Q1 2025 Jiayin Group Inc Earnings Call
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Speaker Change: Good day, ladies and gentlemen, thank you for standing by and welcome to the giant group's first quarter 2025 earnings conference call.
Speaker Change: Currently all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
Speaker Change: As a reminder, we are recording today's call if.
If you have any objections you may disconnect at this time.
Speaker Change: Now I'll turn the call over to Mr. Sam Lee from Investor Relations of Giant group. Please proceed.
Sam Lee: Thank you operator, Hello, everyone. Thank you all for joining us on today's conference call to discuss <unk> group's financial results for the first quarter of 2025.
Sam Lee: We released our earnings results earlier today. The press release is available on the company's website as well as from Newswire services.
Yang: On the call with me today are Mr. Yang.
Yang: Chief Executive Officer, Mr. Frank <unk>, Chief Financial Officer, and Mr. Shafer, Chief risk Officer.
Sam Lee: Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 995.
Sam Lee: Forward looking statements involve inherent risks and uncertainties.
Sam Lee: As such the company's actual results may be materially different from the expectations expressed today.
Sam Lee: Further information regarding these and other risks and uncertainties is included in the Companys public filings with the SEC.
Sam Lee: Company does not assume any obligation to update any forward looking statement, except as required under applicable law. Also this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures.
Sam Lee: Please note that unless otherwise stated all figures mentioned during the conference call are in Chinese renminbi.
Speaker Change: With that let me now turn the call over to our CEO. Mr. <unk>, Mr. Yan will deliver his remarks in Chinese and I will follow up with corresponding English translation. Please.
Speaker Change: Go ahead Michelle.
Sam Lee: That's helpful.
Holly: Okay, Siegel with hernia and could be on your own and easy to Holly Hello, everyone. Thank you for joining our first quarter of 2025 earnings conference call.
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Speaker Change: This quarter China's economy continued to demonstrate recovery momentum and maintained steady growth total retail sales of consumer goods rose by 646% year over year.
Speaker Change: Growth rate accelerating to five 9% in March indicating a pickup in consumer spending we capitalize on our momentum and delivered a strong start to 2025 with loan facilitation volume reaching.
Speaker Change: RMB 35, 6 billion up approximately 58, 2% year over year non-GAAP operating profit hit RMB $607 million Martin a year over year increase of 91, 6% and net profit surged to RMB $540 million rift.
Speaker Change: Flattening our year over year rise of 97, 5%.
Speaker Change: Both business scale and profitability metrics hit record quarterly high since the company's listing marking the beginning of a new phase of rapid growth.
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Speaker Change: Leveraging diverse acquisition channels and wrapping up marketing efforts in the first quarter. The company added $1 or $5 6 million, new borrowers representing a year over year growth of 126, 6%.
Speaker Change: <unk> contribution of total loan facilitation volume was 28, 1% demonstrating robust growth momentum in terms of channel expansion, we explored cross industry use cases to reach new borrowers across different platforms, including lifestyle services online video and travel.
Speaker Change: Establishing strategic partnerships with multiple leading platforms. We further diversified our existing borrower base. Additionally, we integrate AI tour to analyze user feedback and optimize marketing materials, enabling real time adjustments to marketing strategy and targeted resources resource allocation to enhance.
Speaker Change: Borrower acquisition efficiency.
Speaker Change: To meet the rapid growth in consumer demand. We also actively expanded our high quality institutional partnerships as of the end of quarter. One the company maintained partnerships with 59 financial institution with another 55 financial institutions and discussion this insurance robust funding support for our loan facilitation.
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Speaker Change: We view independent innovation is our key growth drivers and continue to accelerate the digital transformation of our business. We actively promoted our four plus two AI development strategy in the first quarter.
Speaker Change: Our four major product matrices.
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Speaker Change: The intelligent agent platform and the large model post training platform.
Speaker Change: This helped establish a technological framework that supports the end to end capability upgrades across the company comprehensively driving high quality development intelligent business scenario.
Speaker Change: We launched the <unk> model management platform, which now covers 90% of our business lines.
Speaker Change: Platform is capable of faster auto deployment greatly streaming streamlining operations and improving model deployment efficiency threefold. Furthermore, model data pre processing efficiency model stability and execution speed have all seen notable improvement with adoption of the <unk> model management platform.
Speaker Change: We have also comprehensively upgraded that tend to R&D performance management platform, creating a unified management platform that covers the entire lifecycle from product development to online operations.
Speaker Change: This further enhances the standardization and automate automation of R&D processes.
Speaker Change: Thank you to Mr. <unk>, <unk> chairman facing to announcing Gisela.
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Speaker Change: In response to the rapid growth of new users and continuous rise in credit demand, we fully implemented the quality score framework utilizing our self developed model to establish a risk assessment system for new borrowers.
Speaker Change: Collaborating across multiple departments, including our acquisition modeling and risk management, we unify the evaluation standards for bar acquisition quality.
Speaker Change: This approach enhance our acquisition efficiency, while maintaining disciplined management of our risk performance by the end of Q1, the 90 day plus delinquency ratio stood at one 3%, reflecting the remarkable stability of the company's risk management system.
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Speaker Change: In terms of overseas business, the Companys continued investment and risk control and operation has yielded significant results.
Speaker Change: Our business partners in Indonesia delivered outstanding performance in the first quarter with a number of new registered users searching by 196% year over year and loan volume growing by 190% year over year, both representing substantial breakthroughs.
Speaker Change: As the business matures, we plan to collaborate with local partners.
Speaker Change: Diversified cooperation to further deepen our engagement in the local market. Meanwhile, risk metrics are met.
Speaker Change: Mexico operations improve accompanied by an increase in return on borrower acquisition investments. This fall it demonstrates the continued advancement of our overseas operational capabilities.
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Speaker Change: Have always adhere to our customer centric philosophy.
Speaker Change: Upholding industry standards at our responsibility.
Speaker Change: In the first quarter. The company released a 2020 for consumer rights protection Whitepaper integrating consumer rights protection into every aspect of the company's operations and management.
Speaker Change: This initiative has multiple dimensions, such as technology, driven proud prevention engaged customer service.
Speaker Change: External collaboration and consumer protection education, Wi Fi per showcases our commitment to enhancing the innovative practices and social responsibility and consumer rights protection. Additionally, we advanced the hardest smile youth mental care project and conducted training for teachers and students focused on psychology.
Speaker Change: <unk> organized apparently workshop and activity supporting children with autism in multiple regions.
Speaker Change: The program has covered nearly 50 school benefiting over 16000 individuals and was recognized by China National Radio.
Speaker Change: Annual extra explanatory case of innovate.
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Speaker Change: Are there more that jiving volunteer servicing consistently provided services for community in special schools promoting the normalization of volunteer services.
Speaker Change: Looking ahead, we will continue to drive industry development through technological innovation and give back to society through concrete action reaffirming the trust placed in us.
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Jonathan: Sure Jonathan.
Speaker Change: Regarding shareholder return in March we updated our dividend policy raising the dividend payout ratio from no less than 15% of the previous fiscal years net profit after tax to approximately 30% of the previous fiscal years net profit after tax in May the board of directors.
Speaker Change: Approved a dividend plan of <unk>, a U S dollars per area.
Speaker Change: With the dividend amount, increasing by approximately 60% compared with last year further details and dates for the dividend will be announced separately after the board of director finalizes them.
Speaker Change: For the share repurchase program. The current plan has an upper limit of $30 million USAID and the board of directors has approved extending its validity to June 12 2026.
Speaker Change: We are deeply honored as always to have the trust and support of our shareholders in the future. We remain committed to sharing the company's development achievements and rewarding our shareholders.
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Speaker Change: This is the operators because we cannot hear you at the moment. Please check if your line is muted.
Speaker Change: Caller. Please do you hold the line Wesley yet get the speakers sound disconnected.
Speaker Change: Hi, operator, this is <unk> <unk>.
Speaker Change: Calling from JM group I believe they're the speaker, who were presenting Jess now.
Speaker Change: Got disconnected there arent that Ian.
Speaker Change: Yes.
Speaker Change: Thank you very much.
Speaker Change: Please do continue to hold the line loss of speakers, we can act.
Speaker Change: Financial support.
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Speaker Change: Hi, Sarah.
Speaker Change: Hello, resistor Speaker line reconnected.
Speaker Change: Yes, we got disconnected sir thanks.
Speaker Change: Thank you. Your line is connected now Sir please do continue.
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Dan: Sure Dan.
Dan: And April China's National financial supervision and Administration Commission issued a notice on strengthening the management of Internet loan facilitation business of commercial bank to enhance the quality and efficiency of financial services, the new rule affirmed the positive valley.
Dan: <unk>.
Dan: The loan facilitation model and set a clear regulatory framework, helping the industry move towards a more standardized and concern practice.
Dan: Looking ahead, despite global uncertainties affecting China's economic recovery, we still see many positive factors. We remain cautiously optimistic for Q2 2025, we set our guidance for loan facilitation volume at RMB 37 billion to RMB $39 billion.
Dan: non-GAAP operating profit at RMB 660 million to RMB $730 million.
Dan: Jeremy wishing clinical sample fund, Tunisia and challenge each other offerings, you told us how would it change.
Speaker Change: With that I will now turn the call over to our CFO. Mr. <unk>. Please go ahead.
Speaker Change: Thank you, Mr Yang and Hello, everyone for joining our call today.
Dan: I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB.
Dan: And all percentage changes refer to year over year comparisons unless otherwise noted.
Yan: As Mr. Yan mentioned earlier.
Yan: The sustained robust growth momentum in the first quarter.
Yan: Cheating a record breaking expansion both in scale and profitability.
Yan: Drilling facilitation volume was $35 6 billion.
Yan: Representing an increase of 58.2% from the same periods of 2010 before.
Yan: Our net revenue was a $1775 6 million.
Yan: Representing an increase of 24% promising period in <unk>.
Yan: Moving onto costs.
Yan: Facilitation of servicing expense was 336 million.
Yan: Representing a decrease of 49, 6% from the same period of time Tony Hall.
Yan: This was primarily due to decreased expenses, you're intending to financial guarantee services.
Yan: Allowance for ongoing capital FX realms receivables and others was $17 5 million.
Yan: <unk> $2 6 million in the first quarter of Centennial.
Yan: Due to the additional oversee guarantees to company provided in the first quarter of trying to identify.
Yan: Sales in our marketing advantage was $674 5 million.
Yan: Presenting an increase of 87, 5% promising period of 'twenty 'twenty four.
Yan: Primarily due to an increase we borrow acquisition expenses.
Yan: G&A expense was affected 2.8 million, representing an increase of 14, 2% from the same period of 'twenty 'twenty four.
Yan: Primarily due to increased professional service fees.
Yan: R&D expense was eight eight points of $1 million compared with $83 3 million in same period of time to turn the floor.
Yan: non-GAAP income from operations was 606.6 million competitive ways RMB 316, 6 million in the same period of 2024.
Yan: Consequently rate.
Yan: Net income for the first quarter was 549 5 million representing.
Yan: Presenting or an increase of 97 point of 5% from 273 point of $1 million in the same period of Centennial.
Yan: Our basic and diluted net income per share.
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Yan: Basic and diluted net income per head yes.
Yan: 10 point to out competitive ways of five $4 16 in the first quarter of 'twenty 'twenty four.
Yan: We ended the quarter with 193 million in cash and cash equivalents compared with $514 5 million at the end of the previous quarter.
Yan: With that we can open the call for questions Ms. Sherry, our chief risk Officer, and I will answer your questions. Operator. Please proceed.
Yan: Thank you to ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again, please standby, while we compile the Q&A roster.
Speaker Change: Thanks, Keith we will now take our first question.
Speaker Change: This is from the line of <unk> Rama from J D. You assets. Please go ahead.
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Yan: Great.
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Yan: What was the at home automation to management to have that screening revenue reported this quarter.
Speaker Change: Two questions.
Yan: One there has been a noticeable chen of rising customer acquisition cost.
Yan: Across the industry.
Yan: Has the company's acquisition close the wall with a new rig concurrently.
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Yan: Yes.
Yan: <unk> narrowed the credit risk of new borrowers.
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Yan: Second question.
Yan: The Companys management planning to address the potential ADR jewelry.
Yan: And the what.
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Yan: To make it big.
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Speaker Change: Hi, I missed apparel, our answer to your first question on the driving customer acquisition costs and Mr. Huang will answer your second question on the ADR at the lifting risks.
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Yan: Starting from Q4 last year, the market has become a lot more dynamic and.
Yan: Overall macro trend has become a little bit different in Q1. This year. The market has turned the market as well as our competitor has turned into acquiring new customers. So yes giant have also observed a rising trend in customer acquisition costs. This development is the result of multiple factors, including the broader external market.
Yan: CLO growth dynamics and the company's strategic decision.
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Yan: So as mentioned earlier, the second half of last year competition among loan facilitation platforms have really intensified, but various acquisition channels.
Yan: The increased pressure to copper to capture new users and then move onto the external may external factors as the first quarter marked the beginning of the year, we have proactively positioned ourselves to supply our full year performance goal.
Yan: Select it really in a strong push for our user base expansion early on.
Yan: Okay.
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Speaker Change: Additionally earlier, Mr. Yan referred to the new regulatory framework, the new regulatory framework on governing loan facilitation.
Yan: <unk> actively exploring new areas of growth.
Yan: Have led to increased investment in experimentation and acquiring new customers and expanding our customer segments as a result derive.
Yan: Because of our acquisition cost to a large extent is a strategic choice.
Yan: We expect this to be reflected in both the scale and quality of customers acquired going forward.
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Yan: In regards to the new customer asset quality the concerns regarding the asset quality.
Yan: We will continue to monitor shifts in the user acquisition models across the traffic ecosystem, while staying focused on effectively reaching our target customer segment, who plan to strengthen our front end risk model modeling capabilities dynamic.
Yan: Dynamically adjusting our channel mix and further enhancing AI applications and data mining and credit risks identification.
Yan: These efforts aim to drive continued improvement in both customer acquisition cost and risk cost metrics for new bars.
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Speaker Change: I will answer the question regarding the AVR domestic risks.
Speaker Change: So.
Speaker Change: The risks the risk with Chinese ADR as being the look there have been ongoing concern for several years with the first wave of pressure starting during president Tom's first term.
Speaker Change: Boeing has returned to the White House, we have gained will have again observed renewed rhetoric and actions in the U S related to the potential of the lifting of Chinese ADR.
Speaker Change: So what we have done is we've engaged in extensive communication in consultation with our vehicle financial advisors and regulatory bodies to assess the potential risks of divesting.
Speaker Change: Based on early evaluation of various factors, including our industry business model ownership structure audit disclosure standards.
Speaker Change: We believe that the risk of delisting for its adding technology in the near term breathing remained relatively low.
Speaker Change: Okay.
Speaker Change: Please stay with me as well.
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Speaker Change: At the same time, we still have to be ready and propane proactively prepared for any alternative scenario.
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Speaker Change: Exchanges, we have conducted comprehensive assessment and preliminary prepare preparations across key areas such as shareholder structure accounting standards and corporate governance and this is all in line with the requirements for dual primary missing.
Speaker Change: Or secondary listing in Hong Kong.
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Speaker Change: As a company that has achieved meaningful scale maintains the core competitiveness and delivers consistent profitability timing technology is well positioned with multiple options in the words of President Trump, we do have cards to play.
Speaker Change: The volatility in the capital markets.
Speaker Change: We remain open to all possibilities and are actively preparing to ensure the company's long term sustainability and to safeguard the interest of our shareholders.
Speaker Change: I guess it went up quite a Chilean finance that concludes my answer to your question. Thank you Misbah.
Speaker Change: Thank you.
Speaker Change: We will now move to the next question.
Speaker Change: Your next question is from <unk> Chen from <unk> Securities. Please go ahead.
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Speaker Change: I have two questions.
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Speaker Change: And the second question is recently the financial regulators issued new guidelines.
Speaker Change: Loan facilitation and China.
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Speaker Change: Thank you Robyn.
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Speaker Change: Thank you Sean.
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Speaker Change: Thank you Michelle and I will answer the first question and Mr. Zhou will answer the second question regarding the new guidelines.
Yan: Mr Yan mentioned.
Yan: In Q1, we came out really strong with good financial results for the first quarter and the first quarter of 2025. The company achieved net profit of RMB $540 million, representing a year over year increase of 97, 5% net profit margin reached 34% significantly higher than the $18 five.
Yan: Percent reached in Q1 2024, this improvement was driven by several key factors.
Yan: Great.
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Yan: China, Shaanxi United Institutional.
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Yan: First reason is due to a significant increase in loan facilitation volume in the first quarter of 2025 total loan facilitation volume reached RMB 35, 6 billion up 58, 2% year over year, marking a new high since our IPO, the resulting economies of scale enable cost and expense efficiencies.
Yan: Due to improved net profit margin.
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Speaker Change: The second reason is ongoing optimization revenue structures as we've mentioned before our current revenues primarily composed of.
Speaker Change: Loan facilitation service revenue and currency related revenue.
Speaker Change: In the recent quarters, we have really strategically focus on driving high quality growth and loan facilitation services, which are at the core of our capabilities.
Speaker Change: In contrast guarantee related services carry lower margins. So we have been intentionally reducing the share of revenue specifically loan facilitation service revenue accounted for 83% of total revenues in Q1 2025 up from 56% in Q1 2024, while at the same time guarantee related revenue drop.
Speaker Change: To nine 6% to 195 down from 35, 6% in the same period last year.
Speaker Change: Shift in revenue mix has significantly enhanced our overall profitability.
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Speaker Change: The third reason is improved operational efficiencies driven by continued investment in AI technology R&D, we continue to invest strategically in technology, AI and R&D with a particular focus on deploying AI across various operational function. These efforts have laid a solid foundation for.
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Tony Banco: So again, James Thank you well meeting Tony Banco sitting onshore pricing yes.
Matt: Hi, Matt.
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Speaker Change: In terms of future guidance and outlook for Q2 were guiding loan facilitation volume could be in the range of RMB $37 billion to 39 billion. This represents a 54% to 62% increase in our non-GAAP operating income between RMB 660 million and RMB $730 million. This is also up.
Speaker Change: The increase year over year.
Matt: Really remain committed to delivering on the goals set at the beginning of the year.
Matt: First returning to a path of high quality sustainable growth and.
Matt: Second at the same time continue to improve asset quality and operational efficiency. We are confident in achieving significant profitability improvements for the full year of 2025.
Speaker Change: Akshay I can move on to Canada.
Matt: Thank you and we will have to.
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Speaker Change: As far as the new regulation goes.
Speaker Change: We think that they started drafting this regulation in the second half of last year and really became official this year overall, the new regulation reflects the.
Speaker Change: The regulatory recognition of the loan facilitation business model.
Speaker Change: Also setting higher standards for its management.
Speaker Change: We believe that encourages platforms to support licensed financial institutions and delivering much broader financial inclusion through better service.
Speaker Change: Better service quality, lower pricing and thereby promoting the industry's orderly development and effective risk control.
Speaker Change: Yes.
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Speaker Change: In order to help our institutional partners achieve their goals and requirements.
Speaker Change: Actively adapting to the evolving product requirements from our partner institutions in terms of price and structure.
Speaker Change: Even the large number and diversity of our institutional partners the responses from them to the new regulation varies to some extent that said, we're really nearing the completion of our product adjustment that implementation. So far for the partners, who are seeking faster alignment with the new regulatory standards, we will begin switching over.
Speaker Change: We're rolling out the updated offering shortly.
Speaker Change: Well, we expect to complete all the necessary adjustments EMEA author requirements across our institutional partnerships ahead of the scheduled deadline.
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Speaker Change: Thank you Michelle.
Speaker Change: At the same time, we'll continue to invest in new growth drivers.
Speaker Change: Across the region and really to expand the scale.
Speaker Change: <unk> optimized the product models and really further enhancing our capabilities in risk management and.
Speaker Change: Internal metrics and cost efficiency and to sustain high quality growth for joining technology.
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Speaker Change: Hope that answers your question.
Speaker Change: Thank you.
Sam Lee: Seeing no more questions I will return the call to Sam for closing remarks. Please go ahead.
Speaker Change: Thank you operator, and thank you all for participating on today's call. We appreciate your interest and look forward to reporting to you again next quarter on our progress.
Speaker Change: Thank you all again this concludes the call you may now disconnect.
Speaker Change: Okay.
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