Q3 2019 Earnings Call
Good morning.
Good evening, ladies and gentlemen, thank you for standing by and welcome to Best Inc.'s third quarter 2019 earnings Conference call.
At this time, all participants are any listen only mode.
Following management's prepared remarks, there will be a question answer session.
With us today, or Johnny Chow, that's <unk>, chairman and CEO , and Japan Principal accounting officer.
For today's agenda, Johnny will give a brief overview of business and operational highlights then Jenny will explain the details of financial results.
Following the prepared remarks, you may ask your questions.
Please note. This call is also being webcast on best Inc.'s IR website.
Our dog best Dash Inc. Dot com.
A replay of this call will be available after the call an investor presentation is also available on the IR website.
Before it begins I will read the safe Harbor statement on behalf of testing.
Today's discussion will contain forward looking statements.
These forward looking statements are based on management's current expectations.
They involve inherent risks uncertainties and other factors all of which are difficult to predict and many of which are beyond the management's control.
The company does not undertake any obligation to update any forward looking statements as a result of new information future events or others, except as required under applicable law.
Please also note that certain financial measures that the company uses on this call or expressed on a non-GAAP basis, such as EBITDA adjusted EBITDA, a non-GAAP net loss.
The GAAP results and the reconciliation of GAAP to non-GAAP measures can be found in best Inc.'s earnings press release.
Finally, please note that unless otherwise stated all the figures mentioned during this conference call are in RMB.
Today's call is being recorded.
No I will like to turn the call over to Johnny Chow, Chairman and CEO of Best Inc. Johnny. Please go ahead.
Thank you operator.
Good morning, and good evening everyone.
Welcome and thank you for joining <unk> plenty notching, so quarterly earnings call.
That's sort of quarter results was highlighted by strong revenue growth.
So when they become that lost reductions, which you saw us achieve positive non-GAAP net income for sexual second consecutive quarter.
And we remain on track to achieve I will go about shooting positive non-GAAP net income for the full year 20, Don King.
Despite challenging market conditions.
You Commerce grew at a healthy pace.
Which contributed to et cetera, we didn't get man for back to supply chain solutions logistic services.
That's expressed in freight continued to gain market share.
The lower cost.
While supply chain management installed cost.
Optimize the deal operations to improve the profitability.
Oh I'm, sorry, that's a few pago.
Overall.
The capital continue to expand and deliver strong grows as we capitalized on the significant opportunities in cost low. So this voltage and geographic expansion being South East Asia.
That's well very well positioned to maintain our strong momentum.
Actually into the fourth quarter.
Which she is a peak season for our business.
We as we execute all strategy of above market growth.
Priest possibilities.
Now, let me share some business highlights with you.
That's express.
Do you have gained market shares was improving its operating efficiency.
Expressed possible bottom exceeded 1.8 non bidding.
Third quarter.
Increase of 38 cents year over year.
But she is 1.38 times up industry.
Market share increased what you'd have a 0.7.
Pamplona eight yes, impute over 28 King.
Mark your U.S.P. continue to try to lower so quarter.
Yes, p., including last mile fees.
Created by switching percentage.
Yes over here to RMB 2.75.
Yes be aix-la-chapelle decreased by about 17% year over year plan do you want points, we true.
We continue to make a strong progress even pulled in a cost structure.
Optimizing pass express networks and investing in technology applications.
Oh possible decreased by 14%.
Why maybe 2.62 year over year.
As we continue to reduce transportation labor leased and other cost.
Core parcel X last mile decreased by 17% to one do you want to 0.19.
Speaker 1: We also reduce express operating expenses were possible significantly.
Nine years ago in November .
That's a spread started operations.
And I have seen this made tremendous progress.
We have seen spewed well off the leading that works in China and that she was a significant gross overlap I forgot pure.
That's all the end of quarter Best Express network.
94 regional hubs and sorting scansource over 5000 franchisees operating nearly 40000. So these stations.
Irene, 100%, all prognosis and city.
I do not need upset or districts and copies in China.
We have deployed.
80, Although me just wanting Ryan and I was just seven demand you're waiting scanning systems.
Got you 100%.
Good to go way deals.
We continue to optimize our network and investing technology application.
Brett is well positioned for its next phase a robust to close.
That's right.
Do you didn't nationwide LTL platform.
Continued to deliver outstanding results.
For the quarter.
Great volume exceeded 1.8 emitting comps increased 28% year over year.
I can definitely higher didn't English beverage.
Revenue grew by 26% why do you 1.3 a bidding.
Gross profit margin increased by 1.7 percentage points year over year to 6.3.
We continue expand its lost about coverage footprints I.
The total number of franchise operated [noise].
Last mile service stations increased by 52% year over year to over 70800.
From that 1700 using feel the 28.
That's right is entering its easier cooperation.
Over that period, we hope you had talked to LTL network in China.
Spanning 90, not regional hubs and sorting sensors over 4500 to franchisees covering 100% problems, just 99% of cities and 97% or districts and called leasing China.
Oh extensive network nationwide network.
And the expanded a lot smell Soviets coverage.
Your position us well too so increased demand for large items ecommerce transactions, while continuing our industry leading gross.
Well their supply chain management I'll focus was on growing the franchise called order fulfillment centers and that you improving muggings.
As a result, the total number or those fulfilled.
The increase significantly by 53% year over year to over 86 million.
All of which the total number of orders fulfilled by franchise a call FCC increased by 100 researching percent, although 40 many.
At September Thirtyth <unk>.
Total gross floor area of called web see increased by 15% year over year, two oldest remedying square meter.
Which over one point street lighting swim either will operate a bike franchisees.
Gross profit margin doubled year over year to accept.
Going forward or we will continue to focus on developing smart supply chain solutions.
And expanding their supply chains service offering 12 customers.
First of all process.
We continue to execute our strategy of growing the number of a higher margin franchised bass needless stores, while improving order quantity of low unlocking membership stores.
Industry door quarter total number on a branded a school, including franchise self operated stores.
Increased by over 160% year over year to over 3400 as of September Claudius.
All of which the number of franchise bass neighbor stores increased to over 3000.
From around the 1000 seeing pure last year.
The total number of older sports field for franchise, a best neighborhood stores increased by 400% to nearly 100000.
When the total number of orders will feel the full membership source decreased by five cents to about 780000.
That's a result, unionpay, we improved the blogging by three percentage points year over year to get upset well reduce EBITDA loss by 25 cents compared with same pure to have plenty 18.
Actually the law school, we are even amidst the of conducting strategic review all the store Pes business has it certain box on its next phase of development.
Well tell you more about it laid off.
You cargo I'll talk of those sort of its brokerage platform.
Continue to grow rapidly since we opened its possible for external customers.
Okay all 2018.
Even the sort of quarter, a total number of transactions all the you'll cargo platform generated from external customers increased significantly by over 220% year over year to over 158000.
Revenue generated from external customers increased to buy more down 170% year over year to all the IB 700 many.
The number but I guess the agents.
On the you'll cobbled praful increase over 16% year over year to over 4900, and nimble to register trucks increased by 27% year over year to over 3000 7000.
Study 307000.
On September 12 years.
You'll kind of a platform now covers Saudi processing China.
Chinese government recently issued a favorable you policies to promote the growth of the longest truckload service brokerage market. We are confident that was all what do you can pick lot infrastructure and transportation operations expertise.
You have a problem is well positioned to capture a tremendous opportunity you know potentially over one credit on the market and become a leader of the industry.
That's global continue to expand its cross border largest the business and beauty is a presence in southeast Asia.
Timber slowest that's sort of yes, that's global services 19 countries and regions outside I mean in China.
We continue to invest in southeast Asia to capture the opportunities fungus explosive growth in E. Commerce, we launched the Vietnam nationwide expressing supply chain management business in July .
After launching high definition was expressed and somebody <unk> management business in January .
Most business are growing rapidly we will continue to look for opportunities we invest expands our service and then that was in southeast Asia in coming years with the goal of becoming the leading into where supply chain largest company bear.
Yes capital continue to provide a financial solutions to our ecosystem participants and contribute to improve overall operating efficiency in our network.
Overall, we get everybody star results for sort of quarter.
That does very well position continue our stronger momentum as we enter into the fourth quarter.
Sure peak season flower business.
And as we execute on our strategy of about locking gross increased profitability.
Before I turn it over to Jan.
I would like to make two announcements.
First I'm pleased to announce that we have have concluded our search for CFO .
This Gloria Ben will join the company and stop on November 18.
We're very pleased to welcome good all year to our leadership team.
Well I'll bring Gloria brings what's for over two decades of financial management and operational experience from walking in number of public.
Private tech larger companies in the U.S.
Most recently as you sold as Cfos of cooperate cooperate visual asking and before that she spent on the other changes as cfos for a number of software as a sluggish this and the King technology companies.
Well real will bring valuable expertise 12 financial and strategic planning as we continue to expand our business.
And a second I will like everyone else.
Our board has authorized share repurchase program.
We have passed and they purchase up to 100 million U.S. ours was all these outstanding 80 OS during the next 18 months.
What does that I will turn it over to Janney.
Our principal accounting officer.
Well again.
Second Gen how anyone.
Uh huh.
It was stronger than you'll go.
Hi, a competitive industry environment, and then that you mentioned that high school season Lumpiness.
We are confident doesn't even close to 22 cents, you're only yeah, Oh, no new off I'd be 8.7 getting.
We also a true cost he was on GAAP net income.
One of the first can you I sort of computer was non-GAAP net income Oh, RMB 16.7 million.
Got you know gets methanol Oh I'd be what kinds of the one thing for them since June of last year.
Well my team includes I'd Oakland Wilkinson.
Just one year over year to five plus five or 8%.
EBITDA increased by 71% to RMB.
I used to be meeting.
Well I just the EBITDA increased you I'd be will come in unfortunately, so I'd be when clients need me well is centered Oh last year.
Our company also doesn't go to the positive operating cash flow Oh, I'm being 200.
Hey.
Southern healing compared to RMB 86 meeting for the same period of last year.
The combination opened on GAAP measures to comparable GAAP measures and the negative adjustment can be found in our Unprecedent beat.
No I would like you some key financial highlights for the quarter Huh.
A year over year basis.
Revenue increased by 19% to I'd be fine one to be probably huge view us okay, so easily impossible bundles and.
[laughter] he loved the local possible.
Oh, that's going to get Crazy T was decreased in costs operating expenses as we continue to optimize network and investing for the 90 application to improve operating efficiency.
Oh Paso decreased by 20%.
Oh bleach transportation costs decreased by cooking, because then you're over yet to I'd be real close to 75.
Legal costs decreased about kinda sleep, that's true I'd be butyl plans, because it's pretty.
<unk> costs increased by five cents to I'd be middle class one other costs decreased by 35% to I'd be hit upon 11.
That's not the root cause decreased 5% to I'd be one kind of look at Citi.
As a result.
<unk> increased by 12 cents to RMB 240, Oh meeting wild well lodging equate exactly two full time success.
<unk> revenue increased by 26% to I'd be one plan well getting.
Hi, my deal to accommodate some increase in one place volume.
You want to be economics continues into southern bank, not skew coverage expansion and book ecommerce.
No no put count decreased by one common sense.
I'd be 700, okay.
Well cost to put huh.
I see ponzi person to RBC.
He fall.
Wage transportation costs decreased by eight cents to I'd be 242 liberal costs decreased by.
Okay, then to I'd be a baseball lease costs decreased by nine cents to I'm BPP and other costs decreased five airplanes will present to I'd be if what do you see.
Gross margin improved by 1.7 percentage 0.26 question because that.
Well lumpy.
By 71% to I'd be it before [laughter] meeting.
Uh huh.
Patrick mentioned in the revenue decreased by seven she will be for hundreds of tier one really.
Despite a 50% increase in novel audits for field.
So do quite well dependent like you'll tool. This can yoshi oclock, yes, with the no possibility I spoke outgoing phone tends to be in it.
Oh, well could imagine doubling <unk> like 1% compared to those things here in 2018.
Gross profit increased by 87% to obese, okay sorry.
So he 70.
Well, let's be missed revenue decreased by 3% should I be.
I will just be could you give me.
Finally, due to focus on decrease in Copel number August so field and we continue to execute Oh, Gee, Oh intensity Olympia efficiency.
Well, probably my team improved by two conference is gonna be deploying to cap on success.
While gross profit increased about kind of eight cents to I'd be that he wasn't it.
I would still be flat opex, you'll cockle, that's the critical Anavex global could you just can't growth momentum and become all important to come to build huh.
No no Kronos told me that so the slight increases significantly by what caused it.
He set up a sense to RMB eight houses would take five kneeling.
I don't know each other by this to me because the increase in Basel transaction on your capital pencil.
No no generally to the slot handle cuts come Oh your capital pencil increased by 174 cents true I'd be.
So I couldn't you mean accounting for eight cents, although the company called colonial you know circling up 2019.
Gross profit so I haven't southern Sudan also increased by 58 cents true on before <unk>.
Oh, the major Olympics best I can oh, excluding share based compensation expenses compared to the same quarter over 2018.
So any expense as a percentage of material decreased by 2.9 percentage points Q2 plentiful Seth.
General and admin treating them as a percentage of revenue.
Hi, good upon focus on each plan to sleep stuff.
Research and development expenses as a percentage of London revenue increased by Dupont's, one because I think one she will get up on 7%.
Hi, Marty so definitely because it professionals.
[laughter] caught up with I'd be 500, Cadiz leaning on six cents over the course millennial.
Compared to care pets, Oh, I'd be 412, meaning all 510% uncle, who doesn't deal you know same period because on 18.
The increase in Capex was kindly due to the up an upgrade uncle making system.
Major hub and that's what he still taking center.
[laughter] Middle September we successfully complete a 200 immunity U.S. dollar come convertible notes offering.
At.
For the kind of associates, who saw Nike.
Okay and catch agreement that you currently I'm talking about the in Coalco, well I'd be for class eight bidding, which allow us to invest for the future and quick loan can bundle all shareholders.
No that's moving to our 2019 financial outlook.
Based on kind of bucket condition and the publishing.
I forgot to keep taking into account below average selling price Apostle <unk> huh.
Under the law nothing you'll go for dotcom.
We adjust our full year 2019 love your guidance to be even Lynch Oh I'd be so he is 4.9 pretty true I'd be.
Okay 5.1 getting.
[laughter], who then Benjamin kinda and couldn't really teaching which is subject to change.
With that well now open the call it two clay thank you [noise].
[noise], we won't know being huh.
We will now begin a question and answer session to ask a question you May Press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the key.
To withdraw your question. Please press Star then too.
We ask that you please limit yourself to three questions. If you have for.
Further questions you may re entered the question Q.
This time, we will pause momentarily to assemble our roster.
[noise].
[laughter].
And our first question will come from Scott Schneeberger of Oppenheimer. Please go ahead.
Hi, Thanks, very much and good morning, good evening everyone.
But my first question.
It's kind of curious how how you anticipate volume in the fourth quarter and a in balancing on pricing, obviously, it's an industry dynamic, but what do you foresee.
And it's in this current quarter as as we head into the new year. Thanks.
Yeah, I'm, so we still maintain a robust grossing volume so no. We stand here that we will grow faster than the a done deal or D.D. the industry.
And my past Oh, we also announced that the Oh the pass a a couple of 11 first day, we receive about one point well. Conversely, many hospitals is very strong. So I think oh for fourth quarter, we are still maintaining a robust volume gross.
Third, yes, you know similitude, who probably little bit lower than pro quarter, but this is gonna be still you know well wait a a genius odious.
Thanks, Jay yet specifically, how did single day compare year over year in the volume I didn't I heard the volume, but could you refresh us on what that yeah. So so yes. So we are we could year over year, we we brought about over 30%.
Okay, well anyway.
Okay, and then and they.
Thanks, one follow up just on a is it staying in express how do you perceive right now the competitive environment for the competitors who are not in the in the top five but those that are small or how do you how do you perceive they're there.
Activity and and they're there relative strengths in the market at the moment.
Yes, so safe competitor and not on top pack property you know they are negative gross right. Because you can think of it I'd be a top packs of you know everybody's going above the maki industry industry average that brings the outside the <unk> based on them, but we see is Uh huh.
Behind that a small compared to basic if they haven't actually grows so just a matter of time, how when you know this is going to be.
Pricing out of pocket.
Hi, Thanks, and just one more if I could throw it in the Capex keeps moving up a little bit I assume that's predominantly investment in technology could you just speak to trend of all of what we should anticipate in future quarters regarding capex is a presenter revenue and how that investments going thanks.
Okay. Thank you very much. So you know as as we said we have a huge amount of a volume and double 11, but as you know looking to whole country eat just sortation centers are you from our volume has gone so much but it is actually has less labor. So much more all that made it. So we just spend a lot of money.
Although may and and you know to reduce costs and automate D. A a total sorting centers.
Given the fact that every third quarter literally it's a traditionally just a higher.
You know capex spending a quarter because most of the or does the projects at tree upcoming infill quarter enforce working anticipating off D. A couple of get up and peak season. So traditionally third quarter, we always spend little bit more compare was retrofit first quarter or the fourth.
Quarter, social Stoke what does he is a high stuff spanning season for the upgrading yada yada automation.
And set that this year will probably stay a little bit more so as I said, finishing at about 3% to 4%. So I wouldn't say full year, we still maintain about four percentage points People's fourth quarter will be less.
And and us for yet will be yeah, we probably would be more again, you know last year, we'd get a spent about 100 I'm excited about 140 many.
Oh, Hi, NBC, Oh, I mean, no I'm, sorry, 1.1 0.4 bidding on these are this year. So so so last year, we spent about old betting. So this is about 40% gross revenue were getting broke 40% so that that will.
Bring up the on the essentially slightly higher loss. Your full year was about 3.9, it's always anticipating this year, maybe about 4.3 to 4.5.
Great. Thanks very much.
Our next question comes from Bow Yang.
Of Citi. Please go ahead.
Hi, Tony and the journey.
I have three questions. The first question, it's about the Guy does actually last things that person to get a revised down oh from previous guidance and the implied fourth quarter revenue gross got done the made a point or with only 17% Yahya gross it seems a little bit conservative [laughter]. So could you please share.
For more color back among a which segment. It's a major you know the major reason behind the two draft.
That does its way back down.
And could you. Please this year I need to be more detailed without the express deliveries Tech second Monday S.P., all still fourth quarter. A this is the first question I second question is about the supply chain management [laughter] actually was thinking the so called to revenue growth. What's in that case, the volume was still wide.
Okay, but whats happened to the U.S.P. still with the lower ASP, but G.P. at the gross margin improved a lot to what the reason behind.
And that's sort of question is regarding Oh.
But that the Proglide M&A to be confused here, we just issued U.S. dollar talented amazing CP two months ago.
And now were going to use Wow, okay mini alphatecs to do the buyback or what's the rationale behind thank you.
Thank you are buying.
Very sharp question first questions regarding to fourth quarter guidance.
Yeah. So if you look at the store, Florida right. So just see it with full year, we tried to achieve our net income positive so non-GAAP .
So we try and tied to see what area, we want to restock, how so given the competitive market. So the fourth quarter I re adjustment that we reap adjustment. The tidings is first of all his feet I'm Super competitive.
So business that a you know s. piece being a lower Dan we anticipated. So so that is part of a major reason that one of them. Second reason is that just spoke Clos as we said we have been continue tied to improve the margin and to make it business model looks more more a workable.
Oh by improved margins and reduce costs and loss.
Yeah, we actually you know that cut cut out a lot about nonprofitable or lower managing our LOE for the borders. So you have a tracing four G.M.B. sorts weekend for revenues down we're really focusing or does the poor the order. So if you look at so quarter.
The store customer actually some extra bros. So that's that's the second one is driving down the fourth quarter at sort of one is basically that Ah you already mentioned in the supply chain some criteria and I guess, yeah, we all try to controlled the risk into a multi odd that Ah.
The the bad or a bad it was Super Bowl, so a controlled yard to improve the quality of that so in that sense that we really restructuring August . So yes. That's the other major reason, we as Scott was asking you know the volume borough. So we still think that's it's good.
The freight de de express and doing.
Supply chain <unk> International Global I think the order business the close on the bottom started so good but are we do making a some strategic change into a multi.
Oh, I sort of businesslike supply chain and the store cross to make it more Oh, you know focus on the profit margins and quality of the orders and that's what the reason for that.
So you were talking about the S.P. 40 odd that the the exercise that that's the second question, but he says one question. So I'm asking one question de expressed assay for fourth quarter, we're actually seeing a similar or slightly higher audience. So quarter traditionally always been the pace fourth quarter ASP going to be slightly higher.
Given that I'm going to the dot dot dot high season business season, Dan their pricing will go up a little bit. So so SP has not been drop what's just so quarter as can be started a higher.
That's a dog your first question. The second question, we're talking about the supply chain why the bottom grow so much and the Oh the margin went up like doubled but the that the.
Revenue actually went down.
So so we are focusing on more all t. I'm happy to see a franchise to us a dog Karl FC business. So that your bottom goes up a lot. If you look at a crowd or EPCI award and Weve doubled to more than doubled.
So the so sort of order for feel winds up but we also kind of out some of these projects, we deem to be a low margin or less quality of a project, which in the end of they probably don't make money all of it.
So we're just kind of it out so so we're doing some kind of.
Oh clean up if you want to say of some of the a though the older project and also structuring it into a more long term gross oh. So just short term I I was expecting that will come back a quarter after.
Next quarter to quarter after that.
The supply chain, we're going to the gross a again actually in fact that I think the a store plus also would be on you know gross up trajectory in next quarter. So.
So that's your second question. The so called <unk>. Yeah, you, maybe asking that question say why why we issued 200 meeting softball convertible bonds that Meanwhile, two months later say you know when a buyback so matures.
So first of all at the issue no combo, Bob it's more opportunistic right because we've seen a market data kept them up is good. So we just go. So go ahead to go to a pop up of the odd aren't the though the war chest and you know give some more were more resilient cash. So data is the its its company separately event. This is not like you know what.
Two months ago would just want to capital model is really good.
And why not you know getting some more more more cash on on side, which is good.
Bye bye bye issuing by issuing announcement, saying that we also planning to buying back some of the shares.
It's it's purely we think that we're confident in what we're doing we're executing our so basically just sweet coffee them on our execution, our strategies and the to achieve the profitability. So so that that that is a a true up to a separate events, but when you look at it you probably look at say confusing, but it's really you know when when we get a.
Convertible bonds would your recent good so is it go to market to get some cash outside.
Okay understood a meaningful Panda express U.S.P. So in terms stuff the young here on issue to be smaller than the so called right.
Oh, you're saying the.
The year over year should be similar because locked the fourth quarter 28 in fourth quarter. The ASP also went up so so so so basically the last year 20, asking for force as being higher than sort of quarter. So the same thing. This year is gonna be higher than sort of quarter. So the so given said I think that.
The year over year decline quarter by quarter, a oh I like to like for like like let's say.
It's probably similar.
Oh, Yeah, I'll make it wrong, okay. Thanks, Johnny maybe calls, but you're saying yes.
Okay.
Thank you.
Thank you buying [noise].
[noise] again, if you like to ask your question. Please press Star then one.
And our next question comes from Calvin long of JP Morgan. Please go ahead.
Hello, John It can you can you hear me.
Yes, the Calvin loud and clear.
Hi.
Yeah, two questions from Lions share of first couple still on express. So firstly just wanted to follow up on sort of E.S.P. trends that we kinda saw in Threeq, you and what we're talking about in Fourq. You. So we didn't notice a bit of an cuts to the last mile fee, which we try not held off on doing in the first half.
Mainly to kinda continue supporting our network.
In terms of going into Fourq, you, what's our thinking on that front in and in terms of the sequential increase in S.P. is that mainly a from a boost in last mile fees or are we also able to boost you know that revenue effectively that we get to keep.
That's the first question I'm on pricing second is just no broader pricing competition in the market at this point in time.
You know for Q, raising a bit of pricing overall I think that's largely in line with historical seasonality in practice.
But in terms of the message we've been getting from a law. These players. It seems like you know competition is still quite high and intense so any adjustments would likely be quite short term. So how are we looking at our pricing strategy to we have any visibility beyond just double 11, how about the rest of.
The peak season couple of 12, and then maybe heading into first quarter next year.
The third question is relates to store plus.
So we kind of talked about the whole restructuring that we were still exploring and looking out for for that business. Just any update on this front and you know what we couldn't be expecting to hear from you guys I'm not going forward. Thank you.
Okay. Thank you for Calvin.
Regarding to the ER the ask people express the last mile on sort of corridor, we will reduce a little bit the fees, probably just as a bit primary we think why more extra last mile delivery is using other means other than just the done by view by the Humalog, there, but boy, so more and more like.
You know the on the Apostle lockers saw the us the at the store. So last mile. You know just lot of other as a means to do that so the costs actually produce a little bit.
In the fourth quarter, we actually raised last smelter feet, a slightly elevated about maybe you know few cents or something across cost of course, the our country. It's just because a peak season coming and we want to make sure that you know the delivery of quality is maintained so we actually increased the pricing, there's a bit but means.
I will also actually increased up the pricing.
True to the revenues that are we Kate we keep right because at the last mile. They're pushing it goes to the all the direct delivery people a franchisees, but we also raised the for the transportation other other car. So this cost so which we so you know what's the ASP for for four or along a lot.
Smile a fee. So we actually raised so that's part of revenue African cheap.
Given the pricing strategy I think you're absolutely right. So fourth quarter I'm, we're seeing that because heavy traditionally every square fourth quarter people raise price there so up at that yes, there's more pressure still gonna have more pressure true odd to odd too in the marketplace. So yeah expecting too we expecting.
The pricing will continue to be on though on the pressure off the after hi seasons and into the into the next year.
Philosophy, we're talking about store closers, so we Orient hired some professional team.
They are doing a strategy I review and as well as some other strategy on that so I can assure you know anything further but when we have that we will we will we will continue to Oh sure was everyone.
Like I do can't say that the we Lori hire some professional on looking at the structures and the possibility or how do you do this.
Ah that's just one very quick follow up on on sort of or what you mentioned about or other means of delivery at this point do we have a rough percentage of what or how many parcels are done by sort of lockers and stores.
So like miles locks mouse, increasing so so you sue the or just like over 30%.
Already being too so the other means.
I think that up essentially got that continue to increase.
Yes.
And just roughly what it was maybe a quarter ago or last year, just so we get a sense the pesos increases.
Lots there probably is about you know a probably just say over like a penny is 10% <unk>.
Additional 10 percentage points, so lots of making about 20 summer and just she has got into Doherty some.
Well, we think they did this numbers continue to increase [laughter].
It just shows I'm not talking it thank you very much.
Yes.
[noise] concludes our question and answer session I would like to turn the conference back over to Johnny child for any closing remarks.
Okay. Thank you for joining our call and we appreciate your support for best.
PC show trial will invest relationship team. If you have it blows up questions. We look forward to speaking to you soon thank you very much.
No conference has now concluded. Thank you for attending today's presentation you may now disconnect.