Q4 2023 Sunlands Technology Group Earnings Call

Operator: Hello, ladies and gentlemen, thank you for standing by, and welcome to Sunlands' fourth quarter and full year 2023 earnings conference call. At this time, all participants are in listen only mode.

Okay.

Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to Sunland fourth quarter and full year 2023, adding conference call. At this time all participants are in listen only mode.

Operator: Today's conference call is being recorded. I will now turn the call over to your host today, Yu Hua, from Sunlands IR Representative. Please go ahead.

Speaker Change: Today's conference call is being recorded.

Speaker Change: Todd the call over to your host today, you awesome sentiment IR representative. Please go ahead.

Yuhua Ye: Hello everyone, and thank you for joining Sunlands' fourth quarter and full year 2023 earnings conference call. The company's financial and operating results were issued in our press release via Newswire Services earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting our website.

Todd: Hello, everyone and thank you for joining <unk> fourth quarter and full year terms you can be straight earnings conference call. The company's financial and operating results were issued in our press release Newswire services earlier today and are posted online you could download the earnings press release and sign up for our distribution list by visiting or what.

Yuhua Ye: The participants on today's call will be our CEO, Mr. Tongbo Liu, and our financial controller, Mr. Hangyu Li. Management will begin with prepared remarks, and the call will conclude with a Q&A session. Before I hand it over to management, I'd like to remind you of Sunlands' safe harbor statement in relation to today's call. Except for the historical information contained herein, certain of the matters discussed in this conference call are forward-looking statements. These statements are based on current trends, estimates, and projections, and therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement.

Speaker Change: That part of it depends on today's call will be our CEO Mr. <unk>, our financial controller mature how you lead management will begin with prepared remarks, and the call will conclude with a Q&A session.

Speaker Change: Before I hand, it over to the management I'd like to remind you all five of her birthday statements in relation to today's call except for the historical information contained herein. The matters discussed in this conference call are forward looking statements. These statements are based on current trends estimates and projections and therefore, you should not.

Speaker Change: Place undue reliance on them forward looking statements involve inherent risks and.

Speaker Change: And certainties and number of important factors could cause actual results to differ materially from those contained in any forward looking statement for more information about the potential risks and uncertainties. Please refer to the company's filings with the Securities and Exchange Commission with that I'll now turn the call over to our C O to O meal.

Tongbo Liu: For more information about the potential risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission. With that, I will now turn the call over to our CEO, Tongbo Liu. Tashi Dibba, Aleywa, welcome to Sunlands Post-Culture and Full-Year Compositing Series, Unneased Composite.

Speaker Change: Uh huh.

CEO Mr.: The company's fourth quarter and full year.

CEO Mr.: Great.

CEO Mr.: Okay.

We are ready to commit to.

Tongbo Liu: Prior to commencing, I would like to kindly remind all attendees that the financial information referenced in this release is presented on a continuing basis, and all fingers are dominant in RMB at this explicitly specified address. It is with great pride that we unveiled the successful combination of the fourth quarter, characterized by a noteworthy net profit of $1.155.2 million and an impressive net profit margin of 28.6%. The metrics underscore our firm financial foundation and steadfast dedication to operational excellence. In the meantime, our revenue stands at and the National average. Reflecting on the entire fiscal year, we successfully recorded an annual revenue of $2.16 billion and a net income of $614.8 million. Additionally, we observed a significant 15.4% increase in enrollment year-over-year, highlighting the growing demand for our offering. Our prudent financial management resulted in a net cash inflow for operating activities of over 135 million, providing a solid financial foundation for our future growth initiatives.

CEO Mr.: Dan.

CEO Mr.: Yes.

CEO Mr.: This information is that he does.

CEO Mr.: Great.

CEO Mr.: Great.

CEO Mr.: Similarly operation spaces, and all fingers.

CEO Mr.: Emanated in RMB unless explicitly specified the outerwear.

CEO Mr.: It is with great pride that we unveiled today the successful combination of the fourth quarter.

CEO Mr.: Characterized by a noteworthy mid appropriate the 115 $5 2 million.

CEO Mr.: And impressive net profit margin of 28, 6%.

CEO Mr.: These metrics underscore our Bourbon and financial Foundation, and a steadfast dedication to operational excellence in.

CEO Mr.: In the Meanwhile, although revenue stands at.

CEO Mr.: Five putting too many marketing is 3.3 person the increase from the previous quarter and surpassing of RDR four cuts despite the year over year revenue decrease.

CEO Mr.: On a full person.

CEO Mr.: Reflecting on the entire fiscal year, we have successfully recorded annual revenue of two point 16 bidding and a net income of 614% at meeting. Additionally, we observed significant 15 point a full person the increase in enrollments year over year.

The growing demand for our offerings, our prudent financial management resulted in a net cash inflow from operating activities of over one starting fire, meaning being a solid financial foundation for our future growth initiatives initiatives.

Tongbo Liu: Throughout the year, we remained agile in responding to market dynamics and user preferences, driving continuous innovation across our product and service portfolio. A pivotal driver has been the dynamic expansion of our interest-based courses, which experienced a 15.4% year-over-year growth. The sector has emerged as an important growth catalyst for the company, further solidifying our leading position in the adult education landscape. Turning to the performance of our major course programs, degree-oriented post-secretary programs accounted for 24.7% of our revenue in 2023. While we continue to optimize the sector's investment, we believe in its promising future. In the current employment landscape, individuals navigating academic pursuits or professional trajectories find themselves confronted with intricate challenges. The symbiotic relationship between salary offers and educational attainment has become more pronounced.

CEO Mr.: Out of the year, we remained agile in responding to your Max market dynamics, and evolving user preferences, driving continuous innovation across our product and service portfolio.

CEO Mr.: A pivotal driver has been the dynamic expression of our interest based courses, which experienced a 15 pulp with the nine person that year over year growth.

CEO Mr.: Victor has emerged.

CEO Mr.: Fortunately growth catalyst for the company further solidifying our leading position in the adult indication that escape.

CEO Mr.: Turning to the performance of our major cost programs deeper onto the postal secretary programs not yet accounted for $24, 7% above our revenue even from the Ministry, while we're continuing to optimize the sectors investment we believe in its permitted future and current employees.

CEO Mr.: Manscape individuals navigating academy pursuits of professional tragic terrorist rather than myself confronted the ways intricate challenges.

CEO Mr.: The symbiotic relationship between Saturday offerings, and then vacation no tenant has become more pronounced this in turn has precipitated assert a surge in the.

Tongbo Liu: This, in turn, has precipitated a surge in the productivity of individuals towards pursuing further education. The sector encompassing professional certifications, skills, and interest programs continues to serve as our key growth engine, showcasing a year-over-year revenue increase of 13.3% and contributing to 17.1% of our total revenue. In 2023, we observed a 21.1% rise in new student enrollment within the sector compared to 2022. Our approach to catering to the growing educational needs of learners across various age groups has been particularly rewarding. Moreover, the standout performance of interest-based education courses remained the foremost highlight of this sector, accounting for 63% of our total revenue and experiencing a significant 4.9% YOY revenue growth. In 2023, the user search volume for adult interest training surged, ranking first among the new business segments in the education sector. This trend signifies a growing focus among adults on inner well-being and personal interests, thereby resulting in a discernible concurrent elevation in the demand for associated knowledge and services.

CEO Mr.: Poor creativity of innovative towards pursuing further education.

CEO Mr.: The sector income passing professionals that certifications skills and interest programs continue to serve as our key growth engine showcasing a year over year revenue increase of 13, 3% and contributing to a 17 seven point of one person to up over total revenue.

CEO Mr.: 823 were observed a 'twenty one, but the lumpiness of the rising they'll still during the enrolment within the sector compared to $2 82.

CEO Mr.: Our approach to catering to the occurring in personal needs of the nurse of course, various age group has been particularly rewarding. Moreover, the standout performers of interest based education courses remained in foremost highlights of this sector accounting for 16, 3% of our total revenue and experiencing.

CEO Mr.: So whenever <unk> 15 for the nine persons.

CEO Mr.: Year over year revenue growth.

CEO Mr.: Importantly in theory, the user search volume for adult interest of training has surged wrecking first amount of it in the opening of segments in the education sector. This trend suddenly fired going focus among adults.

CEO Mr.: And they're willing and personal interests, thereby resulting in a discernible concurrent elevation in the demand pull associated knowledge and services.

Tongbo Liu: Compared to our degree program users, who tend to be younger and more career-oriented, the age range of users in the interest sector is much broader, with a significant portion of the user base comprising middle-aged and elderly populations. After several quarters of practical exploration, we have gained a deeper understanding of the elderly learning market, and today, I'm delighted to share some insights. The first three.

CEO Mr.: Compared to our degree program users.

CEO Mr.: To be younger and more career oriented the age range of users in interest sector as much quarter with a significant portion of the euro base, comprising middle aged and elderly population alpha.

CEO Mr.: After several quarters of practical exploration, we have gained a deeper understanding of the lending market and its game empty back to share some insights.

Tongbo Liu: The expansive nature of China's senior demographic presence is a poor-mainstay landscape for market penetration. As of 2022, China encountered a rare phenomenon of net population decrease. This marks the first negative growth since the 1916s, signifying the onset of a period of population decline.

CEO Mr.: Firstly.

CEO Mr.: The expansive nature of China suddenly earn demographic presents a poor man has not escaped for market penetration as of June 22, China comparatively rare phenomenon of net population decrease this marks the first negative growth since the 19 sixties.

CEO Mr.: Fighting the Unstate off a period of all population decline.

Tongbo Liu: Additionally, the impending retirement phase of China's 6th baby boom generation, spanning births from 1962 to 1975, introduces a cohort of wildly significant socio-economic influences. According to the China Private Wealth Report released by China Merchants Bank and Bain in 2023, the age group of 15 to 59 accounts for 20% of the high net worth individuals with investable assets of over 10 million. In the past, senior education was predominantly supplied by government agencies. However, today's newly retired individuals have the autonomy to select from market-oriented educational institutions and are willing to pay premium prices for such. Sixthly, the last preference and demands exhibited by elderly cohorts across various age brackets underscore the complexity of this demographic, indicating significant untapped potential. Individuals aged 15 to 59 display a vibrant, Ye, Selena Lv, Hangyu Li, Tongbo Liu, Sunlands Online Education Group Taking our traditional Chinese parenting program as an example, individuals aged 14.6 to 16.5 account for 16%, with over 13% being female and 20% from first-tier cities.

CEO Mr.: Additionally, the impending retirement of face of China's take the baby Boomer generation.

Lending birthdays from $19 16 to you to 90 75 introduces a cohorts. Why then is I believe the current social economic influence.

CEO Mr.: According to China private wealth report released by China merchants Bank and the payer named continues Gary The age group of 15 59 accounts for 20% of the high net worth individuals with investable assets of over 10, meaning.

CEO Mr.: In the past Senora sooner application was poor a predominant today supplied by the government to agencies. However, however to this newly retired or individuals have the autonomy to star Dirk from macro oriented educational institutions and are willing to pay a premium prices for such offerings.

CEO Mr.: Six study.

CEO Mr.: The nuanced prefer preference and demands.

CEO Mr.: It is evident by elderly cohorts of course, various H Bray case underscore the complexity of this this demographic, indicating significant untapped potential in.

CEO Mr.: Individuals aged 15, 15, nine nine display a vibrant.

CEO Mr.: Demeanor with a creative direction towards culture, and the spiritual pursuit, such as travel and the lifelong learning endeavors.

CEO Mr.: Inversely the age of 16 and above tend to gravitate towards house sintered consumption patterns embracing nutritional supplements.

CEO Mr.: Hair services.

CEO Mr.: Upon multiple errors.

CEO Mr.: So quantity of our Sydney Arcos enrollees, taking all of our transitional Chinese planting program. As an example individuals age 14 six to 16 five account for 16% with over 17% female and 50% from first tier cities.

Tongbo Liu: We define them as a new generation of vibrant seniors characterized by high cultural refinement, relative affluence, Appalachian opportunities, and a higher pursuit of spiritual enrichment. Our products are well received by this golden age group, and we will continue to see the demands of this demographic to expand this global power services in the future. Drawing inspiration from the developmental trajectory of Japan's elder industry, notably illustrated by Club tourism, Japan's leading senior tribal conglomerate with a membership base of 7 million, which initially focused on tribal products and later expanded horizontally into nursing, insurance, and consumer goods, the aim is to maximize our lifetime value through diversified offerings and high value propositions rooted in effective senior interest education services. For instance, we have launched educational travel packages, integrating courses with tourism activities.

CEO Mr.: We define them as a new generation of Biomarin seniors characterized by high cultural refinements relative of Poland fluids, Appalachia opportunities and the hydro pursuit of spiritual enrichment hour per box are well received by the Golden age group in a way we will continue to stay in the demands of.

CEO Mr.: This demographic to expand with Gulf power services in the future.

CEO Mr.: Drawing inspiration from the developmental charge Terry of Japan's elder industry body illustrated by a Clop tourism, Japan CBD in Sydney Air travel remains with a membership base of seven meaning which initially focused on travel products and later expanded.

CEO Mr.: Horizontally into nursing insurance, then the consumer goods were aimed to maximize our laptop aerials suit ever divert diversified offerings and the high variable provisions royalty in effect here was in their interest and location services.

CEO Mr.: <unk>.

CEO Mr.: We have launched and Cushing not travel packages integrating courses with tourism activities.

Tongbo Liu: These ongoing and innovative initiatives afford us a swifter and more profound insight into our user base. Fulfilling our imagination for future possibilities, we also note the government's attention to and emphasis on the elderly industry. On January 15, 2024, the General Office of the State Council of China issued the first dedicated document supporting the development of the silver economy, which specifically mentioned enriching elderly education services. We will continue to increase investment in course development for this burgeoning demographic. We have curated a range of specified offerings, including premium Chinese painting and music courses, supplemented by a variety of offline events tailored to diverse situational contexts. Notably, our senior brand won the prestigious Craftsman Service Award from People Study Online, a testament to our unwavering pursuit of excellence.

CEO Mr.: Going in innovative initiatives afford us a swifter and more profound insight into our dealer base floating our imagination for future possibilities. We're also load the garments attention to and emphasis on the Alberta industry on January 15th and billing for the general office of the states.

Sale of China issued the first dedicated document supporting the development of the sale of our economy.

CEO Mr.: Wage space, specifically mentioned the in reaching out and in education services, while we will continue to increase investment in course develop development for this.

CEO Mr.: Burgeoning demographic, we have curated Ted a range of specified offerings, including premium Chi Chinese pending and music courses similar.

<unk> supplemented by a variety of offline ones tinder to diverse situational context.

CEO Mr.: Notably our send your brand <unk>, they're pressed teachers cost band Service Award from people steady online are testament to our unwavering pursuit of excellence.

Tongbo Liu: As we progress into 2024, we remain committed to constantly exploring and refining our product mix, targeting different age groups while developing our operational efficiency improvement efforts to support our long-term sustainable growth. Since our initial public offerings, the company has been constantly progressing with stock repurchases. As of December 31, 2023, under the share repurchase plans adopted in December 2021 and August 2018, we have successfully executed the repurchase of American depository shares equivalent to approximately 420,000 ordinary shares, representing a total investment of 15.7 million USD. Looking ahead, we have pledged to fortify shareholder value through ongoing share repurchases, underscoring our steadfast commitment to shareholder interest. With that, I will turn the call over to our financial controller Thank you, Tongbo.

CEO Mr.: As we progress into the newly before we remain committed to constantly exploring and refining our product mix.

CEO Mr.: Targeting different age group, while default ethylene our operational.

CEO Mr.: Additional efficiency improvements airports to support our long term sustainable growth since our initial public offerings with.

CEO Mr.: The company has been constantly progressing with stock repurchases.

CEO Mr.: As of December 31, 2003 under the share repurchase plans adopted in December 'twenty, one in August of 2018.

<unk> successfully executed the repurchase of America American Depositary shares equivalent to approximately 420000 ordinary shares.

CEO Mr.: Representing a total investment of $15 7 million USD looking.

CEO Mr.: Looking ahead, we believe the 245 shareholder value through ongoing share repurchases.

CEO Mr.: Underscoring our steadfast commitment to shareholder interests.

financial controller: With that I will turn the call over to our financial controller hungry to run through our financials.

Thank you <unk> Hello, everyone I'm pleased to present, our fourth quarter results.

Hangyu Li: Hello everyone. I'm pleased to present our fourth quarter results. Over the past year, we have been committed to achieving sustainable growth, placing a high priority on improving operational efficiency and optimizing our cost structure. We continued our impressive level of profitability with a net profit margin of 28.6%, up 3.5% points quarter over quarter. This demonstrated the effectiveness of our operational strategies and highlights our ability to adapt to changing market conditions.

financial controller: Over the past year, we have been committed to achieving sustainable growth, placing a high priority on improving operational efficiency and optimizing our cost structure.

financial controller: We continued our impressive level of profitability with a net profit margin of 28 partners, 6% up three five percentage points quarter over quarter.

This demonstrated the effectiveness of our operational strategies and highlight our ability to adapt to changing market conditions.

Hangyu Li: It is also important to highlight that our net cash inflows from operating activities for the year exceeded $135 million, providing a solid financial foundation for the sustainable development of our business. This success is a direct reflection of our commitment to strengthening our core competence, allowing us to quickly adjust our strategy in response to changing market conditions and customer demand, notably since the fourth quarter of 2021. Our net profit margin has remained above 20%, which is a testament to the strength and the resilience of our business model. Looking to the future, we'll continue to focus on refined operations and efficient official financial management to ensure the company's sustained healthy and stable development. In addition, we'll strictly follow the instructions of the board and implement strategic share repurchases to enhance shareholder value. Now, let me present to you some of our key final results for the fourth quarter All comparisons are year over year, and all figures are in RMB unless otherwise noted.

financial controller: It is also important to highlight that our net cash inflows from operating activities for the year exceeded 100 under $35 million.

financial controller: Providing a solid financial foundation for the 10, most development of our business.

financial controller: This success is a direct reflection of our commitment to strengthening our core competencies.

financial controller: Allowing us to quickly adjust our strategy in response to changing market conditions and customer demand.

financial controller: Notably since the fourth quarter of 2021 hour.

financial controller: Our net profit margin has remained above 20%.

Which is a testament to the strength and the resilience of our business model.

financial controller: Looking to the future we will continue to focus on refining operations and the efficient oarfish financial management to ensure the company's 10th healthy and stable development.

financial controller: In addition, we're strictly follow the structures of the board and implemented strategic share repurchases to enhance shareholder value.

financial controller: Now, let me present to you some of our key financial results for the fourth quarter of 2023.

financial controller: All comparisons are year over year, and all figures are RMB unless otherwise noted.

Hangyu Li: For the fourth quarter of 2023, net revenues decreased by 6.4%, to 541.7 million from 578.6 million in the first quarter of 2022. The decrease was primarily due to a year-over-year decline in gross billings from post-secondary courses in 2023. Cost of revenues decreased by 2% to $73.8 million in the fourth quarter of 2023 from $75.3 million in the fourth quarter of 2022. The decrease was primarily due to lower compensation expenses related to a reduction in our revenue headcount. Gross profit decreased by 7% to 468 million in the first quarter of 2023, from 500 under 3.3 million in the first quarter of 2022. In the fourth quarter of 2023, operating expenses were $348.9 million, representing a 3.8% increase from $336 million in the first quarter of 2022. Sales and marketing expenses increased by 12.2% to $305.8 million in the fourth quarter of 2023, from 272.5 million in the first quarter of 2022. The increase was primarily due to increased spending on sales activities, including higher sales force compensation as well as higher spending on brand and marketing activities focused on interest-based courses.

financial controller: For the fourth quarter of 2023 net revenues decreased by six 4%.

541, 7 million from $578 6 million in the first quarter of 2022.

financial controller: The decrease was primarily due to a year over year decline in gross billings from post secondary causes in 'twenty or 'twenty three.

financial controller: Cost of revenues decreased by 2% to 73.8 million in the fourth quarter of 2023.

financial controller: From $75 3 million in the fourth quarter of 2022.

The decrease was primarily due to lower compensation expenses related to a reduction in our cost of revenue haircut.

financial controller: Gross profit decreased by 7% to 468 million in the first quarter of 2023 from 500 under three <unk> 3 million in the first quarter of 2022.

financial controller: In the fourth quarter of 2023 operating expenses were $348 9 million.

financial controller: Representing a three 8% increase from 336 million in the first quarter of 2022.

financial controller: Sales and marketing expenses increased by 12, 2% to 305 8 million in the fourth quarter of 2023.

financial controller: From 272 5 million in the first quarter of 2022.

financial controller: The increase was primarily due to increased spending on sales activities.

financial controller: Including higher sales force compensation as well as higher spending on brand and marketing activity is focused on interest based causes.

Hangyu Li: General and administrative expenses decreased by 36.8% to 35.5 million in the first quarter of 2023 from 56.1 million in the first quarter of 2022. The decrease was primarily due to lower office costs and rental expenses resulting from the early termination of certain office space. Product development expenses increased by 3.6% to $7.6 million in the first quarter of 2023 from 7.4 million in the first quarter of 2022. Net income for the fourth quarter of 2023 was $155.2 million, compared with $181 million in the first quarter of 2022. Basic undiluted net income per share was 22.59 in the fourth quarter of 2023, as of December 31, 2023. The company had 766.4 million of cash, cash equivalents, and restricted cash and 142.1 million of short-term investments, compared with 757.4 million of cash equivalents and restricted cash and 70.5 million of short-term investments as of December 31, 2022.

financial controller: General and administrative expenses decreased by 36, 8%.

financial controller: $235 5 million in the first quarter of 2023.

financial controller: From $56 1 million in the fourth quarter of 2022.

financial controller: The decrease was primarily due to lower office costs and the rental expenses, resulting from the early termination of certain office spaces.

financial controller: Product development expenses increased by three 6% to seven 6 million in the first quarter of 2023.

financial controller: From seven 4 million in the fourth quarter of 2022.

financial controller: Net income for the fourth quarter of 2023 was $155 2 million compared with 181 million in the fourth quarter of <unk>.

financial controller: Basic and diluted net income per share was 22.59 in the fourth quarter of 2023.

financial controller: As of December 31, 2023.

The company had $766 4 million of cash cash equivalents and restricted cash and 100, and a 42.1 million of short term investments.

financial controller: Compared with 757 4 million of cash cash equivalents under restricted cash and 75 million of short term investments.

financial controller: As of December 31, 2022.

Hangyu Li: As of December 31, 2023, the company had a deferred revenue balance of $1,113.9 million, compared with $1,690.9 million as of December 31, 2022. Capital expenditures were primarily for information technology infrastructure equipment, and the list holds improvements required to support the company's operations. Capital expenditures were 0.2 million in the first quarter of 2023, compared with 0.7 million in the first quarter of 2022.

financial controller: As of December 31, 2023, the company had a deferred revenue balance of $1113 9 million.

financial controller: Compared with $1690 9 million as of December 31st 2022.

financial controller: Capital expenditures were primarily for information technology infrastructure equipment and.

financial controller: And the leasehold improvements required to support the Companys operations.

financial controller: Capital expenditures were $1 2 million in the fourth quarter of 2023.

financial controller: Compared with <unk> 7 million in the first quarter of 2022.

Hangyu Li: For more details on our full year 2023 financial results, please see our earnings price video. Now for our outlook for the first quarter of 2024, we currently expect net revenues to be between 500 million and 520 million, a year over year decrease of 8.3% to 11.8%. This outlook is based on current market conditions and reflects the company's management's current and preliminary estimates of market operating conditions and customer demand, all of which are subject to change. With that, I'd like to open up the call to questions. Auprika?

financial controller: For more details on our full year 2023 financial results.

financial controller: Please see our earnings press release.

Speaker Change: Now for our outlook for the first quarter of 2024, we currently expect net revenues to be between 500 million on $520 million a year over year decrease of eight 3% to 11, 8%.

Speaker Change: This outlook is based on current market conditions and reflects the company's management's current and preliminary estimates of the market operating conditions and customer demand.

Which are subject to change.

Speaker Change: With that I'd like to open up the call to questions.

Operator: Thank you. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising that your hand is raised.

Peter.

Peter: Thank you.

Peter: You ask a question during this session you will need to press star one one on your telephone.

Peter: <unk> automated message advising advising Johan.

Operator: To withdraw your question, please press star 1 1 again. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please stand by while we compile the Q&A roster. As a reminder, to ask a question, you will need to press star 1, 1 on your telephone. To withdraw your question, please press star 1, 1 again. At this time, we are showing no further questions, so this will conclude our question and answer session. At this time, I would like to turn the conference back over to Yuhua for any closing remarks. Once again, thank you everyone for joining today's call. We look forward to speaking with you again soon. Good day and good night. This concludes today's conference call. You may now disconnect your line. Thank you. [inaudible] Thank you for watching!

Peter: To withdraw your question. Please press star one one again so the.

Peter: Benefit of all participants on today's call. If you wish to ask your question to management in Chinese teeth immediately repeat your question in English.

Based on by while we compile the Q&A roster.

Peter: As a reminder to ask a question you will need to press star one on your telephone.

Peter: Thank you withdraw your question. Please press star one again.

Peter: At this time, we are showing no further questions. So this will conclude our question and answer session. At this time I would now.

Speaker Change: Like to turn the conference back over to you for any closing remarks.

Speaker Change: Once again, thank you everyone for joining today's call and look forward to speaking with you again soon good day and good night.

Speaker Change: Okay.

Speaker Change: This concludes today's conference call you may now disconnect your lines. Thank you.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].