Autohome Inc

NYSE:ATHM

Earnings Call Analysis

Autohome sees steady revenue growth and strong profits

In Q2 2024, Autohome's net revenues grew 2.2% year-over-year to RMB 1.87 billion, driven by a 33.1% increase in online marketplace revenues. The company maintained a 30.6% adjusted net profit margin with an adjusted net income of RMB 572 million. The innovative business saw significant breakthroughs, particularly in data products and NEV segments, which nearly doubled in revenue. Autohome is expanding its reach with the Satellite Plan, leveraging flagship stores as central hubs to improve service penetration in lower-tier cities. Future plans include focusing on user-centric approaches, harnessing innovations, and maximizing synergies with Ping An Group to drive high-quality development.

Revenue Growth and Profitability

In the second quarter of 2024, Autohome achieved a steady revenue growth of 2.2% year-over-year, bringing total revenues to RMB 1.87 billion. This growth was primarily driven by strong performance in the online marketplace and other businesses, which maintained double-digit growth, accounting for 33.1% of total revenue. Notably, the data products and new energy vehicles (NEV) segments saw impressive increases, with revenues rising over 15% and nearly doubling, respectively. The company reported an adjusted net income of RMB 572 million, translating to an impressive adjusted net profit margin of 30.6%.

Innovative Business Strategies

Autohome is shifting its focus to innovative business practices, culminating in the expansion of its new retail model through the 'Satellite Plan.' This initiative aims to establish a network of satellite stores in low-tier cities, leveraging existing flagship Autohome Space stores as central hubs. The goal is to widen market access and enhance service delivery, thereby catering to a broader consumer base.

Enhancing User Experience and Digitalization

Further enhancements in user experience are evident through the introduction of smart, digital business management tools that support dealership partners. This platform, featuring advanced operational management capabilities, has been designed to improve dealership efficiency and customer satisfaction. Autohome's collaboration with Ping An Group has matured, offering a complete service system for car owners, aimed at improving user experience across the automotive lifecycle.

Market Conditions and Competitive Landscape

The automotive market in China has been characterized by intense competition, particularly in the luxury segment. A notable reduction in price competition is anticipated, as some luxury car brands withdraw from aggressive pricing strategies after more than 500 days of price cuts. Despite short-term challenges, the outlook remains positive, bolstered by new government policies that increase subsidies for NEV purchases. The subsidies have doubled, with RMB 20,000 available for NEV purchases and RMB 15,000 for small internal combustion engine vehicles. This initiative is expected to encourage higher car consumption.

Future Growth and Shareholder Returns

Looking ahead, Autohome aims to capitalize on its strong market foundation and diversified offerings to explore further growth opportunities. The company has outlined plans for annual dividends of no less than RMB 1.5 billion over the next three years, reflecting a commitment to return capital to shareholders. This builds on their recent strategy of enhancing the dividend payout ratio to 50% of net margins, indicative of their robust cash position, with liquid assets totaling RMB 23.47 billion.

Earnings Call Transcript 2024-Q2

[Operator]

Ladies and gentlemen, thank you for standing by for Autohome's Second Quarter and Interim 2024 Earnings Conference Call.

At this time, all participants are in a listen-only mode. A question-and-answer session will follow management's prepared remarks.

As a reminder, this conference call is being recorded. If you have any objections, you may disconnect at this time. A live and archived webcast of this earnings conference call will also be available on Autohome's IR website.

It is now my pleasure to introduce your host, Sterling Song, Autohome's IR Director. Mr. Song, please go ahead.

[Sterling Song, executive]

Thank you operator, hello everyone. I'm Sterling Song and welcome to Autohome second quarter and interim 2024 earnings conference call.

Earlier today, Autohome distributed its earnings release, which can be found on the company's IR website at ir.autohome.com.cn.

Joining me today on today's call are Chief Executive Officer, Mr. Tao Wu; and the Chief Financial Officer, Mr. Craig Yan Zeng. Management will go through their prepared remarks, which will be followed by a Q&A session where they will be available to answer all your questions.

Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provision of the US Private Securities Litigation Reform Act of 1995. Forward looking statements are subject to risks are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to those outlined in our public filings with the US Securities and Exchange Commission and Hong Kong Stock Exchange. Autohome doesn't undertake any obligation to update any forward-looking statements except as required by any applicable laws.

Please also note that Autohome's earnings press release and this conference call includes discussions of certain unaudited non-GAAP financial measures. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in our earnings release.

I will now turn the call over to Autohome's CEO, Mr. Wu for opening remarks. Please go ahead Mr. Wu.

[Tao Wu, executive]

[Interpreted] Thank you, Sterling. Hello everyone, this is Tao Wu, CEO of Autohome. Thank you for joining our earnings conference call today.

[Interpreted] In the second quarter, Autohome's net revenues grew steadily, user traffic increased noticeably and our innovative business continued to make breakthroughs, driving the continuous optimization, an upgrade of our entire business structure.

[Interpreted] Specifically, in the second quarter, total revenues grew by 2.2% year-over-year to reach RMB 1.87 billion, of which, revenues from the online marketplace and others businesses continue to maintain double-digit growth year-over-year, reaching 33.1% of total revenue. Notably, many business lines such as data products and NEV have experienced robust growth, with revenues for the quarter increasing by over 15% and nearly doubling respectively year-over-year. In addition, we have maintained a healthy profitability while driving the developments of our businesses and fulfilling our commitment to provide stable shareholder returns. In the second quarter, adjusted net income attributable to Autohome was RMB 572 million, allowing our adjusted net profit margin to reach 30.6%.

[Interpreted] In our innovative business arenas, we have further expanded our new retail business reach, increasing and intensifying our penetration from high-tier to low-tier cities. By leveraging our established flagship Autohome Space stores as the core hub, we have rapidly initiated our satellite plan. This plan utilizes our Autohome Space doors as the core hubs to extend our reach into neighboring low-tier cities, creating a network that radiates from single point to cover an entire region. This network dynamic not only accelerates the reach and depth of the sales network, but also significantly broadens the scope of our services, enabling us to access a broader market and wider range of users. On digitalization, we continue to drive product innovation and upgrade by leveraging the capabilities of our smart series products which introduced a comprehensive digital business management platform for our dealership partners, encompassing everything from infrastructure setup and development, digital tools empowerment and the implementation of sophisticated operations management, providing our dealership partners with an advanced and systematic digital support system, allowing them to achieve increased efficiency in their business operations. In addition, our cooperation with Ping An Group has also entered a new phase. During the second quarter, we integrated various resources, including car purchasing tools, content and vehicle services to establish a comprehensive service system that spans the entire lifecycle of car owners providing users with a convenient one-stop service experience.

[Interpreted] Looking forward, we will remain focused on our user-centric approach, harness innovation to drive development while continuously exploring new models of online to offline integration and in the process, strive to provide users with even higher quality, even more convenient and even more efficient service experience. Over this course, we will fully explore and elaborate the extensive resources and technology of Ping An Group to seek even greater synergies and identify additional opportunities in the automotive ecosystem. We believe that with our solid business foundation and diversified range of businesses, Autohome is well positioned to achieve a new phase of high-quality development.

[Interpreted] With that, I will now turn the call over to our CFO, Craig Zeng, for a closer look at our second quarter 2024 operating and financial results.

[Yan Zeng, executive]

[Interpreted] Thank you everyone. Thank you Mr. Wu, hello everyone. This is Craig Zeng, the Chief Financial Officer of Autohome.

[Interpreted] In the second quarter, we continued to deepen our focus on enhancing our content portfolio, revitalizing the content through 2 categories, professional content and broader general auto-related content, establishing Autohome's new IP matrix.

[Interpreted] For example, regarding professional evaluation, we have expanded our content to include targeted evaluation for hybrid vehicles, NEVs and ICE vehicles. On general auto-related content, we've expanded our design, automotive culture, off-road vehicles and other content for unique scenarios, resulting in the creation of eight IP programs, including So Fast So Test, Top 10 Horizontal Evaluation and [indiscernible]. We are also integrating live streaming and short video format into our content to form a more comprehensive content matrix that caters to our users' diverse consumption preferences. To-date, these eight IP programs have garnered a total exposure of 860 million views across the entire network, significantly enhancing the influence of our platform.

[Interpreted] In addition, by focusing on the new vehicle launch events prioritized by OEM, we've developed a set of content offerings that spans the pre-launch, during launch and post launch stages of each new car launch. This approach begins with exclusive 3D car model speculations during the pre-launch progressing to an in-depth introduction during launch, and then customer type evaluations post launch, effectively prolonging exposure times for each new car's selling point. This not only helps CN customers efficiently promote their products, but also allows Autohome to gain influence among CN users. According to QuestMobile, our number of average mobile DAU reached 67.91 million in June, an increase of 8.3% from a year earlier, and scoring our leading position in the auto-media vertical.

[Interpreted] Turning to NEV, as Mr. Wu mentioned, we initiated the satellite plan in mid-May, a strategic initiative to establish satellite stores in low tier cities adjacent to the flagship Autohome Space store. This initiative establishes a 1+N synergistic service ecosystem where a single core Autohome space store could support multiple satellite stores, thereby broadening our service reach to more regional markets. To-date, we have established old home space stores in 28 cities, including first tier and super first tier cities across China, achieving full coverage in these key urban areas. Additionally, we are piloting and testing the water for the satellite store model in five cities through effective collaboration between core Autohome Space store and these satellite stores. We've developed a comprehensive sales network, upgrading the new retail model from a single point to an upgraded, comprehensive model. We are confident that the ongoing implementation of the satellite plan will enable us to influence and serve more users in low tier cities.

[Interpreted] Even after the national trade-in for new policy, we leveraged our Autohome Space store and holographic exhibition truck as platforms to organize the 100 cities trade-in for new car buying festivals, providing consumers with immersive car searches, multi brand comparative test drives and other services. The event brings even more mainstream NEV brand models and used car exchange services to regional markets. Spanning two months, the festival featured over 100 offline auto shows and attracted more than 500,000 consumers. We are also pleased to see that revenues from EV brands saw a continuous rise in the second quarter, nearly doubling compared to the same period last year, consistently outpacing industry growth rates.

[Interpreted] In the digital realm, we are embracing the trend of refined operations and have introduced smart digital connection, a data product using model algorithms to improve user profiling, helping customers to more accurately identify target users, assess vehicle replacement intentions leading to increased store visit rates. Smart test drive, another data product, integrate software and hardware and AI-driven quality control capabilities to address the customer pain-points of information, opacity in test drive scenarios. This solution provides dealership clients with digital management tools covering the entire test drive process, enhances the user test drive experience and helps dealers establish a closed loop, data-driven ecosystem for their offline services. During the second quarter, total data products achieved an increase in revenue year-over-year of over 15%.

[Interpreted] In the used car segment, our vehicle condition inspection tools have seen continuous momentum with the proportion of strictly verified high quality vehicles in our system consistently on the rise. In the first half of this year, there has been an increase of 55.4% year-over-year in the number of authenticated used car on our platform, effectively promoting the standardization for the entire used car industry. In terms of our business model, our used car business combines Autohome Space stores for offline services with Ping An's extensive network of car owner service centers to provide after sales support. This one-stop used car service model has achieved strong results at our Chengdu pilot store. We plan to expand this model to additional cities in the second half of the year as the model continuously improves and matures.

[Interpreted] Overall, Autohome's core businesses remain strong and stable, while our innovative businesses steadily make constant progress, contributing to generate incremental revenue streams. This reflects the substantial strides we have made in implementing our automotive ecosystem strategy. Looking ahead, we'll continue to focus on long-term development by enhancing our users' experience with more diverse and a richer content, professional services and more personalized and intelligent solutions. Furthermore, we will seek-out and seize opportunities for growth in new business areas, injecting new vitality into the company's development with the aim of creating stable, long-term, positive returns for our shareholders.

[Interpreted] Next, let me briefly walk you through the key financials for the second quarter of 2024. Please note that, as with prior calls, I will reference RMB only in my discussion today unless otherwise stated.

[Interpreted] Net revenues for the second quarter were RMB 1.87 billion. Breaking it down by segment, media services revenues were RMB 433 million; leads generation services revenues were RMB 820 million and online marketplace and others revenue were RMB 619 million, up 14% year-over-year.

[Interpreted] Cost of revenues in the second quarter was RMB 346 million compared to RMB 330 million in the second quarter of 2023. Gross margin in the second quarter was 81.5% compared to 82% during the same period last year.

[Interpreted] Turning to operating expenses, sales and marketing expenses in the second quarter were RMB 753 million compared to RMB 824 million in the second quarter of 2023. Product and development expenses were RMB 350 million compared to RMB 330 million in the second quarter of 2023. General and administrative expenses were RMB 180 million compared to RMB 91 million during the same period last year.

[Interpreted] Overall, we delivered an operating profit of RMB 412 million in the second quarter this year compared to RMB 342 million for the same period of 2023. Adjusted net income attributable to Autohome was RMB 572 million in the second quarter compared to RMB 569 million in the corresponding period of 2023.

[Interpreted] Non-GAAP basic and diluted earnings per share in the second quarter were RMB 1.18, up from RMB 1.16 and RMB 1.15, respectively, in the corresponding period of 2023. Non-GAAP basic and diluted earnings per ADS in the second quarter were RMB 4.72 and RMB 4.71 respectively compared to RMB 4.62 and RMB 4.61 respectively, in the corresponding period of 2023.

[Interpreted] As of June 30, 2024, our balance sheet remains quite strong with cash, cash equivalents and short-term investments of RMB 23.47 billion. We generated net operating cash flow of RMB 432 million in the second quarter of 2024.

[Interpreted] The above is our financial summary. With that, we are ready to open-up the Q&A session. Operator, please open the line for Q&A session, please.

[Operator]

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Thomas Chong from Jefferies.

[Thomas Chong, analyst]

[Interpreted] So recently we saw some luxury car brands exited the price war. So what do you think the reasons behind and also government launched some policies a couple of days ago. So how it will positively impact us and the whole industry.

[Tao Wu, executive]

[Interpreted] Since last year, we said that the auto market competition becomes even more fierce with very severe rat-racing and all kinds of automakers start to rage the price war and in order to gain more shares from the market, you can see that the duration of this round of price war, the intensity of the price cut as well as the depth to this impact goes beyond everybody's expectation. Since the beginning of last year to now, the price war has already lasted for more than 500 days. So for BBA as well as our other luxury brands, they decided to withdraw from the price war after participating for more than 1 year. We think that might be the following reason

[Interpreted] So first of all, from the OEM perspective, we have observed that price for volume strategy doesn't slowdown the decline of the sales. You can see there's 1 example. They originally priced 300,000 cars, now only sold at RMB 200,000 with a price cut of RMB 100,000. Even like that, in first half of this year, Mercedes Benz and BMW here in China, sales continue to decline versus it appeared last year. However, at the same time, the price cut also imposes negative impacts on the brand image of those luxury brands. Besides, we can see continuous price flow also harm the profitability of the automakers.

[Interpreted] And secondly, from the dealers perspective, those dealers are also under big operation pressure because of the continuous price war. There are two aspects of it. The first thing is pretty high inventory pressure. According to the statistics of Chinese Association of Automobile Manufacturers, in June, you can see that the Chinese Dealers' Inventory Alert Index was 52.3%, which is already above the threshold of PMI. And by brands luxury and imported brands, their inventory early alert index was 66.4% and for those mainstream joint venture brands, 60.68% and the Chinese domestic brands, 61.5%. We can see that the luxury brands are under the biggest pressure, much higher than the other 2 categories.

[Interpreted] And the second side is actually BBA dealers already start to suffer from big losses. You can see according to the statistics, in the first half of this year, more than 80% of the dealers cannot complete their sales goals and topped, if they continue to go for the price for volume strategy, quite a few BBA dealers they cannot survive anymore in these circumstances. BMW's brilliant CEO said that BMW will continue to keep the close contact and discussion with upstream and downstream partners, so as to explore commercially viable model and to ensure auto partners can make enough money so as to live for the future.

[Interpreted] As a result, with the decline of the sales volume, with all kinds of pressures such as profitability, brand value as well as dealership, BBA decided to withdraw from the price war. So after BBA decided to withdraw from the price war, we see that different automakers they don't act in a consistent manner. Some choose to follow and the others choose to withdraw from the price war. However, most of the automakers still adopt a win and see attitude. We think that in short-term the price war cannot be totally ended and with price cuts as well as poor sales performance, the price adjustment as well as withdrawal from the price war may impose this pressure on the sales volume of the automakers. As a result, we can see that market competition is still pretty fierce.

[Interpreted] In terms of the policy update since July 25, NDRC and Ministry of Finance has printed out the document called [indiscernible], intensifying the support on large scale equipment replacements and consumer products trading for new, so as to encourage trade-in to promote the consumption of the automobiles. And also at the same time, the designated car scrappage subsidy standard has been greatly improved and now for the purchase of the NEV passenger vehicles, you can get a subsidy of RMB 20,000 and the purchase of 2.0 liters and below ICE cars can get a subsidy of RMB 15,000. So versus the previous policy, now car scrappage can get a doubling subsidy.

[Interpreted] Mr. Cui Dongshu, Secretary General of CPCA also said that this round of car scrappage and replacement subsidy expansion and doubling is a very favorable news for the entire auto market. It is expected to drive around 2 million car consumptions of this year -- sorry, 2 million cars scrappage of this year and also in favor of driving more than hundreds of billion of replacement related consumption. And for Autohome, you can see that with the increase of the NEV replacement, it will be favorable for our NEV business and with the opening of the offline franchising stores, we will better satisfy the customers needs on car selection and car purchase. And for Autohome, we can see that the revenue coming from the NEV brands will also quickly on a rise in the near future.

[Interpreted] And in short-term, you can see that more than one year of rat racing in this industry really compromised the profitability of the automakers and also triggered a series of issues and were also affected by this industrial headwind. However, in the long run, with the mitigation of the price war and with government keeps launching favorable policies to support the auto market consumption, we strongly believe that the auto market is still equipped with long-term growth potential and we are also bullish about the long-term [indiscernible] development of the auto industry in China.

[Operator]

Our next question comes from the line of Brian Gong from Citi.

[Brian Gong, analyst]

[Interpreted] I have 2 questions. First question is regarding the used car markets. Given recently easing price war by OEMs, what's the latest situation for used car markets? Have you observed any improvement, marginal improvement for used car market?

And the second question is about dealers. Have we seen a lot of closure of those dealers recently or do you expect any large scale closure in the future?

[Tao Wu, executive]

[Interpreted] If you look at the used car market, because the new car price has been -- keeping declining. As a result, it imposes a lot of pressure on the used car market. In June, you can see that used car sales dropped by 1 percentage point year-on-year. Since then, a lot of used car potential buyers had to purchase a new car and be car hoarders because of their price volatility, they wouldn't like to sell their cars. So here you can see that we are already approaching the half year. So for the half year, volume campaign resulted in very big volatility of the new car transaction price. As a result, the sales rate for the used car is already intensifying. And in June you can see that used to car UCMI Index is also declining to 41.2%, a drop of 2.4 percentage points year-on-year and also highlighting that the used car market is not performing pretty well with a lot of big competition as well as the pressure of the entire market.

[Interpreted] So, if you look at the market, we can observe the following 2 characteristics of the used car market. The first thing is that the price remains low and in June, you can see that the used car average price remains at about RMB 64,400, which is the low point within this year and I think that this is within our expectation because of the new car price. And the second thing is that cross-regional trading is very active and the entire market still have a lot of vigor and vitality. This is pretty unique in the Chinese market. As a result, to construct an integral and trustworthy and transparent industrial environment is very important.

[Interpreted] Even though there are some challenges in short-term for the used car market, but in the long run, we think that the scale, the policy environment, market structure as well as the consumer demand of the used car market doesn't fundamentally change. And I think that with the car consumption, market expansion as well as the rising recognition of the consumers for used car, in the longer future, we think that used car market still got a lot of potential and expected to grow in a sound manner. And you can see from Autohome's perspective, we're also very much focusing our own capacity building. For example, we intensify our products in terms of the car conditions and car statures, inquiry products. In the first half of this year, I already mentioned, our platform, the authenticated high-quality vehicles number increased by 50% year-on-year. We hope that with the entrance of Autohome into this market, the consumers can actually purchase the used car in a reassured manner and the used car market can become very active again.

[Interpreted] The second question is about whether there is closure of the stores for the traditional ICE sellers and I think that if you look at the ICE sales volume as well as any of the announcements of the listed company, I think that the closure of the traditional ICE dealers is inevitable. If you look at the first half of this year, there are almost 5,000 stores are shut down.

[Interpreted] So this is not a 1-way thing or adjustment. If you look at the overall auto sales volume, actually there's no big decline. So this is actually the restructuring of this industry. We see the emergence of the NEV as well as the bigger penetration into the lower tier cities. So I think that in these circumstances, no matter whether OEMs or the dealers, they have to adapt and have to transform according to this trend.

[Interpreted] So from Autohome perspective, we also actively empower our clients to cope with these kind of challenges. As I mentioned before, in our new retail businesses, we also launched the Satellite Plan, just to enable our dealers as well as our OEM partners. And for dealers, we also actually help them in the car use services, acquisition as well as extension. So for Autohome, it's both opportunities as well as challenges.

[Sterling Song, executive]

Okay operator, the next one please.

[Operator]

Our next question comes from the line of Ritchie Sun from HSBC.

[Ritchie Sun, analyst]

[Interpreted] I have 2. First of all, in terms of competition, we have observed that a lot of Internet platforms started to develop the leads generation businesses as well as using large language model to improve the efficiency and conversions. So what does management will do or what will management do to address these challenges? Second of all, in terms of cash balance is very adequate and profit is also quite stable. What does management feel on the potential special dividends or even lifting the dividend payout ratio? And would management consider launching a big scale by the program?

[Tao Wu, executive]

[Interpreted] So for your first question, which is actually about the other entrants into the lease generation businesses. Actually, this is not something new, and it already happened for quite a long time. And for Autohome, we think that this is a long-term challenge for us because we cannot monopolize this business.

[Interpreted] So before Autohome entered into this area, actually there are already some search platforms as well as some pan-media engaging in this business. And after we enter into this area for more than 10 years, we still face quite serious competition. And for Autohome, we think that our specialty is about professionalism in the verticals and we actually cover the whole lifecycle, including car selection, car purchase, car use, as well as car replacement.

[Interpreted] And in terms of the content measures to the challenges, we have three solutions. First is in terms of the content innovation. In recent years, Autohome have introduced a lot of short phone videos and live streaming as well as the other new formats as to enrich our ecosystem of the contents, while at the same time we also build a lot of exclusive and unique IPs just to have our IP ecosystem to differentiate from our competitors. And the second is in terms of the user experience enhancement, we keep optimizing our website as well as app interface design, so as to offer more convenience to our users. And third one is in terms of the corporation channel expansion. We have been cooperating with a lot of pan media platforms so as to build the traffic matrix, so as to deliver win-win against the competition.

[Interpreted] So the second question is about dividend payout. Let me first review our dividend payout history. Over the past 2 years, we have been enhancing the return to our shareholders. From 2019 to 2021, we actually distributed 20% of our net margin to the shareholders as a dividend. And in the year 2022, we also updated our dividend payout policy with a fixed amount of RMB 500 million, which is equivalent to 28% of our net margin of the same year. And in December 2023, we keep [indiscernible] our dividend payout policy and over now announced RMB 1 billion dividend payout decisions, which has enhanced our dividend payout ratio to 50% of our net margin. So I think that in the next 3 years, from 2024 to 2026, the annual dividend payout amount will be no less than RMB 1.5 billion.

[Sterling Song, executive]

Operator, the next question please.

[Operator]

Next question comes from the line of Xiaodan Zhang from CICC.

[Xiaodan Zhang, analyst]

[Interpreted] My question is regarding your new retail model for NEVs. As Autohome launched the so-called Satellite plan in the second quarter, so how should we think of your expansion plan going onwards?

[Tao Wu, executive]

[Interpreted] I think that since the launch of the first offline store in September 2022, now we already actually, our space store already take root in 28 cities in China and covering southeast and the southwest as well as the north part of China. And so far, you can see that our satellite store model already covered 5 cities, including[indiscernible] and this is actually a new trial and in the future we're going to have a similar trial from different angles and the store opening pace is quite consistent with our communication at the beginning of the year because of the satellite store is pretty new model and the major purpose is to cover more low-tier cities, so that our space stores can have a better reach-out and coverage.

[Sterling Song, executive]

Okay, operator, that's the end of the Q&A session.

[Operator]

Thank you. I'll now turn the conference back to the management for closing comments.

[Tao Wu, executive]

[Interpreted] Thank you everyone. Thank you very much for joining us today. We appreciate your support to the company and look forward to updating you on our next quarter's earnings conference call in a few months time. And in the meantime, please feel free to contact us or email us if you have any further questions or other comments. Thank you very much. Bye-bye.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]