Chailease Holding Company Ltd
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Chailease Holding Company Ltd
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Welcome to the Chailease First Quarter 2020 Earnings Release Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded. For your information, a webcast replay will be available within an hour after the conference is finished. And now I would like to turn the call over to the Kimberly Lian, Project Manager of the Chailease Holdings. And Ms. Lian, please go ahead.
Thank you, Jason. Hello, everyone. Thank you for joining us today for our first quarter 2020 results conference call. On our call this afternoon, I'm joined by Ms. Sharon Fan, Head of IR Department, and she will be open to your questions after my presentation. The presentation I'm giving today will be available for download on our official website at www.chaileaseholding.com.tw.
As a reminder, please refer to the disclaimer on Page 2 regarding the forward-looking statements. Our actual results may differ from such statements. Let's begin the presentation. Please turn to Slide 3 for today's agenda. The agenda we are going to cover for today includes management highlights providing you highlight points of the first quarter of 2020 followed by the performance review for the consolidated level in each segment in our main operational regions, including Taiwan, China and ASEAN operations.
Now I'd like to turn to Slide 4 for highlights that summarize our performance of the first quarter of 2020. First of all, the summary table here shows you the loan portfolio growth for each of our main operational regions for 2020. You can see in the little column of the table, we achieved 18% year-over-year portfolio growth on a consolidated level. Our main operation regions, Taiwan, China and ASEAN's loan portfolio grew by 17%, 19% and 20%. On a quarter-over-quarter basis, the consolidated portfolio showed 0.4% sequential increase.
Looking to the major operational regions. Taiwan has continued its business momentum. China and ASEAN's accumulation of loan portfolio is slower due to the impact of coronavirus outbreak. For this year's guidance, we have revised a little bit to reflect the current situation. Taiwan and China's loan portfolio growth is still expected to grow 5% to 10%.
For ASEAN region, we have revised loan portfolio growth rate to flat due to lower visibility of the progress of coronavirus in ASEAN region. Overall, the consolidated level, we are still looking for 5% to 10% growth for the whole year.
Next, the second point is revenue recognition change for China and treatment is starting from first quarter of 2020. According to the new accounting treatment starting from this quarter, only the gross margin portion of the trade finance business for our China and treatment operation is booked. And this net amount will book into fee and commission income instead of sales revenue under the new recognition method; we will explain in details later. And for the third point, we would like to highlight is that the overall asset quality remains stable.
Let's move to the next section. Performance review for the first quarter of 2020.
As we see on Slide 6, the consolidated portfolio reached TWD 416.1 billion for the first quarter end of 2020 with 18% year-over-year growth rate and 0.4% sequential increase.
In the first quarter, Taiwan managed to keep its business momentum and China and other are both affected by the coronavirus outbreak.
Turning to Slide 7. The graph shows the trend of consolidated loan yield and cost of funds for the past 12 quarters. As you can see, we managed to maintain stable stat within a narrow range in the last 3 years. This quarter, the yield is moving downward a little bit due to the slightly decrease of Taiwan's yield. We will look at each operational regions here and cost of fund in the next section.
Next slide, Slide 8. The graph in this slide shows you the trend of consolidated fee and commission income. The fee and commission income is driven by the new business volume during each quarter. We see a growing fee and commission income when compared year-on-year or quarter-over-quarter to reflect the steady business growth.
Next slide, Slide 9. On the left-hand side, the consolidated revenue for the first quarter of 2020 reached TWD 13.9 billion, representing 8% growth compared to the same period last year versus 18% of year-on-year portfolio growth. On the right-hand side, the first quarter consolidated revenue was down 15% from the previous quarter versus 0.4% of sequential portfolio growth. And as we mentioned earlier, stronger year-on-year revenue growth rate compared to the growth is due to the change of fast revenue recognition starting from first quarter of this year.
If we try to hop back the TWD 1.46 billion sales revenue to assume the recognition method is unchanged, then the growth rate will be more in line with portfolio growth rate. On the right-hand side, the revenue will decrease by 6% instead of 15% compared to previous quarter is the accounting treatment for sales revenue remains the same.
Moving on to Slide 10. On the left-hand side, the consolidated net profit for the first quarter of this year reached TWD 3.92 billion and the earnings per share was TWD 2.95. The net profit amount increased by 10% year-on-year and negative 2% quarter-over-quarter. The negative growth quarter-over-quarter is due to the impact of corona virus as well as the traditional slow season in the first quarter because of the Chinese New Year holidays.
Moving on to Slide 11. This slide shows you the loan portfolio mix and profit contribution in terms of our major operational regions. The breakdown remains similar to previous quarter. On the left-hand side, we can see Taiwan business accounts for half of group's total portfolio. China is about 34% and ASEAN 15%.
On the right-hand side, Taiwan net profit accounts 50%, China, 34% and ASEAN 5%.
Moving on to Slide 12. It shows the cost-to-income ratio and leverage ratio for the group level. Our group level's cost-to-income ratio lower to 30% in the first quarter as less travel expense spend and some headcount-related operating expense are not accrued yet due to the temporary operation disturbance because of the coronavirus. The leverage was held at 6.7x at the first quarter end, which is the same as previous quarter.
Please turn to Slide 13. The consolidated return on assets on an annual basis achieved 3.2% for the first quarter of this year, reflecting a slightly slow growth of net profit in 2019. The consolidated return on equity on the right-hand side was 22% for the first quarter, which is still above our long-term goal of 20%.
Next slide, Slide 14. The consolidated delinquency ratio is shown on the left-hand side. At the first quarter, our delinquency ratio from all 3 operational regions increased a little. Therefore, the consolidated delinquency increased to 3% from 2.6% last quarter. Later in the presentation, I will talk about each regions in more detail.
Moving on to the segment review. Let's look at our operation performance country-by-country. On Slide 16, our Taiwan loan portfolio reached TWD 25.9 billion at the first quarter of this year, which representing 17% year-over-year increase and 3% sequential growth rate compared to the previous quarter. Major gross drivers coming from overseas financing through helicopters, ships and real estate related project financing in this quarter.
Moving on to Slide 17. It shows the trend of our Taiwan loan yield and funding costs. Taiwan funding cost remained in the first quarter. Taiwan's yield is down by 26 basis points compared to the previous quarter, mainly due to the product mix changes in this quarter. In this quarter, the growth rate for service industry, for example, restaurant and food chains were slower due to the risk concern of slower demand. As for bigger ticket size loan, overseas, helicopters, shipping financing and real estate project financing are performing better in this quarter.
Turning to Slide 18. The graph shows Taiwan's fee and commission income for the last 5 quarters. Fee and commission income continued to grow in this quarter due to the continuous growth of new business disbursement volumes.
Moving on to Slide 19. Revenue from our Taiwan operations for the first quarter of 2020 reached TWD 7 billion, representing 21% year-over-year growth. For the quarter-over-quarter comparison, the revenue growth was up 2% as business momentum in Taiwan is less affected by the coronavirus compared to other regions.
Turning to our next slide, Slide 20. Taiwan's net profit for the first quarter of 2020 reached TWD 2.2 billion, which grew by 23% compared to the same period last year. The first quarter net profit for Taiwan grew negative 12% quarter-over-quarter. And this is mainly due to a onetime tax benefit of TWD 470 million booked in the first -- fourth quarter last year.
According to the special regulations for repatriation of overseas funds released last year, the company repatriated overseas fundings back to Taiwan to enjoy the preferential tax rate.
On Slide 20. The left-hand side shows Taiwan's first quarter delinquency ratio rose to 2.9%. Here, delinquent amount in this quarter increased from the prior quarters, mainly due to more new delinquencies from consumer car financing and micro business financing with lower rise off and recover amounts from delinquency this quarter.
Slide 22. The allowance to loan portfolio in Taiwan slightly increased to 2.1% in this quarter.
Next, let's take a look at our China operation on Slide 23. China's total loan and receivable reached TWD 142.8 billion at the first quarter end, which grew by 19% year-over-year and negative 2% quarter-over-quarter. China's business volume was affected by the coronavirus lockdown in Wuhan and other regions of China. It also resulted a slower accumulation of the loan portfolio in this first quarter.
Turning to Slide 24. This slide shows you the loan yield and cost of fund trend for our China operations. China continued to maintain stable sales for this quarter.
Next slide, Slide 25. This slide shows you the trend of fee income resulted from the new business volume in China plus the deferred portion of the fee income from previous year. In addition, according to the new accounting treatment for trade finance business starting from the first quarter, the gross margin portion of the trade finance business will now be recognized in the fee and commission income instead. The first quarter's fee and commission income added to TWD 670 million.
Next slide, Slide 26. China's revenue for the first quarter of 2020 totaled TWD 5.1 billion, decreased by 8% year-over-year and decreased by 31% if compared to first quarter. Apart from coronavirus impact in the first quarter, year-over-year revenue grew slower than portfolio growth was also partly due to the trade finance recognition method change starting from this year.
If we try to add back the trade finance figure of TWD 1.31 billion and I assume the recognition method of sales revenue from trade finance business remained the same as last year, the revenue growth rate will then turn out to be 16% year-over-year increase and 13% quarter-over-quarter increase.
Moving on to Slide 27. China's net profit in the first quarter of 2020 was TWD 1.96 billion, increased by 21% year-over-year. For tax repay of this quarter of 2020, we recognized approximately RMB 90 million compared to RMB 40 million in the first quarter of last year.
On the right-hand side, China's first quarter net profit was up 35% quarter-over-quarter, which was partially contributed by additional tax repay of about RMB 17 million being recognized compared to the first quarter -- fourth quarter last year. In addition, to comprise the antitax avoidance requirements, our holding company adjusted investment structure for China operations. As a result, we recognized additional TWD 460 million income tax expense for the first quarter -- fourth quarter last year. Therefore, resulted in a significant increase of profit for the first quarter compared to fourth quarter last year.
Turning to next slide, Slide 28. On the left-hand side, China's delinquency ratio at the first quarter end goes up to 2.4%, up a 0.5 percentage point. This rising ratio was due to impact of coronavirus in the first quarter. 2.4% of delinquency ratio is still within management's expectation, and we didn't see any further significant change of our China asset quality so far.
As of April end, about 5% of China's portfolio was after the grace period our loan restructuring program, and the split is about half and half.
Next slide, Slide 29. China's allowance to loan portfolio ratio for the fourth quarter was -- remained 2.6% which remains sufficient.
Moving to ASEAN region on Slide 30. The total portfolio of our ASEAN operation at the first quarter end of this year reached TWD 62.4 billion and was up by 20% year-over-year and a negative 2% sequential growth. The lower accumulation of the loan portfolio growth in the first quarter compared to fourth quarter end was due to the impact of coronavirus lockdown in some of our ASEAN regions.
Let's turn to next slide, Slide 31. The left-hand side shows the revenue of our ASEAN operations. It was TWD 1.67 billion, which grew by 18% year-over-year. The revenue growth rate is quite in line with portfolio growth rate which was due to trade finance business is no longer inflated top line revenue starting from this quarter.
The number you see on top of the bar are TWD 153 million can add back to see an apple-to-apple comparison, which is having the sales revenue, recognition method remains the same as before.
On the right-hand side, the revenue for the first quarter was about TWD 1.67 billion, which grew negative 14% quarter-over-quarter. Business overall is impacted by the coronavirus outbreak for the first quarter.
Last slide, Slide 32. The total net profit for the first 3 months of this year was TWD 348 million, representing 26% year-over-year growth and negative 22% quarter-over-quarter growth. If we compare the first quarter of this year to the fourth quarter of last year due to more conservative economic outlook was taking, there was more impairment expenses recognized in first quarter versus fourth quarter of 2019.
In other regions, we also provide grace period and a restructuring program to our clients, and the amount is ranging from 10% to 20% loan portfolio in different countries to accommodate local government policy and all the individual market situation.
That is all for my presentation today. Thank you for your attention. And now I would like to turn the call back to operator to start our Q&A session.
Thank you.
[Operator Instructions] And the first question is coming from Gurpreet Sahi of Goldman Sachs.
So a couple of questions, please, if I may. First one on Taiwan delinquency. Can you explain why there's a jump in Taiwan delinquency this quarter? And second one on China. So I see the usual jump, but then can you -- I got this from the Chinese call that
[Audio Gap]
for increase in credit cost in China by 30 or 40 basis points. So can you relate your comment regarding the 5% of your borrowers in China asking for some sort of loan modification to how much credit losses can be finally expect it?
And then third and final question is regarding this spread which has so much of a decline in Taiwan? I know Kimberly mentioned that it is related to how the new business is lower-yielding than the older business, so can you talk about the yields that you are getting on this overseas helicopter and ship finance and real estate finance?
Okay. I'll answer the question by one. First is the Taiwan delinquency ratio. For this quarter, we can see it was increased to 2.9% compared to previous 2.7%. Actually, it's more driven from some segments, which is, as we mentioned in the presentation, like some of the micro business financing deal and some consumer car leasing or financing. So those segments, the delinquency ratio was increased more significantly. But overall, still remain -- I think the 2.9% still quite within the reasonable range. So I think to Taiwan -- the center similar to China, within the first quarter probably is the worst stage probably already like occurred in the first quarter, we already see some stabilization. And hopefully, this will be -- the delinquency ratio already reached to kind of peak. And I think going forward, we are still quite confident that this delinquency ratio should remain within the reasonable range, which is around 3%.
And then for the second question about the credit cost for our China operation. And as in the Chinese session of the result call, our CFO mentioned that in this quarter, our China delinquency ratio still set at 1.3%. So we didn't increase. But for the set portion, which is we offer the grace period and the restructuring, which is about 5% of the China portfolio. And to set aside some provision for this part, which is about RMB 90 million, 9-0.
And so I think because we have seen the data shown for this special batch like we provide grace period and restructuring, 5% of the China portfolio. With this, the quality prior to the other actually is similar. So I think because we already set aside RMB 90 million to try to increase the provision to cover this special program, so I think going forward, we will continue to monitor the asset quality of this 5%, how it evolves going forward.
And so still, we remain the same general provision ratio. And on top of that, we set aside RMB 90 million to, like, have kind of special provision for this part.
And now the last question is about the spread. I think the spread, the yield for Taiwan decreased in this quarter, mainly because of the product mix, as we mentioned in presentation. Because in this quarter, most of the growth driver comes from those like big ticket size of the helicopter or ships that kind of financing or the real estate project financing. For that part, the yield is lower. And -- but the return is the same as we explained before, because the credit cost is lower for this business segment and also the operating leverage is higher. So it won't impact our overall return, but from the yield perspective, it will lower our overall Taiwan yield.
So that's mainly because of the product mix change in this quarter. But I think for the longer term, like, for the whole year of this year, probably we still -- we will maintain similar, like, product mix compared to last year, year-over-year comparison. So overall, probably this year will be gradually coming back a little bit for the whole year point of view.
[Operator Instructions] And the next question is coming from Edwin Liu of HSBC.
May I ask a question regarding your Southeast Asia portfolio? Could you give some idea about the delinquency ratio? And if I remember from my memory, I think the delinquency standard is 90 days. And in first quarter, we've already seen a pickup in the delinquency ratio. So I think is it fair to say that the delinquency ratio will continue to deteriorate into second quarter and third quarter?
Okay. Regarding the asset quality of our ASEAN operation, and I think the blended delinquency ratio for ASEAN in this quarter end is 5.4% compared to previous quarter, it's about 5.1%. So it increased a little bit. And because 80% of our ASEAN still comes from Thailand, and Thailand -- oh sorry, let me do some correction, the overall ASEAN delinquency ratio was 4.6% on a blended basis, and compared to previous quarter, it's 4.2%. And the Thailand delinquency ratio was 4.5 -- 5.4% this quarter, also increased from the previous quarter of 5.1%. So I think -- yes, because for the most of the ASEAN countries, still, I think it's still kind of in the very -- a more worse situation compared to about this coronavirus outbreak compared to Taiwan and China.
So right now, we have still maintaining a more conservative view. And we also try to set aside more provision for all the ASEAN operating subsidiaries. So we will continue -- we will see whether the asset quality is evolving and development in the next quarter because hopefully, it's already peak in recent months. So -- and then it can be gradually stabilized in -- like in the next month or at the second quarter. That's our current observation.
Okay. So can I just follow-up on that? I think you mentioned set up -- already setting up some of the provision for ASEAN. So is it already reflected in the first quarter earnings number? Or is that provision still going to increase in the second and third quarter?
I think, yes, later on, you will see our segment information later, but -- the segment breakdown. I think I can give you some numbers for the provision expense for the overall ASEAN. Actually, we increased about TWD 86 million for the provision expense, which is about 90% increase compared to previous year -- year-over-year comparison.
TWD 86 million in terms of NT dollar?
Yes, yes.
[Operator Instructions] And our next question is coming from Anupam Mathur of Goldman Sachs.
So my first question is, what is our credit cost guidance for this year for different regions?
I think, so far, because we still need to continue to see what is development of the coronavirus situation going forward, so as of now, I think we should -- we just look at the
[Audio Gap]
comply with the -- all the accounting principles in terms of the provision requirement. So as we explained earlier, for -- because overall, we need to set aside for general provision and the other portion is the individual provision for those delinquent cases. And for the delinquent cases as well as our delinquency increase, then we will set aside more individual provision accordingly for the general provision part for the performing loans. And so far our general provision ratio for China already increased from like 1% for past last year to 1.3% at the current quarter. And on top of that, we also set aside more, which is like RMB 90 million to cover those customers that we offer some special program.
And for the time line, actually, the general provision ratio has remained similar to last year. And the individual provision is just as the policy, we will, according to the delinquent cases to do the case-by-case provision and to set aside the provision. So the -- in general, it's difficult to forecast the whole year credit cost at current end point. So I think just -- we just want to say that -- in addition, we just followed the regular provision policy. And according to the accounting, like, IFRS requirement, we set aside sufficient provision to cover that.
Okay. Understood. But do we have any guidance on the general provisions? Like, this is for the general...
Yes, general provision is like so far current -- currently, we have about 1% for Taiwan, 1.3% for China, plus the additional RMB 90 million.
Okay. Understood. Understood, understood. The second question I had was on this Taiwan growth in helicopter, real estate and shipping finance. So I'm just curious, like what sort of exposures, like, what sort of customers are these? Because, like -- because typically, these kind of exposures would be risky, right? So what are the clients are we dealing here?
Okay. If you look at the presentation, PowerPoint the industry exposure, actually, for Taiwan, we have about 6% industry exposure to the shipping, which is the ship financing we mentioned. And for those are mainly covered Southeast Asia countries. Those are the major markets and also Taiwan. So for that part is some overseas financing-related business. And yes, it accounts for like 5%, 5% to 6% of the total Taiwan portfolio.
Okay. But, like, when we are growing in construction, real estate project financing, I'm just curious, like, what type of customers are we giving loans to because typically, these industries are higher risk segment, so I'm just curious?
Construction is more we refer to those construction equipment. And the real estate is for some real estate development project that we provide some bridge loan. It's relatively shorter term.
Okay. Okay. Understood. The other question I had was on the China. Given there is slowdown in the western countries, is there any exposure in China, which you are closely monitoring or which has started showing early warning signs, say, directly or indirectly related to exports? So any exposures to that?
Okay. I think for our China portfolio, most of our clients still mainly domestic market-driven business. So the export-oriented that kind of business-driven clients accounts for a very small portion of our China portfolio. So as we explained, starting from last year because of the U.S.-China trade war, we maintained this exposure at below probably 5% to 10% of the overall China portfolio exposure. So that kind of exposure is quite limited.
Okay. But this -- we are talking of a direct export or indirect costs? So, like, some of our customers within the supply chain of exports, right? So...
I think it's direct costs second derivative. Yes. So because in China, still, we are mainly focused on the SME equipment leasing business. And also, in terms of the industry, it's very, very diversified. So there's no concentration at all.
Understood. Understood. And just one more from my side is, what sort of collection trends are we seeing from the customers?
Sorry, you mean the monthly account receivable collection?
Yes.
I think, so far, we are gradually back to the normal level, which is like 98%, 99%. As we -- as I remember, last month, we already back to like 98-point something collection rate. Hopefully, we can go back to the -- to even better collection rate, which we always have like more than 99% in last year. But I think things are getting better.
Okay. Because I'm just curious like when China utilization rates are closer to 70%, 80%, how are we able to manage the 98%, 99% collection rate? How do we manage such high rates when the clients themselves have not reached to the full utilization?
This collection rate is referred to the monthly account receivable, monthly due payment from our customers. So if they want to maintain the loan in the regular pool, so we won't activate perhaps, like, collection process. I mean they need to, like, maintain regular payment, right? So I think most of our clients, they will try the best to meet the payment schedule. So it will remain in the normal pool.
And next, we'll have Chung Hsu from Crédit Suisse.
Sharon, Just 2 question for me. One is, if I look at Page 24 of your presentation and if I look at the funding cost in China, for the past 3 years, it's been a slowly rising trend. And in fact, first quarter this year, with the highest of 5.02%. But if we look at China, the way PBOC is cutting the RRR the projected liquidity system and try to use LPR to guide market rate down, that's seem to be a bit of divergence of what we're seeing here in Chailease. Is there anything one-off or anything we should be aware of or just that as you grow faster in China than the overall money supply in China, you have to go through funding for smaller banks who will actually charge more to just by their cost of funding. Is that the way to think about it?
And then the second part of the question to that is, can you -- or how quickly are you passing on that to your customers? Because we obviously didn't see that in the last 2 quarters, when things are slower and tougher in China. Are we able to pass that on possibly second half this year?
Okay. Regarding the slight increase of the China funding cost overall, I think because the change from the PBOC benchmark rate to the LPR more market-driven interest rate is starting from this year. But actually, most of our funding is still using the old pricing mechanisms, which is the bench -- PBOC benchmark rate. So I think this rate cut hasn't really factored into our funding costs yet. And the other thing is, as you mentioned that because our China business growth rates still continue at a quite good rate, and we need more and more funding, so we need to utilize probably some more -- a little bit more expensive funding that we can get. So overall, I think we still cannot -- you still cannot see a very clear decrease of the funding cost because of the market rate trend is trending down. But because our business is still growing at a quite good pace and we need to find some more -- a little bit more expensive funding going forward. But I think that on the other side, we also try to develop a more diversified channel. Hopefully, on the average funding cost, we still can maintain the similar level.
And if we see this increase of the funding cost is a confirmed trend, for the -- for like continues like 2 or 3 quarters, then we will start to review -- revisit our pricing strategy depending on reprice. As you know, most of our pricing is fixed for 3 years contract term. For the new deal, actually, we can reprice our product. So I think actually, we can do the repricing quite quickly. Just we need to make sure this is really already a confirmed trend of the overall long-term funding cost to us. And the second -- yes, it's about the -- yes, that's my answer.
Okay. And the second question is, I just want to clarify that 5% loans restructured/given grace period, that is as of end April?
Yes.
Okay. And Manager has mentioned in the Chinese call that you would not give any more grace period and I just want to clarify if that's correct. And -- but selectively, there could be more restructured loans in May and going forward?
Yes. Because of this grace period, it's really a very temporary short-term solution that we try to react to this suddenly lockdown of the cities in China that we have operations. So going forward, I think we will use the restructuring as a program that we offer to some eligible clients.
I see. And I just want to clarify that we have this number correct. So out of 5%, 2.5% is restructure and 2.5% is given grace period, right?
Yes. Roughly, the split is half and half.
Okay. And if that means that those given grace period, if they somehow cannot pay on time, they will go into delinquent and the provisions will start to pick up?
Yes. Yes. If they cannot meet the new requirement, then it will book as -- you will put into the delinquency pool.
Understood. Are you able to give us more color of that RMB 90 million one-off provision booked in -- taken in March? Is that before a grace period type of loan -- or the loans given grace period of the restructured loans, but there's no breakdown just for those 5%?
Because actually, I think it's better to look at this together because in -- if they -- for some clients, we offer them grace period. They need to like flow into restructure. Because as you can see, last quarter, we say there's only 1% of the customer, they take the restructuring program. But in this quarter, actually, there are more. So obviously, some of the customers, they take the grace period program already are into this restructuring. So actually, it didn't -- I think we better to look at these 2 pool together. And going forward, then it will remain only one program, which is the restructuring.
[Operator Instructions] And next we'll have Anupam Mathur of Goldman Sachs for questions.
Sorry, I had just a couple more questions since nobody is asking. So one is on the liquidity situation in China in terms of our funding situation, what is the current situation in terms of getting liquidity in China for us?
Okay. Actually, I think our China funding support still remain quite sufficient under current growth prospects. So far, I think there's no problem in terms of liquidity or funding for our China operation, funding availability, still quite sufficient.
Okay. And just one last one from my side is, you mentioned there has been some pickup in the micro loans and car financing. So any other portion of the service industry we are monitoring or any estimate of vulnerable exposures you might be monitoring in Taiwan?
I think in Taiwan, because still most of the pure service-related industry got bigger impact from this COVID-19 outbreak, and which is like some hotel, restaurant chain store and which is our micro business -- financing business units. So that portion, the delinquency ratio increased more, obviously, for this quarter. And for the other, actually are less impacted.
And how big is that portion, the pure service industry?
It's about 5% -- 4% to 5% of Taiwan book.
And there are currently no questions on the line. We thank you for all your questions. That would be the end of the Q&A session. And also, we thank you for your participation in Chailease conference. You may now disconnect. Goodbye.