Q1 2025 Full Truck Alliance Co Ltd Earnings Call
Operator: Ladies and gentlemen, good day and welcome to Full Truck Alliance's first quarter 2025 earnings conference call. Today's conference is being recorded.
Ladies and gentlemen, good day and welcome to full truck Alliance's first quarter 'twenty 25 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Malmo head of Investor Relations. Please go ahead.
Mao Mao: At this time, I would like to turn the conference over to Mao Mao, head of investor relations. Please go ahead.
Mao Mao: Thank you, Drew.
Speaker Change: Thank you Jan please.
Mao Mao: Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the safe harbor from liability, as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors.
Speaker Change: Today's discussion will contain forward looking statements relating to the company's future performance, which are intended to qualify for the safe Harbor from liability established by the U S. Private Securities Litigation Reform Act such statements are not guarantees of future performance and are subject to certain risks and.
Speaker Change: Synergy assumptions and other factors.
Mao Mao: 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 The general discussion of the risk factors that could affect FTA's business and financial results is included in certain filings of the company with FTA. The company does not undertake any obligation to update this forward-looking information, except as required by law.
Speaker Change: Some of it's mix.
Speaker Change: Yeah, the company's control and could cause actual results to differ materially from those mentioned in today's press release and the discussion.
Speaker Change: A general discussion of the risk factors that could affect <unk> business and financial results is included in certain filings of the company with SEC. The company does not undertake any obligation to update this forward looking information except as required by law.
Mao Mao: During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today.
Speaker Change: Today's call management will also discuss Hudson.
Speaker Change: GAAP financial measures for comparison purposes only.
Speaker Change: A definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP Spanish adult please see the earnings release issued earlier today joining.
Mao Mao: Joining us today on the call from FTA's Teenage Management are Mr. Hui Zhang, our Founder, Chairman and CEO, and Mr. Simon Tsai, our Chief Financing and Investment Officer. Management will begin with prepared remarks and the call will conclude with the Q&A session. As a reminder, this conference is being recorded.
Speaker Change: Joining us today on our call from XT eight.
Mr. Mackay: Mr. Li Zhang our founder Chairman and CEO and Mr. Mackay, our chief financing and investment officer.
Speaker Change: 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.
Mao Mao: In addition, a webcast replay of this call will be available on FTA's Investor Relations website at ir.fulltruckalliance.com.
Additionally, a webcast replay of this call will be available on FTE Ace investment based on its website at IR jobs full truck along with dotcom.
Hui Zhang: I will now turn the call over to our Founder, Chairman and CEO, Mr. Zhang. Please go ahead.
Speaker Change: I'll now turn the call over to our founder Chairman and CEO. John. Please go ahead Sir.
Hui Zhang: Hello, everyone.
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Hui Zhang: Welcome to the 1st Annual Economic Dialogue of Manchester City in 2025. Looking back at the 1st quarter, in an environment full of opportunities and challenges, Manchester City has insisted on maximizing quality, smartening, driving public services, and reducing costs in the cargo industry. Through technological innovation and product upgrades, we continue to replace traditional offline trading models to promote platform ecological value and take new steps. The order volume of Jiulu Group has increased by 23%, far exceeding the sales volume of public goods, and laid a solid foundation for the development of high quality all year round.
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Hui Zhang: Hello everyone, and thank you for joining us today on our first quarter 2025 earnings conference call. In the first quarter of 2025, we continue to focus on enhancing operational efficiency and reducing logistics costs within China's road freight industry. Leveraging cutting-edge digitalization and smart technologies, we successfully navigated a challenging yet opportunity-rich economic environment. Through ongoing technological innovation and product upgrades, we further displaced traditional offline logistics transaction models, elevating the value of our platform ecosystem to new heights. As a result, our total fulfilled orders for the quarter grew 23% year-over-year, significantly outpacing the industry growth, and laying a solid foundation for sustainable, high-quality development throughout the country.
Speaker Change: Hello, everyone and thank you for joining us today on our first quarter of 2025 earnings conference call in the first quarter of 2025, we continue to focus on enhancing operational efficiency and reducing logistics costs within kind of notably industry, leveraging cutting edge digitalization and small to tell.
<unk>, we successfully navigated a challenging yet opportunity rich economic environment.
Speaker Change: Ongoing technological innovation and product upgrades, we further displace traditional offline logistics transaction model.
Speaker Change: The value of our platform ecosystem to new Heights.
Speaker Change: As a result, our total fulfilled orders for the quarter grew 23% year over year significantly outpacing the industry and are laying a solid foundation for sustainable high quality developments throughout the year.
Hui Zhang: In this quarter, we have achieved a comprehensive breakthrough in the core operating indicators, and the customers' pull-in, transportation and matching have all achieved a milestone-like progress in the quality of the wire. First of all, in the face of the potential customers of small and medium-sized goods, we insist on long-term investment in brand and on-site pull-in, and convey the brand quality and product value that is the number one in the country and the first in the world. In the first quarter, the average monthly supply of goods was 2.76 million people, which increased by 28.8% in comparison.
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Hui Zhang: The size of the goods' membership has broken through 1.1 million people. The ratio of direct customers, appointments and orders has increased by 51%, and the brand user structure has continued to be optimized. Building on this momentum, we achieved breakthroughs across our key operational metrics during this quarter, reaching pivotal milestones in user acquisition, transportation capacity, and the quality of matching as well as monetization. Targeting the substantial potential of approximately 30 million small and medium-sized direct shippers, we continued our long-term investments in branding initiatives and online user acquisition. These strategic efforts reinforced our brand perception and clearly communicated our unique value proposition of nationwide freight coverage, market-leading volume, and lower cost for Consequently, our average shipper MAUs reached 2.76 million in the first quarter, up 28.8% year-over-year.
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Speaker Change: Building on this momentum we achieved breakthroughs across all key operational matrix doing just quarter, reaching people until final adult use acquisition transportation capacity and the quantity of matching as well Oh My God nation.
Speaker Change: How do you think the substantial potential of approximately 30 million small and medium size of drop shippers. We continued our long term investments in branding initiative and online yourself position. These strategic efforts reinforced our brand perception and clearly communicated our unique value proposition of nationwide.
Speaker Change: St coverage market, leading volume and lower costs for Angel City shippers.
Speaker Change: They all average ship I mean, you've reached 276 million in the third quarter up 28, 8% year over year, our total shipper remembers exceeded $1 1 million and the order contribution from direct shippers increased to 51%, reflecting ongoing improvement in our plan.
Hui Zhang: Our total shipper members exceeded 1.1 million, and the order contribution from direct shippers increased to 51%, reflecting ongoing improvements in our platform's user structure. In terms of operating ecosystem and compatibility efficiency, we continue to enhance the driver's performance through the driver behavior points, priority cards, and good or bad mechanisms. At the same time, we have also designed member products for all kinds of drivers. The number of driver members has increased dramatically. The driver support process is maintained at more than 85%. It is more profitable to receive more orders and serve better, which further improves the driver's sense of achievement.
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Hui Zhang: QE platform upgrade rate has reached 39.2%. The same rate has increased by nearly 6%. It has created a new historical record. Turning to our transportation capacity ecosystem and matching efficiency, we continue to enhance truckers' fulfillment capabilities and service quality through our trucker rating system, priority access, and premium cargo bidding mechanism. We also introduced tailored membership offerings to support diverse trucker segments, which contributed to reaching an all-time high in trucker membership. Notably, the next month's retention for truckers responding to orders consistently remaining above 85%, highlighting the strong engagement and stickiness of our trucker community. Our focus on more orders, excellent service, and higher income has bolstered trucker satisfaction and encouraged continued participation.
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Speaker Change: Turning to our transportation capacity ecosystem and matching efficiency, we continued to enhance truckers fulfillment capabilities and our service quality through our trucker reading system priority access and premium cargo bidding what kind of thing. We also introduced tailored membership offerings to support diverse truck or a settlement.
Speaker Change: Which contributed to reaching an all time high in trucker membership normally the next month's retention for Ah trial parents responding to all the consistently remaining about 85% highlighting the strong engagement and stickiness of our trucker and community.
Speaker Change: Focus on more others excellent service and higher income has bolstered truckers satisfaction and encourage them to continue the participation.
Hui Zhang: As a result, our platform's overall fulfillment rate for the first quarter reached 39.2%, up nearly 6 percentage points year-over-year, setting a new record. And on the paper of the Delegation, this quarter we have further released the huge monetary resume of the platform. to promote high-speed growth of the business, and to verify that the full platform has created unique value for both the private and the public. The high-quality operation of this quarter has brought excellent financial performance. The total revenue of the group has reached 2.7 billion yuan, which is 19% higher than the previous year. As well as services and revenue 延续强劲功能,同臂伸脑 51.5% to 10.5 billion yuan, with a total gross profit of 39%.
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Hui Zhang: According to non-U.S. accounting standards, after the adjustment, the operating profit reached $13.2 billion and the growth rate was 171.5%. After adjustment, the net profit reached 9 billion yuan in 2013, an increase of 84% Regarding monetization, I will prudently tap into the significant monetization potential of our platform, fueling robust revenue growth for the quarter. These achievements further underscore the unique value we deliver to both truckers and shippers. Our high-quality operations translated into exceptional financial performance this quarter. Our total net revenues reached RMB 2.7 billion, up 19.0% year-over-year. Notably, revenue from our transaction service continued to grow rapidly, rising 51.5%.
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Archie: Regarding monetization our product he have to ensue.
Archie: Is it kind of monetization potential of our platform feeling robust 70 gross for the quarter. These achievements further and of course, the unique value, we deliver to both truckload and sugar.
Archie: Our high quality operations translated ancient exceptional financial performance. This quarter. Our total net revenues reached RMB two 7 billion up 19 point there'll be some year over year.
Archie: Revenue from our transaction services continue to grow rapidly rising 51, 5%.
Hui Zhang: year-over-year to RMB 1.05 billion and accounting for nearly 39% of our total revenue. Non-GAAP-adjusted operating income surged by 171.5% year-over-year to RMB1.32 billion and Non-GAAP-adjusted net income increased by 84% year-over-year to RMB1.39 billion.
Archie: Year over year to RMB, one 5 billion and accounted for nearly 39% of our total.
Archie: non-GAAP adjusted operating income surged by 771, 5% year over year to RMB 1.32 billion and non-GAAP adjusted net income increased by 84% year over year to RMB, one three back again.
Hui Zhang: This year, DTRIK and Smart Robots have led a new wave of infrastructure. As a representative of the new manufacturing power of logistics, Manbang will actively embrace the opportunity of logistics AI. This year, we plan to further increase our investment in Home China to maintain a long-term infrastructure lead in heavy-duty vehicle driving. On the other hand, the full chain of dry-clad logistics provides a huge opportunity for the application of AI. We will actively explore the effect of reducing costs for the industry. This solid first quarter performance provides a strong foundation for us to invest further in strategic areas of growth.
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Archie: With solid first quarter performance provides a strong foundation for us to invest further in strategic areas of loss during the quarter. The emergence of deep sea and intelligent robotics initiated a new wave of technological advancement.
Hui Zhang: During the quarter, the emergence of deep-seek and intelligent robotics initiated a new wave of technological advancement. As a leader propelling the new quality productive forces of the logistics industry, we remain dedicated to seizing the opportunities presented by the industry's digitalization and AI-driven transformation. This year, we plan to deepen our investment in PLUS TRC to maintain our long-term technological leadership in heavy-duty trucks' autonomous driving. Additionally, the full spectrum of road transportation scenarios presents vast opportunities for AI applications, which we will actively explore to drive cost reductions and efficiency improvements across industries.
Archie: And neither are propelling the new quality productive forces of the logistics industry, we remain dedicated to seizing the opportunities presented by the industries digitalization and I I driven transformation.
Archie: This year, we plan to deepen our investment in plus piazzi shoot maintain our longtime and technological leadership in heavy duty truck autonomous driving Additionally, the full spectrum of road transportation Sinaville's presents a vast opportunity for AI application, which we will actively explore to drive cost.
Archie: Reductions and efficiency improvements across the industry.
Hui Zhang: Next, we will give the floor to Simon to introduce the performance of the first quarter. Thank you once again.
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Archie: Thank you once again now I'll pass the call over to Simon who will provide an update on our first quarter business and financial results.
Simon Tsai: Now I'll pass the call over to Simon, who will provide an update on our first quarter's business progress and financial results. Thank you, Mr. Zhang. Thank you all for joining today's earnings conference call.
Speaker Change: Thank you Mr. Jonathan. Thank you all for joining today's earnings conference call I will now provide an overview of our operational highlights.
Simon Tsai: I will now provide an overview of our operational highlights and financial results for the first quarter of 2025. Let's start with our operations. We continue to refine and enhance our fulfillment services, achieving record milestones this Our fulfilled orders rose to 48.2 million, a 22.6 percent year-over-year increase, outpacing the broader freight industry trend. This growth was driven by an expanding shipper base and improved fulfillment efficiency, supported by positive shifts in our user structure. Our fulfillment rate reached a breakthrough milestone at 39.2% in the first quarter, up nearly 6 percentage points year-over-year. This marks yet another new record for our platform.
Speaker Change: Financial results for the first quarter of 2025.
Speaker Change: Let's start with our operations.
Speaker Change: We continue to refine and enhance our fulfillment services achieving record milestones this quarter.
Speaker Change: Others Rose to $48 2 million, a 22, 6% year over year outpacing.
Speaker Change: Outpacing the broader industry trends.
Speaker Change: This growth was driven by an expanding shipper base and improved fulfillment efficiency supported by positive shifts in our use of structure.
Speaker Change: Our fulfillment rate reached a breakthrough milestone at 39, 2% in the first quarter.
Speaker Change: Nearly six percentage points year over year.
Speaker Change: This marks yet another.
Speaker Change: New new record for our platform.
Simon Tsai: Notably, the average fulfillment rate of low and medium frequency direct shippers approached 60%, an increase of nearly 10 percentage points year-over-year. Orders from these user groups now account for more than half of total orders, reflecting the successful optimization of our shipper user structure and improved ecosystem.
Speaker Change: Notably the average fulfillment rate of low and medium frequency direct shippers approached 60% an increase of nearly 10 percentage points year over year.
Speaker Change: Others from these user groups now account for more than half of total orders, reflecting the successful optimization of our super user structure and improves ecosystem. These.
Simon Tsai: These achievements underscore the effectiveness of our differentiated operational strategy and set a strong foundation for future service quality enhancements.
Speaker Change: These achievements underscore the effectiveness of our differentiated operational strategy and set a strong foundation for future service quality enhancement.
Simon Tsai: Moving on to our user base, both our average shipper MAU and the number of shipper members continued their steady growth in the first quarter. Our average shipper MAUs reached 2.76 million, up 28.8% year-over-year. In March, we surpassed 3 million average shipper MEUs, setting a new monthly record. Total shipper members exceeded 1.1 million by the end of the first quarter, another all-time high. This growth was primarily driven by increase among low- and medium-frequency direct shippers, resulting from our effective user engagement and retention initiatives. We improved conversion rates at key onboarding stages, such as new shippers' initial engagement, their first fulfillment and early repeat orders.
Speaker Change: Moving on to our user base both on every Super I meet you and the number of ship remembers continued their steady growth in the first quarter.
Speaker Change: Super I may use reached two point to seven 6 million up 28, 8% year over year.
Speaker Change: March we surpassed three minutes average super meus sitting on a new monthly record.
Speaker Change: Total Super members exceeded $1 1 million by the end of the first quarter. Another all time high.
Speaker Change: This growth was primarily driven by increased among low and medium frequency direct shippers, resulting from our effective user engagement and retention initiatives.
Speaker Change: We improved conversion rates at key onboarding stages, such as new shippers initial engagement their first fulfillment and Verde repeat others. This was accomplished through targeted strategies, including streamlined shipment onboarding enhanced fulfillment assurance and improve that.
Simon Tsai: This was accomplished through targeted strategies, including streamlined shipment onboarding, enhanced fulfillment assurance, an improved retention rate, and dedicated customer support and service engagement via WECOM. Our 12-month rolling retention rate for shipper members remained above 80%, demonstrating strong user loyalty to our platform as our user base continues to expand.
Speaker Change: Tension rate and dedicated has customer customer support and service engagement.
Speaker Change: We call them.
Speaker Change: Our 12 months rolling retention rate for shipper members remained above 80% demonstrating strong user loyalty to our platform as our user base continues to expand.
Simon Tsai: Turning to our trucker operations, we upgraded our trucker credit rating system in a quarter, optimized the benefits associated with trucker membership, and refined our premium cargo bidding algorithm. These efforts drove sustained improvements in trucker performance with the number of active truckers fulfilling orders through our platform over the past 12 months increasing to 4.18 million. In addition, engagement and loyalty among truckers further improved, with the truckers' average monthly fulfilled orders increasing year over year, and the next month's retention rate of truckers who responded to orders consistently exceeding 85 percent, underscoring the effectiveness of our initiatives in building a reliable and committed trucker network.
Speaker Change: Turning to our trucker operations, we upgraded our trucker credit credit rating system in the quarter optimize the benefits associated with truck or membership and refined our premium cargo bidding algorithms. These.
Speaker Change: These efforts drove sustained improvements in trucker performance with the number of active truckers fulfilling orders through our platform over the past 12, plus increasing to $4 $1 8 million.
Speaker Change: In addition engagement and loyalty of my own truckers further improved with the Truckers' average monthly fee with orders increasing year over year in the next month retention rate of truckers, who responded to others consistently exceeding 85% underscoring the effectiveness of our initiatives and building.
Speaker Change: Reliable and committed trucker network.
Simon Tsai: Shifting now to our transaction service, revenue for the quarter saw significant acceleration, increasing 51.5% year-over-year to RMB1.05 billion, thanks to the dual engine of order growth and enhanced monetization. We made substantial progress across several key monetization metrics. Our monetized order penetration rate surged to 85.2% for the quarter, an impressive increase of nearly 8 percentage points from 77.4% last year, while the average monetization amount per order improved to RMB25.5 from RMB22.7 a year ago. These results were propelled by the refined management of our freight matching system. By continuously iterating and optimizing our multi-dimensional commission model and differentiating freight pricing for low, medium, and high frequency shippers, we strengthened retention among core shipper users, unlocking monetization potential within long-tail user demographics.
Speaker Change: Shifting now to our transaction service revenue for the quarter saw a significant acceleration increasing 51, 5% year over year to RMB 1.05 billion. Thanks to the dual engine of other growth and enhance monetization we made substantial progress across.
Speaker Change: Several key monetization metrics.
Speaker Change: Our monetized all their penetration rates surged to 85, 2% for the quarter, an impressive increase of nearly eight percentage points from 77, 4% last year, while the average monetization amount per order improved to RMB 25.5 from RMB 20.
Speaker Change: $2 seven a year ago.
Speaker Change: These results were propelled by the refined management of our freight matching system.
Speaker Change: By continuously iterating and optimizing optimizing our multi dimensional commission model and differentiating freight pricing for low medium and high frequency shippers, we strengthen our retention among core super users unlocking monetization potential within long tail user demographics.
Simon Tsai: With our fulfillment efficiency consistently increasing, the growing willingness of our low and medium frequency direct shippers to pay supported further refinement of our monetization structure.
Speaker Change: With our fulfillment efficiency consistently increasing the growing willingness of our low and medium frequency direct shippers to pay supported.
Speaker Change: To pay supported further refinement of our monetization structure.
Simon Tsai: Looking ahead, we will leverage our intelligent risk control system and dynamic pricing capabilities to deepen monetization in high-value scenarios. Combined with our tiered approach to shipper member operations, these initiatives will expand our base of quality shippers, fostering a virtuous cycle of quality user growth and monetization efficiency. In addition, we plan to harness AI to further enhance matching efficiency, enabling smarter, faster connections between shippers and truckers.
Speaker Change: Looking ahead, we will leverage our intelligent risk control system, and dynamic pricing capabilities to deepen monetization and high value scenarios.
Speaker Change: Combined with our tiered approach to ship remember operations. These initiatives will expand our base of quality shippers fostering a virtuous circle or cycle of quality user growth and monetization efficiency.
Speaker Change: In addition, we plan to harness the eye to further enhance matching efficiency and.
Speaker Change: Labeling smarter faster connections between shippers and truckers, we believe this will fuel stronger momentum throughout 2025, and driving long term value for our platform.
Simon Tsai: We believe this will fuel stronger momentum throughout 2025 and drive long-term value for our platform.
Simon Tsai: Now I'd like to provide a brief overview for our 2025 first quarter financial results. Our total net revenues in the first quarter were RMB $2,699,900,000, representing a 19% increase year-over-year, primarily attributable to an increase in revenues from free matching services. Net revenues from freight matching services including service fees from freight brokerage models, membership fees from listing models, and commissions from transaction services were RMB 2,247.1 million in the first quarter, representing an increase of 20.2% year-over-year.
Speaker Change: Now I'd like to provide a brief overview for 2025 first quarter financial results.
Speaker Change: Total net our total net revenues in the first quarter were RMB 2 billion $699 9 million, representing a 19% increase year over year, primarily attributable to an increase in revenues from freight matching services.
Speaker Change: Net revenues from freight mentioned services, including service fees from freight brokerage models membership fees from listing models and commissions from transaction services were RMB 2 billion $247 1 million in the first quarter, representing an increase of 22% year over year.
Simon Tsai: primarily due to the rapid increase in transaction service. Revenues from freight brokerage service in the first quarter were RMB965.7 million, remaining nearly flat, primarily attributable to an increase in service fee rate offset by a decrease in transaction volume, as we exercised caution in this business by proactively downsizing operations in anticipation of possible VAT rebate adjustment. Revenues from the freight listing service in the first quarter were RMB234.9 million, up 10% year-over-year, primarily due to the growing number of total paying members. Revenues from the transaction service in the first quarter were RMB1 billion and 46.5 million, up 51.5% year-over-year, primarily driven by an increase in order volume, penetration rate, and per order transaction service fee.
Speaker Change: Primarily due to the rapid increase in transaction service Rep.
Speaker Change: Revenues from freight brokerage services in the first quarter were RMB $965 7 million remaining nearly flat primarily attributable to an increase in service fee rate offset by a decrease in transaction volume as we exercised caution in this business by proactively downsizing operation.
Speaker Change: In anticipation of possible V a T rebate adjustments.
Speaker Change: News from fleet from the free listing service in the first quarter were RMB 200 mm.
Speaker Change: And $34 9 million up 10% year over year, primarily due to the growing number of total paying members.
Speaker Change: Revenues from the transaction service in the first quarter.
Speaker Change: Were RMB 1 billion and $46 5 million up 51, 5% year over year, primarily driven by increase in other in other volume penetration rates and per order transaction service fee revenues.
Simon Tsai: Revenues from value-added services in the first quarters were RMB452.8 million, up 13.5% year-over-year.
Speaker Change: Revenues from value added services in the first quarters were RMB $452 8 million up 13, 5% percent year over year.
Simon Tsai: and this increase was primarily due to growing demand for credit solutions. First quarter cost of revenues was RMB 698.6 million, a decrease of 32.3% from RMB 1 billion and 31.9 million in the same period of 2024. The decrease was primarily due to decreases in VAT-related tax surcharges and other tax costs, net of grants from government authorities. And these tax-related costs, net of government grants totaled RMB 565.6 million, representing a decrease of 37.7% from RMB 908 million in the same period of 2024, primarily due to a decrease in tax costs, net of government grants related to the company's free brokerage service.
Speaker Change: And this increase was primarily due to growing demand for credit solutions.
Speaker Change: First quarter cost of revenues was RMB $698 6 million a decrease of 32, 3% from RMB 1 billion and $31 9 million in the same period of 'twenty 'twenty four the decrease was primarily due to decreases in B T related tech surcharges and other text.
Speaker Change: Net of grants from the government authorities and these tax related costs net of government grounds totaled RMB 565, 6 million representing a decrease of 37.7 from RMB 908 million in the same period of 2024, primarily due to an.
Speaker Change: A decrease in tax cost us net of government grants related to the company's freight brokerage service.
Simon Tsai: Our sales and marketing expenses in the first quarter were RMB 377.9 million compared with RMB 340.1 million in the same period of 2024. The increase was primarily due to an increase in advertising and marketing expenses for user acquisitions, partially offset by lower salaries and benefits expenses. General and administrative expenses in the first quarter were RMB 186 million, compared with RMB 264.5 million in the same period of 2024.
Speaker Change: Sales and marketing expenses in the first quarter were RMB $377 9 million compared with RMB 341 million in the same period of 2024.
Speaker Change: The increase was primarily due to an increasing advertising and marketing expenses for user acquisitions, partially offset by lower salaries and benefits expenses.
Speaker Change: General and administrative expenses in the first quarter were RMB 186 million compared with RMB $264 five minutes in the same period of 2024. The decrease was primarily due to lower share based compensation and salary and benefit expenses.
Simon Tsai: The decrease was primarily due to lower share-based compensation and salary and benefits expenses. RMB expenses in the first quarter were RMB 193.4 million, compared with RMB 247.7 million in the same period of 2024. The decrease was primarily due to lower salary and benefits expenses. Our income from operations in the first quarter was RMB 1,202.4 million, an increase of 285.2% from RMB 312.2 million in the same period of 2024. Net income in the first quarter was RMB 1,278.9 million, an increase of 118.1% from RMB 586.4 million in the same period of 2024. Under non-GAAP measures, our adjusted operating income in the first quarter was RMB 1,318.1 million, an increase of 171.5 percent from RMB 485.4 million in the same period of 2024.
Speaker Change: R&D expenses in the first quarter were RMB, one $193 4 million compared with RMB $247 7 million in the same period of 2024. The decrease was primarily due to lower salary and benefits expenses.
Speaker Change: Our income from operations in the first quarter was RMB 1 billion $202 4 million an increase of 285, 2% from RMB $312 2 million in the same period of 'twenty 'twenty four.
Speaker Change: Net income in the first quarter was RMB 1 billion.
$278 9 million, an increase of 118, 1% from RMB $586 4 million in the same period of 2024.
Speaker Change: On the non-GAAP measures or adjusted operating income in the first quarter was RMB 1 billion $318 1 million an increase of 171, 5% from RMB 400.
Speaker Change: $85 4 million in the same period of 2024, our adjusted net income in the first quarter. It was RMB 1 billion $391 4 million, an increase of 84% from RMB 7700 and.
Simon Tsai: Our adjusted net income in the first quarter was RMB 1,391.4 million, an increase of 84 percent from RMB 7,056.4 million in the same period of 2024. Basic net income per ADS was RMB 1.22 in the first quarter compared with RMB 0.56 in the same period of 2024. Diluted net income per ADS was RMB 1.21 in the first quarter compared with RMB 0.56 in the same period of 2024. Non-GAAP adjusted basic and diluted net income per ADS was RMB 1.32 in the first quarter of 2025 compared with RMB 0.72 in the same period of 2024.
Speaker Change: $56 four minutes in the same period of 2024.
Speaker Change: Basic net income per ads was RMB, one point to two in the first quarter compared with RMB <unk> five.
Speaker Change: Five six in the same period of 'twenty 'twenty four.
Speaker Change: Diluted net income per ads was RMB, one point to one in the first quarter compared with RMB 0.56 in the same period of 2024.
Speaker Change: non-GAAP adjusted basic and diluted net income per a b S.
Speaker Change: The 1.32 in the first quarter of 2025 compared with RMB seven two in the same period of 'twenty 'twenty four.
Simon Tsai: As of March 31st, 2025, the company had cash and cash equivalents, restricted cash, short-term investment, long-term time deposits and wealth management products with maturity over 1 year of RMB 29.3 billion in total, compared with RMB 29.2 billion as of December 31st, 2024.
Speaker Change: As of March 31, 2025, the company had cash and cash equivalents restricted cash and short term investments long term time deposits and wealth management products with maturity over one year of RMB $29 3 billion in total compared with RMB 29.
Speaker Change: Point 2 billion as of December 31, 2024.
Simon Tsai: For our second quarter 2025 business outlook, we expect our total net revenues to be between RMB 3.06 billion and RMB 3.12 billion, representing a year-over-year growth rate of approximately 10.6% to 12.9%. This forecast reflects the company's 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 hereof.
For our second quarter, 'twenty 25 business outlook, we expect our total net revenues to be between RMB, three 6 billion and RMB three point.
Speaker Change: One 2 billion, representing a year over year growth rate of approximately 10, 6% to 12, 9%.
Speaker Change: This forecast reflects the company's current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy. That's off the date hereof.
Simon Tsai: Before concluding our prepared remarks, I'd like to highlight that on May 16, 2025, our Board of Directors approved an additional investment of US$125 million into PLUS PRC, a leading autonomous driving technology company in China. This investment will count in the principle and the crude interest of certain convertible nodes issued by PLUS PRC, which were acquired in May 2024 and January 2025. Post the completion of the transaction, we expect to maintain no less than 52.8% of equity interest and 56.2% of voting rights in PLUS PRC, excluding ESOP.
Speaker Change: Before concluding our prepared remarks I'd like to highlight that have made the 16th 2025, our board of directors approved an additional investment of U S. Dollar 125 million and two plus P. R. C. A leading autonomous driving technology company in China. This investment will count.
Speaker Change: It will counting the principle and accrued interest of certain convertible notes issued by plus PRC, which were acquired in May 2024 and January 2025.
Speaker Change: Post the completion of the transaction, we expect to maintain no less than 52, 8% of equity interests and 56, 2% of voting rights in plus PRC excluding aesop.
Simon Tsai: with the expected amendment to the memorandum and articles of association of PLUS TRC that will allow Full Truck Alliance to control the board of PLUS TRC. We expect to consolidate financial results of PLUS TRC into our consolidated financial statement upon completion of these investment transactions.
Speaker Change: With the expected amendment to the memorandum and articles of association of P. Plus Trc that will allow food truck alliance to control the board of plus P. R. C.
Speaker Change: We expect the consolidated financial results of clot, plus PRC into our consolidated financial statements. Upon completion of these investment transactions. We believe that we are at a pivotal moment in the era of AI and autonomous driving transitioning from technology technological validation to large scale development deployment.
Simon Tsai: We believe that we are at a pivotal moment in the era of AI and autonomous driving, transitioning from technological validation to large-scale deployment. Through deeper collaboration with PLUS PRC, we aim to capitalize on the opportunities within intelligent technologies, and we are confident that this forward-looking strategy will establish a significant first-mover advantage in addressing the critical needs of road transportation and further reinforcing our leadership position in the industry.
Speaker Change: Through deeper collaboration with plus PRC, we aim to capitalize on the opportunities within intelligent technologies and we are confident that this forward looking strategy will establish a significant first mover advantage in addressing the critical needs of road transportation.
Speaker Change: Reinforcing our leadership position in the industry that concludes our prepared remarks, we would now like to open the call to Q&A. Operator. Please go ahead.
Operator: That concludes our prepared remarks. We would now like to open the call to Q&A. Operator, please go ahead. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. 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: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question.
Speaker Change: <unk>. Please press Star then two 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.
Operator: At this time, we will pause momentarily to assemble our roster.
Speaker Change: This time, we will pause momentarily to assemble our roster.
Ronald Keung: The first question comes from Ronald Keung with Goldman Sachs. Please go ahead. Thank you, Mr. San. Thank you, Mr. Simon. I would like to ask about the amount of our monthly sales. I see that the monthly sales have increased by about 23 percent in the first quarter. This is far more than Dapeng. I would like to hear about the main driving factors, especially the tariff adjustment since April. Have we seen any impact on the platform volume? Do we have any adjustments to the overall volume for 2025? Let me translate. Thank you, my agent, for taking my question.
Speaker Change: The first question comes from Ronald Ronald Keung with Goldman Sachs. Please go ahead.
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Speaker Change: Hey, you can shop at home until you do call our win and drunk she hung on that you'd see.
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Speaker Change: We can't tell I don't want to Michele Oh, I'm Fine you shop. Thank you management for taking my question.
Ronald Keung: I just want to ask about the fulfilled orders. That was very healthy at 23 percent in the first quarter, outperforming the industry significantly. What are the key factors? Since the tariff impact came in April, have you seen any impact on your order volumes? How should we think of the full-year volume expectations for 2025? Thank you. Thank you, Ronald.
Speaker Change: Can I ask about the fulfilled orders that was very healthy at 23% in the first quarter of outperforming the industry.
Speaker Change: We have kept me so what are the key factors and then since the tariff impact came.
Speaker Change: In April have you seen any impact on your order volumes and how should we think of the full year volume expectations for 2025. Thank you.
Speaker Change: Thank you Ron.
Hui Zhang: Despite the traditional seasonal slowdown during the Chinese New Year period, our platform delivered a remarkable 22.6% year-over-year increase in fulfilled orders in the past quarter and significantly outperforming the broader market. We believe this strong performance was attributed to three key factors. First, we experienced a continued expansion of high-quality user base, although we exercised caution in terms of marketing and promotional activities over the holiday period. And following the Chinese New Year, the number of active shippers rebounded rapidly, with average monthly active shippers exceeding 3 million in March, setting a new record. And notably, the majority of new users we acquired were SME owners with high-quality order demands.
Speaker Change: So despite the traditional seasonal slowdown during the.
Speaker Change: Chinese new year period.
Speaker Change: Our platform delivered a remarkable 22 10, two 6% year over year increase and fulfill the others in the past quarter and the six.
Speaker Change: Significantly outperforming the broader market.
Speaker Change: We believe this strong performance was attributable attributed to three key factors.
Speaker Change: First we experienced a continued expansion of high quality user base, although we exercise caution in terms of marketing and promotional activities over the holiday period.
Speaker Change: And fall into Chinese new year to a number of active shippers.
Speaker Change: Rebounded rapidly with average monthly active shippers exceeded 3 million in March setting a new record.
Speaker Change: Notably the majority of new users, who are we acquired were SME owners with high quality other demand.
Hui Zhang: and also their industry distribution align closely with the platform's overall structure, which is pretty much domestic demand-driven. And given these characteristics, they will provide a solid foundation for future other volume growth. The second element is the strong order. volume growth was attributable to effective execution of our refined operational strategies. Through multiple initiatives focusing on shipment, onboarding, fulfillment, assurance, and retention enhancement, we have significantly improved conversion rates from new user registration to first order fulfillment and early repeat orders. This year, we are also planning to deepen our targeted operation for key freight categories, ensuring that we match shippers with truckers who have relevant transportation experience and capability.
Speaker Change: So their industry distribution align closely with the platforms overall structure, which is.
Speaker Change: Pretty much domestic demand driven and given these characteristics characteristics. They will provide a solid foundation for the future other volume growth.
Speaker Change: The second element is.
Speaker Change: Other.
Speaker Change: Volume growth was attributable to.
Speaker Change: Effective execution of our refined operational strategies.
Speaker Change: Through multiple initiatives focusing on shipment onboarding fulfillment assurance and retention enhancement.
Speaker Change: We have significantly improved conversion rates from new user registration to first order fulfillment.
Speaker Change: And early repeat orders. This year. We are also planning to deepen our targeted operation for key freight categories, ensuring that we match shippers with truckers, who have relevant transportation experience and capabilities. We hope this approach will continue to enhance for human experiences.
Hui Zhang: We hope this approach will continue to enhance fulfillment experiences, reinforce user trust, and support sustainable long-term growth. And lastly, continuously breakthroughs in our new business contributed to the robust order volume growth as well. Both our less-than-truckload and intra-city business maintained rapid growth momentum during the quarter. In particular, we expect a strong demand in the LTL subsegment to become a key growth driver for the platform going forward. Regarding the impact of the recent tariff adjustments, we have not observed, even until now, any significant impact on our business. And that is primarily due to our focus on domestic freight transportation.
Speaker Change: Reinforce user trust.
Speaker Change: And support sustainable long term growth lastly continuously breakthroughs.
Speaker Change: Breakthroughs in our new business contributed to the robust other water goes as well, both our less than truckload and intra city business maintained rapid growth momentum during the quarter in particular, we expect a strong demand in the L. P. L sub segment to become a key growth driver for the platform going forward.
Speaker Change: Regarding the impact of the recent tariff adjustments.
Speaker Change: Have not observed even until now any significant impact on our business.
Speaker Change: And that is primarily due to our focus on domestic domestic freight transportation export cargoes typically rely on containerized logistics and largely managed through third party logistics specialists specialists, which fall outside of our scope.
Hui Zhang: Export cargoes typically rely on containerized logistics and are largely managed through third-party logistics specialists, which fall outside of our scope. While the upstream suppliers in the manufacturing chain may face indirect pressure from tariffs, such effects are highly fragmented and not quantifiable at this moment. We will closely monitor any potential indirect effects on the supply chain and will assess and address a long-term impact as they arise.
Speaker Change: While the upstream suppliers and the manufacturing chain may face indirect pressure from tariffs from tariffs.
Speaker Change: Such effects are highly fragmented and not quantified but at this moment, we will closely monitor any potential indirect effects on the supply chain and will assess and address a long term impact as they arise.
Hui Zhang: Looking ahead to 2025, we still remain optimistic about our overall outlook. Our core strategy will continue to focus on strengthening our long-haul freight operations by improving supply, demand, matching, efficiency, and enhancing the end-to-end service experience just to solidify our leadership position in the long-haul freight market and drive high-quality volume growth. Ultimately, we are committed to creating sustainable value for both shippers and truckers and building a long-term, mutually beneficial ecosystem.
Speaker Change: Looking ahead to 2025, we still remain optimistic about our other volume outlook.
Speaker Change: Our strategy will continue to focus on strengthening our long haul freight all places by improving supply demand matching.
Speaker Change: Efficiency and enhancing the end to end service experience just to sort of defy our leadership position in the long haul freight market and drive high quality water, but ultimately we are committed to creating sustainable value for both shippers and truckers and building a long term mutually beneficial.
Speaker Change: Ecosystem.
Hui Zhang: Thank you.
Speaker Change: Thank you.
Speaker Change: Yeah.
Eddy Wang: The next question comes from Eddy Wang with Morgan Stanley. Please go ahead. Mr. Hui Zhang, Mr. Simon, Mr. Mao Mao, thank you for your question.
Speaker Change: The next question comes from Eddie Leung with Morgan Stanley. Please go ahead.
Speaker Change: Hey, Oh, it's all five months AUM I want to like I said, just hold to you we're not going to push harder.
Eddy Wang: Congratulations on your excellent performance in the first quarter. My question is about the return on investment. In the first quarter, we saw that the return on investment continued to rise to 39.2%. The return on investment increased by 5.7%, and the return on investment increased by 1.7%. We can see that the return on investment has increased significantly in the past few quarters. I would like to know where the main driving force comes from. Thank you, management, for taking my question.
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Speaker Change: What did you find yourself. Thank you management for taking my question. My question is just regarding the fulfillment rates are we see that to the fulfillment rates continue to increase in the first quarter.
Hui Zhang: My question is regarding the fulfillment rate. We see that the fulfillment rate continued to increase in the first quarter, reaching 39.2%, a year-over-year improvement of 5.7% points, and a quarter-to-quarter improvement of 1.7% points. What are the main drivers behind the significant increase in the fulfillment rates over the three consecutive quarters? Thank you. Thank you, Eddy.
Speaker Change: And 69, 2% a year over year improvement of five seven percentage points and quite a quarter improvement of one seven percentage points.
Ought to be a majority of the drivers behind the significant increase in the fulfillment rates over the summary consecutive quarters. Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you Eddie the fulfillment rate improved rapidly in the first quarter, primarily due to the combined effects of user structure optimization.
Hui Zhang: The fulfillment rate improved rapidly in the first quarter, primarily due to the combined effects of user structure optimization, upgraded operational strategies, and in constant matching efficiency. First, our improved user mix has significantly enhanced our overview of fulfillment quality over the past two quarters. The order contribution from direct shippers increased to 51 percent this quarter from 47 percent in the prior year period. This user group, primarily composed of small and medium-sized business owners, typically demands higher service quality and greater fulfillment reliability. During the quarter, the average fulfillment rate of direct shippers approached nearly 60 percent, significantly outperforming that of intermediaries and other professional shippers.
Speaker Change: Upgraded operational strategies any house to matching efficiency.
Speaker Change: First our improved user mix has significantly in house overview fulfillment quality over the past few quarters. The other contribution from direct shippers.
Speaker Change: Increased to 51% this quarter from 47% in the prior year period.
Speaker Change: This user group, primarily composed of small and medium sized business owners typically demands higher service quality and greater feeling their liabilities and during the quarter. The average fulfillment rate of direct shippers approached nearly 60% significantly outperforming that up intermediaries and other professional shippers.
Hui Zhang: We believe the continued growth in the share of direct shippers will be a key structural factor driving overall platform procurement rate improvements. And second, our refined operational strategies are unlocking greater efficiencies through the user lifecycle. During the first quarter, we further clarified the pricing structure. holistically so that for any given shipment, the freight rates decrease in the order of entrusted shipment followed by full truckload and then less than truckload. The clearer pricing differences between different transaction types help shippers set reasonable expectations, reducing cancellations caused by pricing misunderstandings. Additionally, we optimized the trucker order acceptance process so that the post-cargo information is obfuscated, thus encouraging truckers to return to the app for full details before accepting, which extends their online time and improves matching precision, significantly enhancing procurement outcomes.
Speaker Change: We believe the continued growth and the same in the share of direct shippers will be a key structural factor driving overall platform for human rate improvements and secondly, our refined operational strategies are unlocking greater efficiencies through the user lifecycle.
Speaker Change: During the first quarter, we further clarified the pricing structure.
Speaker Change: Holistically, so that for any given shipment the freight fees.
Speaker Change: The freight rates decreased in the other Av and trusted shipment followed by food truckload and then less than truckload.
Speaker Change: Clear of pricing.
Speaker Change: Differences between transact different transaction types help shippers set reasonable expectations, reducing cancellations caused by pricing misunderstandings.
Speaker Change: Additionally, we optimize the trucker all their acceptance process. So that the poster carpal information is husky.
Speaker Change: Complicated thus encouraging truckers to return to the App for food details before accepting which extent are there all the time and improved matching precision.
Speaker Change: The difficultly in hunting fulfillment outcomes.
Hui Zhang: We also strengthened shipper loyalty through initiatives such as dedicated WECOM customer support and customized service for key accounts, which have improved retention and repurchase behavior, reinforcing fulfillment capabilities of shipper users. As a result, matching efficiency has improved substantially. In the first quarter, the number of monthly active truckers also increased significantly year over year, ensuring sufficient transportation capacity supply. For example, the average time from order posting to successful matching decreased under 10 minutes, an improvement of more than 35% year over year, which provides strong underlying support for fulfillment growth.
Speaker Change: We also strengthened shipper loyalty through initiatives, such as dedicated we called customer service and customer support them customized service for key accounts.
Speaker Change: Which has improved our retention and repeat purchase behavior reinforcing fulfillment capabilities of shipper uses so as a result of matching efficiency has improved substantially.
Speaker Change: In the first quarter the number of monthly active truckers also increased significantly year over year, ensuring sufficient trust patient transportation capacity supply.
Speaker Change: For example, the average time for every time from other posting to successful matching a decreased under 10 minutes and an improvement of more than 35% year over year, which provides a strong underlying support for fulfillment pool.
Hui Zhang: Looking ahead, we remain confident that the upward trend in fulfillment rates will continue as we further expand our direct shipper base, deepen our user segmentation strategies, and enhance product experiences. By leveraging technology and building a stronger ecosystem, we aim to elevate fulfilling performance to new heights in creating more predictable and tangible values for both shippers and truckers. Thank you.
Speaker Change: Looking ahead, we remain confident that the upward trend upward trend in fulfillment rates will continue as we further extend our direct shipper base deepen our user segmentation strategies and enhance product experiences.
Speaker Change: By leveraging technology and building a stronger ecosystem. We aim to we aim to elevate fulfillment performance to new heights, and creating more predictable intangible values for both shippers and truckers.
Speaker Change: No.
Wenjie Zhang: The next question comes from Wenjie Zhang with CICC, please go ahead. Hello, Mr. Hui Zhang, Mr. Simon, Mr. Mao. Thank you for accepting my question. My question is about the shipments. We can see that the shipments in the first quarter reached 2.76 million, which is about a 29% increase. I would like to ask what the driving factor is, and based on the trend of the past three years, the shipments and shipments have shown a trend of rapid growth. I would also like to ask what the main reason is.
Speaker Change: The next question comes from <unk>, Zhang with C. ICC. Please go ahead.
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Speaker Change: For attachments and they'll show you, but that's what they're not too sure nobody attention. They always how did you go out to evaluate nutrition well what did you finally got a question regarding she'd be users in the first quarter. The number of monthly active shippers increased about 29% to $2 76 million I'm I Wonder what are the main reasons behind this high growth and if we look at.
Wenjie Zhang: Let me translate for myself. My question is regarding shipper users. In the first quarter, the number of monthly active shippers increased about 29% to 2.76 million. I wonder what are the main reasons behind this high growth. And if we look at overall trends over the past three years, we have seen an accelerated growth of the shipper users. What are the primary reasons for that?
Speaker Change: The old trends over the past three years, we have seen them actually everybody grows they'll distribute users are what are the primary reasons for that.
Speaker Change: Okay.
Hui Zhang: Thank you. In the first quarter, the number of monthly active shippers maintained a growth trajectory that we observed in the past few quarters. We believe this momentum was driven not only by short-term strategic optimizations, but also by the platform's long-term accumulated value, which continues to strengthen our user ecosystem. First, our comprehensive marketing system enabled more targeted outreach to prospective users during the quarter. On the digital front, we consistently optimized keywords placement and search to download conversion rates across major app stores, while also investing in precision marketing on content platforms, including short-form video apps to attract potential users.
Speaker Change: Thank you in the first quarter the number of monthly.
Speaker Change: Monthly active shippers maintained a growth trajectory we observed in the past few quarters. We believe this momentum was driven not only by short term strategic optimizations, but also by platforms long term accumulated value, which continues to strengthen our user ecosystem.
Speaker Change: First our comprehensive marketing system, enabling more targeted outreach to prospective users during the quarter on the digital front, we consistently optimized keywords placements and search to Donald conversion rates across major App stores, while also investing while also investing in prestige.
Speaker Change: Marketing content platforms, including short haul short form video apps to attract potential users.
Hui Zhang: Offline, we continue to enhance brand recognition through truck stickers, billboards in commercial areas and other physical channels, effectively driving traditional offline users to move online and creating a healthy conversion funnel from brand exposure to app download. Second, our refined operational strategies on shipper side significantly improved user engagement and retention. As mentioned earlier, we adopted a three-step strategy on user conversion, focusing on shipment onboarding, fulfillment assurance, and retention enhancement. Thanks to the operational team's efforts, conversion rates for both first-order and repeat orders for new shippers have improved remarkably. Additionally, our membership program, which offers benefits such as freight discounts and shipment tracking for frequent shippers, further stimulated user activity and loyalty.
Speaker Change: Offline, we continue to be a house brand recognition through truck stickers, billboards and commercial areas and other physical channels effectively driving traditional offline users to move online and creating a healthy conversion funnel from brand exposure to app downloads.
Speaker Change: Second our refined operational strategies on Super size significantly improved user engagement and then.
Speaker Change: And the retention as.
Speaker Change: As mentioned earlier, we adopted a free step strategy on user conversion focusing of shipment onboarding fulfillment assurance and the retention of huntsman. Thanks to the operational teams at force conversion rates for both first order and repeat orders for new shippers has improved.
Speaker Change: Felipe.
Speaker Change: Additionally, our membership program, which offers benefits such as freight discounts and shipment tracking for frequent shippers further stimulated user activity and loyalty.
Hui Zhang: From a long-term perspective, we believe the ongoing enhancement of the platform's value proposition has accelerated user growth. Our increasingly efficient and transparent matching mechanism enables more direct shippers to connect with truckers at reasonable freight rates, avoiding the traditional price markup typically associated with offline intermediaries. Furthermore, as an independent third-party platform, we have built a robust credit rating and dispute resolution system that enables us to provide detailed order and communication records to support user claims in the event of a dispute, helping to minimize transaction risks. These user experience advantages and safeguards have underpinned our accelerated shipper MAU growth over the last three years.
Speaker Change: Long term perspective, we believe the ongoing enhancement of the platform's value proposition has accelerated user growth.
Speaker Change: Our increasingly efficient and trust transparently matching kind of enables more direct shippers to connect with truckers at reasonable freight freight rates avoiding the traditional price markup typically associated with offline and intermediaries.
Speaker Change: Furthermore, as an independent third party platform, we have built a robust credit rating.
Speaker Change: And just a dispute resolution system that enables us to provide detailed.
Speaker Change: Alder and communication workforce to support use of claims in the event of a dispute helping to minimize transaction because.
Speaker Change: These user experience advantages and safeguards to underpin our accelerated shipper Mou growth over the last.
Speaker Change: Three years.
Hui Zhang: Looking ahead, we will continue to center our strategy around user value, deepening technology empowerment and operational innovation. Our goal is to further expand the share of direct shippers, reinforce our leadership in the digitalization of freight logistics, and drive sustained high-quality user growth.
Speaker Change: Looking ahead, we will continue to center our strategy around the use of value.
Speaker Change: Deepening technology empowered empowerment and operational innovation. Our goal is to further expand the share of direct shippers reinforced our leadership in the digitalization of freight logistics and drive sustained high quality usable.
Speaker Change: [noise] debt does that conclude your answer.
Hui Zhang: Did that conclude your answer?
Speaker Change: Yes.
Brian Gong: Thank you. The next question comes from Brian Gong with Citi. Please go ahead.
Speaker Change: Thank you. The next question comes from Brian <unk> with Citi. Please go ahead.
Speaker Change: Yes.
Brian Gong: Good evening, Hui Zhang, Thomas Chong, Mao Mao, Jiulu Li, Eddy Wang, Dapeng Gong, Yuxuan Mi, Full Truck I have a quick question. What do we see in terms of the active situation of the first-term platform drivers? Has the active driver's list rating on the platform improved? We also know that the current employment environment is relatively more stable. Have we seen a rapid increase in the number of users on the truck drivers' side? Has there been an improvement in the private-public-domain relationship? Thank you. Thank you, Brian. In the first quarter, the average number of monthly active truckers remained above 3 million, achieving high single-digit growth year over year.
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Speaker Change: So we see it.
Speaker Change: Just a real trusted myself.
Speaker Change: How was the truckers activity level in the fourth quarter.
Speaker Change: And that has the order acceptance frequency actually progress all the pads on the platform.
Speaker Change: Great.
Speaker Change: Well, if you'll notice the rapid growth of the number of chocolate users gave them run it.
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Speaker Change: Thank you Brian in the first quarter the average number of monthly active truckers.
Speaker Change: Above 3 million achieving high single digit growth year over year, both our truckers engagement and transaction frequency per truck or improved in parallel. We believe there are three drivers of Truckers Act for truckers are activity growth first the continuous increase in shipper other water and they effectively activated the existing truckload.
Hui Zhang: Both our truckers' engagement and transaction frequency per trucker improved in parallel.
Hui Zhang: I would believe there are three drivers for truckers' activity growth. First, the continuous increase in shipper order volume effectively activated the existing trucker capacity on the platform, while also encouraging previously dormant truckers to become active. This naturally created a positive cycle of order growth driving trucker activation. Meanwhile, our evolving matching algo significantly reduced the idle time between orders for truckers. Based on our transaction data, the Empty hauling, empty weighting, and empty loads data all declined year over year, both lower than industry average, boosting truckers' order-taking efficiency per unit of time and further motivating them to remain active.
Speaker Change: Capacity on the platform. While also encourage them previously dormant truckers to become active this naturally created positive cycle of other pools drugging trucker activation. Meanwhile, our in evolving matching alcohol and significantly reduce the idle time between others for truckers base.
Speaker Change: Our transaction data the.
Speaker Change: Empty hauling empty waiting an empty loads a day.
Speaker Change: All declined year over year.
Speaker Change: Both are lower than industry average boosting truckers order taken efficiency per unit of time, and so the motivating them to remain active.
Hui Zhang: In addition, our trucker membership system has become a critical lever for improving fulfillment. By the end of the first quarter, the number of trucker members who subscribed to our Shengxin program had grown steadily to over 700,000, contributing approximately 40% of the platform's long-haul fulfilled orders. Truckers enjoying membership benefits such as priority access to orders and other exclusive privileges show significant higher transaction frequency and fulfillment rates compared to non-members. If the membership penetration rate continues to rise, we expect the platform's overall trucking supply and matching efficiency to improve.
Speaker Change: In addition, our trucker membership system has become a critical level a critical lever for improving.
Speaker Change: Improving our fulfillment by the end of the first quarter. The number of truck crew members, who subscribe to our servicing program has grown steadily to over 700000 contributing approximately 40% of the platform's long haul for few of the others.
Speaker Change: Truckers to enjoying membership benefits such as priority access to orders and other exclusive privileges shows significant hydro transaction frequency and fulfillment rates compared to nonmembers.
Speaker Change: The membership penetration rate continues to rise, we expect the platform's overall trucking supply and matching efficiency to improve.
Hui Zhang: In terms of the overall trucker user trend, we have observed a structurally stable supply of medium and heavy-duty truckers over the past two years. This is largely due to the naturally high entry barriers for truckers, including the requirement for a professional driver's license, substantial vehicle investment and a certain level of cargo resources, all of which help filter out newcomers with non-trucking backgrounds by increasing order frequency and offering all-around support. Our platform has helped these truckers improve their vehicle turnover, enabling them to maintain resilient incomes amid economic fluctuations and thereby strengthening the stability of the core trucking base.
In terms of the overall trucker user trend, we have observed a structurally stable supply of medium and heavy.
Speaker Change: Heavy duty trucks over the past two years. This is largely due to the naturally high entry barriers for truckers, including the requirement for a professional drivers license substantial vehicle investment and a certain level of cargo resources, all of which help future out newcomers with long trucking backgrounds by increasing other frequency and offer.
During all around support our platform has helped these structures improve their vehicle turnover, enabling them to maintain resilient incomes amid economic fluctuations and thereby strengthening the stability of the core trucking base.
Hui Zhang: Looking ahead, we are confident that as order volume continues to grow, the trucker vehicle's utilization will further improve as well as the income. Meanwhile, with ongoing optimization of matching efficiency and membership programs, we expect supply-demand dynamics to become even more balanced, which ultimately creating greater value for both truckers and shippers.
Speaker Change: Looking ahead, we are confident that as order volume continues to grow with the truckers.
Speaker Change: The truckload vehicles utilization will further improve as well as the zinc called Meanwhile, with ongoing optimization of matching efficiency and member membership programs, we expect supply demand dynamics to become even more balanced, which ultimately creating greater value for both truckers and shippers.
Speaker Change: Thank you.
Thomas Chong: The next question comes from Thomas Chong with Jeffreys, please go ahead. Good evening. Thank you for accepting my question. We can see that the revenue growth for the first quarter is 51.5% and it continues to grow rapidly. Can you share with us what the main driving force is? And what are our main operating strategies in the first quarter? Thanks, management, for taking my question. In the first quarter, transaction service revenue increased by 51.5% year-on-year, continuing its rapid growth. What are the main drivers behind this? What are the focuses for your commission strategies this quarter? Thank you.
Speaker Change: The next question comes from Thomas Chong with Jefferies. Please go ahead.
Speaker Change: So sure.
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Speaker Change: My question in the first quarter.
Speaker Change: Surface revenue increased by 51, 5%.
Speaker Change: Continuing its rapid schools.
Speaker Change: The drivers behind this.
Okay.
Speaker Change: Michigan strategies this quarter. Thank you.
Thomas Chong: Thank you Brian, that's a good question. In the first quarter, transaction service revenue continued to grow strongly, primarily driven by dual engines of expanding business scale and improving order quality. First, the number of commissioned orders continued to grow rapidly, given robust growth in fulfilled orders and increased commissioned order coverage. In March, we newly rolled out commissioned services in 39 additional cities across northeast and southwest regions. increase in overall commission coverage from 77% in the same period last year to 85% this year. Looking at our full year strategy, we plan to further expand the number of commissioned cities.
Speaker Change: Thank you Brian that's a good question in the for the first quarter transaction service revenue continued to grow strongly primarily driven by a.
Speaker Change: The dual engines of extending this is scale and improving order quality.
Speaker Change: First the number of commission orders continued to grow rapidly given our robust growth and fulfill that others increased commission coverage in March we are newly rolled out Commission services in 39 additional cities across the northeast and southwest regions incur.
Speaker Change: The increase in the overall commission coverage from 77% in the same period last year to 85% this year.
Speaker Change: Looking now at.
Speaker Change: Our full year strategy, we plan to further expand the number of commission cities.
Thomas Chong: Given our strong capabilities to identify high-quality transactions than prior years, we believe that transitioning from a city-based exemption model to a more refined order-based exemption model will achieve higher monetization efficiency. This fine-tuned commission strategy will allow us to enhance user experience while driving sustainable growth in transaction service revenue.
Speaker Change: Given our strong capabilities to identify high quality transactions than prior years, we believe that transitioning from a city based exemption model to a more refined older based exemption model will achieve higher monetization efficiency.
Speaker Change: This fine tooth Commission strategy will allow us to enhance user experience, while driving sustainable growth in transaction service revenue.
Thomas Chong: Second. The monetization per order also improved steadily from RMB22.7 per order in the same period last year to RMB25.5 this quarter, representing a 12% year-over-year increase. This was largely driven by the larger order contribution from high-quality transactions. With our improvements in freight pricing and wise protection for truckers, they have become more open to accept higher commission rates, creating a healthy cycle of better service for shippers, reasonable freight premium to truckers, and ultimately more room for commission, mutually beneficial to both users and the platforms. Looking ahead, we believe there is considerable room for further growth in transaction service revenue through ongoing optimization of order structure and the platform's efforts to provide protections and added value to both shippers and truckers.
Second.
Speaker Change: The monetization per order also improved steadily from RMB 22, seven per order in the same period last year to RMB 25, five this quarter.
Speaker Change: Representing a 12% year over year increase.
Speaker Change: This was largely driven by the large by the larger order contribution from high quality transactions with our improvements in freight pricing and price protection for truckers. They have become more open to accept higher commission rates, creating a healthy cycle with better service for shipper at a reasonable premium to trucker.
And ultimately.
Speaker Change: More room for commission mutually beneficial to both <unk>, both users and the platforms. Looking ahead. We believe there is considerable room for further growth in transaction service rubbing through ongoing optimization of auto structured and the and the platforms are forced to provide protections and added value to both a ship.
Thomas Chong: We'll continue to refine our commission strategies, enhance monetization efficiency, and ensure that platform service delivers greater value to users to drive sustainable growth in our transaction service business.
Speaker Change: And truckers will continue to refine our commission strategies enhanced monetization efficiency.
Speaker Change: And he assured that platform service that deliver greater value to users to drive sustainable growth in our transaction services business.
Wan Lao: Thank you. The next question comes from Wan Lao with CITC. Please go ahead. Thank you, Hui Zhang, Thomas Chong, Mao Mao, for accepting my question. At the beginning of today's event, the management team also mentioned that we are going to increase the investment for home-based business this year. I would like to ask the management team what are the main considerations for increasing the investment this year? And what is the current progress of the home-based business? I will translate it myself. Thank you, Spanish Brain, for taking my questions.
Speaker Change: Thank you.
Speaker Change: The next question comes from one now with Citi.
Speaker Change: The I T C. Please go ahead.
Speaker Change: Hmm.
Speaker Change: Thanks, Yeah, it's all it all that much at all my Muslim additional lending as you well know.
Speaker Change: Thanks James.
Speaker Change: Just to quantify NT dollar 10 yachts and yachts.
Johnny: Johnny that holds the Sympson when he talked about his home a woman tenure and so no I think it holds without drama called reach among the homeless and Gianni.
Johnny: Josh I'll show you on anything more than what's in your face Spanish brand for taking my questions. So my question is just about what are the key considerations behind it behind the anticipated increase in <unk>.
Wan Lao: So my question is about what are the key considerations behind the anticipated increase in the investment in PlusPRC during this year? And what is the current progress of PlusPRC's business? Thank you. We believe the autonomous driving technology is a critical inflection point, as I mentioned, shifting from technical validation to large-scale commercialization. With rapid advancement in perception algorithms, decision-making systems, and increasingly supportive regulatory environments, the sector now offers a significant commercial potential. By scaling up our investments at this pivotal moment, we aim to seize the opportunity presented by the technology's maturation and acceleration, and accelerate the development of closed-loop ecosystems from R&D to monetization, particularly by building early-mover advantages in high-demand applications such as long-haul logistics.
Johnny: Our investment in our past PRC during this year and why do you use the current progress all hospitality business. Thank you.
Johnny: Thank you I will leave the autonomous driving technology is a critical inflection point as I mentioned shifting from technical validation to large scale commercialization.
Johnny: With the rapid advancement in perception of algorithms decision, making systems and increasingly supportive regulatory environments. The sector now offers a significant commercial potential.
Johnny: Getting up our investments at this pivotal moment, we aimed to seize the opportunity presented by the technologies maturation and acceleration.
Johnny: And accelerate the development of close loop ecosystem from R&D to monetization, particularly by building early mover advantages in high demand applications, such as long haul logistics.
Hui Zhang: On the collaboration front, we have established joint R&D initiatives with leading OEMs to co-develop and deploy next-generation autonomous driving systems. In terms of commercialization milestones, our intelligent trucking fleet has already begun delivering freight services to enterprise clients. This real-world deployment allows us to continuously accumulate operational data while providing tangible efficiency gains. including lower transportation costs and improved coordination between human operators and autonomous As a dedicated innovator in autonomous driving, PLUS PRC is committed to reshaping transportation economics through practical and scalable technological solutions. Unlike pure-play R&D companies, we focus on solving real-world challenges such as fuel efficiency, driver fatigue, and fleet management complexity with targeted applications.
Johnny: On the collaboration front, we have established joint R&D initiatives with leading Oems to.
Johnny: Co develop and deploy next generation autonomous driving systems.
Johnny: In terms of in terms of commercialization milestones are intelligent trucking fleet has already begun delivering freight services to enterprise clients.
Johnny: This real world deployment allows us to continuously accumulate operational data why while providing providing tangible efficiency gains.
Johnny: Including a lower transportation costs has improved.
Johnny: Coordination between human operators and autonomous systems.
Johnny: As a dedicated innovator in autonomous driving plus PRC is committed to reshaping transportation economics through practical and scalable technological solutions.
Johnny: Unlike pure play are the companies, we focus on solving real world challenges such as the fuel efficiency.
Driver fatigue, and fleet management complexity with targeted applications. Looking ahead, we remain focused on two core goals.
Hui Zhang: Looking ahead, we remain focused on two core goals, reducing costs through breakthrough technologies and driving operational efficiency, ultimately helping the industry transition towards a safer, smarter, and more sustainable freight transportation.
Johnny: Reducing costs through breakthrough technologies and driving.
Johnny: Operational efficiency ultimately, helping the industry transition towards towards a safer smarter and more sustainable freight transportation.
Richie Sun: Thank you. The next question comes from Richie Sun with HSBC. Please go ahead.
Johnny: Okay.
Richie soon: The next question comes from Richie soon with HSBC.
Speaker Change: Please go ahead.
Richie Sun: Good evening, Chairman Zhang, Simon, Mao Mao. Thank you for giving me the opportunity to ask questions. My question is about AI. What are the main applications of AI in terms of brand and product features? And what are the future plans? Thank you, Ritchie. Currently, the application of AI technology is primarily focused on intelligent dispatching. And based on extensive user research, we identified that many shippers experience common pain points during the truck finding process, such as missed calls and inefficient communication due to repeated interactions. To address these challenges, we invested over a year integrating the freight industry's specific features into our AI large model to create our smart truck finder designed to help shippers locate the right truckers more effectively and efficiently.
John: Alright, John.
John: And then my mom I somehow got seen them again with you in the key equate well doing do you so guangxi either.
John: <unk> Gonna come yet, we all have the annual wage CFO I'm Yan, how you hold them quite hard Osha months.
Speaker Change: Thank you management for taking my questions. So my question is about AI. So what are the main applications of AI on the platforms product. Thanks, a lot of peace, apparently and what are the plans for the AI depending upon in the future. Thank you.
John: Thank you Richie currently the application of AI technology is primarily focus on.
Speaker Change: Intelligent dispatching and based on extensive use of research we identified that many shippers are experienced common painful stewards of truck finding process such as Mr calls and inefficient communication due to peak at interactions two.
Speaker Change: Dressed these challenges we invested over a year.
Speaker Change: Integrating the freight industries specific features into our AI large models to create are smart.
Speaker Change: Truck finder designed to help shippers locate the right truckers more effectively and efficiently.
Hui Zhang: With the AI-powered truck finder, shippers can simultaneously communicate with multiple truckers 24-7 and provide real-time response to truckers' inquiries. This is significantly improving. communication efficiency. In addition, the AI system can automatically verify the vehicle status and conditions to ensure that they meet the shippers' requirements. It also leverages the platform's broader market data to intelligently filter and recommend the most suitable and cost-effective truckers, providing shippers with a more reliable and hassle-free experience.
Speaker Change: With the AI powered truck finders shippers can simultaneously communicate with multiple truckers 24, seven and provide real time response to truckers inquiries.
Speaker Change: This significantly improving.
Speaker Change: Communication efficiency.
Speaker Change: In addition, the AI assistant can.
Automatically verify the vehicles state us in conditions to ensure that they meet the shippers requirement.
Speaker Change: Also leverages the platforms, rather and market data to intelligently future and recommend the most suitable and cost effective truckers, providing shippers with a more reliable and hassle free experience.
Hui Zhang: Furthermore, we will substantially increase AI-related investment and actively explore the use of AI technology in other areas such as order posting, customer services, and route planning. Looking ahead, we aim to continually deepen our AI capabilities to further enhance overall operational efficiency and consistently deliver high-quality, more efficient services to shippers and truckers. Thank you.
Speaker Change: Furthermore, we will substantially increase our related investments and actively explored the use of AI technology in other areas such as other posting.
Speaker Change: Customer services and route planning looking ahead, we aim to continually deepen our AI capabilities to further enhance overall operational efficiency and consistently deliver high quality more efficient services to shippers and truckers. Thank you.
Operator: And that concludes the question and answer session.
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 closing comments.
Mao Mao: I would like to turn the conference back over to management for any additional or closing comments. Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Full Truck Alliance or TPG Ambassador Lin. Our contact information for IR in both China and the U.S. can be found in today's press release. Have a great day.
Speaker Change: Thank you once again for joining us today.
Speaker Change: Any further questions. Please feel free to contact us at full tilt alliance or TPG Investor Relations.
Speaker Change: Our contact information for eye on China.
Speaker Change: China and U S can be found in today's press release.
Speaker Change: Thanks.
Operator: The conference has now concluded. Thank you for attending today's presentation.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: You may now disconnect.
Speaker Change: Okay.
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Speaker Change: Okay.
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