Q3 2022 OneConnect Financial Technology Co Ltd Earnings Call
Okay.
[music].
Hello, everyone and welcome to the ICF T 20, <unk> Q3 earnings release, My name is Emily and I will be coordinating Yoko today at the end of todays presentation, you have the opportunity to ask a question by pressing star for probably the number one on your telephone keypad I will now turn the call over to our host Danielle <unk> head of Investor Relations.
Please go ahead.
Thank you Hello, everyone and welcome to all third quarter 2022 earnings conference call All financial and operating results were released earlier today and are currently available on our IR website.
Today, you will hear from our chairman and CEO , Mr shouldn't horrible well give opening remarks, and Q3 business highlights afterwards, our CFO Mr. Loyal Paul will offer a closer look into our financials.
And then in question then.
The session management team will be available we have our head of South East Asia business midst chimney.
<unk> Chief Executive of Hong Kong Virtual Bank, Mr. Michael D and our head of strategy and product Mr. Allen Dong.
In today's conference.
He will make statements in Mandarin or in English for those.
I'm wondering if it goes back to the translation will be provided.
If any dependency management statement original language will prevail unless otherwise stated growth rate all the matrix referred to year over year growth versus the same period of last year.
And then currency is in RMB.
Before we start let me quickly cover the Safe Harbor statement.
Well, we'll be making forward looking statements, which will involve a number of risks and uncertainties that would cause actual results to differ materially. Please note that we may present, both F. R. S. In the last financial measure.
With that I'm now pleased to turn the call to our chairman and CEO , Mr son Temple single Leap.
Sure.
Okay.
Yes, Jason told Paul.
They're all doing well are in there.
Thank you can you keep up with.
Hello, everyone I'm sure telephone. Thank you for taking the time to dial in won't come next 'twenty 'twenty to Q3 earnings release.
So Jeff.
Campbell Y'all get you should be a bot.
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Before I begin I'd like to announce that personnel change first during today's board meeting the board approved drug for a year long trends congratulation as executive director and according to the mid Cushing, the Chief operating officer and director of good strategic Development Center.
Ping an group.
A non executive director.
Thanks, and I appreciate Don Yeah, its contribution to the company during his tenure as executive director.
Thank you.
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International complex duty implications from Covid and the macro uncertainties perpetuated into the third quarter. Despite these challenges won't connect team overcame difficulties when O olive and achieved solid performance in Q3.
Revenue in the first nine months up by 13% reached 3.22 billion yen.
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Reality agenda, Ikea harsh in that country.
Washington Trust pay shouldn't take time to go now you also have potential.
Medical economics, and the pandemic continue to weigh on the growth parts of our business, including some implementation projects and usage or volume based product.
We see declining usage in lending products in auto insurance ecosystem product.
Hello, Matt.
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Other than these programs, we didn't know robust development from other solutions.
For example offerings from Gameloft platform, especially AI customer service, maintaining strong growth momentum in the first half of 2022 in both custom remember and revenue.
Overseas business, which includes paying ongoing commercial banking Hong Kong registered a growth rate more than double last years.
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As an important initiative in our stage two strategy. One comment has continued product integration and upgrades by launching new offerings in digital insurance, we released a digital management platform for life insurance agents and kicked off corporation with the globe.
Ballpark 60 insurance company applying our products to its business in South Africa.
As for digital banking, we have integrated retail and SME lending systems and built a needle platform based on our unified technology architecture.
On top of that we proactively adjusted our product portfolio, so using our projects with heavy customization and so our eye as well as improving product standardization.
Over the short term disease at the expense of some projects and the growth rate, but looking forward. These efforts will further dosing into <unk> competitiveness in our core products and generated valuable return.
Please go.
Yeah. Thanks, Joe you got a whole thank you to the project.
Next I will brief you on business development in this quarter.
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So how much impact.
This year, we're still at the second stage of development that is broadening customer engagement, where we focus on peanut group in a financial institution customers as well as integrated products and build Gamat platform.
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Nowhere at page four.
We remain committed to one body to win strategy in stage, two which means we continue to focus on financial institution customers.
Pending ecosystem and overseas business.
Thank you you guys more securely control shoot at key yogurt job cohorts, where you thought you might be able to send out only some gotcha.
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In Q3 total revenue reached 1.07 dealing yet premium plus customers increased by nine year over year to 163.
Operation efficiency improve significantly margin of net profit attributable to shareholders narrow to Mark Lee by 13 percentage points to negative 12, 4%.
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Now next page five.
As one body to win strategy takes route won't connect achieved greater coverage of financial institution customers in the first three quarters.
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Digital banking products, including digital lending a banker at deepening our engagement with a washout Bank bank of Maine, born bank of Suzhou and many other customers.
Enabling them in their digital Inc Trust structure and accelerating the application of home developed technology.
Volume about flat satisfy.
So that people can see you thought yes, I hit the ball out here high qualified yet.
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Shanghai Boston Seaport.
In digital insurance, we English into the relationship with many insurers and the first nine months.
Our property and casualty insurance Liberty mutual.
Insurance and <unk> insurance to name just a few.
These brand names demonstrate our growing penetration among insurance companies.
John .
What's really being some struggle with trying to keep your that well may you. Please oh, yeah by Union, So long as you Johan.
Sure.
In terms of cannot platform upgrade and a hit products, including AI customer services continued to make new market a breakthrough as you can see from projects with bank of Great Joe Bank of Beijing, and bank of Chongqing etcetera.
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Standardization of high gross margin products is the key to won't come next future as a business and service provider.
Can see on page six.
Customer services, leveraging <unk> unique advantage of business, Pos technology, and incorporating diverse financial scenarios and leading technology now spans a wide range of functions, including smart customer service smartphone application smart marketing and the robust platform.
Find knowledge basis, 1600, AI services service scenarios over 200 of quality assurance models and over 3 million AI sales scripts underpinning the product.
Listing AI adoption rates as high as 94%.
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Yogurt, Yaacov, Shelby cuneiform heat up and down.
Julie you end up Colin Yankee call genius. It sounds like you do Youll hear cobalt June quarterly you can travel a lot and goodbye.
By the end of September 3rd Party revenue growth in our customer service by both on a year over year basis premium class customers also extended its significantly its customers are also quite speaking net expansion rates for premium plus customers in the first three quarters.
EBITDA over 100%.
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Hi, Rod.
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Next please go to page seven.
Overseas business remains a key initiative in our one body two week strategy as we continue to strengthen our international presence in Hong Kong and the Middle East.
Formula for.
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Yes Ricky.
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Jim Chirico Gulfport Pete <unk>.
Shinbone tagging humans.
Charlie can you talk about that.
Really a trend you'll keep that absolutely no hockey stick shall not be.
<unk> is the first virtual bank in Hong Kong to focus on S. N E services. We're also the only want to use the old China data overnight data for modeling, which means timber alert and more precise loan approvals for Smes and as long as recognition.
Hong Kong and a in Hong Kong.
Gail B is committed to dish the only financial inclusion.
Opening can be found online and within one day.
Customers, we serve 30% are first time their loan applicant.
Revenue growth in 2020 won't ranked first among virtual bank in Hong Kong and the revenue continued to show strong growth momentum in the first nine months of 2022.
Creasing by two fold year over year.
We also enjoyed great brand name in the industry evidenced by awards from renowned financial news outlets, including Asia money, Euromoney, and Hong Kong economic journals.
The bank ranked 45th in the global top 100 digital only banks ranking cop, one eight Hong Kong.
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Credit reference service to a services agency in Hong Kong paying that won't come next C. R. E. Also went well and we officially received a license for a fee or a business. This week. The company is expected to launch business in 'twenty from Q3 to provide a three types.
Products and services, namely traditional credit reference services Emailed me too crowded reference services and cross boundaries services. For example, issuing cross boundary credit reports as always we aim to deliver a differentiated diapers and accessible credit reference products.
And service model is contributing to establish two the establishment and the improvement of credit a reference system in the greater Bay area.
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To rebound back to their habits.
At the same time, we have broadened our presence in the middle East.
In September we announced our collaboration collaboration with Abu Dhabi Global market to empower the development of the SME financing platform.
IPhone aimed to promote financial inclusion in the region improved transparency and lower operating costs for Smes.
We officially launched our UAE subsidiary of that'd be global market October to provide digital services with leading technologies such as the cloud computing artificial intelligence to empower financial institutions in the Middle East and North Africa in their digital transformation journey.
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Also on page eight. Additionally, we are also happy to announce that our brand new life insurance product made it was advances in the international market as well.
With the new digital and efficient all in one platform for life insurance Asian, which spans a wide range of insurance services from digital advisory theories themselves. So it's fun to customer insight, we formed a strategic partnership with a global top 50 ensure to empower them.
Digital transformation of its life insurance Asian in South Africa.
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On page nine.
As I mentioned in the opening remarks.
The future of one connect rising product standardization.
During the first nine months, we continued to improve our products by standardizing functions and completed over 60 update.
In digital banking, we integrated retail and SME lending system and the billing to immuno platform Batesville, a unifying technology architecture.
In Ghana platform includes data on me, though, California improvement and the AI capability improvement and customer service and.
We are confident that standardized products will boost wont come back to overall profitability.
Another part of our efforts to execute this key initiative in stage two strategy I E product integration and upgrade is to proactively adjust our products.
Projects, we phased projects with heavy customization and low or I or the results, we see improved ROI in Q3.
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Thank you.
While COVID-19 outbreak researchers across China, where only one months away from the end of 2022.
Won't come on the microenvironment pandemic business growth under pressure.
However, this does not undermine our confidence in our future, which stems from the recognition by the market and our customers whose data.
Product competitiveness and the growth in financials that our team has worked hard to look to deliver we believe external challenges are only temporary.
A young Tech company, we will remain agile and remain committed to improving third party revenue and becoming profitable.
This allowed us to therefore, it was all right I got you okay. Thank.
Thank you for teaching incentive with a tricky I won't get hit.
Some of them.
Next our CFO .
Well give you a detailed.
Financials in Q3 of the first nine months was up please.
Okay. Thank you.
Good evening everyone.
I'll give you an update on our financial results in Q3.
Total revenue in third quarter reached one 7 billion.
Third party revenue.
Maintenance study.
0.35 P M.
Premium plus customers or customers with <unk>.
Revenue contribution over one over 1 million was up by nine customers to 163.
Net loss this quarter was zero.
One 3 billion with a net.
Net profit margin at 12, 4%.
Which improved significantly.
<unk> 13 percentage points.
From negative 25, 3% in Q3 2021.
Let's start from the top line.
Revenue remained stable at 1.07 billion this quarter.
Increased by 13% to $3 two 2 billion in the first.
Nine months.
'twenty two.
In Q3, the revenue increase was driven by operational support <unk>.
Implementation and others.
However, this was offset by the revenue drop from.
Some business origination and risk management.
From pandemic.
And to all of their continuous fees all of those projects.
The core initiatives.
Teach strategy.
I will give you more colors on revenue diversity.
Revenue mix by customer type.
That's the same.
This quarter compared to the same countries last year.
Revenue from third party customers reached to $351 million.
Similar to Q3 last year.
And accounted for 33% of total revenue.
Due to Covid impact.
Revenue from business origination all the insurance claim products and domestic implementation.
Shrink.
No or low value products, hopefully reduce that.
Other than the business as mentioned above.
Do achieved stable improvements.
Distributions from <unk> grew slightly by five 2% from $113 million to 118.
Representing 11% of total revenue.
Operating support business contributed most of the revenue growth.
Revenue from peer group reached 599 million in the third quarter.
Made up 56% total revenue.
The overall contribution from group remained steady usage volumes.
Some transaction based products decreased.
For example, PUC claim related to products and banking lending products.
This was offset by customer service support business, our new launched projects to meet the business requirements.
Yes.
Moving to revenue mix by business cut implementation revenue accounted for 19% of total lessons.
Reached $202.
From $189 million and it's been a contributor last year.
Which was driven by the ongoing digital transformation MTN group and our new overseas life insurance business expansion.
On the other hand implementation revenue was from domestic third party customers dropped due to the pandemic travel restrictions and our continuous fees out of low value projects with high customer.
<unk> requirement.
Revenue from business origination.
$94 million compared to 115.
Period last year.
Primarily due to the decreased lower volumes as a result.
Then of course in the macro economy.
Revenue from risk management was 105 million this quarter.
Versus 130 million computer last year.
Primarily due to the decreased usage volumes P&C insurance claims related products that are more susceptible to COVID-19 control measures.
Revenue from operations support rose to $294 million from 200 eating them.
For the same period in the prior.
A year.
Ordinary benefiting from the increase in product usage charged by stock based expense.
Especially there is constant business customer services.
Revenue from cloud services platform remained steady this quarter.
Revenue contribution of 200.
Then before.
Meetings slightly trucked from.
Sorry.
297 million slightly dropped from 303 million Sims periods last year.
As mentioned in previous earnings release.
Our cloud services business has entered into a stock stage and revenue remained at a stable level.
Which is subject to actual usage volumes overall thanks.
Third quarter revenue is in line with company's expectation.
Post implementation and other revenue was up by 19, 2% to 78 million from 65 this quarter.
Accounted for 7%.
Such improvement was mainly driven by the robust growth.
Virtual bank business in Hong Kong.
At the peak parts to our strategy in the greater Bay area and overseas.
This revenue kept improving multiple times faster than the overall business.
Let's turn to the revenue mix by product type.
Gamma platform.
Strategic focus for innovation.
Was the biggest chunk of our revenue.
Which accounted for 49% of total revenue in the first quarter.
Hey, good customer service.
Core banking system and other initiatives businesses.
Cabot to present <unk> remarkable growth.
Revenue growth from overseas insurance business contributed to the increase of each dollar of insurance revenue.
With the production of 21%.
Meanwhile, digital banking make up 28% of total revenues and the Pea will be accounted for 2%.
So the revenue mix by product type in.
In the nine months of 2022 digital banking digital insurance platform under pier will be contributed.
8%, 19%, 61% and 2% of total revenue respectively.
This quarter we.
Continuing to committed to our stage two strategy.
Where we focus on potential.
Premium plus customers.
The total number.
M club customers continuing to grow this quarter.
Nine customers grew 163.
With most of them being our existing customers. The increase also testifies to our success in deepening engagement with existing customers.
We are happy to see that more and more premium plus customers are using multiple products from our different product lines.
Gross profit was 375 million in the third quarter.
And our gross margin.
35, 1% remains above the level at the same period last year.
Our net basis.
Basis gross margin was 38, 4% compared to <unk>.
$42 two.
Prior year.
This was a mixed results caused by different factors.
And with perfect Incretion and upgrades.
Key initiatives.
Two we continue to optimize our product strategy improving.
Product standardization and proactively please.
It's requiring heavy customization.
On the other hand usage volume of products with relatively higher gross margin such as P&C claims related products and alone in risk management decreased due to the intense macro circumstances.
We are pleased to see that.
We are well on track to our breakeven targets as we meet covenant purpose and loss reduction this quarter.
First of all.
Our research and development expenses into $287 million.
From 300.
23.
As a percentage of revenue it amounted to 26, 9%.
Paired with 34% in the prior year.
We continued to implement our second stage strategy on product integration.
Our products on the overall point of view are more and more mature graduating.
At the same time, we'll commit to improve.
The efficiency by optimizing marketing structures.
Looking forward will be.
Keep spending most of our resources on research and development to upgrade and development.
To strengthen our competitiveness in the market.
Sales and marketing expenses for the third quarter of 2022 decreased to 294 million <unk>.
Compared with 131 million in the prior year.
The percentage of revenue decreased to eight 8% from 12, 3%.
The improvement with benefits.
From the enhanced sales capabilities and efficiencies.
We managed to further reduce our total sales labor cost while remaining revenue growth.
Meanwhile, telecommunications marketing and travel related expenses.
<unk> decreased compared with the same periods over 2021 partially due to the Covid control policy.
Regarding general.
Administrative expenses came to 167 million.
170 million units, including last year.
As a percentage of revenue decreased to 15, 7% from 16, 9%.
Notwithstanding some one off expense <unk>.
Included we managed to decrease general and administrative expenses.
There is stringent cost control measures.
Benefited from all of US our net loss narrowed to $133 million from 270 million units been periods last year.
The margin improved by two nine percentage points.
From negative 25, 3% to 12, 4%.
Continuing to deliver double digit improvements.
On this page you can find a comparison of costs in the past three years and as the first nine months in 2022, which shows clearly the path towards breakeven by midterm.
We will continue to implement higher ROI perspective requirements and if results products.
Which are missing our standards.
We also maintained.
The cost discipline to cook the expenditures.
With all these measures we are confident about breakeven with regards to our business plan.
I would like to.
Each of the key focuses of wound connect in 2022 third party revenue growth and cost discipline to path to profitability.
Due to the current circumstances, we are still facing pressure on both total and third party revenue growth.
However, we do believe that the group will recover once the Covid control measures peace and democracy tuition viewpoint.
We can also see the production decreasing and optimization, we will further improve our revenue growth.
Profit improvement.
Lastly, we summarize key financial metrics in the third quarter I mean in the first nine months as well as adjustments none of that those gross margin references. Thank you.
Thank you.
Great.
Ready for questions. Please open the line.
Thank you if you'd like to ask a question. Please do so now by pressing star followed by the number one on your telephone keypad. When it says you will tend to speak I will instruct you on your line will be open as a reminder, that is star followed by the number one on your telephone keypad.
Our first question today comes from Timothy Zhao with Goldman Sachs. Please go ahead.
I wanted to transition without human knowledge of <unk> went to counting how many vehicles going on yet.
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Our son, Uva Digger, Ashish, what you're doing there to close shortly.
And Keith.
Darwin pieces that you guys have going.
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On a year with Asian footprint.
You don't really see a quote.
Jim a couple of basis points.
Polymer should each element.
Quote on the tundra.
I'll now highlight two.
Sure.
Sure sure.
<unk>.
Thank you Sir.
I have two questions. The first one is about the industry can management share some color on how.
The management team and look at Ikea ascending spending in all the financial industry.
And Ping, an and to third party customers.
And that figure industry context, how should we look at industrial spending into next year and how that will impact all revenue growth.
Secondly on the overseas business I see that our overseas business has progressed and different finish lines in different regions.
Sure.
Our strategy in terms of our expansion on a high level and how should we think about revenue contribution for next year. Thank you.
Yes.
Thank you Timothy syndrome will take your first question and Michael and then we will take your second question.
General teeth.
Lastly, it is Steve.
You want a general Hong yet.
Hi, John .
So I'll answer your question about the development of financial institution.
Industry.
So each any any job if you think you saw some choices.
Yeah.
Uh huh.
On G&A.
Well. Thank you once you go yeah that shouldn't you will jump at them shop cannot be itt's future when I see.
What you're seeing in shop.
The macro environment dependent make half could the business develops then banks under pressure so over the short term some financial institution may cut their investments to lower costs and improve efficiency.
Thanks <unk>.
Take a frugal Hudson.
Yeah, Hi, Linda.
As usual I should if you don't use yet.
Hi, L T cell <unk>.
No.
Bulk law from England.
But looking forward over the medium to longer term we.
We do see market demand from banks.
So banks are.
On the business pressure I'll need to boost their operating operational efficiency, mainly from risk management and operation support.
Uh huh.
Hi, Thank you.
Sure.
In fact with the firm yet.
All right.
I'll be I'll call it future.
And we see great digital transformation.
And from the following areas.
Sure.
<unk>, yes <unk> be.
The truth of what did.
Are you seeing crop.
So firstly banks to have demands in risk management capabilities from technology application digital operation data security and the adoption of home developed technology.
Yes, sure Gail <unk> downhole data.
Classic Tomo, that's only good night. Thank you.
And these are also the key focuses of our R&D investment in digital banking platform.
Now turning to our NIM.
You see all that.
Right.
JV shocking for Qunar chunky frugal heartburn.
Jewelry economic downturn medium and small sized banks.
In need of a had to call a digital transformation.
Oh, sorry, yeah, well Jackie.
Yeah sure so we saw coming.
Sheila.
And that means small and medium sized banks mi business cost technology solutions.
I'll take it.
Thank you.
Okay.
Uh huh.
Tony.
Okay.
Right Okay.
Uh huh.
Taking a dharma yeah.
Can hear you yeah, we can hear you.
Okay I'll take the question on the Southeast Asia are the overseas question right. So I think probably they feel we have positioned as a region that has more than $2 billion, our growth potential and in Saudi and in the next two years the economy entering into potentially recession ethylene you see thought.
APRA asked the one bright spot that has the highest GDP growth or that region, having five 5% GDP growth. So we continue to be very bullish about southeast Asia growth today with anything more than 100 customers and over.
20 countries.
The revenue ticket size is very positive because the sales are in U S dollars and the ability to surprise the same solution in U S dollars.
That's much more profit.
And then going into do they want to treat in fact in Q3. This year. We started two collaborations wanted to pick more collaboration so that we combine a.
What is good from the East we believe what is good from the west.
So backhaul banking in this collaboration we started launching in Q3 were foreseeing a good result, coming potentially next year and then in Q3, we also launched our iridium entity, we actually had the NTT earlier on it after we did the product and the actual entity launch.
The dry type event, which is the fintech inventing a would that be a lots of course, yeah. So.
At this moment I think we're seeing good enough growth Q3 growth is very good for us at about two three compared to a year on year.
For XL a percentage.
So revenue I remember, we thought had off initially in the earlier, yes single digit to the revenue and then we went into elite teams.
We are about 20% of external revenue offline connect and we continue to see that growth continue to grow.
Yeah.
Alright, thank you.
Let me talk about the the Hong Kong business overseas famous for when come out that we have that we have two parts. One is the south East Asia with Xiaomi, We just described.
The Hong Kong.
Hong Kong, we actually have the sweet different.
Different settlements.
As a technology or services for financial institutions in Hong Kong.
That's very similar to what you just described.
Mark it's our our competitive edge et cetera, So I will not repeat that.
The attitude.
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What's your bank.
I did reference agency business.
We have to bear with valuable license in Hong Kong.
So from here it will be I think Mr. Shan has already introduced that you get the main presentation that we consider to be one of the best performing major banks among there among the eight I think the the reason for that was that first of all we have a very different.
Additionally, we are different from the rapid progress that.
And we said we've got to fix it.
Now the fact that antibody itself, we had to OCI.
Back so we had a lot of the technologies, we have the rock types of entities that we catch rate.
Borrow from that <unk> laid out and at that incremental.
Hong Kong in Hong Kong market.
I think.
We will continue to focus on the SME, we will compare that you're using.
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Ankle market in the graduate to expand.
To a broader broader Sacramento honest upon entre out on the GTA area.
We will partner with more and more ambitious.
Using all the types of data to show that.
If you were in the entire week after week.
You'll notice that during the.
Formal launch of CDI commercial thinking to change.
Albeit actually without the front.
Actually we are the largest contributor of CBI.
H in Hong Kong, So we <unk>.
Continuing to move on because we need to grow.
Our revenue.
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Second high side, but I think we had is a kind of reference.
We're not the three.
Yeah.
Yeah.
Well have to see how Facebook rocket devices area.
We formally with either the license earlier this week from Hong Kong Banking Association. So we are starting to do the initial thing which means we will look at all the data from the Therewith Bank and we estimate to launch our foremost services in the second half.
Yes, I think this is also very.
We are very.
Optimistic about this one.
Because I think given the more and the more the connection between BVA between mainland China and Hong Kong.
When can that I think that we're not there.
One of the mainland based company that has a license in Hong Kong, we are uniquely positioned.
Two average.
Our strong technology leadership in all I feel I think I made that I could come back to private information in mainland China, Hong Kong drags that we can provide more holistic.
I did reference a report to the banks.
And also I think our technology advantage, although without all that stuff.
Providing a of course, but we will also to be able to provide risk and sell it through some elements of it.
That's why the banks or other financial covenants.
I think.
Hello.
We are very very optimistic.
The growth of our business.
Thank you.
Yeah.
Yeah.
Our next question comes from Tien and Shout with Orient Securities. Please go ahead.
Okay.
Thanks, Good morning, So I'm, just gonna to prevent or different you know Goldman chief legal and T system, a powerful immune function Theresa completions at a change in tone.
I don't know.
The whole government T cells from Tangshan, finally sponsorship with Oh syndrome.
Gotcha.
Is that what you're telling me ally, particularly on the harsh system.
I would also to the transmission and the first line so quickly.
Question about the cash and what's our current cash position and.
Second one is after single fleet or the biggest change during the last one year. Thank you.
Yeah. Thank you, Tim and our CFO Lora Ho will take your first question.
No.
J D.
Change in the fall.
Just don't depending on when the closing.
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You mentioned that people will be July that to other people.
Turning to EBITDA.
I will answer your question about our cash position.
So as of the end of September we now have around $23 7 billion of cash around 420, new nearly an AD or a virtual bank P. L. P and the rest is with our other entities.
Okay.
More women.
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And we have we see a tick.
The improvement in our cash control measures personally we have narrowed our loss is remarkably and just have the benefits of our cash position.
Okay.
Ah.
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Secondly, we also improved increased efforts in the collection.
We see good growth as a result, we see decreased days of accounts receivables and shortened.
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So we have sufficient cash position and sound business operation. We are confident that this cash will be enough to sustain us to meet.
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Yeah.
Well last week.
Eric you want to push it even yet generally downhole too all right guys, Yes T D.
So I'll answer answering your second question about what has changed over the past year.
Well it could also be a target.
Yeah sure.
Good job.
I have three main messages. The first is that our products are more focused.
Yes.
Sure.
The second is that we have broaden engagement with our customers.
Sundance.
Just your general thoughts.
So.
The third change is that we see lowered the cost and the improved efficiency as a result, we see significant improvements in our operational efficiency.
Sure.
Realized metal again.
Again being the Gainesville, Dr. Geoff block cohort Shanghai.
Looking forward, we remain committed it to a second stage strategy.
Is broadening customer engagement.
Yes, currently npls of the product cycle.
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We also build part.
And the cheap product standardization sell standardization as well as delivery standardization.
Yeah.
Sure Joe you've got a whole cadre.
Jackie to.
It looks like and kind of it can be in that thank you.
So again it won't come back that will remain kind of amazing to our.
Our target of business.
Leaving business class technology.
Good day.
Thank you.
Is that all the questions. We have time for today, So I'll hand back to the management team for any concluding remarks.
Thank you everyone for joining the call today.
If any questions. Please feel free to contact our IR team. We appreciate your interest in following up and looking forward to speaking with you again. Thank you.
Yeah.
Thank you everyone for joining us today. This concludes our call you may now disconnect your lines.
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