driver of our business. Our new initiative center around non academic tutoring. Over the past few quarters, we have been diligently designing and developing educational products tailored to students' learning needs. By sparkling students' interest in learning, we aim to enhance their fundamental critical thinking skills and learning abilities while fostering healthy study habits and self motivation. Our course offerings undergo constant iteration and refinement and have shown to be popular and satisfied with our students.

Speaker 2

Underpinned by a combination of top notch educational products and high caliber learning services, gross billings of our non academic tutoring services increased by triple digits year over year. While maintaining our competitive edge in these structures, we have also consistently enhanced our tutored service capabilities. Additionally, by diversifying our educational products and learning service formats, we have established a comprehensive product metrics to meet users' varied and personalized learning needs. Our ongoing refinement of products and the teaching capabilities has also contributed to further improvement in retention rates. In the meantime, we have closely monitored regulatory policy developments and engaged proactively with authorities at different levels to seek compliance guidance for curriculum content and frameworks.

Speaker 2

This ensures that we can plan for long term healthy business growth within regulatory boundaries. Our traditional learning services continue to maintain a leading edge in the online space. In terms of educational products, we have developed a more targeted and personalized curriculum by taking a tiered approach to design and developing holistic learning journeys. We have also carefully curated and cultivated the most influential and reputable instructors in the industry and established a highly competitive team of tutors. For customer acquisition, we have developed channels driven by high quality content and efficiently gathered user feedback to derive valuable insights for our business.

Speaker 2

By seamlessly integrating front end and back end processes, We have consistently enhanced our customer acquisition efficiency. In the 4th quarter, we achieved rapid growth in gross billings from new enrollments, while simultaneously reducing the unit acquisition costs. The other crucial component of our learning services is educational services for college students and adults, which accounted for around 25% of total revenues during the quarter. Benefiting from a refined strategic focus and optimized educational products, gross billings of this segment rebounded to grow by more than 10% year over year in the quarter, setting the stage for its contribution to our revenue growth in 2024 and beyond, driven by robust market demand and improved operational efficiency. Both our domestic exam prep business and overseas study related business are charting a more promising growth trajectory.

Speaker 2

Particularly in the quarter, our overseas test prep business saw year over year growth of more than 200% in both revenue and gross billings. Thanks to our ongoing innovation and expansion efforts in the short video and live streaming space. Furthermore, our postgraduate entrance exam prep business generated a positive cash flow for the 2nd consecutive quarter, while our civil service exempt prep business achieved quarterly profit. For the full year 2023, our net revenues grew by 18.5 percent year over year to approximately RMB3 1,000,000,000, while gross billings grew by 31.7 percent year over year to over CNY3.3 billion. Gross margin was 73.3 percent, 1.4 percentage points higher than the same period of last year.

Speaker 2

Non GAAP net income was RMB51.1 million and non GAAP net income margin was 1.7%. These robust operational and financial results are attributable to our year long efforts to diversify our customer acquisition channels, upgrade our teaching and service offerings and enhance organizational and execution capabilities. By strengthening our core competencies, we were able to swiftly deploy resources based on changes in the market environment and user demand, proactively meeting diverse customer needs while remaining compliant with regulatory requirements. Looking ahead to 2024, we will further unleash the untapped potential across our business lines and embrace emerging opportunities as they arise. Leveraging our diversified product metrics and service formats, along with efficient customer acquisition and operational capabilities, We remain dedicated to providing students with exceptional learning experiences and excellent learning results.

Speaker 2

I will now present our financials in more detail. Our cost of revenues this quarter was RMB227,700,000. Gross profit increased 13.4% year over year to 533,300,000 and gross profit margin was 70.1%. Total operating expenses during the quarter increased 49.1% year over year to RMB 721.2 million. Breaking it down, selling expenses increased 60.7 percent year over year to RMB465.7 million, accounting for 61.2 percent of net revenues.

Speaker 2

This was primarily attributable to our increased marketing investments to address the robust demand during the winter season, benefiting from our expanded operations in a diverse range of innovative customer acquisition channels, especially in the short video and live streaming space. Our selling expenses ROI in quarter remained at a high level observed throughout the year. Moving on, research and development expenses increased 22.1% year over year to RMB136 1,000,000, accounting for 17.9% of net revenues. General and administrative expenses increased 45% year over year to RMB119.5 1,000,000 accounting for 15.7 percent of net revenues. Loss from operations was 100 and 87,900,000 and operating margin was negative 24.7%.

Speaker 2

Non GAAP loss from operations was RMB172.2 million and non GAAP operating margin was negative 22.6 percent and loss was RMB119,600,000 and net income margin was negative 15.7%. Non GAAP net loss was 100 and $4,000,000 and non GAAP net income margin was negative 13.7%. Our net operating cash inflow was RMB491.5 million. Turning to our balance sheet. As of December 31, 2023, we held $741,700,000 in cash, cash equivalents, restricted cash and the resolvable cash balance also part of payment platform along with around RMB2.3 billion in short term investments and around RMB1 1,000,000,000 in long term investments.

Speaker 2

This comes to a total of over RMB4256,900,000 higher than at the same time point in the last year. As of December 31, 2023, our deferred revenue balance was around RMB1.2 billion, which primarily consisted of tuition received in loans. As of December 31, 2023, we have repurchased an aggregated of approximately 4,900,000 ADS on the open market for approximately US12.4 million dollars We will continue to execute stock buybacks in accordance with the guidance of the Board of Directors and create a long term value for our shareholders. Before I provide our business outlook for the next quarter, please allow me to remind everyone that this contains forward looking statements, which involve risks and uncertainties, which are beyond our control and could cause the actual results to differ materially from our predictions. Based on our current estimates, total net revenue for the Q1 of 2024 are expected to be between RMB 908,000,000 and RMB 28000000, representing an increase of 29.4% to 31.2% on a year over year basis.

Speaker 2

This concludes my prepared remarks. Operator, we are now ready for the Q and A section. Thank you everyone for listening.

Operator

Thank you. We will now begin the question and answer session. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. The first question comes from Timothy Zhao with Goldman Sachs. Please go ahead.

Speaker 4

Thank you management for taking my question and congratulations on the very strong results. I have two questions. One is about the student acquisition history for the upcoming or the ongoing winter vacation. Could management share some color on the customer acquisition progress and also the related customer experience cost? And secondly, I think in your prepared remarks, you mentioned comprehensive channels to acquire customers, including the short form videos, live streaming and offline avenues.

Speaker 4

I think specifically on offline, could you share some color on your plans for 2094 in terms of the number of learning centers or any color on your projected revenue or profit contribution that would be very helpful? Thank you.

Speaker 2

Sure. Thanks, Timothy, for your question. First, we're very happy to share the most recent updates for our winter vacation performance. And in terms of the customer acquisition cost, let's revisit the winter vacation performance from both supply and demand perspectives. So starting with the supply side, the current operating environment imposes relatively high requirements on an institution's capability of deliver high quality products, including the ability of continually refining the credit loans, like speculative reserves and like the cash positions and also very important to meet all compliance standards.

Speaker 2

Therefore, the supply of high quality courses in the winter actually is very limited. So then but like on the demand side, we have perceived a strong demand from the students. So the scarcity of supply coupled with strong demand presents an excellent growth opportunity. And also, we were fully prepared for the winter peak season. And therefore, our winter vacation cost billings has maintained quite a high year over year growth rate.

Speaker 2

If we exclude the cash collection from retentions in the same period of last year. We do an apple to apple comparison. Weifo see a high end of high double digit year over year growth over our traditional learning services and academic tutoring services. Actually, that's quite impressive. And but behind all these fast growth is our high efficiency of our customer acquisitions.

Speaker 2

So we deployed certain new channels, especially for the short video live streaming platforms as well as our new explorations to some offline channels. Both these channels have really high requirements on the operations, especially for the collaboration between the front end and the back end. We need to have the ability to target the process to precisely targeting our customers and fulfill their needs in a very short of time. Then also that needs our back end teams, which means our tutors to further facilitate these parents and students timely and meet their learning demands. So based on our observation, we do observe a meaningful customer acquisition cost decline in the winter vacation.

Speaker 2

And also you asked about our offline channels and our offline operations. Actually, basically, like 2 different business. 1st, to facilitate our online business, we also have some offline channels to support our online business to grow. And in the other hand, we do start to deploy our operations for our offline mailing centers. And we're more than happy to share with you some perspectives and insights into our offline operations.

Speaker 2

So the reason why we start to enter into the offline space is because in the post pandemic area, we've keenly observed a diversification in students' learning needs. While many have adopted well on learning online, There is a growing desire among students to return to offline classrooms for more connections, interactions and engagements with the teachers and their classmates. Currently, numbers of parents opt for a hybrid approach, with some courses taken online and others offline, aiming to enhance learning efficiency and cater to diverse learning needs. So as an educational institution, one of our most important mission is to continually meet customer demand. So when such demand arise, we naturally extend our operation to offline and adapt the education products accordingly.

Speaker 2

And on the other hand, we dedicatedly evaluate our management team's background and capabilities. Our founder, Larry, brings years of experience in offline business operations, very profound industry insights and considerable personal influence, which can all contribute to attract all those top talents in the space, especially after the double deductions. When customer demands align with our organizational capabilities, we embark on the exploring and expanding our offline operations. So that's the reason why we started to enter the offline space. So then when we operate or in the selection in the selecting locations process or when they started to plan for expansion of our offline operations, we employ more of a dynamic approach.

Speaker 2

We continuously optimizing and adjusting while we need to consider a few factors like market demand and also Gaotu's brand influence and penetration in certain areas and also the acceptance of teaching products by the students and teachers in that specific area and most importantly, our ability to recruit and nurture outstanding principals and teaching faculties locally. So, to development of offline operations also entails a long cycle requiring sustained investment from user cultivation to word-of-mouth referrals, which is the reputation for the local offline learning centers. So we will be extremely patient and wait for the spreading and growth of our offline business. Ultimately, no matter it's online or it's offline, students always care most about the suitable teachers and the fitting curriculum and the outstanding services. So we will continue to strive tirelessly to meet those expectations.

Speaker 2

And in the past quarter and also in the full year of 2023, offline business showed a very limited impact on our financials. So we will update you every milestone of our offline operations in the future. Hope that address your questions, Timothy.

Speaker 4

Sure. That's very clear and very helpful. Thank you, Shannon. Thank you.

Operator

Thank you. The next question comes from the line of Alice Cai with Citibank. Please go ahead.

Speaker 5

Hi, management team. Thank you for taking my questions. Firstly, congratulations on the company's strong performance in 4Q. And I have 2 questions regarding the guidance provided. And the first one, regarding the guidance for Q1, which seems slightly conservative, Could the management team share your perspective on this?

Speaker 5

Do you consider the guidance to be on the cautious side? And second, could you please share with us about a general idea of the guidance for the full year 2024? Thank you.

Speaker 2

Sure, Alex. Alex, thanks for your question. Let me take your second question first, so we can give the audience a whole picture of our clients for the full year of 2024. So looking into 2024, the growth in education space typically initiate from expansion of gross billings. And if we look at our Q4 results, in the Q4 of 2023, our gross billings reached approximately RMB1.3 billion, making the highest single quarter level in the past 3 years.

Speaker 2

This metric indicates that our business is on a healthy and rising trajectory of growth. And furthermore, we have been able to effectively extend the trend of accelerating growth into the Q1 of 2020 4. And let's dive into each part of our learning services. We observe that revenue growth, especially in non academic tutoring, continues to accelerate given a sound unit economic model. The demand for non academic tutoring is substantial.

Speaker 2

With clear compliance and the governance guidance in place, our business growth initiates with new enrollments and sequentially generates incremental revenues through retentions and course extensions. So we have confidence in our operational capabilities and the reputation we have established among students and parents. Therefore, we anticipate triple digit year over year growth in our non academic tutoring section. While for our traditional learning services, which is basically a high school business, continue to maintain a leading IAG in the online space, We will leverage our existing competitive advantages to further deepen this mode. We anticipate that the growth rate of our traditional business will far exceed that of 2023.

Speaker 2

And regarding learning services we provided for colleagues, students and adults, We are glad to see it's rebounding in Q4 2023. We always prioritize margin improvements over revenue expansion in this sector and ascertain the profitability at a unit economics level and then focus on achieving effective growth as our primary strategy. So based on all those considerations, we are waiting to elevate our targets and goals for both cost billings and revenue growth in 2024 and have confidence in overall growth prospects for the whole year. And secondly, in terms of growth efficiency, our explorations of diverse customer acquisition channels have effectively lowered customer acquisition costs. From high quality content generating on short video, live streaming platforms and to expanding into offline customer acquisition path, our levering commitment to creating customer value serves as drivers for our sustainable growth.

Speaker 2

And in terms of the guidance for the Q1, so in the first quarter, we are still in a phase of adjusting the revenue structure. And we have the confidence that in the more near future, like in the Q2 of 2024, we will see an accelerated growth rate for both of our cost savings and revenues. And yes, that basically addressed your questions. Thank you, Alice.

Speaker 5

Thank you.

Operator

Thank you. The next question comes from Crystal Lee with CMS. Please go ahead.

Speaker 1

Thank you for taking my questions and congratulations on those strong results. I just noticed that your gross profit margin narrowed slightly in this quarter compared to last quarter and last year. Could you please share the reason behind this? And could you give us more color on your margin outlook going forward? Thank you.

Speaker 2

Yes. Thanks a lot. Yes, it's a very good observation. So we observed a 4.7 percentage points decrease in GP margin on a year over year basis. This year over year decrease in GP margin was due to a few reasons.

Speaker 2

Firstly, in terms of our revenue contributor to meet diverse user needs, we actually we have constructed a product metrics, which primarily focused on online large live classes, complemented by 1 on 1 classes, smart textbooks and offline small classes. So among these, online large live classes boosted the highest level of GP margin. As our business expands, the proportion of revenue generated from our 1 on 1 classes, smart books and offline small classes is gradually increasing, altering the revenue mix and substantially impacting the GP margin level. And secondly, in preparation for the peak season during the winter vacation, we have proactively reserved a proportion of teachers and tutors. These teachers and tutors have not yet reached their full capacity levels in the Q4, thus affecting gross profit margins as well.

Speaker 2

But as always, we always need a time period for our new teachers and tutors to gradually adopt our learning methodologies and provide a sufficient training period for our teachers and tutors, so they can better serve our students. So we do see these investments as valuable. So looking forward, in the middle term, as our teacher capacity increases, the GPU margin and NPU margin are expected to improve. And also in the long run, our gross profit margin will depend on the future revenue structure. Hope that address your question.

Speaker 2

Thank you. Thank you,

Speaker 1

Shannon. That's very helpful.

Operator

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Ms. Katherine Chen for any closing remarks.

Speaker 1

Thank you, operator, and thank you, everyone, for joining the call today. If you have any further questions, please don't hesitate to contact our Investor Relations department or our management via e mail at irl2.cm directly. You are also welcome to subscribe to our news alert on the company's IR website. Thank you very much again for your time. Have a great night.

Speaker 5

Thank you.

Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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