Q3 2019 Earnings Call
Ladies and gentlemen, thank you first any bought and what's come to the Lexington Tech third quarter. Two so somebody to earnings conference call. At this time, all participants are in listen only mode.
As a place to that this conference is being recorded today I'd like to head of corporate over its your first speaker today Mr. <unk> senior director of capital markets. They keep it'd be go ahead.
Thank you operator, Hello, everyone and welcome to machines third quarter 29 to earnings conference call. The company's results were issued earlier today in our posted online joining me today on the CLO are mr., Jay shelf or founder Chairman and Chief Executive Officer, Mr., Craig Jones, our Chief Financial Officer.
Mr Lyondell, our chief risk Officer, Mr. Stanley, It's all our senior financial director and other members of our team for todays agenda and Mr. Shao will provide an overview of our recent performance and highlights. This is doing well discuss our financial results and Mr. Bill will discuss our credit performance before we can.
When you I refer you to our Safe Harbor statement in the earnings press release, which applies to this call will make forward looking statements.
So this call includes discussions or certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures. The most directly comparable GAAP measures. Finally, please note that unless otherwise stated all figures mentioned going this conference call.
Let me be I will now turn the call over to our CEO Mr. show them I will translate for.
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Hello, everyone I'm very pleased to announce the execution of our new consumption platform strategy and our strong active customer.
I was once again allowed us to achieve strong growth in our business. This quarter for the first time, a registered users switched over 60 million an increase of 92.2% year on year, our new active customers for the quarter was 2.5 million a very strong increase a 265% ourselves with.
3.2 billion, an increase of 72% our gross profit was 1.7 billion, an increase of 122%, allowing us to achieve our eighth straight quarter of double digit growth since our IPO.
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So what lucent she saw chasing trade yourself. If you can probably look we can talk about why didn't know what makes it a year those licenses ocotlan logos latonya into this assumption is essentially the long enough will be when somebody can you afford taught you about was one of them.
You can see that in our year to date machine in the three areas are consumption scenarios financial services and customer benefits and privileges I've continue to push forward on our strategy of a new consumption platform connecting our customers when many online and offline consumption scenarios activating millions of new consumption requests which has.
Demonstrated in the increasing growth of our platform there any single state listings on consumption platform achieved over 100 million in G.M.B. and under 10 minutes less than half the time that took last year.
King with our partner show me now these Carla say cool and 18 other ecommerce platforms together created a new singles day installment market, increasing the number of daily installment purchases by 3.8 times, an increasing GMP by 540%. In addition, bushings new membership benefits car look huh.
Hi study conducted other benefit cards, including movies music travel and other benefits and products like by educated young adult customers at the end of the third quarter Bushings paid membership product has already served over 1.5 million customers.
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You know deeply awareness and appreciate the fact that as the number of our customers grow our responsibility to protect our customers grows as well in the third quarter. We introduced our young user protection program 2.0 system for protecting customers using AI and victory that technology to practice that against overconsumption.
To protect against fraud and to protect our users private data well, what we call. The three protections, we believe that with our technology capabilities, which has been accumulated over the past six years, we can provide hundreds of millions of customers with a safe convenient unsustainable service and in turn enabling to continue.
The growth in a stable and sustainable manner.
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[laughter]. In addition, bushings AI laboratory and Big data Center has introduced our new clean sheet AI smart financed platform, which has not only being deployed across all business lines to increase efficiency, but it's also providing machines financial technology with greater security and safety.
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As a result of our strong capabilities. We're seeing has gained the trust of the broadest than most diversified group of institutional funding partners. Today, we have established with over 100 large national banks insurance companies and consumer finance companies strategic cooperation agreements positioning ourselves as a leader in our industry.
In diversified funding.
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That's being skewed consumption platform strategy is continuing to release the inherent consumption was essential of China's millions of educated no doubt customers, giving us confidence in the future of our company as a result, we adjusted our full year long origination guidance to 115 to 125 billion that's come.
Fair to last year 66 billion, a growth of 74% to 90% recently AC now since reports on leverage levels of China's you also review.
China as you step levels as measured by monthly payment as a percentage on monthly income, there's only 12.5% and still exhibits great potential for growth in accordance with the government's macro policies encouraging consumption. We have reason to believe that leading players serving the emerging educated young adult consumer population will further.
Home to grow and develop.
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Next I'd like to invite our CFO Craig to discuss our recent financial performance.
Thank you Jay and Hello, everyone I'm pleased to announce by the we have once again delivered strong results.
The interests of time I would not go over line items by line items off our financials for more detailed discussion of our third quarter 2019 resolved.
Please refer to our earnings press release.
As Jay mentioned.
Total operating revenue for the third quarter 2019 reached 3.2, feeling driven by strong growth in our financial service income.
Which reached 2.2 billion of wage no for the patient was one point I'm, giving.
Adjusted net income was 740 minutes.
Tracking our continued strong growth under performance.
Fully diluted adjusted.
Adjusted net income per income per ATM was 3.86.
We continue to see the future potential of our business model.
The performance of our customer cohort, whom we acquired in the fourth quarter up 15.
Balances now.
RMB 13, 707, Hey, and the who was 30 days delinquency rate. The problem is at a 1.19%, which a stable level of core activity rates at 42.7%.
Our operating leverage operating expense as a percentage of the average loan balances now 6.5 sensing the quarter I didn't know advertisements marketing advertising DNA and R&D was 1.33, 0.1 websites and the 1.1% of average loan balance respectively.
We currently have 62.6 million registered users and the fixing point 7 million customer was quite in line up from 9.6 million in September 32018.
We acquired nearly 2.5 meeting new active customers in the third quarter.
Overall, our average credit limits was RMB 9488.
Why our average tenure is now starting 0.3 months.
The weighted average 80 hours 10 basis 0.6.
In terms of our funding for the quarter only 6.5 set up our funding for new low Autonation came from I would use the these high platform.
And the 93.5 setting up our funding for new low on the nation came from our future funding partners.
And that Jay mentioned.
We are pleased to announce that the we now expect total 2019 low automation to be ranch RMB hundred 15 225 billing.
Versus our previous guidance off.
Hundred 15 billion.
Next I will discuss our credit situation right.
Thank you crap, we continue the outcome credit performance this quarter.
By the awful second factor affecting our industry, our credit card they continue to be height and that we spread our credit decades, and the charge off ratio from remain at the same level at its core was up for this quarter I want any big Pocketing Clinton ratio remains low at when printed books that and then we continue to see strong performance as our lifetime.
Charge off ratio customary to quantify.
[noise] reporting spread the outcome platform to continue for the full you up 29.
These that I conclude our prepared remarks operator. Please proceed.
Ladies and gentlemen, we will now begin to question and answer session. If he wishes to ask a question. Please press star one I'll get telephone and wait for adding to the announced.
I wish to cancer request, please press the pound our haskins.
Please ask your question the Chinese if you can fed tightening repeat the question.
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So I will translate all my questions.
So congrats on the results Oh I have three questions.
So first is it's about our little rock heart product.
Just wanted to check.
So what's what's the percentage of the loan origination from so far card I felt forward total loan originations and Oh, what is the new user on new borrowers contribution from the card.
And the related question needs about the combination on this virtual credit card.
Solution.
We recently saw that Oh for example, we each have a summary, we bank also launched a related.
Oh, sorry, similar products called Salt five Chen.
So just want to.
That's our view about the future completion on this virtual card products and take them quite chains fall degrees and business trends, including the loan origination growth Asacol tea and also our sales and marketing expense as we we've seen.
He spent over 500 or maybe in on south marketing.
In the third quarters, so just want to check.
Our for acquisition pace in the fourth quarter.
And the lots quite saying Savi regulation. So we've seen that regulates is encouraging the on attendance with strong capital base and strong capital t. to to be license.
So what what these are I know current situation in terms of Oh.
Topline license such as a consumer finance company license or on like micro lending something license. Thank you.
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So Jackie on your questions Oh answer the first and third one and I'll leave the question on the fourth quarter and the situation there for Craig our CFO .
Well as you know it's demonstrate a very very strong growth. It's a very very convenient product and as we're looking into the fourth quarter and beyond it continues to be very strong contributing greatly to our customer acquisition and other numbers I can make up something like say, maybe 20% to 30% or maybe.
Nations and perhaps a this will continue to grow and certainly a it's helping our customers with their needs. So we certainly see that we're getting a lot of a new active customers from this and as mentioned the the growth and the active rates continue to be very very strong now with regards to the competition I think.
It's perhaps worth pointing out that we're still targeting the same type of customers and also a lot other customers that were serving where in fact already our existing customers. So in fact, we're actually serving the same customers and also we're not changing our fundamental customer profile now why are.
It's important because we bank and some of the other competitors out there they serve fundamentally different customers customers are not our customers to have a different profile. So as a result, we're not really seen significant competition or potential competition from the as they're actually fundamentally targeting a different group.
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Yeah, no on the licensing in the licensing situation I think we've been consistent same to ultimately we're not a financial institution and fundamentally we don't want to rely on any particular license from per se, but as you said the companies that are highly compliant the companies that are.
A good they will basically you get the respect them attention and certainly if we have the opportunity we will certainly focus on potentially acquiring additional licenses.
As you know we already have the internet micro loan licenses and other licenses and we'll continue to accumulate.
The proper licenses, however, I'm specifically the license that may be coming I'm will disclose a more about it at the appropriate time, when the time becomes closer.
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Hi, Thank you to attrition is are you going to be job toby's outdoor that you could you do hope you can only shelf how that plays which had the dilution will take us we're glad total.
And so I think Jackie given that before the overall guidance for the year.
We revised did the upwards a bit.
That kind of answers them some of your questions regarding the numbers for the fourth quarter and.
Things are looking.
Now that said on one hand, we're very fortunate and nearly all of our funding now is institutional funding.
However, there is always certain uncertainties.
She data with institutional funding at year end.
So hansa there is some risks there, but that said again.
Our overall guidance for the full year has been raised so ultimately in spite of the uncertainty certainly the fourth quarter numbers are looking a higher than they were before.
No on customer acquisition, I think ultimately as you know where you're very analytical about these things and it always depends on returns the effectiveness how the different channels a work. So right now the return certainly are very good it would take us something like three months, maybe maximum six months to recover the.
The typical costs and there are certainly we've spent a lot in the third quarter, but ultimately because we're very analytical about this and its hands on the other trends, we can get omnichannel well have to adjust accordingly in the future. So it depends on the situation, but again the third quarter was definitely a bit of a high.
And potentially in the future we may adjust downwards slightly.
Hope that answers your questions.
Although invention and then just going into <unk>.
[noise] [noise] once again, if you wish to ask question. Please press star one of your telephone and waiting to be announced.
You can answer your question. Please press the pen or Haskins. Please ask your question can you give you can then kind it could be the question.
Your next question comes from the line of adding young from Bank of America Merrill Lynch. Please ask your question.
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So about two quick follow up questions. The first one gets up I would use that demographics understood that Jay already seeing that I'm not much off.
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So the proposal on regulation on private companies using use that they tough <unk>. How do you have nasas well. So just wondering if we have any thoughts on now how we position again as such our proposal I think it.
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Hi, Good luck I, just want mission sounds a little pocket as good as you go get that looked went up plus the dollar pinball. So again, we'll Miss you like New York Initially you when you call. It probably will go to call. The Shelby futile once I get I can call that you go do so it's a lot depends on what's gonna. So we'll make no pun intended to develop thick.
And so Eddie with regards to your question regards to our customers and what changes we have seen.
I think its first important to emphasize that we're continuing to serve China educated young adult cohort or China, hi grow cohort.
Channels may change the acquisitions methods may change, but ultimately these are still the customers that were going after.
Currently about one third of the customers are being acquired from online sources in particular online direct advertising.
About one third is from refer rose or some natural traffic and then about one third is offline, but fundamentally the customers. There's still 24, there's still 25.
Now with regards to the online customer acquisition source.
It is a very results driven a particular channel, it's a very effective channel and up even though it is a new channel that really we only used very widely this year.
It's still the same customers that were going after so at the core of it on the answer your question how have the customers change.
No obvious changes, perhaps the only thing is that given that we're acquiring them online. We're just slightly more conservative with the credit that we give them. So we will prefer that we give them some credit and then let them use it and then give them additional credit based on that assessment.
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So it will.
Sorry, Eddie with regards to your question around privacy concerns and some of the.
Things there has been issued out there.
I think first it's a little perhaps are important to emphasize that when it comes to data and the use of day, but we're pretty conservative and we try to make sure that there is minimal impact or intrusion and we use the minimal amounts of data that we need so in particular for things such as contacts and <unk> and GPS data.
As well as a other information.
There's three principles that we definitely have to abide by at least internally one as mentioned we want to minimize the intrusion and also to minimize the use of in particular sensitive information. So this is something that very much internally, we have as a policy second we obviously have to.
Do all this with the customers permission. So it's only with the customers permission and authorization that we use any other data and then finally, we definitely cannot use any of this data for things such as collections or pursuing that so regardless to the overall situation.
Everything that we do is compliant with the law with the nation's law and the matter companies that have gotten into problems in the past quite often they were using the data in a non discrete way to make profits. So this is something that also we don't do we certainly don't.
And then those types of practices.
Oh, yes. Thank you.
Your next question comes from the line of Alex <unk> from you'd be Ed. Please ask your question.
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So Alex regards to Ah you FCB as you know we'd have disclosed I'm quite a bit of information as well once so maybe announcement and as you know the FCB was for 300 million conversion price of allow $14 and a with a Phd.
One of the top investors a in the sector, certainly very very well respected I think bye everyone.
And they have been in fact, I'm observing the us for quite a long time now with regard to the use of proceeds.
Certainly the a use will be for future plans and operations and then again the terms of a the proceeds was quite good and it will certainly help us drive our future growth for our shareholders in the future now on the Oh, you mean bank investment, it's the 18th private bank.
In China and as I think you know we have a 10% stake it is a completely new bank and in itself itself. This provides a lot of value given that there's no legacies problems.
First as you know private bank licenses are very very rare in China, and it's a very rare opportunity for us to participate in one, especially a new one.
We believe that in this situation, we can have a strategic cooperation as well as the play our technology to help the bank grow and to achieve the vision of becoming a technology bank in their place. It will also help us greatly with issues around compliance and also deepened Nick.
Cooperation with financial institutions.
Also as a shareholder it will be easier to gain trust from this bank and also within the context of the situation and on this point I'm of course, what the future we're constantly pushing the plans and also what.
Have a very very clear plan to work together with the bank in the future.
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Yeah, So I think.
When I.
Look at the situation with the credit quality.
Very very a unique situation and 28 team with the P to P and the third quarter and at the time, certainly we made a different tests and adjustment, but because of the situation with the P to P.
We face basically a climate whereby.
It was actually a little bit difficult to deal with the borrowers in that particular quarter, but since then as you can see from our other statistics, we have made 'em some fairly big adjustments to adapt to what was basically a unique situation in that case so hence.
As to not repeat the mistakes or the past, but again on that particular quarter third quarter 2018.
Yes, the there certainly was a.
Clear deterioration in credit quality.
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Yes, SAP Hana out on the JV fair value changes.
That makes you do it should you how should wait and you should I think five and you David I'd encourage you are mostly.
Hi, Todd you go on this geography gene humor.
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M., so I'm on the fair value changes or the financial derivatives, a gallon cheese, Oh, I think well know that that's an account that will be looked at every single quarter and depending on where the numbers are there may be some adjustments up and down accordingly.
So there may be if you will have some fluctuations in that.
But that is essentially a normal part of our business.
Tony Junket I found the you know woman tragedy that you don't seem closely tied Buick always yet torm than what should I doubt you, but unforeseen coating line haul additional.
With element to be on your here should in turn the California, John John Quealy, One, which will give you tie that to show you how does that mean entre into using hopefully beauty like always him as economically we that you've heard me away.
So you go to physically we would be up off of it.
So a part of this of course is the fact that we acquired a lot of new customers in the third quarter. So naturally as the new customers come in at the square then in turn increase some of the credit costs or the potential provisioning and a as these are new customers. We also have to within the.
Quarter over a period removed the bad ones and protect the bad credit. So this wouldn't turn will naturally under our motto generate some of the fluctuations.
Your next question comes from the line up.
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Question would just two quick follow up on on that topic I already mentioned previously if I for one again on.
Does that change Alstom financial.
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How about that.
And so let's see with regards to your questions I think overall, a as you know.
Under six or six we have to do a forecasts and in terms or the forecast for the asset quality and the outlook.
Certainly we don't see any deterioration in asset quality at least not right now everything is looking very stable and so hence up yes, our asset quality continues to be fine.
With regards to the customers and the composition.
Yes, there's definitely a higher percentage of.
New customers within the active but in terms of the old customers and how they're behaving and their retention rates. It's still very much about the same so no real changes there. So it's really just more new customers and longer term, perhaps something like.
In the medium term at least 30% the active customers our new customers would be what we consider a healthy number and of course, we have a very mature and sophisticated management system for managing the new customers credit to ensure that they continue to grow with us so ultimately.
In terms of the customer mix profile and our operations around it.
Some of the numbers have changed fundamentally not too much has changed with regards to our operations.
With regards to your question of whether Theres, some type of ceiling for customer acquisition.
What we see certainly is that there is a very stable high growth industry environment at least for us. So in that sense. We also see that this is reflecting the consumption upgrade the do consumption. Many things that we see India Chinese economy. So I'm actually we don't really see a ceiling right now.
For the customer acquisition.
Once again, ladies and gentlemen, if you wish to ask question. Please press star one of your telephone Lake pardon the analogy.
Your next question comes from the line of Martin Malloy from Nomura. Please ask your question.
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Okay, I guess I'll, let me translate buffer so yes.
You're absolutely right. The HP are the rising they p. ours assumption of a few things one of which would be the number of new customers as well as the low amount and yes. Indeed, the new customers would have a higher A.P. ours, but I'm, obviously as we continue to work with our new customers as they become a.
Our recurring customers DPR will come down and we have to determine the actual risk adjust the hbr. Accordingly, now I'm also Jay will like to emphasize that of course, our new customers will they become our old customers and as we continue to work with them.
We believe that not only will be able to offer them come down, but overall that the hbr for our entire platform should not continue to rise. So basically exactly as you said is essentially a function of the number of new customers.
I'm going with a quick for most of US is what could that you're quite apart. There was some good as objections and see so let's just say congratulations for personal will meet your meal fund Dodd with and make a functional seem so ins in school no updates to the Fox onep easier because it jumped up against those improvements to the possibility of could the Saudis you from interest.
And they go even when they use it didn't have become dot say slow from quick Tchaikovsky's or patents was was that we might have paid.
Talk planning differentials will be meetings or what that with the quite at par thinking.
I'm sort of following me, which I thought you know if I'm in the native from teachers to use you eat again, the syndicate adult business, which was the like that.
So you told me I was going to us lots of good the eco tragedy, what form is seasonal misses that I see good things out when teeny bits on that.
So regards to the credit numbers, we've always maintained a very conservative policies and we certainly haven't changed our policies.
With regards to our customers and customer acquisition.
With regards specifically to the decrease in the delinquency, there's a couple of reasons for that one.
Definitely partially it was due to these strong growth. So the denominator if you will only equation.
Impacted the overall numbers, but also a because we didn't loosen the policies. We continue to maintain a very very strict policy. So hence our overall performance was a reflection of that as well.
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Okay.
As a woman's ended the year to the tune club will make a new audiences and does it go to your Eagle motion. That's what are you guys have held up a user there so learn and it's a safe to say that we had a very good single state, we did very well, where we had good numbers and grow.
But that said Theres definitely no direct relation per se between us and goes day and the race and guidance rather it has a lot to do given the time of year already.
The scale that we've achieved over the full year in particular, our number of customers the growth of our platform. So it has more to do with our operating model than singles day per se.
Excellent. Thank you. Thank you very much.
Your next question comes from the line up year end John from Credit Suisse. Please ask your question.
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No so with regards to the loan facilitation. The two models of move off balance sheet. If you will just passing the rest completely off balance sheet.
And the other model, we'll let you do have the Arista reserves, we've been doing both for quite a long time and we have to adjust how much we use of each or do a beach.
Based on if you will what the circumstances ours to make them host reasonable or correct the adjustment but to answer your question more directly. It's currently at something like less than 20% that is effectively off balance sheet.
And ultimately the original tradeoff that we have to consider is a question around.
The company's profitability and some other considerations as well so if we do more off balance sheet. Obviously, we have to give up some profitability on essentially that then goes to the institutional funding partner now is not trade off a worth it.
I guess, so it depends on other things going on in the operations at the time and ultimately this is simply just gay risk reward tradeoff and if we can control the risk and we're confident in our ability to control. The risk then why would we want to give up the profitability now there's clearly benefits to both models to go club and.
Reserves and not having reserves, but ultimately we have to make a decision based again on the profitability as well as our own cash and up other situations.
Oh, great LNG children, you for the other direct.
Our balance sheet data to create Jvs radio to leaves a Utah, though.
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So do you feel woman variety limiting MACI see although on a on because it has its own here when thinking about your finish Aldo social relationship.
And so with regards to 'em D. A changes are seeing a bit in the take rate there's definitely multiple factors going on here and I think a it can only be described this being a little bit complex.
Clearly, there's the on and off that we talked about earlier and also a if you do more of one then obviously you're going to give up some profitability and turned that impacts the take rates.
But then that in turn then also what ties into other things around our future plans and anything that we might have gone.
If you will for the next year, so it's a little bit more complicated, but ultimately if we had to sum up the take rate it would be stable, it's still generally stable within what we expected to be.
Okay. Thanks.
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Your next question comes from the line of Alan Cohen from Alethia capital.
Ask your question.
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Have a negative impact on the company so overall profitability.
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So I'm out of the a funding cost and in particular, the individual versus a institution though.
They can be good friends and the a individual kirby cheaper, but they're not really significantly cheaper so.
Give a example, where they are particularly close in India for quarter last year, where capital is a bit more abundant on both we saw that that was basically something like 7.9 presenters are 7.8%.
And I'm part of this I'm also just has to do with how a certain costs are a accounted for so the individual sometimes the operating costs of those costs of operating it or not included but overall it you can say that ultimately the individual funding, it's pretty stable at somewhere around 8%.
In institutional however, it can be more complicated.
It's fairly stable as well, but as mentioned earlier, we were guards to the loan facilitation and different models and different reporting and whether the risk is on or off.
Once you include that into the math and you get numbers, a little bit different and perhaps less stable, but once you take that out you'll probably still get something like 8% plus or so so ultimately there is a difference, but it's probably not that significant.
Okay. Thank you.
Thanks for the [noise].
Your next question comes from the line of John Hi from Morgan Stanley . Please ask your question.
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Three questions about risk because some acquisitions and product. So the first one is on a risky since that however have been in should position as a percentage on the on voluntary principal this ratio remains relatively high for the for these two hotels you said the accounting impact on that all used decent normal ratio going forward [noise].
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You mentioned about one set of Ti on Traffics are quite online just wanted to just at a fixed percentage on we've done that materially changed and according to some.
Metrics and I'll show, what's the metrics about off that we're looking at.
Customer acquisition costs, all accentuates interest one to you for you with feels like hot or from eat that because of my phone line seems to be more difficult to retain not sure. If that's the.
The Sam and some interim analyses and the final question. Since about 10 are these you since there's a slight increase all followed on Pandora to starting points for the moms are not very big difference, but he seems a bit strange given that we have a higher portion of new customers.
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So John regards to the customer acquisition I'm. So certainly for the online customer acquisition. We have if you will a full at least develop strategy method. A suite of you will have customer acquisition and plans associated with that let's say you can get a greater and faster scale with the online methods.
In particular under the <unk> full suite of solutions that we developed internally. So hence the effectiveness is quite high it's quite an efficient and we're going to recover the cost in three months or less so hence a well definitely continue to do more but ultimately, we'll do more red appropriate levels and depend.
On the overall situation now offline has a lot of benefits as well it's much more precise.
We can be a clear about some of these things obviously, it's also face to face.
Hi, its maybe a little bit surprising is the fact that actually offline is even more effective we can recover casa perhaps in something like a month. So hence a it's just adjusting the right amount of.
Next we'll be well based on the year circumstance.
On the new customers early on.
As mentioned earlier definitely need for the new customers, a particular period of operations and then a longer term of course, the new customers were moved to become a old customers and a this in terms a impacts our operations.
In terms of the tenor and.
Yeah, 13.3 months it doesn't really have anything per se to do with new customers, it's not related to that it's much more the overall product on the product designs and the product mix that up.
Commercial using and another way perhaps to look at it as you know the 10 or average 10 or for the previous quarter was 12.8 months and a 13.3 month isn't that big a difference. So it's kind of within the normal range of operations and based on how we manage our customers.
Oh, well your full year to acquire or me all down there.
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Tony I want interest there should be out named the phone carefully call you took out years ago attitude.
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Yeah, So with regards to a the on on off balance sheet, and managing risk and what you say on the.
Account. So yes, I mean, you were definitely very astute and ultimately the on balance sheet in terms of the risk. Yes, you could say a fire that would definitely be a true now has that been because of any major changes or anything like that no definitely not everything in general.
Is more or less the way that it was before there was definitely has not been any changes over adjustment and as I think you know and we've talked about many many times when we manage the company and we run the whole company as a whole we look at the whole book, we don't look at it as basically on off risk, but rather we look.
At the the Wesco the entire portfolio.
Well, the I'm, feeling Tencent and I'll come see when his own should actually go if you know there's something I'm thinking.
Restorations on the south.
Thanks Scott.
There are no further questions at this time I'd like to have got nice back to pay centers. These containers.
[noise] [noise] operator, there's no further questions at the time I think a weekend conclude the call [noise].
Thank you ladies and gentleman that does conclude the conference calls party. They keep our participating me all disconnect.