Chailease Holding Company Ltd
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Chailease Holding Company Ltd
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Welcome to the Chailease Fourth Quarter 2019 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 Vic Wang, Manager of Investor Relations. And Mr. Wang, please go ahead.
Thank you, operator. Hi. Good afternoon, everyone. I would like to welcome everyone to Chailease Holding Fourth Quarter and Full Year 2019 Earnings Conference Call. With me this evening is Ms. Sharon Fan, Head of IR, and she will open to your question in Q&A period. I will walk you through this quarter earnings presentation, which is available for download on our corporate website under the IR section.
As a reminder, please refer to the disclaimer regarding forward-looking statement at the front of the presentation. The agenda we are going to cover for today on Slide 3 includes management highlights, fourth quarter 2019 consolidated performance review, followed by the segment review for our Taiwan, China and ASEAN operation.
Without further ado, I would like to start the presentation from Slide 4, highlights for overview of our fourth quarter 2019 operational results. First, the summary table here shows the loan portfolio growth for the full year as well as fourth quarter 2019. On the year-over-year basis, Taiwan, China and ASEAN loan portfolio grew 7%, 28% and 30%, respectively. Taiwan grew 20%, if we include the Solar net assets to make the growth comparable. On a consolidated level, we achieved 17% year-over-year loan portfolio increase. Compared to the previous quarter, Taiwan increased 5%, China increased 11%, ASEAN increased 4% and 7% growth on a consolidated basis in the fourth quarter 2019. For the 2020 loan portfolio growth guidance, after considering current macroeconomic and the impact of COVID-19, the management expect 5% to 10% growth on the group level. For Taiwan, China and ASEAN loan portfolio growth 5% to 10%, 5% to 10% and 10%-plus loan growth is expected, respectively. The management will revisit the yearly guidance in the second quarter when we have more visibility.
Next slide, Slide 5. It's an update for our fee income recognition. Table here shows the percentage of fee income recognized for 2019. For the full year 2019, Taiwan and China recognized 88% and 56%, respectively. The impact of unrealize the fee income expect to further minimize and reduce this year.
Let's move to the next section. Fourth quarter 2019 performance review. Moving on to Slide 7. Consolidated loan portfolio reached TWD 414 billion at fourth quarter end 2019 with 17% year-over-year growth and 7% quarter-over-quarter increase as China continue with the major growth driver for the quarter.
The next slide, Slide 8, shows you the trend of consolidated average loan yield and cost of fund for the past 3 years. As you can see, we continue to maintain relatively stable interest spread. We will discuss the change of each operation region in the next section.
Next slide, Slide 9. This page shows you the change of consolidated fee income. On a quarter-over-quarter comparison, consolidated fee income continue to grow, reflects the continued business momentum.
Next slide, Slide 10. On the left-hand side, the consolidated revenue for 2019 reached TWD 59 billion, representing 17% growth compared to 2018. This lower consolidated revenue growth compared to portfolio growth was mostly driven by decreased fee income due to fee recognition change in 2019. On the right-hand side, fourth quarter consolidated revenue was 16% -- TWD 16 billion, increased 7% from the previous quarter.
Moving on to Slide 11. On the left-hand side, the consolidated net profit for 2019 totaled TWD 15 billion, and earning per share was TWD 11.65. On the right-hand side, fourth quarter consolidated net profit was up 3% as more operating expense were booked for the quarter.
Turning to Slide 12. The slide shows you our loan portfolio mix and profit contribution in terms of operating region. On the left-hand side, we can see Taiwan business field account for the half of group total portfolio. China is about 34%, and ASEAN slightly increased to 15% for fourth quarter 2019. On the right-hand side, Taiwan net profit contribution accounts for 51%, and China accounts for 41%. ASEAN contribute 5% to the consolidated net profit.
Moving on to Slide 13. The chart on the left-hand side, cost-to-income ratio maintained efficient at 31% for 2019. The chart on the right-hand side, asset to equity increased to 6.7x for 2019.
Slide 14. The consolidated ROA on an annualized basis was 3.6% for 2019, decreased 0.2 percentage points compared to 3.8% in 2018 due to change of fee income recognition in 2019. Consolidated ROE on the right-hand side was 24% compare to 23% in 2018.
Next slide, Slide 15. The consolidated delinquency ratio, on the left-hand side, at fourth quarter end was down 0.2% to 2.6% as Taiwan decreased and China maintained this quarter. Later in the presentation, I will talk about each region in more detail. Moving to the right-hand side, allowance to loan portfolio ratio slightly decreased to 2.5%.
Moving on to the segment review. Let's look at our operation performance region by region. On Slide 17, our Taiwan loan portfolio reached TWD 200 billion at fourth quarter end 2019, representing 7% year-over-year increase sequentially, was up 5%. If we include our Solar net assets, loan portfolio growth for 2019 increased 20% and quarter-over-quarter increased 6% as new loan disbursement for Solar business, used car financing and lending in macro enterprises continue the business momentum for the quarter.
Next slide, Slide 18. This page presents trend of our Taiwan loan yield and cost -- funding costs. Cost of fund at fourth quarter 2019 was slightly decreased to 1.34% from 1.36% in third quarter as funding costs for U.S. dollar decreased.
Turning to Slide 19. This slide shows you the change of our Taiwan fee income. Business momentum continued for the quarter.
Moving on to Slide 20. Revenue for our Taiwan operation for 2019 reached TWD 26 billion, representing 17% year-over-year growth. The slower revenue growth compared to portfolio growth was mainly driven by less fee income were recognized in 2019. For the quarter-over-quarter comparison on the right-hand side, fourth quarter revenue was TWD 6.9 billion and grew by 4% quarter-over-quarter.
Turning to next slide, Slide 21. Taiwan's profit for 2019 grew by 16% compared to 2018. The fourth quarter Taiwan net profit was about TWD 2.5 billion, which grew by 16% quarter-over-quarter, mainly due to TWD 770 million tax refund was received as we repatriate overseas funds back to Taiwan to enjoy the preferential tax rate in the fourth quarter.
On Slide 22. On the left-hand side, Taiwan delinquency ratio at fourth quarter dropped 0.3 percentage point to 2.7%. If you look at new delinquent amount this quarter, it decreased from the prior quarter. On the right-hand side, recovery from delinquency and write-offs remain stable.
Next slide, Slide 23. Allowance to loan portfolio for Taiwan slightly decreased to 2% in this quarter.
Let's start China operation on Slide 24. China total loan and receivables reached TWD 146 billion at fourth quarter end 2019, which grew by 28% year-over-year, an 11% increase sequentially. This quarter, China continued the business momentum from prior quarter which increased the loan disbursement.
Turning to Slide 25. This page shows the loan yield and cost of fund trend for our China operation. China continue to maintain stable spread for the quarter.
Next slide, Slide 26. This slide show you the trend of fee income in China. China continued the business momentum from the prior quarter.
Next slide, Slide 27. China revenue for 2019, total TWD 26 billion, increased 13% as less fee income were booked this year. On the right-hand side, the sequential revenue was up 9%.
Let's look at China revenue breakdown on the Slide 28. Trade finance revenue was totaled TWD 9 billion for 2019, which maintained the same level of 2018 but increased 7% quarter-over-quarter.
Moving on to Slide 29. China 2019 net profit reached TWD 6.8 billion, increased by 9% year-over-year and was down 20% sequentially. To comply with the global anti-tax avoidance requirement, our holding company adjust the investment structure of China operation. As a result of that, we recognized additional TWD 460 million income tax expense for the quarter.
Turning to next slide, Slide 30. On the left-hand side, China delinquency ratio in fourth quarter remained at 1.9%. On the right-hand side, write-off and recovery from delinquency amount increased for the quarter compared to the prior 2 quarters. Due to the impact of COVID-19 and China imposed the lockdown in Wuhan and other cities, starting from February 2020, the management decide to provide grace period and loan restructuring for the clients in China with good payment track record. Currently, the amount of grace period and loan restructuring provided are totaled 3% of China loan portfolio.
Next slide, Slide 31. China's allowance to loan portfolio ratio for fourth quarter was down 0.3 percentage point to 2.6%, which remains sufficient.
Moving to ASEAN on Slide 32. The total loan and receivable at fourth quarter end 2019 reached TWD 63 billion, was up 30% year-over-year and 4% sequential growth. Vietnam and Malaysia operation continue to deliver higher loan portfolio growth in 2019.
Let's turn to next slide, Slide 33. The left-hand side, ASEAN revenue for 2019 totaled TWD 7 billion, grew 43% compared to 2018. On the right-hand side, ASEAN fourth quarter revenue was up 15% sequentially as more sales revenue from trade finance in Vietnam was booked for the quarter.
Moving to the last slide, Slide 34. ASEAN 2019 net profit reached TWD 1.3 billion, increased by 12%. On the right-hand side, ASEAN fourth quarter net profit was up 36% sequentially, driven by less impairment expense in Thailand for the quarter.
And this also bring us to the end of my presentation for today. Thank you for your time and listening. Now I would like to turn the call to operator to open the line to questions. Operator?
[Operator Instructions] The first question is coming from Stephanie Wu of HSBC.
I was just wondering if you could give some more color on the recovery in China, please. So you mentioned, obviously, the grace period. And how long do you expect that to remain in place? And then can you talk a bit, please, about the kind of recovery and activity you're seeing and how that's impacting your borrowers in China?
Okay. So far, in response to this COVID-19 outbreak in China market, so far, management has adopted like 2 measures to like to handle this situation. So first is for the grace period, which we will extend -- we will like make the -- only for the February and March. For these 2 months of monthly payment, that we will extend no more than 90 days. So that -- which means before like -- by end of June, then hopefully, everything can like go back to normal process. So this is what we offer, the grace period for some of our customers. And actually, for all the cases like apply for grace period or restructuring also needs to be case by case evaluated. So, so far, overall, about 2% of our customer or about the portfolio amount was given the grace period and another 1% for the extension of the payment schedule.
And in terms of activity on the ground, so obviously, your borrowers are very much geared into maybe infrastructure projects. Is that fair to say? Or maybe you could talk a bit about what the exposure is mostly to and what are you seeing anecdotally on the ground. I mean we're seeing some NDRC data related to infrastructure projects resuming 60% to 80% of prior kind of -- in activity levels and, even in the property sector, pickups as well. Can you corroborate that? And maybe can you talk a bit about how much exposure you have to Hubei province versus other provinces and so whether, elsewhere, there's going to be problems or not and whether the situation is getting worse or better?
Okay. So far, we already have like 49 branch offices in the whole China market in like many provinces. And in Hubei province, we only have one branch office, which is in Wuhan. So Wuhan accounts about 2% of the China business volume, which is less than 1% of the whole group in terms of the overall portfolio exposure.
And in terms of the industry segment exposure because so far, we still many -- the major product we offer in China is still the manufacturing equipment leasing to the SME. So if you can see on our presentation slide, the very last page of the top 5 industry exposure in China, actually, they're still mainly focused on those manufacturing sectors and actually almost no exposure to the property, and we only provide services to the private sector. So there's no SOE like related clients.
Okay, great. So I don't want to hold all the questions. But I mean in summary, you're saying that the maximum risk you're going to see here is 3% of China loans. In case the business doesn't come back, we would have an effective risk on 3% of our loans. And what percentage of that would be -- or what is the collateral amount?
You mean the 3% for those we offer the grace period and the extension?
Correct. So this must be a risk that they might not come back and another loan. So how much is collateralized of that?
Every deal has the collateral by using the equipment, yes. So basically, we need to closely monitor this portion of the portfolio that we offer, the grace period. And hopefully, they can -- their payment capability can be -- catch up after like a few months. So that's the reason why management didn't change any definition of our like 30 days overdue as a delinquency. We just offer some short-term solution for the clients in response to this virus outbreak situation.
But in terms of your own financials, I mean, by the second quarter results, we should've captured all of the negative impact is what you're saying, right? Because all of this has been extended to June. And so by June, we should know what -- how much of the 3% restructured loans and grace period has gone bad and that will be recognized in the June quarter.
Yes. Yes. So under the current -- this arrangement, so all the delinquent will be catch up at the second quarter.
[Operator Instructions] And next, we'll have Jemmy Huang of JPMorgan for questions.
Just trying to clarify one question during the Chinese session. I think the CFO kind of mentioned how you expect credit cost will be trending up, but just want to reconfirm. I think what CFO mentioned about 1.7% credit cost, is that for China operation only or for the group as a whole for 2020?
That's for China. Because for last year -- as you remember, for last year, our general provision ratio for China operation is around like 1% to 1.2%. And then this year, I think given all the macro situation, we already like has a higher like forecast about increased 30 to 40 bps. So it's about 1.4% to 1.6%. That's our estimate for China.
Okay. Just one follow-up question. I think for the restructure and for the grace period, I think the grace period, as you mentioned, it's only for February and March. But for the restructuring parts, is that program will continue even beyond first quarter? I mean if in April, you still have customers come to you saying that they want to renegotiate the payment tenure, will you still accept that? Or you would just...
I think so far -- because the restructure is more -- it's a higher hurdle because the sales -- the account officer need to provide more detailed evaluation. And so we will try to extend the payment like no more than 3x of the current installment. For example, if current client, they apply for the extension, it's restructurable extension, that the remaining payment probably only like 20 months, they can extend no more than like 3x of the 20 installments. So it's more case -- it's even more case-by-case like review. So, so far, we just -- we didn't like discuss about whether it will extend like more than June.
So in your case, you mentioned 20 months and then 3x, which will become 60 months, 6-0. Is that the case?
Yes.
That's the maximum.
That's the maximum, but still subject to the case-by-case review.
And then for the interest rate, is that likely to be lowered as well?
No. I don't -- so far, we haven't discussed reduce the charge -- the interest rate we charge.
And the next question is coming from Edwin Liu of HSBC.
So I mainly have 2 questions. Firstly, it's on -- you just mentioned the general provision for China. Can I get an update on general provision for Taiwan? And would you change that as well?
And also, second question on loss given default. I think management mentioned some figure in the Chinese call. So just want to get the updated figure on consolidated level and for Taiwan and China, respectively.
Okay. For Taiwan, the general provision rate, because you can see our Taiwan asset quality still remain very healthy and stable, I think so far, we didn't have big change of the general provision ratio, so far. And as long as the asset quality can maintain, I think it's probably still maintain around 1%.
And for the loss -- the recovery rate, you mean, or the loss rate. For China, actually, the average -- I think the best recovery rate we achieved for China operating can be as high as like 70%. But I think the average is still around 50%. So the loss ratio for China probably still about 40%, on average.
And for Taiwan?
Taiwan loss ratio like still around like 30%.
[Operator Instructions] And the next question is coming from Chung Hsu of Crédit Suisse.
Yes. I just have a few follow-up questions. Can I first confirm that loan restructures are not given grace period? Meaning there's no hold in payments for the restructured loans. And also, if we look at these restructured loans and loans given grace periods, the IRR from Chailease perspective is not lower, not less.
And just -- and my second question is when you -- when the CFO guided 1.7% credit cost of China, that is already factored in this 3% restructured loans and also loans given grace period or these loans -- these are not taken extra provisions yet unless there's any delinquency from this later on this year.
Okay. Maybe I answer your second question first. Yes, this 1.7% is already taken to this restructure and grace period into consideration. So yes, that's for your question, the second question.
And for the first one, actually, for the grace period, we -- now we offer is for the February and March payment, which is our account receivable for these 2 months. And for the restructure, actually is more to extend the payment period. And like I -- like the example I mentioned. So probably our customers, they -- we can like given customer more installments to pay. So for every payment, the amount will be reduced a little bit, try to ease their paying -- the payment pressure, yes.
So is it fair to say that these loans, 3% loans, won't serve as any problems for the next 2 to 3 months? We probably have to wait until mid of the year to see if there's any further issue.
Yes. Yes. Yes. So because we just offered them this short-term like solution first and continue to monitor to see what's the result.
And the next one is from Stephanie Wu of HSBC.
Can we just clarify the 2020 guidance on growth? And sorry, it was a bit quick, maybe I got it wrong. But I think you mentioned Taiwan, China, ASEAN plus 10% loan growth this year. Can we just think about China and what you've experienced in the first quarter and then talk about arithmetically how that adds up to 10% for the year as a whole, assuming that China growth is also 20% -- sorry, 10% for 2020? So if you think about first quarter loan growth and then what kind of a recovery we need to see to achieve that number, please, in detail.
I think given the limited visibility so far for the first 2 months this year, and so management guided for like 5% to 10% growth on the consolidated level and also for Taiwan and China. And probably, we have some chance to have a better than 10% growth for ASEAN operation. So yes, that so far, like management can given about the guidance, the growth guidance. But we will revisit this, our forecast, when we have this first quarter result.
Okay. But I mean it's fair to say that probably in the first quarter, there wasn't much growth. I mean seasonally, it's slow and obviously the COVID situation as well. What I'm wondering is -- is it ultimately with this guidance and you're expecting a V-shape recovery sometime after the second quarter, isn't it? So basically, we're going to see nothing in the first half or maybe nothing in the first quarter and then maybe some pickup in the second quarter in some provinces and then a big V-shape recovery in the second half. Is that how you would see this?
Yes. So we still kind of cautiously like optimistic, hopefully, that we can catch up some of the loss business opportunity in the second half.
So is it possible to talk about industry? Because obviously, I got it wrong early when I said infrastructure projects would help you. What we need to see is a pickup in overall economic activity and sort of CapEx -- manufacturing CapEx, right? That's what we need to see.
Yes. But so far, in China, still -- we still believe there's growth opportunity coming from the more penetration to the new market, new customer base. So probably overall for the nationwide, the CapEx expenditure didn't increase that percentage. But still, we can like develop new potential clients, offer them this financing, new financing like product to them in addition to the traditional bank lending.
And the next question is coming from [ Michael Ling ] of [ Kittei Securities ].
Just want to -- firstly, I just want to clarify that for those loans you mentioned you offer a grace period or loan extensions, that they will not be categorized as nonprofitable at the moment. And just wondering that the company did this before or not. The Chinese, they offer the China customers this kind of grace period or loan extension before in that.
Second question is regarding the interest rate margin, that I noticed that the interest margin was narrowed in China in the fourth quarter and the lending rate was down by more than 10 basis points. Is this -- any reason behind? You said that result from derisking. And what's your interest rate spread guidance for this year?
The last question is regarding the loan growth, that in the first quarter and since we are moving toward the quarter end by now, that -- is there any visibility that we -- about loan growth in the first quarter? That is it possible that we will see loan decline quarter-on-quarter?
Regarding this grace period and restructure, actually, in the past, it's very, very -- like very few cases. It's not like this time. We offer more to our -- good -- to our clients with good track record. In the past, it's very few cases that we're using this grace period or extension.
And for the spread, actually -- probably it's because of the depreciation of the RMB because we didn't change our pricing, and the funding costs also remained quite stable. So I think going forward, we still expect to maintain this spread level going forward.
Regard -- the last question is about the -- sorry, can you?
Yes. The loan growth in the first quarter that -- will we see a quarter-on-quarter loan decline?
I think for this quarter, yes, maybe because it's really tough for the February and March for the new business volume. So probably, yes. But it probably is a little bit challenging to like maintain the balance or even increase.
Okay. Just a follow-up question regarding your loan duration in China and in Taiwan. The duration in China is like 2 years?
3 years.
3 years in China, and 2 years in Taiwan?
Taiwan. Because the product is more different products with some very short-term duration, so the blended duration -- the average duration is about 20 months.
I see. Sorry, another follow-up question is regarding that. The Chairman mentioned about the loss on the given defaults that was about 30%. Is it firm-wide? Or is that differ hugely from Taiwan to China?
Actually, our Taiwan loss given -- LGD is usually around 30%. And in China, for some good quarters, we reached to this level, too. But I think on the average, still about 40% LGD for China.
[Operator Instructions] And next question is from Stephanie Wu of HSBC.
Sorry to monopolize your call here. But can you talk a bit about ASEAN and some of the growth drivers you mentioned previously, sort of, Malaysia and Vietnam as kind of geographies? What exactly is driving this year? I mean Malaysia is a quite well-penetrated market, and so to better understand where the growth is coming from in ASEAN. And then can we talk a bit about the profitability from ASEAN and how you expect that to improve over time? Or what exactly is the reason for lower profitability across the ASEAN portfolio?
I think for ASEAN, for the group level, our strategy is to -- like the ASEAN is mid to longer term, that driver for the whole group, because after all, ASEAN only accounts for like 5% of the group profit, although it's -- the portfolio accounts for like 15% because we still need to deduct the minority interest there. And for the past couple of years, the major growth comes -- for ASEAN, major comes from Malaysia and Vietnam. They continue to deliver like 30% to 40% year-over-year growth, but still relatively small base. And for Malaysia, because of this virus outbreak, I think probably this year, we need to like lower down our growth guidance, not to like 30% or 40% like before. So that's the reason why our Chairman mentioned in the growth guidance about like roughly 10% for the whole ASEAN growth. So yes, that's about our ASEAN like strategy.
No. So I don't quite understand. So I mean Malaysia is very, very penetrated market. I mean where are we gaining the share from? Why is growth so strong here? And again, I mean...
For Malaysia, we are mainly offering the consumer used car financing. So -- and I think there's still quite a good unpenetrated market. So still can offer us quite good growth.
And the reason that ASEAN as a whole is less profitable, is it because our cost to income is much higher as we kind of grow that business and we have a lower scale? Or is it inherently because the spreads are lower or my credit cost is higher? Can we just go into the composition of profit?
Okay. Because currently, still -- our ASEAN operations still 80 -- 70% to 80% comes from our Thailand subsidiary. And Thailand spread is lower because it's relatively more competitive market, yes. So I think probably we need to like wait our Malaysia or Vietnam grow to a bigger portion of the ASEAN, then we can enhance the profitability structure for ASEAN.
And so Thailand is also just used car financing. I mean so basically, the whole of ASEAN is just used car financing.
So Thailand is more for the commercial-purpose vehicle financing, like all those big trucks, those transportation equipment for all the like small enterprises.
And given the strong growth we've seen in those kind of geographies in ASEAN, I mean, do we expect a sort of natural loan book seasoning impact to further kind of -- and have profitability there? As we kind of slow down growth this year, should we see a negative impact of seasoning loan book, do you think, after we had a very strong growth last year?
Okay. We already have more than 20 years operation history in Thailand and more than 10 years operation experience in Vietnam. So I think our asset quality already proved to be quite -- like within a quite narrow -- like narrow band variance. So the credit cost has been maintained quite stable.
Okay. And then last question was around sort of dividend payout ratios, dividend yield and, obviously, capital adequacy. So I think there was resolution recently that you can raise additional capital. So can you talk about where our capital adequacy is, where we would like to be and how we think about dividend payout?
Okay. So far, management still want to maintain a similar payout ratio as last year, which is around 40% cash dividend payout ratio should be maintained this year. And because as you -- we always like guided that we -- the management wants to maintain the leverage ratio, which is the total asset to equity, no more than 8x. And as you can see from our -- this quarter presentation, this leverage ratio already reached almost 7x. And so we are in the process of prepare the equity fund raising. And this time, we -- the management consider to do these preferred shares and to enhance our balance sheet structure by increase the equity portion and -- but because in Taiwan, this coupon rate for the preferred shares actually is quite reasonable and quite low, so management think this is a good funding tool for us to support our future growth.
So just remind me, in terms of the size that you've announced, how would it improve our leverage ratio? And how many years of growth is this going to support, i.e., when do we have to raise again?
Okay. This amount we planned this time to raise is about TWD 15, 1-5, billion, which should bring down our leverage ratio below 6x and to support another like 3 to 5 years growth.
And then given the share price performance recently, obviously, with the global market sell-off, is that still the right thing to do, to raise the equity now if you think about the dilution impact? Or are we...
Because we are considering these preferred shares, so it should be no dilution for the common shareholders because we pay the fixed coupon rate, which is around 3% to 4% in Taiwan market, yes.
And when you say the payout ratio will be maintained at 40% cash payout. That is the payout for FY '19, right, that you're going to make in the coming months?
Yes.
Okay. But longer term, longer term, how do we balance the dividend payout with the growth? You're still obviously seeing strong growth, and we still need growth capital. So are we committed to this 40% payout ratio? And would you say that a lot of your investors are looking for the yield when they invest in your stock?
Because in our -- the company policy is to -- the payout ratio is like within 30% to 50%. In some years, we pay out to the maximum of 50% because we slow down the growth and like we adjust down this payout ratio to 40% starting from last year because we -- management think we can go back to a little bit better growth compared to like year 2015. So I think, yes, if there's no significant change, I think, going forward, this 40% payout still can be maintained.
[Operator Instructions] There are currently no questions. Thank you.
Jason, we can end the call, please.
Yes. Thank you, Mr. Wang. And ladies and gentlemen, we thank you for your participation in Chailease conference. You may now disconnect. Goodbye.