Q2 2019 Earnings Call
Good morning, and good evening, everyone welcome to the candle Inc. second quarter 2019 earnings Conference call.
At this time, all participants are now listen only mode.
This call is also being broadcast live on the company's IR website.
Joining us today are Mr., Sean Healey, <unk>, Chief Executive Officer, and Mr. Yang Jie Li.
Chief Financial Officer of the company following managements prepared remarks, we will conduct the Q and a session.
Before we begin I refer you to the Safe Harbor statement in the company's earnings release, which also applies to the conference call today management will make forward looking statements. Please note. This call is being recorded I would now like to turn the conference over to Mr. Jie Li CEO of Tango. Please go ahead Sir.
Oh gosh, it's kinda <unk> DRG two would have bought they'll help me out of everyone welcome to <unk> earnings call today.
So one thing just a little follow up on Sunday Mall, you more top showcasing Georgia, all true Clinton, usually you can jump on easier when you have somebody else do what she says Oh, you mean do you watch <unk> <unk>, who did she say show me that until that's done she says I'll shut down why that's all we appreciate it.
So what's the then current valuations.
Jonathan pop up to 19, Chinas automotive industry continued to underwhelmed Cincinnati fundraising macroeconomic environment actually trying to U.S. trade dispute decreasing demand on industrial uncertainties caused by new national emission standards. Your body hostess. All so time will tell you were sound card you Jeez, you wouldn't pull teaching you're trying to work on the football. She don't you called a cultural shift down just ends up being GE, Chicago, Washington, <unk> Jeter would you talk a little about please the external pressure we remain committed.
<unk> strategy and as a result, our business achieved steady improvement over the past several months. During Q2, we continue to focus on strengthening our core competency in auto loans the city patients to visit my refining our krona over any spending all channels. We also accelerating the development of our aftermarket services, well driving our auto insurance visitation business when necessary.
In addition, we thought a deepened our cooperation with Oh, Oh poor strategic partner adult punish it would I BBC viewed it significantly south. Moreover, we continue to establish new partnerships with founding partner than Oems.
Are you doing your RG <unk>, sorry, we didn't hear so no one thought on a Sunday and Sunday Georgine Anton She told me turns out since the Arkansas.
She's don't need Biogen's went away through the horses here because yeah. So gorgeous until it was the one that you can call political year. We don't do you didn't discuss yet arch into its own to your moved up probably left a lot of oil and the result of <unk> efforts in these areas. Our total revenue increased by 42.3% year on year to easier ones reasons on our latest junior RG <unk> total once and she said she thought that I'll walk those.
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Sorry that you laid out you know somebody I know, sometimes you'll see that the June but time will tell you that you do what you called juicing call joining call, providing how long something ongoing all done both geological Chuck how could go see.
First I was off as our primary growth driver our auto loans Biddulph Woo Jeon RG. One we know we often quite trends will send somebody sunglass hosts it how important the mpower and judging goes on the whole geopolitics coordination George and goats changing goes on from pad, we think while she's searching or hoping that a few ways. She don't seem to have ended she said she knows how will you Sanjay in charge associated gene shotguns. It. So once you guys, how well it's actually margins hold up would you use. It also just two more one would think she goes on zee. Okay. So you also forgot BB guns or buy ones that you'll see the mill. So John Congrats on keeping the question do you what do you teach you sound Bhagyam also logix thoughts would you how it works is when the Mpower for example to sheet principal what doorway to travel with the Fuji.
Just how water on that she said you motors huh Geo you'll hear that I hope those yet jets the arch to more total portfolio you Oneto Gee, how do you see that stood out and the and the.
Yes, Jim Sundin shouldn't put it was up four one so with Jim Bob You said, she that shows onto to power systems on thousands of parts, partially our 70, we continue to expand our aftermarket services, while driving our auto insurance facility facilitation business. So the net settle in Q2, our aftermarket services business contributed 35.9 million RMB or 10.7%, while total revenue the auto insurance facilitation businesses in particular accident insurance, an anti theft assurance services performed very well completing 500 and as far as 5817 transactions in the quarter up 88.2% sequentially.
These aren't secure one for treating non OCO funded but not all of them in terms of what's on we saw just a windfall docomo Washington today. She told that she was a general booking that thinks this year you know getting dot bungie to full houses your phone car total again by you guys should hopefully will lead you went on new projects and just how much did you hold all being towards how good the shake out you don't lose you touch on what kind of sentences OCTG to show you Googled Geving instances that need that drove always take your follow up 80, we facilitate over 250 car purchase transaction for license the DD drugs in the second quarter. We also provided DD drivers with a complete suite, so affordable solutions, including Costco thing auto financing insurance and licensing.
So what does your calculations based on the tremendous under the bundle you treating cheese, so Joe you towards the yield folklore.
We try to go to work on bunch I'm sure as Chery automobile. We are also currently in the process of negotiating partnership with additional domestic and foreign Oems.
So that gives you the total used so so quarter to quarter, I mean, Google or could you achieve your full blown powder coating TCIL children. So.
Got it and dose at the time, which I assume on could you found me I'm really talking about Tony Tony will lead up into generating that will materially cogency suited to door. She is OTI mobile that you're seeing.
It is also worth highlighting that we were recently certified by the Ministry of Science and technology as a high a new technology enterprise. This is a powerful endorsement of our ongoing efforts.
Total financing technology innovation going forward, we remain committed to advancing our auto financing services with data and technology.
Geo to the full year 2000 gold Taco Bell Harbor, given your warmer tone to that woman gentlemen, bottini four houses how would the high yielding gente way.
Although the auto industry still facing challenges and macroeconomic uncertainties do exist. We are confident that as we continue to execute our growth strategies efficiency for actively provide high quality services to our partners and car buyers and effectively utilize our ample cash reserves, we will further consolidate our market leading position going forward.
What is your thoughts as Gysle Shellum angiotech, along with the CFO together with our TSR sharp Consequently told us how got hit with that I will now turn the call over to our CFO , Michael John to take you through our financial performance in the second quarter.
Thanks, Joe Hello, everyone and welcome to our second quarter 2019 earnings for.
Before I started to review our financials for the quarter. Please note that unless otherwise stated all numbers a RMB terms at all competitors on a year over year basis.
Although cost sales in China continue to punch due to uncertainty in the macroeconomic environment and escalation all the China US trade War, we successfully launched through the tape maintaining our strong growth momentum and delivering another quarter of solid financial results.
Our total revenue in the second quarter 2019 were 336.3 million, representing a year over year increase of 42.3% outperforming the high end of the company's guidance by 6.8%.
Our aftermarket services facilitation business also continued to wrap up with our revenues going to 35.9 million.
Cost of revenue in the second quarter last 125.8 million as a percentage of total revenues cost of revenue in the second quarter increased to 37.4%.
34.4% in the prior year period.
This increase was primarily driven by a higher amount of incentives paid to employees each financing transactions.
Sales and marketing expenses in second quarter increased to 44.5 million from 37 million in the prior year period, mainly due to increases in travel expenses as we further expanded our operations and share based compensation expenses.
As a percentage of total revenue.
Sales and marketing expense in the second quarter decreased to 30 point.
2% from 15.7% in the prior year period.
General and administrative expenses were 43.5 up 43.4 million or 15.9% of total revenues in the second quarter compared ways.
31.4 million or 13.3% of revenue in the prior year period. This increase was mainly driven by higher share based compensation expenses during the quarter.
Research and development expenses in the second quarter increased to $12.3 million from 9.5 million in the prior year period as we continue to expect our R&D efforts and invest in product innovation.
As a result of our strong revenue growth and a successful optimization of cost structures. Our income from operations in the second quarter increased by 17.3% to $84.3 million from 71.8 million in the prior year period.
Our net income in the second quarter was 94.6 million, increasing 46.4% from 64.6 million in the prior year period, our non-GAAP adjusted net income, which excludes the impact of share based compensation expenses increased by 66.7% to 116.9 billion in the second quarter.
On a per share basis, our diluted net income per adss was RMB two point sixx at our diluted non-GAAP adjusted net income per Hds was RMB 2.75 in the second quarter 2019.
Moving onto our balance sheet.
As of June 32019, we had a cash and cash equivalents of 1000 $609.6 million compared with 2170 8 million as of March 30, Onest 2019.
The change was due to that the company invested certain amount of cash in term deposits over three miles or better cash on cash returns.
Looking forward to the third quarter 2019, we expanded our total revenue to be between 300 million RMB and 325 million RMB. Please note that this forecast reflects our current and preliminary review on the market and operational conditions, which are subject to change.
This concludes our prepared remarks, operator, we're now ready to take crushers.
Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one on your touched on China. If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then too.
In addition for everyone's convenient if you wish to ask a question. Please ask your question first and Chinese and immediately repeat your question in English.
We will pass momentarily to assemble our roster.
Thanks.
[noise].
Again, if you have a question. Please press Star then one.
First question today comes from Chinese visa that.
With can't go. Please go ahead.
Oh, Oh during two months in Georgia, She went to <unk> or should we go to <unk>.
So when once used to acquire <unk>, that's what people sometimes unnamed off they seem the garage I mean, if you go in you said you are holding like onto anything else. She dollar hurts youve heightened the homes that treatment. So the two part domain timetables and it seemed like I old Navy when it's in the Monaco warm and chat lines up.
How about in detail what makes you. So its household at some point during that time.
10 minutes earlier.
So my question is regarding the.
Our partnership with I think between.
Wondering how insulated.
Product and.
Lowing yield that Weve facilitates lease I think you've seen.
All right.
Yes, our outlook.
For the for the segment in the second half of the year, so regarding the cost sales and our product development. Thank you.
How should you Oh look we've gone into the single which is easily you also thought though.
Well, that's all the time, he will unfold what tissue Tommy Hilfiger, Jason Giambi.
No go when we gave the guidance on the digital and what else are you that those affiliations RMB.
Just hoping that doesn't touch you don't you don't.
So were features she told me last one on the take rate to sit by bunch it won't all yours.
So it gets are already enjoying yet your essentially your whole healthy tissue typing in late two funds on top of machine.
Okay irritation overtones our country.
Good warm what do you take just how many when when you go to our chartering just on terms that you want to push it on page G tampering the sound Sham Patriots.
Archie you couldn't totaled just over to Jikun bottomed out your top on that you can do.
Thank you for your question. So I'll answer your question for my one regarding your first question our partnership with IVC well, we have seen a working with SVB on both subsidized and non subsidized front right now the 1 billion.
All in all based on the non subsidized the loan loan product for non subsidized the product right now the take rate is about 5% and Uh huh.
As I said the.
I think the the unfolding.
Yes, the non subsidized loan products and by now the amount is over 1 billion and.
Regarding the subsidized products, we have signed agreements with the Oems, we have completed system configuration as well.
Our product launch training with our OEM partners and we are now engaging with demo mobile yet.
Okay well. Thank you all go wouldn't you.
Q1 will go Honda Hallador huge he says that on tissue control just how the tissue the yield was on the Kaiser now. So two questions you know Tim basis household LG. So you know Shangdong William County has a U haul so ship oil Ahana youre content has on the tissue.
So who knows how many years ago, when we in Chicago transfer to be shoe on Tom will also be going on a little harder.
Good how than OCA hallador functional our total over the hurdle.
Regarding our engagement with other banks right now I I mean with.
Hi, PBC, we are working very active fact active base of non subsidized the product that we are also working on subsidize the product as well and the bank. The other banks in the market today have limits. This is therefore reseller partnerships as for example, like a bank of China and stuff.
Construction bank of China say, they have expressed a strong interest.
And actually the fact, they all self.
Both ferrous John subsidize the product resources.
In fact, they are already offering them subsidize the products for yet in the China market. So now Thats why we are now actively engaging with Doug and I hope that with the better.
Incentives and better conditions for collaborate and we won't be able to establish our partnership with the other back with the these are the banks successfully very soon.
Okay flowing into single wouldn't you shop on the undertaking walk.
So were wondering Gee terms will follow our domain mall, you more harshly, Georgia, all galluccio part and just you know you're going to see so for territory accordingly.
Are you doing HR finance to what you just as an example of what gene while still for $2000, which is a shopping center that energy systems showed out whether it's how we treat shift towards hosted a loan to de leveraging tool.
Tony This is due to the sharp on Yandex tertiary one where people accountable.
Regarding the third question outlook for the second half well.
Lots of a negative factors impact.
History, so far.
So in the macro economy, and the trade frictions between China, and us increasing consumption switch over from the National five emission standards National six emission standards as well that reduction of subsidy for new energy costs. All these options now.
Impacting negatively on the Chinas auto market in the second half of COVID-19, although the government has launched and some policies to stimulate car sales, we have not yet seen any turning point in the market yet Adam China's market is yet to recover the oversea game, we are not very optimistic about chinas auto market in the second half.
We have to say good person Chevron Neil Warma Junkies, you totally goes how all of the shares. So she'll forward CDR you offer we charted tissue chart, our Korean torturing. The total booked are similar with the youth geological virtual tons of Cotwo sources, how would the whole year why people are doing the work I want to turn more intra quarter to see that turns on a company.
Good thing these challenges in the second half will continue to be fast expanding our dealership network.
Optimizing our service quality and efficiency and advancing our technology through innovation.
As we continue to deepen our collaboration with more financial institutions and Oems we have.
Your next question comes from Joey Zoo with Morgan Stanley . Please go ahead.
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Hello, <unk> salary familiar with from a dream part Jewish our occasional how many of them with you I'd be were for a rule could go.
Oh come D'amico things out around taekwondo shouldn't you can go through quarters, we'll make it goes how children you forgot you talked on the food out there at Harvard Brown contingent on what iOS from out of <unk>.
And I'll briefly translate my question and as currently covered dealer groups has already flowed out going forward that whats the management plan on an operating efficiency improvement front and such as increased Ah dealer coverage efficiency off the salesperson or increase the number of credit applications for dealer Oh, no more zio toll no buttons on since you know going to jump to like genes you. Let your he's got you know she's a woman a one where the shows a woman she towards suntan liens that sounds to me that sounds yeah, well once I know, but she also lower than quantity G. She called them they're living they showed me Shaw go to line No go no go or if we are to quit doing she did that don't like to call them deliver they showed it I don't know Oh God knows assays a woman a woman go no go Oh, how long that takes you to hit that hit our Honda hooked up real quick you was a woman sent me a good team shoot Oh Gosh Gee goes how can we talk with you go yeah, we gave them with that.
I showed him that you show you won't really change also owning their loans.
Yeah, we won't look woman to another change or something happens that she should doses that Sanjay and he showed the art chanteuse. Each Argentina is our commentary, it's really encouraging to see Joel what beach, our child, yet no. One went to that thought how soon do you on what's the use it or try way look good to hear it you know it sounds you can.
It's really a GE loans or not to go to deal with it sounds I shop, who does how does it.
No what do the Yodle will not go talk with them what the top quota not jump to one when she goes on long law, just don't bundled deals on the Albertsons are turned down well good Youngstown warn lot than you thought.
Not for us either de Novo tier cities. They have strong demand for Casa thing and also for funding.
Okay. So that's a strong competitive advantage in all these areas. So thats why we are trying to leverage these advantages to me right now for us Ddas demand forecasts only thing and something right now these kind of problems.
On a small scale that we have.
So the pilot program expense, we won't be able to further expand our dealership networks exactly and also well be such a program will help improve the d. The stickiness with I can go on with that we are confident that our business well for that sort of grow very strongly.
With.
Okay. That's all from me thank you.
The next question comes from Michael Li with Bank of America Merrill Lynch. Please go.
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Go say revenue upon me and I Hope you got housing to all kind of have to aftermarket necessarily thought usually I think ought to be done, but that's when they get opened or how did you buy your shares what you'll sleep Bob.
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You only woman touching and 62, she's very well there.
Okay. So how you can call that the only time you know so it's off to a cashier yeah.
No particular site homepage and how does he got its own surging done such a good job in Niger Shami will mcallen founding partner I see your job you can't Yoshida. So you just sounding the alarm that she is a woman that timing, but jumpy ticketing versus how much you how to change it.
I would say change, we'll let Johnny she attempting to manage down even use it concert up on its new good thing over containing a leading doctors is that the CEO Ah yes, she dollars or do we have and can go handset.
You got a certain type of security dicing, the higher you could change watching that to me you got all her book I'm not Super wasn't the other one more quick ones without it you do other sources. It sounds I accordion feature you isn't changing to shame quote before she goes up and this is you cannot do you find that you got shelf data yet of course, what thoughts are that you could use only coffee that you're going to jump into so that you find in Georgia that you have and you can switch invoice is supposed to go down he was shot show that.
Now do you want them and Johnny what have you done that you'll see each year and that's a good idea well aren't you Banja when the data from the GE has answered all your so you just bought a equal fund that degree shellfish. Each of them is the goal that you only got to shop. So darts as I knew eventually it's usually bought Eagle majority that sometimes it's also the journey for shock effect. So you noted that you see as a woman charge will let Johnny you got just insights into Velocigene wash out the budget I assume that you got Charlotte Eagle Awfully, which you will see it wasn't particularly good as if you are doing as well Gee woman that Johnny but instead of lunar new year goal on that you. All these years ago I mean does it she said.
No one will create larger ones that younger more standalone that down even though you've got you ultimately are they evaluating the affiliate you're suing them along with that you panic part of your data at each year.
Total Chu.
Good idea on when they see what she dog anymore should I think element between cash on the unique fit on generally are the you got lucky.
So what are your thoughts as to.
Take the telephony medallion, Oklahoma take a hosted on a giant Eagle Ford goes you did say in guys you've got on whether to me, but you will see that.
Thank you.
Michael for your question I will answer your question your question and actually I think the reason for our strong growth in those.
First in Q2 in the first half actually there are several re contributors on drivers. The first one the cost of funding for us.
Kengo and indeed, so that mean that means we have a better or more we are even more advantageous position in our partnership with bank of Shanghai, then with Alan on the partners and Thats why we are.
We are more competitive now than our industry peers in time in terms of our cost funding in the in this regard and also from the product side. There is another piece of information not meeting our CEO touched upon earlier that in June our non subsidize their products with CBC increased strongly in in in fall. So that's why.
On the product side, we have the.
Strong advantages and the second reason is that taking that.
First half indeed, the car market and the auto market in China under performed and whatnot.
Our total sales were not very high however in the index. Indeed stay they need. This cycle. We are we are also experiencing those peaks and troughs and for example in Q1.
Latif.
In about a January we saw a small size the rebalancing the auto market.
That is the auto sales picked up for some brief brief period of time I think the reason was that was mainly because of the lacking is because there are some consumption that should have taken place in late night. Today takes now one pound to that January as Q1 now COVID-19. So these lacking infat has done that so these the rebound in the car markets and.
And can go has successfully taken advantage of Lisa a rebound. In addition, we have.
Earlier in fact is strongly to improve our dealership network management that is we are now focusing more on direct coverage relevant as Pete. So this is another reason that we can take advantage of this opportunity to achieve certain end market performance and in addition in June and now this year, we notice and not a rebound in the market I think at least rebound was triggered by the switch from national emission standard five two national emission standards, six and because of leases, which over a lot of the Oems are starting to promotional programs for their national five based car products and so thats why there was still a strong a brief period of strong sales in the market again, and again Tangoe was able to catch this opportunity and improved our business.
And the third reason is that.
Well, it's it's not anticipating tangoe has.
Made a lot of assets to better manage our channels. For example, we have changed our channel management model that we have also impacted a lot to improve the dealerships did finish with tango and sales in that despite the lower sales as a whole in the car market, we are able to improve our market share in his back through our dealership.
In our dealership network and for example, our single dealer or single store penetration rate has successfully improved thereby improving our market share. So all these reasons our country drivers of our strong growth in the first half of this year or in addition, there is also less contribution from our aftermarket service as well.
John Let me go through it you go into customer.
Sure No I didn't see that whatever is going to show how your thoughts are shying. How do you go to your two d., that's sitting on the formula to determine the your slot on each of the business, though the horseshoe sure. Daniel we showed or for you. How do you get you get something do you want to go into detail hotels, which is a whole bunch ofer I want to repeat that thinking, but how should we you address Takeda does incumbent D.
Alcohol mix that we should acquire yard actual dano shoulder fake you can do a Google should the hardness and you were trying to sell on letting the take rate or tell you got two with regard to your continues on the revenue yes. The the patches is sue on the timeshare supergene duties.
Sure Todd.
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You got it.
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Yeah, Hi, Bulkers.
I think this year high so it's all good sign home Holzshu that youve gotten wasn't on the financial review.
You'll see on the Shiva performance MTD.
This is something we're finding that trigger chart would identified the funding for the customer and of course, the bank pays Pic take rate to can go so lower cost of funding does it mean that the take rate received by cash flow from the banks will increase in addition, we expect.
At the end of the interbank interest rates to go down in the second half actually has gone down.
In the past few periods. So what is your outlook for the second half in terms of low cost funding well the cost of funding will it continue to go down and while laughing intensely to higher take rate can go. So the answer is as follows first of all indeed as you did have described the funding cost.
Can I mean, lower funding cost means that a higher take rate for can go and the second point I would like to make is that actually lower cost of funding is all.
Another benefit that is to the customers the.
80 are offered to customers go down with the lower funding costs and that improves the chemicals that stratasys missing that on the product side as well as on the channel side. So overall speaking first of all higher take rate that mean, it means a higher revenue for Kendall and second the lower cost of funding I mean, we are more combat competitive on the channel side as well that's why we have seen growth on both on the price side and also on the volume side for Kendall and the second point I would like to make is that indeed.
We expect the overall market cost of funding to go down in the second half and.
And regarding our partnership with I think the bank of Shanghai, Yes, Indeed live.
As the market into.
Market the cost of AWN is going down of course, our Cardinal funding with these partners will go down as well.
TIGIT almost everybody thought.
Thank you.
The next question comes from 10 Ho with T.H. capital. Please go ahead.
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I now want to wake up and see that you're going to see not only mine stand on its own woodside make or the team called within sound back He's actually got.
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Not much more courses and so they need and the like are you able to find out what comes down Jones themes and cooking soups. We wouldn't she did you see your contract means your plans on humans refineries that.
So that leaves a trade war, China as increased the terrorists importing components.
From China from flat, because there is going to impact could dealers and houses. It's the impact you. That's number one question number two reason today, we see tightness on national.
I love the shoes, so what your future development and to how can you make sure you're not.
You know work together with some you know up Huffman a local regional bank.
So good question third question I recently, we saw some higher delinquency rates from consumer borrowing and lending and Jed I wonder.
Your cooperation with the state Bank do you actually what's the term up email you or enter into them for those delinquent loans. Thank you. That's great question through the standard.
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Does the way going that you're saying, you'll you took what they don't know what change in charging the initial not well mr. Joe can JADAK should I will miss his any systems or does a woman doesn't look great brands such as a woman so shorter qualification onetime Todd no tumble to beat your door does a woman then the buttons are still should I assume that dumping boat show none of us will ensure them races that you want to try to take off.
Just the impact yet while we do expect to see impacts that so far we have not yet seen the you know the real impact not yet the reason I think it's mostly because many most of our customers. They are buyers on for domestic domestically produced the card amongst all the cost to them as they are located in the lower tier cities. So I think not so it takes time for such an impact to transfer you know to such a customer segment and to such a market segments. So far we have not seen the no substantial impact yet also so down in Chinas economy is thought to have an impact on the market.
For example, well Kengo indeed has outperformed the market as a whole. However, we have not seen the growth right. If the exceptionally intense especially in terms of sales as high as we expect it to be despite the heavy investment we have made in improving our sales sales productivity and improving our channel and so.
The growth rate is not as high as we have expected it to be in addition to control risk. We have you know region a lot of applications from our customers. So rejection right from Kengo actually has increased this also shows the impact of the.
Economic slowdown on our business I can't go in order to better control risk as we have you know rejected more customers than many of our peers and regarding our partnership with the smaller banks are our partners.
All major banks in China, we have no small bank partners.
But the second there was.
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Hi, good farming carnage alkali John mentioned that he was young watches well me a current dollar one that's I'm glad that you've got oil side, it's all over the funding source juices.
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Total funding they got when I talked to you guys.
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A buyback that's why it took us a woman second cohort going sign contacting them, which entity with your dog Entendre Jami facilitation services. There are two types of fulghum facilitation services well with a one one is the first one is oh can go take the credit risk and the second one is that Kangel does not take no credit risk and we because we have started our collaboration with I. CBC and Chicago Bank not for long.
Oh that is we are still you know at the beginning of our partnership can go decides to take calls the guaranteed responsibilities that is so we take all the credit risk in other words, if the loans overdue kengo or have to buy back the loans.
At the time to time, Doug Tim Dunbar, you were going to do so sandy.
Just to go back to do that.
And I think Joe you don't know when or where youre getting quarter to go take rate and I would however does he got a thing that you got.
Oh, Yeah Johnny.
Tonkel.
Oh shut off I know you shortage will this is what we think the shuttle tanker Joey does either consider it as always let's go to short term goals.
Yeah, Hi, John D., but that whole guy here, who can take two during the quarter of each year.
Thank you times suggests a hope to me.
Yes, I mean, you guys. She gets pulled I refuse.
Johnny Good did you guys say that she can shop or will this issue on that goal titled machine like Goto or quite as large machine right.
Ill, let Johnny which over the last year, what that's about.
[noise] works the credit risk, but he tonne tango gets a higher take rates from the bank.
Such a product in order to compensate for the credit risk that we have to take off and that such a model as I've described or is that just before the beginning of our partnerships and we our strategy is that well as we show our founding partners. Our strong post on performance then we will be able to renegotiate with our founding partners of these times, especially when we review our performance after a certain period of our collaboration so okay is that in the future. Then can go well focus more on products that are products of which we do not take any credit Rick.
Sure. Thank you.
This concludes our question and answer session I would now like to turn the conference back over to management for any closing remarks.
Oh sure Nigel.
Miserable when you Uh huh.
[laughter] you have no more questions then that closing for the macro that today's earnings call. Thank you very much.
Thank you everyone.
This conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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