Full Truck Alliance Co Ltd

NYSE:YMM

Earnings Call Transcript 2021-Q2

[Operator]

Ladies and gentlemen, good day and welcome to Full Truck Alliance's Second Quarter 2021 Earnings Conference Call. Today's conference is being recorded.

At this time, I'd like to turn the conference call over to Mao Mao, Head of Investor Relations. Please go ahead.

[Mao Mao, Head of Investor Relations]

Thank you operator. Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the Safe Harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors.

Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion. A general discussion of the risk factors that could affect FTA's business and financial results is included in certain filings of the company with the SEC. The company does not undertake any obligation to update this forward-looking statements, except as required by law.

During today's call management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today.

Joining us today on the call from FDA's senior management are Mr. Hui Zhang, our Founder, Chairman and Chief Executive Officer; and Mr. Simon Cai, our Chief Financial Officer. Management will begin with prepared remarks and the call will conclude with a Q&A session.

As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on FTA's Investor Relations website at ir.fulltruckalliance.com.

I'll now turn the call over to our Founder, Chairman and CEO Mr. Zhang. Please go ahead sir.

[Peter Hui Zhang, Founder, Chairman and Chief Executive Officer]

[Foreign Language]

Hello everyone, and thank you for participating in the Full Truck Alliance inaugural earnings conference call today on June 22, 2021. FTA successfully listed on the New York Stock Exchange marking the start of our new journey as a public company. On behalf of FTA's employees and myself. I'd like to extend our sincerest gratitude and appreciation to all our long-term and new shareholders for their unwavering support.

[Foreign Language]

I believe many of you are joining us today not only to hear about our second quarter earnings results and achievement, but also to learn more about our response to the regulatory developments that occurred in early July. We wanted to assure you that we have attached great importance to the cybersecurity review initiated by Cybersecurity Review Office or CRO of the Cyberspace Administration of China and have cooperated full day with CRO during the review process.

In addition, we also conducted a comprehensive self-examination of any potential cybersecurity risks, and are committed to continuously improving our cybersecurity system and technological capabilities. New user registration for our Yunmanman and Huochebang apps remain suspend in China, but the apps are operating normally for existing users. In line with our commitments to safeguard national security and public interest. We will bear no effort to fulfill our corporate and social responsibilities and actively promote the implementation of relevant cybersecurity policies.

[Foreign Language]

Now turning to our second quarter earnings results. As we present our results for the first time as a public company. We are pleased to report a solid second quarter performance positioning us for a promising year. Our total net revenues doubled from the same period last year to RMB1.12 billion. We continue to prove our platform's ability to generate profit on non-GAAP basis, as we adjusted net income reached RMB99.5 million compared with a net loss of RMB39.14 million in the same quarter last year.

These results were driven by an 87.9% year-over-year increase in fulfilled orders, which came in and 36.0 million during the quarter coupled with continued improvements in user engagement, where average shipper MAUs grew by 40.3% to 1.53 million, bringing our gross transaction value or GTV to RMB74.0 billion, 57.8% higher than what we had in the same period of 2020. The quick growth and consistent strength across our business attest to our ability to successfully manage our rapid expansion as we lay a solid foundation for long-term profitability.

[Foreign Language]

With that overview, I would like to update you on the scale of our platform, user behavior and new initiatives as well as draw your attention to certain trends we are seeing our core business and how they fit into our long-term strategy. Starting with our platform, our cutting edge logistics infrastructure and innovative proprietary technology are becoming increasingly advanced, as proven by high for human rights in the second quarter reaching approximately 30% compared with 17% in the same period last year. These remarkable improvements demonstrated our ability to quickly and seamlessly analyze and process data on both the shippers and truckers end our deep understanding of supply and demand and our steadily improving matching efficiency.

[Foreign Language]

During the second quarter, we witnessed an increasing proportion of direct shippers on our platform, which changes on our ability to improve the freight measuring efficiency and provide high quality solutions, among other things. Going forward, we expect direct shippers to contribute more significantly to our increasing traffic as we benefit from the powerful network effects amid continued growth for our platform.

[Foreign Language]

As previously mentioned, the average shipper and is in the range of 1.53 million during the second quarter, increasing 40.3% year-over-year. We also experienced sustained growth in the number of truckers for building shipping orders and truckers actively negotiating or bidding portioning orders in the second quarter. Shippers and truckers have diverse complex and often highly non-standard needs and we cater to that by providing comprehensive logistics and value-added service that contributes to better service quality and higher transaction for rates helping us achieve a strong record of shipper retention for example, the 12-month retention for our pay members remain stable at about 85%.

[Foreign Language]

We believe our long-term success depends on our ability to continuously improve service quality and address users pain points, capabilities that also form the cornerstone for fulfilling our corporate and social responsibilities. We're committed to protecting the interests of all our staff and users and are continuously refining features and functions on our platform to improve and promote transparency, trust and efficiency across industry.

[Foreign Language]

Now let's take a deep dive into our business. We generate revenue primarily from freight matching service, which includes freight listing, freight brokerage and transaction commissions as well as various value-added services.

[Foreign Language]

First of all, our online transaction service is a testament to our diverse and evolving monetization capabilities. Following the excellent customer acceptance in 10 cities, we have extended this commission model to 60 cities as of June 2021. During the second quarter, we collected commissions worth RMB160.9 million, up 88.1% from the previous quarter. Commission to GTV as a percentage of total GTV generated on our platform continues to increase from the previous quarter.

Truckers next month retention rates in the 60 cities are stable at approximately 9%, the stable volume growth in commission areas and high trucker retention both demonstrated the sustainability of our closed loop commission business model and indicate great promise for future expansion.

[Foreign Language]

Moving onto our freight listing service, not pay the membership fees from shippers remains one of the most stable revenue streams. In the second quarter, our refined marketing strategy and optimized operations yield positive results as our membership fee revenue grew in tandem with the number of users on the platform. We believe our ongoing efforts to increase growth transaction value improve matching efficiency and enhance user experience will ultimately boost membership fee.

[Foreign Language]

Our freight brokerage service or marine is one of our core service offerings. Management aims to provide end-to-end freight matching services with a higher level of service quality assurance to shippers and solve a significant pain point for many shippers when contracting with truckers, making shippers more dependent on the use of the service. Skill and transaction volume remain our primary focus and core strategy going forward and we believe the main feature will spur more shippers to repeatedly use our platform to address their shipping needs.

[Foreign Language]

Lastly to increase the use of stickiness and engagement on our platform, we provide a comprehensive range of value-added service to shippers and truckers catering to that diverse and complex needs, including the lessened truckload Intracity and special goods shipments in addition to our full truckload services, as well as a series of value-added services. As of June 2021, about 2.67 million users has used at least one of our value-added service. We expect our value-added service to continue to improve user engagement and stickiness, which in turn will attract more industry participants to cooperate with forming a virtuous cycle thriving the constant level of growth.

[Foreign Language]

We have a clear path for advancement and expansion, while also proactively pursuing strategic investments, acquisitions and collaboration both domestically and overseas to expand service offerings to further consolidate our leading market position, improve our core platform capabilities, attract new ecosystem participants, and manage our business explosive growth. Now I'd like to review some of our recent activities and upcoming initiatives for 2021 and beyond.

[Foreign Language]

In the second quarter, we completed our investments in plus AI or plus a developer of automated driving system for trucks, along with global investors raising a total of U.S.350 million. We began our investments in class in June 2018 as part of our strategy of holding equity interests in complimentary business and entered a strategic partnership with club to develop autonomous truck driving technology. We believe autonomous trucks could potentially transform the logistics industry and result in significant savings in labor and fuel costs.

[Foreign Language]

Speaking of fuel costs, the constant liability of fuel price present material challenge for the road transportation industry. In the second quarter, Sinopec Group Capital completed its investments in FTA. And well laid out emerging technologies, such as big data and artificial intelligence in the fields of energy and highway logistics. We look forward to exploring the possibilities of a more in depth cooperation with Sinopec as we seek to improve the overall operation efficiency in the logistics industry. While bringing greater value to more truckers and logistic companies.

[Foreign Language]

With respect to the road transportation ecosystem, we are also exploring software as a service solution for logistics to enhance our problem solving capabilities, while strengthening the ties with shippers and truckers from different sectors. In addition, in the second quarter, we built an open platform and started collaborating with leading logistics companies products, merchandising platform and other industry practitioners to better serve the industry with integrated service including switching options, logistic management and other value-added services. Furthermore, we continue to expand our interest in LTL shipping services during the quarter and plan to test our model in ton of cities before launching nationwide.

[Foreign Language]

Our solid and steady growth would not be possible without our innovative technology and the unique data generated by our day-to-day operations, including rich and structured data on routine matching, pricing and order fulfillment. By analyzing and leveraging this valuable data, we have developed several proprietary technology, which we apply to fit matching pricing and truck navigation. Such data and technologies enabled us to increase the fulfillment rates and freight measuring efficiency.

Our R&D team continue to grow in second quarter and our talent structure would further optimize with the number of core R&D experts more than doubling year-over-year. Going forward, we will continue to recruit and retain top talent in artificial intelligence and engineering logistics and other disciplines to build a team that can support our long-term growth.

[Foreign Language]

In summary, we had another strong quarter and we are well positioned to proceed along this growth trajectory. Building on this positive momentum we plan to grow our logistics network, expands the skill of our platform and widened our service offerings in the coming quarters to further drive user engagement and enhance winning citation capability. Moreover, we will make additional investments in infrastructure, technology innovation and data analysis to improve matching efficiency and accelerate the digital transformation of halfwords.

[Foreign Language]

In closing, I would like to reiterate that China's logistics industry has enormous potential weighing to be unleashed. Our user centric side of proposition cutting edge digital transaction platform and ecosystem and strong R&D capabilities uniquely positioned FTA to play a leading role in the country's evolving logistics industry.

Looking ahead with a mission to make logistics better and smarter. We remain committed to shaping the future of the industry with technology. We are confident that our strategic initiative will further support our top-line extension and yield considerable returns in the long run as we continue to build value for our company investors and growing communities of users.

With that, I will now turn the call over to our CFO Simon Cai to discuss our financial performance.

[Simon Chong Cai, Chief Financial Officer]

Thank you. I'd like to provide a brief overview of our second quarter 2021 financial results. Before I get started, I'd like to clarify that all financial numbers presented today are in RMB amount and all percentage changes referred to year-over-year changes unless otherwise noted. As Mr. Zhang stated our total net revenues many consisting of revenues from freight matching services and value-added services or RMB1,118.8 million in the second quarter of 2021 representing an increase of 100.9% from RMB556.9 million a year-ago, primarily attributable to an increase in revenues from freight matching services. Revenues from freight matching services in the second quarter of 2021 were RMB937.6 million, representing an increase of 109.8% or RMB446.9 million in the same period last year.

As part of our freight matching services, we generate service fees from freight brokerage models, membership fees from listing model and commission from online transaction services. revenues from freight brokerage service in the second quarter of this year were RMB601.3 million increased by 88.6% from RMB318.9 million in the same period last year, primarily due to significant increase in transaction activities amid a substantial recovery in both transportation in China post the COVID but partially offset by a decrease in our average fee rate to attract more users to use our service.

Revenues from freight listing service in the second quarter of 2021 were RMB175.4 million, up 37% from RMB128 million a year-ago, primarily due to an increase in total paying members and increased shipper demand for our services as our business continue to expand. We started monetizing online transaction services by collecting commissions from truckers on selected types of shipping orders from three cities in August last year. In the second quarter of this year, we collected commissions in a total of 50 cities, and our total transaction commission amounted to RMB160.9 million in the second quarter, increased by 88.1% from RMB85.5 million in the first quarter this year.

As we continue to grow our platform, we expect to achieve high monetization efficiency, while bringing more value to both our truckers and shippers. Revenues from our value-added services in the second quarter of 2021 were RMB181.2 million, an increase of 64.8% from RMB110 million in the same period last year, mainly attributable to higher revenues from credit solutions and other value-added services.

Cost of revenues in the second quarter of this year was RMB627 million, compared with RMB378.2 million in the same period of 2020. The increase was primarily attributable to an increase in VAT related tax surcharges and other tax costs, net of tax refunds on government authorities, which was RMB572.4 million increased by 73.7% from RMB329.5 million in the same period of 2020 primarily due to an increase in transaction activities, evolving our freight brokerage service.

As a percentage of total revenues, cost of revenues for the second quarter of 2020 decreased to 56% from 67.9% in the same period last year. Sales and marketing expenses in the second quarter of this year were RMB236.8 million compared with RMB71.5 million in the same period last year. The increase was primarily due to higher advertising and marketing expenses to promote new initiatives, and increase in salary and benefits expenses due to increased headcount and sales and marketing personnel as well as increased share-based compensation expenses.

General and administrative expenses in the second quarter of this year were RMB2.123 billion compared with RMB347.1 million in the same period last year. The increase was primarily due to an increase in share-based compensation expenses. R&D expenses in the second quarter of this year were RMB165.1 million compared with RMB87.9 million in the same period last year. The increase was primarily due to an increase in salary and benefits expenses driven by higher headcount in R&D personnel as well as increase in share-base comp.

Our operational leverage steadily improves in the second quarter of 2021, it excludes share based compensation and compensation expenses resulting from share repurchase, adjusted operating expenses, which included sales and marketing expenses, G&A and research and development expenses accounted for 41.7% of total revenue in the quarter compared to 45.9% in the same period last year, the improving operating leverage was driven by economies of scale of our platform. Many expenses, including labor costs are closer to fixed expenses in nature and do not increase proportionately with the growth of the platform GTV.

Loss from operations in the second quarter of 2021 was RMB2,040.4 million compared to RMB345 million in the same period last year. Net loss in the second quarter of this year was RMB1,958.2 million compared with RMB297.3 million in the same period last year. We achieved the profitability under the non-GAAP measures during the second quarter of 2021.

Our non-GAAP adjusted operating income in the second quarter of 2021was RMB20.1 million compared with non-GAAP adjusted operating loss of RMB84.1 million in the same period last year. Non-GAAP adjusted net income was RMB99.5 million compared with non-GAAP adjusted net loss of RMB39.1 million in the same period last year.

We believe that further improvement in our profitability proves the operational capabilities of our platform. Basic and diluted net loss per ADS were RMB7.34 compared with RMB1.72 in the same period last year, adjusted basic diluted net loss per ADS were RMB0.49 compared with RMB0.23 in the same period last year.

As of June 30 2021, the company had cash and cash equivalents, restricted cash as well as short-term investment of RMB26.9 billion compared with RMB18.9 billion as of December of last year. For the second quarter of 2021, net cash used in operating activities was RMB48.8 million.

Looking at our business outlook for the third quarter of 2021, we expect our total net revenues to be between RMB1.04 billion to RMB1.15 billion, representing a year-over-year growth rate of approximately 42% to 56.2%. This forecast reflects our current and familiar view on the market and operational conditions and the impact of ongoing cybersecurity review and new COVID outbreaks in certain areas of China, which are subject to changes.

We will fully cooperate with the cybersecurity, we will offer to facilitate its review process while we are closely monitoring these developments, and we will provide more updates when possible.

Looking ahead, we remain committed to continuous improvement of our service offerings to better meet diverse needs of truckers and shippers as we continue to grow our logistics network and develop a smarter logistics infrastructure across the value chain. We're confident, we will further enhance our monetization capability, deliver sustainable growth and generate value for our shareholders in the long run. That concludes our prepared remarks. We would now like to open the call to Q&A. Operator, please go ahead.

[Operator]

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question today comes from Ronald Keung from Goldman Sachs. Please go ahead with your question.

[Ronald Keung, Goldman Sachs]

[Foreign Language]

Thank you, management. I have two questions. First is, could you share what is the latest progress in your closed loop model and advancing in that in the second quarter of 2021. What is the fulfillment rate? And how do we plan to further improve its fulfillment rate into the future? And my second question would be given the recent extreme weather, there were floods, typhoons, and the recent outbreak of COVID and particularly in Nanjing has that affected the business volumes and operations of the business and our third quarter revenue guidance. Thank you, Peter Hui Zhang.

[Peter Hui Zhang, Founder, Chairman and Chief Executive Officer]

[Foreign Language]

In the second quarter, our closed loop model was further enhanced and our fulfillment rate continued to increase reaching approximately 30%. Just remarkable improvement was mainly attributable to both our deep understanding of both supply and demand and the steady improvements in our matching efficiencies.

So going forward, we will continue to generate more structured data through our advanced big data technology, improve the standardization of order entry and requirements of data analysis. We're also launching a recommendation based model to constantly improve the demands and efficiency and enhance user experience. We expect the overall rate on our platforms to continue increasing over the next few years.

[Foreign Language]

So since late July, the typhoons and floods have impacted our road transportation in some areas, including Hunan and some cities of Changzhou [indiscernible] as well as Shanghai, the extreme weather had an impact on our business in some areas in the third quarter, but given the short duration of the extreme conditions, our business in related areas have gradually recovered after the disaster. And we believe that extreme weather will not significantly impact our overall business and the financial performance in the third quarter.

Speaking of the pandemic impact, in the third quarter based on our current assessments, our business in some areas of Changzhou, Hunan - and the Hunan province has been affected as the pandemic it's ongoing, we will continue to monitor the impact on our business. And things to operate, our employees from Nanjing office have been working from home and have been able to function efficiently with the support of our internal communication tools. I'll talk one it's running smoothly at the moment and all business departments are progressing as expected with no disruption to daily operations. So in keeping with our commitment to prioritize employees, health and welfare, we encourage employees to work from home and come back to the office when the pandemic is over.

[Ronald Keung, Goldman Sachs]

Understood. Thank you, management. Take care.

[Operator]

Our next question comes from Wang from Morgan Stanley. Please go ahead with your question.

[Unidentified Analyst]

[Foreign Language]

I have two questions. First is what's the impact of the ongoing cybersecurity review on our user growth? What are the measures we have adopted to improve our user retention and increasing the engagement level of the existing users where - when you are not able to bring in the new users? And the second question is that, do you see any impact on the transaction flow and trackers retention in the pilot city things that commission model would have put in place in the second quarter. And what is the rollout plan for your commission model in the second half of this year and where the tight any regulatory environment impact your take rate. And what's the outlook for the take rate for the second half of this year. Thank you.

[Peter Hui Zhang, Founder, Chairman and Chief Executive Officer]

[Foreign Language]

Regarding first question on the cybersecurity review, yes, that the suspension of the new user registration for our Yunmanman and Huochebang apps in China has an impact on the business. And the extent of the impact depends on how long does essentially well that, while there will be no direct impacts on the existing users of FTA's mobile app. With the reviews during progress, we will continue to monitor and evaluate the impact on our overall GTV and the revenue in the second half of the year.

And given the uncertainty around the real timeline, we are now adopting some operational initiatives to boost the activity of the existing users, which many include activating and stimulating certain users through targeted marketing, enhancing the user experience of the registered users by streamlining the delivery process, et cetera. We believe the impact of the cybersecurity review on how business growth is temporary. And our overall business strategy will not be affected in long run.

[Foreign Language]

In terms of the transaction commission, during the second quarter, we collected commissions of RMB168.9 million in 60 cities and the commissions GTV as a percentage of total GTV continues to increase from a prior quarter. In terms of the key operating indicators, we see our business growing steady in the 60 cities with the truckers next month retention region around 9%, this signal truckers willingness to pay a commission reflecting the recognition of our value for both shippers and truckers and injecting competence into our nationwide rollout in the future.

And compared with the intermediary fees charged by middleman, we believe our mid commission is idle. We are committed to not infringing truckers' best interests, and we provide these truckers with a series of additional limits through the closed loop transaction. We believe this added value provided by our platform is recognized by the truckers. FDA has been paying close attention to the relevant regulatory guidelines, and we believe our current commission rate is in line with the regulatory requirements are in keeping with the regulatory requirements with the continuous enhancement of the value of our platform and service.

We see there is still room for further improvement of intake rate. And we will continue to communicate with regulators conduct self-examination periodically and embrace the changing regulatory environment.

[Unidentified Analyst]

[Foreign Language]

[Operator]

Our next question comes from Charlie Chen from China Renaissance. Please go ahead with your question.

[Charlie Chen, China Renaissance]

[Foreign Language]

So I have two questions here and thanks for your time to take my questions. The first is regarding the new initiatives that the company has taken, which is the intracity and also LTL business, how's the progress in the second quarter? And how is the investment going forward? Will there be more investments? And also, how do you position this to new business in your service portfolio? And my second question is, how is the recent trends of the competition landscape in the full truckloads business, especially since second quarter? Thank you very much.

[Peter Hui Zhang, Founder, Chairman and Chief Executive Officer]

[Foreign Language]

Okay, regarding first question on our new initiative. In the second quarter, the progress in the intracity and LTL business was in line with what we expected, both still in the trial period in more areas. We will only consider extending the coverage after carefully testing the economic model. And we believe we'll continue our investments in the next two to three years. We entered the intracity and LTL field aiming - meaning to build a one stop logistics service platform to meet that diversified needs for our existing shippers.

In terms of the competitive advantage, compared with LTL and interested in shipments, we believe that FTL shipments have higher requirements in terms of automating trucker management monitoring of the whole fulfillment process, as well as offering of value-added service. And we believe that we have accumulated rich experience in capital collaboration and entered this new business areas with a significant competitive edge. At the same time, the LTL and intracity segments are highly overlapped and correlated with FTL, which helps save additional user acquisition costs. Therefore, from the client coverage and operating efficiency perspective, we believe it's a natural extension of from our existing FTR business.

[Foreign Language]

In terms of the competitive landscape of the industry since second quarter, we have not seen any significant changes yet. We are a leading worldwide digital freight platform and a pioneer in the FTL market. In terms of GTV, we are the largest digital freight platform in the world. And our business maintains strong momentum in the second quarter. Since the earliest freight listing service, we have deepened our roots in digitization.

As of now, our platform covers more than 70% of the heavy duty and medium duty truckers in China. The China's road calculation market is larger than 6 trillion in 2020, while the penetration of digital freight platform was only 4%. And FTL shipments rely on the nationwide network, it is highly complex and dynamic arbitration of millions of shipments, it is difficult to replicate and form a natural barrier of entry for us. Our platform has a clear competitive edge. We don't see any potential substitutes for a competitor players in the market for us at present while our real competitors are appointment truckers from the offline model.

Going forward, we will continue to enhance our platform capability to bring more value to both shippers and truckers while rapidly replacing the traditional offline appointment trucker model and increasing the online penetration. But overall, the low transformation market is massive. Yet the current penetration is still very low. So, we don't think the emergence of any potential competitors will change the existing industry landscape. And with the gradual improvement of our closed loop model, we believe the online transaction fulfillment rate will further increase and the network effect of our platform will become more evident. With our continuous efforts, we are confident to further augment the penetration rate of digital freight platform in the future.

[Charlie Chen, China Renaissance]

[Foreign Language]

Thank you very much.

[Operator]

Our next question comes from Xin Yang from CICC. Please go ahead with your question.

[Xin Yang, CICC]

[Foreign Language]

So my question is about the cybersecurity review. So what I said this cybersecurity review will cover and how was the company's data security protection system? And how long will the cybersecurity review take? In your view what should be done or rectified the order to successfully complete a review? Thank you.

[Simon Chong Cai, Chief Financial Officer]

So the main purpose of the review is to prevent national data security risk and safeguard national security and public interest. We have established, a comprehensive data and network security protection system in terms of structure technology, and also internal processes. So based on our preliminary self-assessment, we have not found any situation or issues that may lead to direct removal of our forming apps.

We will also cooperate with regular regulatory authorities to review and maintain close communication with them to minimize the impact on company's business. Given their - give there's no precedent to follow the review, the actual review period and work or rectifications that needs to be done will depend on regulators actual timetable. We'll fully cooperate with regulators to complete the review as soon as possible.

And in future, we'll continue to improve our internal operations systems and safeguard the security of our own data and network. Meanwhile, we are committed to continually improving our cybersecurity systems and technology capabilities under the guidance of the authorities.

[Xin Yang, CICC]

Thank you.

[Simon Chong Cai, Chief Financial Officer]

Thank you.

[Operator]

And ladies and gentlemen, with that we'll conclude today's question-and-answer session. I'd like to turn the conference call back over to Mao Mao for any closing remarks.

[Mao Mao, Head of Investor Relations]

Thank you again for joining us today. If you have any further questions, please feel free to contact us at Full Truck Alliance directly or TPG Investor Relations. Have a good day.

[Operator]

Ladies and gentlemen, that does conclude today's conference call. We thank you for joining you may now disconnect your lines.