Q4 2024 Full Truck Alliance Co Ltd Earnings Call
Speaker Change: Ladies and gentlemen, good day and welcome to Full Truck Alliance's fourth quarter and fiscal year 2024 earnings conference call.
Today's conference is being recorded
Speaker Change: At this time, I would like to turn the conference over to Mao Mao, head of investor relations. Please go ahead.
Speaker Change: Such statements are not a guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion.
Speaker Change: A general discussion of the risk factors that could affect FTA's business and financial bounce is included in certain filings of the company with the SEC.
Speaker Change: The company does not undertake any obligation to update this forward-looking information except as required by law.
Speaker Change: During today's call, management will also discuss such a non-GAAP financial measures for comparison purpose only. For a definition of non-GAAP financial measures and a reconsideration of gap to non-GAAP financial results, please see the earnings release issued earlier today.
Speaker Change: Joining us today are the call from FTA's Senior Management, Mr. Hui Zhang, our founder, Chairman of the CEO , and Mr. Fan Tai, our CFO . Management will begin with prepared remarks and the call will conclude with a Q&A session.
Speaker Change: As a reminder, this conference is being recorded. In addition, a webcast replay of this call will be available on FTA's www.invacelrelations.com. I will now turn the call over to our founder, Chairman M.C.O. Mr. Zhang. Please go ahead sir.
Speaker Change: Hello everyone, welcome to the Manbao 2024 Q4 earnings call.
Speaker Change: In the recently concluded fourth quarter, we continued to promote the digitalization and intelligence of the freight industry.
Speaker Change: Helping the whole society reduce logistics costs, facing the challenges and opportunities of the macroeconomic environment, Fanbang relies on strong network efficiency and extreme transaction efficiency to continuously replace the traditional offline transaction model.
Speaker Change: Driving the growth flywheel at high speed, the group's orders increased by 24% year-on-year, once again surpassing the growth rate of the logistics market, marking a successful conclusion for 2024.
Speaker Change: Hello everyone, and thank you for joining us today on today's fourth quarter and fifth quarter year, 2024, early conference call. In the fourth quarter, we made significant strides in announcing the digital and intelligence transformation of the logistics industry, substantially contributing to the reduction of social logistics costs.
Speaker Change: amid a dynamic macroeconomic landscape, we capitalized on our robust network effects and unparalleled transaction efficiency to further supplant traditional offline logistics transaction models, accelerating our growth firewall.
Speaker Change: As a result, our total fulfilled orders in the fourth quarter increased by 24% year-over-year was again outpacing the overall industry's growth and concluding 2024 on a strong note.
Facing thirty million young men
Speaker Change: For potential small and medium-sized cargo owners, we have made a firm long-term investment in brand acquisition. The average monthly active shippers in the next quarter exceeded 2.93 million people.
Speaker Change: Year-on-year growth exceeded 30%, and the user structure is continuously being optimized.
Speaker Change: The proportion of fulfilled orders by registered users reached 50% for the first time, and by the end of the fourth quarter, the number of registered user members on the platform exceeded 1 million for the first time.
Speaker Change: While the number of users is rapidly increasing, connections are also continuously strengthening. In the Unity GP formula, the number of active drivers in the past 12 months has risen to 4.14 million.
Speaker Change: The driver's process for the next month remains above 85%, while the share of the driver's online transaction wallet also continues to grow.
Speaker Change: In terms of cable quality, this quarter we have further systematically unleashed the platform's enormous monetization potential, driving rapid revenue growth. The above achievements once again prove the unique value that the Manfang platform creates for both private parties.
[inaudible]
Speaker Change: Throughout the quarter, we remain dedicated to delivering user value, propelling key operational metrics to new heights. In terms of user growth, we made long-term investments in brand enhancement to attract new users, aiming to capitalize on the potential of the 30 million users' more and a medium-sized direction for market.
Speaker Change: Our user structure also reached significant milestones, demonstrating our ability to try rapid user growth while strengthening user engagement.
Speaker Change: For the first time in our history, our direction first accounted for 50% of total fulfilled orders, and the number of shipper members exceeded 1 million by the end of fourth quarter.
Speaker Change: In terms of trucker supply and fulfillment efficiency, the number of active truckers fulfilling orders through our platform over the past 12 months, such as 4.4 million, with the next month retention rate of truckers who responded to orders exceeding 85%.
Speaker Change: Meanwhile, truckers' water share of online connections has continued to grow. Our bandage proposition of more others enhanced the pickup efficiency and higher earnings has gained widespread recognition within the trucker community.
Speaker Change: We have also notably improved the trucker ecosystem and matching efficiency by implementing trucker
Speaker Change: for our success and our premium cargo bidding mechanism, enhancements that drove our fourth quarter-fulfumer rate to 37.5%, up 5.4% percentage point year-over-year.
Speaker Change: Regarding monetization, we continue to smoothly tap into our platform's significant monetization potential, this quarter, fuelling robust RAMNY growth. These achievements reaffirmed the unique value we created for both shivers and truckers.
Speaker Change: Based on high-quality business operations, the financial performance this quarter was also outstanding, with the group's total revenue in the fourth quarter increasing by 32% year-on-year, reaching 3.17 billion yuan.
Speaker Change: Under non-GAAP , the adjusted operating profit increased by 142% year-on-year to 960 million yuan. The adjusted net profit increased by 44% year-on-year to 1.05 billion yuan.
Speaker Change: supported by these operational accompaniment with delivered a record-breaking financial performance for the quarter.
Speaker Change: Our Total Net Revenue School by 32% year over year reaching RB 3.17 billion. North Belay, Transaction Service revenues remained the primary rose driver, surging over 70% year over year to RB 1.16 billion, and the contributing 36% of our total net revenue.
Speaker Change: Menggap adjusted operating income sold 142% year-over-year to RMB 963.3 million and that Menggap adjusted net income through by 44% year-over-year to RMB 1.05 billion.
Speaker Change: As a representative of new productive forces in logistics, Manbang actively embraces the technological trend of artificial intelligence. Based on unique business scenarios and high-growth data, we are exploring the use of AI to enhance the experience of freight matching and transportation efficiency, helping drivers to pick up and deliver more profitably, assisting shippers in reducing logistics costs, and creating long-term value for the industry.
Speaker Change: Now I will hand over the time to Simon to give a detailed report on the performance for the fourth quarter.
Speaker Change: Before I wrap up, I'd like to share some thoughts about the technology trends shaping our industry. As a pioneer in advanced logistics productivity, we remain committed to embracing technology-driven innovations.
Speaker Change: Currently, we are leveraging our unique user scenarios and high quality data to explore AI applications that will potentially enhance the efficiency of free matching and charter capacity scheduling.
Speaker Change: Thank you all, once again, now I will pass the call over to our CEO Simon, who will provide an update on our fourth quarter business progress and the financial results.
[inaudible]
Speaker Change: Thank you, Mr. Zhang, and thanks everyone for joining our earnings conference call today. I will now provide an overview of our operational highlights and financial performance for the fourth quarter of 2024.
Speaker Change: Let's start with our operational performance, this pass quarter, which was highlighted by significant breakthroughs in extending our user base, enhancing efficiency and improving monetization capabilities.
Speaker Change: We also achieved a remarkable 24.3% year-over-year increase in fulfilled orders to 56.9 million in the fourth quarter.
Speaker Change: This growth was primarily driven by a rapidly expanding shipper user base and the increased fulfillment efficiency stemming from shifts in our user structure along with the earlier Chinese New Year and other seasonal factors.
[inaudible] I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Building on our third quarter momentum, our fulfillment rate set another new record for this quarter, increasing significantly to 37.5%.
Speaker Change: up over five percentage points year-over-year. Notably, the average for human rate of low and median frequency shippers exceeded 55%, continuing its upward trend quarter over quarter.
Speaker Change: The other contribution from our low and median frequency shippers reached 50%, also marking a new milestone.
Speaker Change: are increasingly optimized to order and use the structure, ongoing improvements to our matching outgones, and we find operational strategies collectively, draw this quarters all time high for female mate.
Speaker Change: Our average shipper MA use increased by 31.3% year over year to 2.93 million in a quarter, with our average shipper MA use surpassing 3 million.
Speaker Change: for the first time in December last year. This strong growth was driven largely by our low and medium frequency direct shippers.
Speaker Change: Our coordinated efforts of course multi-channel user acquisition, streamlined app interfaces and initiatives supporting new users have significantly improved the new user onboarding experience.
Speaker Change: Shipper activity remained robust as a result. With our Shipper member 12 months loading retention rate consistently exceeding 80% in the fourth quarter.
Speaker Change: Our trucker side operational performance was equally impressive in the fourth quarter.
Speaker Change: The number of active truckers for fitting orders through our platform over the past 12 months increased to 4.14 million quarter over quarter. And our next month's retention of truckers who responded to orders remained above 85%.
Speaker Change: Boosted by tiered incentive strategies, such as the Premium Cargo bidding initiatives and the Carefree Package, the average number of monthly fulfilled orders per trucker continue to rise, further enhancing trucker retention and sickness.
Speaker Change: Next, I'd like to highlight the progress we have made in our transaction service.
Speaker Change: Feued by increased order volume and refined monetization strategies, revenues from transaction service soared by 71.1% year over year to RMB 1.16 billion in the fourth quarter.
Speaker Change: Specifically, our monetized order penetration ratio also increased to 82.9% for the quarter, a jump of over 11 percentage points from 71.7% in the same period last year.
Speaker Change: Additionally, our average monetization amount per order, which includes mostly transaction commission increased to RMB 24.6 in the fourth quarter, up from RMB 20.6 a year ago.
Speaker Change: By dynamically fine-tuning commission metric granularity, we have effectively catered to different transaction types and user demands, driving parallel improvements in both matching efficiency and monetization quality.
Speaker Change: Heading into 2025, we'll continue finding our smart pricing model to further enhance the monetized order penetration ratio and overall monetization rate, unlocking even greater monetization potential.
Speaker Change: After a self-review of our operational results, business development plans, kept the requirements and cash position, our Board of Directors has approved a semi-annual cash dividend policy set to begin in 2025.
Speaker Change: We expect a total cash dividend for $20.25 to be approximately US $200 million. The initial dividend tailout is projected to be around US $100 million, trust-lating.
Speaker Change: This dividend will be payable on or around April 18, 2025 to shareholders on record as of April 7, 2025.
Regarding our Short-Route Purchase Program starting from March 2024
Speaker Change: Additionally, in March this year, our board has approved a further extension of the share repurchase program, allowing for US$200 million in additional repurchase through March 12th,
Speaker Change: Now moving on to our 2024 fourth quarter and year end financial results. In interest of time, I'll be presenting abbreviated highlights only. We encourage you to refer to our press release you should earlier today for complete details.
Speaker Change: Our total net revenues for the full year 2024 were RMB 11.2 billion representing a 33.2% increase year over year, net revenues for the fourth quarter were RMB 3.2 billion representing a 31.8% increase year over year.
Net revenues from freight matching services, including service fees.
Speaker Change: from freight brokerage models, membership fees from listing models, and commission from online transaction services, or RMB 9.5 billion for full year 2024, up 34% from 2023, primarily due to the rapid growth in our transaction service. [inaudible]
Speaker Change: revenues from freight brokerage service reached RMB 4.7 billion for 2024 up 20.7% year-over-year.
Speaker Change: For the fourth quarter, the net revenue increased by 17% to RMB 1.3 billion, primarily driven by an increase in service fee rate, partially offset by a decrease in transaction volume.
Speaker Change: representing a 66.7% increase year over year, but the fourth quarter net revenues amounted to RMB 1.2 billion, representing a 71.1 increase.
Speaker Change: Year over year, primarily driven by increasing all the volume, commission penetration, and per other transaction service fees.
Speaker Change: Revenue from Battery Address Services for RMB 1.7 billion in 2024, representing a 29% increase year over year.
Speaker Change: For the fourth quarter, net revenues increased to 469.3 million, representing a 19.8% increase year-over-year, mainly attributable to growing demand from truckers and suppliers for credit solutions.
Speaker Change: The fourth quarter, our cost of revenues was R&B 1,391.7 million, compared with 1,152.3 million in the prior year period.
Speaker Change: The increase was primarily due to an increase in BET related tax surcharges and other tax causes.
and out of grunts from government authorities.
Speaker Change: These tax-related costs net of refunds totals RMB 1,278.5 million, representing an increase of 25.9% from RMB 1,15.3 million in the same period of 2023.
Speaker Change: A primary duty and increase in tax causes related to the company's freight-bropage service.
[inaudible]
Speaker Change: How sales market expenses in the fourth quarter were RMB 471.8 million compared with RMB 420 million in a prior year period. This increase was primarily due to an increase in advertising and market expenses for user acquisitions.
Speaker Change: General and administrative expenses in the fourth quarter of 2024 were RMB202.3 million compared with RMB266 million in the same period of 2023. The decrease was primarily due to lower salary and benefit expenses.
Speaker Change: R&D expenses in fourth quarter were R&B 200 and 5 million compared with R&B 255.3 million in a prior year period. The decrease was primarily due to lower salary and benefits expenses resulting from a decrease in headcount.
Speaker Change: Our income from operations in the fourth quarter of 2024 was RMB 835.4 million, an increase of 233.1% from...
RMB 250.8 million in the same period of 2023.
Speaker Change: net income in fourth quarter of 2024 was RMB 574.6 million compared with RMB 588.3 million in the same period of 2023.
on the non-cat measures.
Speaker Change: Our adjusted operating income in the fourth quarter of 2024 was RMB 963.3 million, an increase of 141.6% from RMB 398.8 million in the same period of 2023.
Speaker Change: Our adjusted net income in the fourth quarter of 2024 was R&B 1 billion and 52, 1 billion and 52 million.
Speaker Change: An increase of 43.5% from R&B 733 men in the same period of 2023.
Speaker Change: Darluted Nailing Comfort ADS was RMB 8.53 in the fourth quarter of 2024 compared with RMB 0.56 in the same period of 2023.
Speaker Change: Now gap adjusted diluted net income per ADS was RMB 0.99 in fourth quarter of 2024, compared with RMB 0.69 in the same period of 2023.
As of December 31st, 2024
Speaker Change: our cash and cash equivalents, restricted cash, short-term investments, long-term time deposits, and wealth management products totaled RMB 29.2 billion.
compared with R&B 27.6 billion as of December 31st.
2023
Speaker Change: Well, our first quarter 2025 business outlook we expect our total revenues to be between R&B 2.63 billion and R&B 2.68 billion, representing a year-over-year growth rate of approximately 15.9% to 18.1%.
Speaker Change: This forecast reflects our current and preliminary views on the market and operational conditions which are subject to change and cannot be predicted with the reasonable accuracy as of the date heroes.
Speaker Change: And that concludes our prepared remarks. We'll now like to open the call to Q&A. I'll feature, please go ahead.
We want to begin the question and answer session.
Speaker Change: To ask a question, you may press star, then one, on your touch-tone phone.
Speaker Change: If you're using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: If it any time your question has been addressed and you would like to withdraw your question, please press star then two.
Speaker Change: Please also note, 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.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question today comes from Ronald Keung with Goldman Sachs. Please go ahead.
Ronald Kyung: Thank you to General Manager Zhang Hui, Simon, Mom, and Emma. I would like to ask about our tourism orders for the fourth quarter, which have seen a year-on-year growth of over 24 points. This growth rate is even higher than that of the third quarter.
Then voluntarily copied this big brand, Huo Yun.
Ronald Kyung: I want to know the main driving factors and how we should expect the order volume for the R5 year. Let me translate that: Thank you management. We've seen the number of fulfilled orders for the fourth quarter was very strong at 24% plus.
Thank you.
Speaker Change: Thank you, Ronald. Our platforms, our other volume, continue to grow very steadily in the first quarter. It's beyond seasonal tailwinds given the impact of our earlier Chinese New Year in 2025.
Speaker Change: There are three key elements which drove this momentum. And first we continue to see robust growth in new user acquisitions against the backdrop of rising shipper demand for reduced electricity costs and improve efficiency. We have adopted a
Speaker Change: Do Your Approach to Optimize New User Acquisition and Combining Precise Online Marketing with Offline Engagement.
Speaker Change: Online, we focus on boosting app store promotions and targeted ads to improve our conversion rate. Now, offline, we expanded brand visibility and reached more target users with truck stickers and tarp ads.
Speaker Change: such as high speed rail stations, airports, and business districts to connect with direct shippers across multiple touch points. And thanks to these
Speaker Change: In fact, it's new user acquisition initiatives. Our Shipper MAU surpassed 3 million for the first time in December last year. And for full year 2024, our average Shipper MAU's grew more than 30% year over year.
Speaker Change: Accelerated meaningfully from the prior year with direct shippers making up a big chunk of growing share. Given the relatively low online penetration rate in the long-haul market, we're confident we can continue to expand our shipper user base at a very healthy pace.
Now, second.
Speaker Change: We continue to implement and execute highly effective operational strategies which help to accelerate other bottom growth. When you use this, we focus on improving fulfillment rates for their first three trials.
Speaker Change: This is achieved by leveraging hands-on support from our operations team, offering new users incentives through various benefits and using WeCom or WeChat engagement.
Speaker Change: to enhance both user retention and auto fulfillment. For Active Truckers, we upgraded our premium cargo bidding function and introduced a dedicated service section with expanded coverage of four other types.
Speaker Change: In addition, we find to you now our other distribution mechanism based on truckers, credit ratings, further improving the fulfillment efficiency in matching met to low value freight resources.
Speaker Change: And finally, rapid growth in our new user, new business lines, contributed to all the expansion. For example, our lesson truckload business, again, excavated very strong growth
Speaker Change: as viewed by optimized pricing strategies and upgraded matching algals and these improvements
Speaker Change: As we move into the current year, we remain optimistic in all the volume growth of the platform regardless of macro challenges, where our full truck load business will continue to deepen.
Speaker Change: online penetration and expand our market share. Meanwhile, we also keep refining our product offerings and operational strategies to strengthen our lesson truckload and short haul services and make a very solid foundation for long-term scalability.
I hope that answers your question.
Yes, thank you Simon.
Brian Gong: The next question comes from Brian Gong with City. Please go ahead.
Brian Gong: Good evening, General Manager Zhang, General Manager Sun, General Manager Maomao, and Anna. First of all, congratulations on the excellent performance. I have a quick question about the occupancy rate for the fourth quarter.
Speaker Change: It continued to increase to 37.5% based on the previous quarter.
Speaker Change: Year-on-year increased by 5.4, and there was also a significant month-on-month increase. I just want to ask what are the main driving factors for this. Do we have any targeted operational strategy adjustments, and what are our expectations for 2025?
Speaker Change: Xie Xie. I will translate it myself. Thanks Maximum for taking my question. I have a quick question for a few minutes, please.
Speaker Change: What were the key drivers behind this improvement? And what operational strategies were implemented to enhance the performance rate? And what is your expectation for 2025? Thank you.
Speaker Change: Thank you, Brian . Our fulfillment rates reach another record high in the past quarter.
The three main contributors to this first, the continuous.
Speaker Change: Yuxuan Mixed Improvement has laid the foundation for other quality improvement in the fourth quarter. The other contribution from direct shippers was around, well it actually hit 50% of the time for the first time in fourth quarter.
Those professional shippers such as Street Piles and Brokus.
Speaker Change: Exceeded 60% in fourth quarter. The subscribers of this program are mainly direct shippers, especially those who newly joined the platform.
due to the high certainty of the fulfillment.
Speaker Change: In addition, our precision operation strategies are delivering strong results, for instance, the expanding coverage of premium cargo bidding functions for the boosted trucker's
Speaker Change: to others. Our algal-driven, precise recommendations, more effectively aligned trucker's preferences with freight-source labels.
Speaker Change: as a result, the median for human time for truckers dropped to under 10 minutes in fourth quarter.
Speaker Change: We also implemented additional measures to address duplicate freight listening including proactively suppressing orders from inefficient professional shippers to prioritize exposure for high quality orders from direct shippers.
The ongoing improvement in supply demand dynamics also.
Positively, Impacted, or for Human Rate
Apart from seasonal tailwinds, it's mentioned before.
our continuous improvement on improvement, on trait quality.
Speaker Change: led to a steady increase in both the number of truckers responding to and fulfilling others in the fifth quarter.
Speaker Change: Meanwhile, Trucker's wallet share also rose steadily, enhancing the overall sufficiency of trucker capacity and ensuring greater fulfillment stability.
Speaker Change: Moving forward, we expect our film rate to continue its steady upward trajectory.
Speaker Change: driven by ongoing upgrades to our direct shippers strategy or technological capabilities.
Speaker Change: as well as growing trucker eco-system synergies. And these factors will create a positive cycle between high quality orders and sufficient trucker capacity and further boosting our
Speaker Change: The next question comes from Charlie Chen with China Renifang. Please go ahead.
Thank you.
Charlie Chen: Okay, thank you to the management for giving me this time to ask questions. I have two questions regarding membership. First, I would like to ask about the growth trend of the main membership numbers in the fourth quarter, and specifically, what is the latest progress on these low-cost small memberships? Let me translate.
Charlie Chen: Thanks Management for taking my questions. I would like to ask some questions regarding the user membership. What was the growth trend for Shipper membership in the fourth quarter? And what is the latest update on the 288 at your mini membership? Thank you.
Charlie Chen: Thank you, Charlie. We reached a milestone at the end of fourth quarter with the number of active ship members on our platform's basic surpassing one million.
Charlie Chen: is actually 1.05 minute to be precise. The key growth drivers of Shipper's membership were the optimization of our membership tiering system and our targeted sub-stay strategies.
Thank you.
Charlie Chen: So look at our membership system, our 288 tier mini membership, which was launched in early 2024 as unleashed incremental growth contributing most of our new shipper members this quarter.
Charlie Chen: It is different from the existing 688 and 1688 tier members.
Charlie Chen: the two eight-eight years offer fewer shipping benefits, but at a much lower price, effectively lowering the barriers to entry for new shippers and boosting pay-member conversions.
Additionally, we introduced it.
Charlie Chen: targeted subsidies for new user purchasing, the many membership, as well as returning users who met certain criteria, and further reducing the membership cost and allowing shippers to enjoy benefits such as such as shipment tracking and freight rate.
Charlie Chen: Discount, which in turn enhanced overall user engagement on the platform.
Charlie Chen: Additionally, our operations team is developing a transition model to encourage many members to upgrade to the six, eight, eight tier closely monitoring the renewal rates and
Upways to inform long-term member strategies.
that align with user behavior.
On a related note, our gradual conversion strategy
Charlie Chen: We introduce a 30-day unlimited shipping feature for certain newly registered shippers and will closely monitor the positive impact of these feature on membership conversion.
Charlie Chen: and looking ahead, we are confident that by continually optimizing our membership products and fine-tuning our operational strategies, we can further expand our paying member base and enhance overall user engagement with us. Thank you.
Thank you, Simon.
Simon Cai: The next question comes from Wenjie Zhang with CICP. Please go ahead.
Wenjie Zhang: Good evening, management team. I have a question regarding the freight economy. We see that the year-on-year growth rate of revenue for the entire freight economy business in the fourth quarter is 17%, which exceeds market expectations. I would like to ask what is the main reason for exceeding market expectations?
And what is our outlook on this business this year?
Wenjie Zhang: Thank you, Wang Ji. The better than I expected, revenue growth for a freight brokerage business in fourth quarter was primarily driven by the increase in service fee rate, and that's partially offset by a decrease in transaction volume.
We're both maintaining a cautious approach to freight brokerage.
Wenjie Zhang: This is one of our traditional business. The battery proposition for this business has been to improve user retention and engagement by meeting the invoicing needs of high frequency shippers as they find it convenient and compliant.
Wenjie Zhang: and since the publication of the Fair Competition Regulatory Review last August , we further tuned down the scale of this business to adjust to the potential changes of national B.A.T. requirements.
Wenjie Zhang: As a result, the total transaction value of freight brokerage business declined both year on year and quarter over quarter in fourth quarter, 2024.
Meanwhile, anticipating potential reduction in regional tax rebate.
Wenjie Zhang: We raised our service e-racing October last year. By Q4, the overall service he had increased
Wenjie Zhang: From about 6% a year ago, this strategic adjustment helped to offset the decline in transaction value and then contributing to the year-over-year revenue increase.
Wenjie Zhang: By the end of 2024, although we received notifications from certain local governments on further tax rebate reductions, our practice rate adjustments.
Wenjie Zhang: This way we can ensure stability and sustainable growth for our business while creating value for our users in the long term.
Wenjie Zhang: and our free brokerage business. We expect core transaction service business and its revenue to grow at a strong pace.
Wenjie Zhang: and thanks to our expanding user base, steadily improvements in monetization, efficiency and disciplined cost control plus the operating leverage were very confident in achieving over 60% year-on-year growth.
and adjusted operating profit for $20.25.
Thank you.
Thank you, Dan.
Speaker Change: The next question comes from Richie Sun with HSBC. Please go ahead.
Richie Sun: Good evening, Zhang Huizhong, Simon, MaoMao, Emma, thank you for giving me the opportunity to answer your questions.
Richie Sun: I would like to ask the management, can you share any progress of Lindan Nianwu in the fourth quarter?
Richie Sun: Haiyou, Ru Ke, Chi Bei, Lin Dan, Ting Che, Haiyou, Zhuan Qian, Zhu Yao Yan, Wu. My question is about less-centred low-business. How did the LTL business progress in fourth quarter, and what are the key differences between LTL carpooling and dedicated line services? Thank you.
Thank you, Jik. Our LTL business maintained.
Richie Sun: and the ongoing optimization of our carpooling features. We have been very focused on solving the time limit issues that are often plagued.
Richie Sun: The traditional LTR express and dedicate line, the logistics, like multiple loading and unloading.
Richie Sun: Pickout and the delivery process by developing a carporting model that caters to diversified
Richie Sun: Whether it's short to median distance or large freight volumes, we have been able to streamline processes by offering a single loading and unloading and door-to-door delivery service.
Richie Sun: As a result, we're not only improving transportation efficiency, but also significantly reducing the risk of cargo damage and gaining market share of shippers.
Richie Sun: Looking at our user conversions, the other voting growth in the first quarter was mainly from small and medium sized direct shippers.
Richie Sun: Over 70% of which migrated from offline LTL dedicated lines and express models based on survey.
Richie Sun: Our core advantage lies in our unique door-to-door delivery model and lowering pricing given the massive trucker supply, which is much more efficient than the traditional offline options.
and during the quarter our product functionality improvements.
Richie Sun: have further contributed to user goals. For Shippers, we introduced a feature that allowed them to compare prices between full truck load and less-and-truck load carpooling options, making it easier for Shippers to see the cost advantage of carpooling.
Richie Sun: On trucker's side, we have successory road out, route dedicated route operations.
Richie Sun: I'm going forward with plan to expand our route operation, coverage to further enhance.
Richie Sun: The Matching Efficiency, which will help us establish stronger operational barriers.
Richie Sun: We're also exploring opportunities in the LTL dedicated line sector. Right now, we are working closely with LTL dedicated lines to meet their diversified translation needs and improve the overall shipping experience for our shippers.
Richie Sun: I'm looking ahead, we're confident that our well-established operational know-how in FTL will help us strengthen our advantageous position in the large ticket out your market.
Richie Sun: We're also committed to boosting industries, online penetration rates which will help solidify our competitive edge in the local market.
Thank you
[inaudible]
Thank you.
Speaker Change: The next question comes from you and Lia with the ITIC. Please go ahead.
Yuan Liao: Thank you to President Zhao Hui, President Simon, President Maomao, and President Emma for accepting my question. Congratulations on achieving strong performance growth this quarter. My question is actually about the 350 million impairment we saw in the report this quarter. I would like to ask the management to share with us the reasons behind this.
Yuan Liao: And in terms of reducing holdings in the coming quarters, will there be any changes? I'll translate it myself. Thanks management for taking my questions.
Yuan Liao: My question is, what are the main reasons behind the 350 million on the impairment loss in the first quarter? And any guidance for the impairment in the new few quarters, thank you.
Yuan Liao: Thank you. The impairment loss in the fourth quarter was mainly stemmed from our investment.
Yuan Liao: in an e-commerce platform that focuses on tire sales and aftermarket all the parts of my chain. And that company has been facing ongoing operating losses.
Yuan Liao: The initial investment into that company was made by another team back in 2018 under a different leadership before with my mother and Hortrebaum operations were fully integrated.
Yuan Liao: Regarding our accounting treatment for the investment, we have always adhered to a prudent and standardized principles.
Yuan Liao: and regularly assess the most up-to-date situation of invested companies. Based on audit judgment, we believe that the financial conditions of this investment is beyond recovery. As a result, we made a full impairment provision of 350 million RMB in the fourth quarter.
Yuan Liao: Looking ahead, we will continue to maintain a prudent approach to investing while strengthening our post-investment management. Our key goal through investments is to create synergies to our freight matching business and contribute to the achievement of our long-term vision.
Thank you.
Speaker Change: The next question comes from Thomas Chong with Jeffries. Please go ahead.
Thomas Chong: Good evening, thank you to the management for accepting my question. My question is about our perspective from the group's standpoint this year.
Speaker Change: Thanks management for taking my question. My question is about our group strategy. How do we envision our overall development strategy for this year? Thank you.
Speaker Change: Thank you, Thomas. We expect the company to maintain steady business growth in 2025 with a year-on-year.
and other modern growth expectations of at least 15%
Speaker Change: This growth will be driven by efficient user acquisition strategies and technology which will deepen the platform's online penetration and further improve operational efficiency across the entire battery chain, accelerating the digitalization transformation of the freight industry.
Speaker Change: From financial strategy perspective, our focus will be on optimizing the revenue structure. The proportion of freight brokerage business in the overall revenue mix will be further reduced to ensure that sustainable development while effectively managing risk.
Speaker Change: Meanwhile leveraging the platform's network effects and technological capabilities, the transaction service business will continue to grow rapidly through economies of scale and enhanced
Speaker Change: It will become the core engine of our company's revenue growth as a strategic pillar in the
Speaker Change: This adjustment strategy reflects our proactive management of the business portfolio, ensuring a balance between optimizing the business mix and increasing the share of high-margin businesses.
Speaker Change: By improving operational efficiency, we aim to significantly enhance your overall profit margin. I would believe this flexible yet very robust strategic path will provide shareholders with higher certainty of long-term returns and strengthen our company's leadership position within the industry.
Thank you.
Thank you very much.
Speaker Change: And that concludes the question and answer session. I would like to turn the conference back over to management for any additional or clothing comments.
Speaker Change: Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Photoshop Alliance
Speaker Change: Our contact information for ii, both China and the US can be found in today's press release. Have a good day.
Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.