Chailease Holding Company Ltd
TWSE:5871
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Chailease Holding Company Ltd
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Welcome to Chailease 2022 Full Year Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. For your information, a webcast replay will be available within an hour after the conference call is finished. Please visit www.chaileaseholding.com under the Investor Relations section. Now I would now like to turn the call over to Ms. Kimberly Lian, Project Manager of Investor Relations. Please go ahead.
Hello, everyone. Thank you for joining us today for our Full Year 2022 Result Conference Call. I'm joined by Ms. Sharon Fan, Head of IR Department, and she will be open to questions after my presentation. The presentation I'm giving today will be available for download on our official website. And as a reminder, please refer to the disclaimer in Slide 2 regarding forward-looking statements. Our actual result may differ from such statements.
Now I'd like to begin the presentation by turning to Slide 3. Today's agenda include management highlights followed by the consolidated performance review and segment review for our major operations. Now let's turn to Slide 4 for highlights that summarize our performance of 2022. First of all, the summary table here shows you the loan portfolio growth for each of our main operation regions with the year-over-year and quarter-over-quarter comparison. 2022 is still a year filled with hardships. In facing these challenges, Chailease has continued to seek drivers for growth in our 3 major markets, Taiwan, China and ASEAN operations. We also stay informed of the latest industry development trends. And diversification in our customer base, industries and geographical regions also help mitigate negative impact of the decelerated global economy.
In 2022, Chailease Holding once again had outstanding performance. Our consolidated level, you can see on the right-hand side of the table. We achieved 20% year-over-year portfolio growth and 4% quarter-over-quarter growth. Our main regions, Taiwan, China, and ASEAN's loan portfolio grew by 23%, 10% and 33% year-over-year and 3%, 2% and 8% quarter-over-quarter. Due to the currency depreciation against NT$ the portfolio growth rate of our ASEAN was about 25% in local currency.
As for China, although China's portfolio growth was slowed down in year 2022 due to the disruption caused by the pandemic lockdown, however we have seen gradual recovery after second quarter and achieved 10% annual portfolio growth. As for Thailand and ASEAN's operation regions, both has outperformed in 2022 of the planned target. Secondly, in 2022, we continue to maintain nice profitability and maintain operational efficiency in all of our major regions. Third, in terms of ESG achievements Chailease Holding has been selected and included in both DJSI World Index and DJSI Emerging Markets Index for 3 consecutive years.
Looking into 2023 for our portfolio growth guidance, the company will continue to pursue healthy growth in all of our major operating regions. In terms of portfolio growth target for this year, the company is looking for 10% to 15% for Taiwan and China operations and 15% to 20% for ASEAN regions.
Let's move to the next section, performance review for the full year. As we can see on Slide 6, the consolidated loan portfolio reached TWD 671.2 billion for the fourth quarter end of 2022 with 20% year-over-year growth and 4% sequential increase. Nice growth momentum shown in the fourth quarter. Especially Taiwan and ASEAN grow nicely quarter-over-quarter.
Turn to Slide 7. The graph shows the trend of consolidated loan yield and cost of fund for the past 12 quarters. We continue to be able to maintain stable spread. This quarter, the cost of funds is rising in the fourth quarter both in Taiwan and ASEAN to reflect the rising interest environment. However, we have been able to gradually adjust the price accordingly for new contracts.
Next slide, Slide 8. On the left-hand side, the consolidated revenue for 2022 reached TWD 86.7 billion, representing 20% growth compared to 2021 last year, which is in line with the overall portfolio growth. On the right-hand side. Fourth quarter consolidated revenue increased by 4% from the previous quarter.
Moving on to Slide 9, on the left-hand side. The consolidated net profit for the year total TWD 27.2 billion and earning per share was TWD 17.17. The EPS ratio already factored in the preferred share dividend paid in May last year. [indiscernible] net profit growth and revenue increase was mainly due to lower consolidated effective income tax rate compared to last year. The consolidated effective tax rate now is back to a normal level at around 28%. On the right-hand side. First quarter consolidated net profit was down 13% quarter-over-quarter as higher expected credit loss booked in the first quarter and higher interest expense due to the rising rate environment.
Turning to Slide 10. This page shows you our loan portfolio mix and profit contribution in terms of our operational regions. On the left-hand side we can see Taiwan's business account for 51% of the group's total portfolio, China accounts for 33% and ASEAN 15%. On the right-hand side, in 2022, Taiwan net profit contribution account for 50% and China account for 43%. ASEAN contributed 6% to the consolidated profit excluding minority interest. Taiwan's contribution to the group both in terms of the portfolio size and net profit was back to 50% and above as a result of faster growth compared to China in the past 2 years.
Moving on to slide 11. It shows the cost to income ratio and leverage ratio for the group level. On the left-hand side, cost to income ratio is 26% for 2022, which was maintained compared with previous year. The chart on the right-hand side, asset to equity, decreased to 5.8x compared to last year as TWD 11.5 billion GDR offering is completed last July.
Please turn to Slide 12. The consolidated return on asset on an annualized basis achieved 3.6% for 2022 compared to 3.5% in 2021, reflecting slightly higher growth of net profit for 2022. And this is due to the effective income tax rate back to a normal level starting 2022. The consolidated return on equity on the right-hand side is 24%, which has continued to achieve our long-term target level of above 20%. And the formula we use to calculate the ROE is excluding the preferred shares.
Next slide, Slide 13. The consolidated delinquency ratio shows on the left-hand side at fourth quarter end that delinquency ratio is increased slightly to 2.4% because of China and ASEAN's delinquency trends slightly up. Later in the presentation we will look at each region's asset quality in segment review. Looking at the right graph, allowance to portfolio ratio is maintained at 2.1% and it remains sufficient.
Moving on to the segment review. Let's look at our operation performance country by country. On slide 17 (sic) [ Slide 15 ]. Our Taiwan loan portfolio reached TWD 341.1 billion at the end of 2022, representing 23% year-over-year increase and 3% quarter-over-quarter growth rate. Overall, every product line performed well in 2022 besides the growth driver for the new business unit such as offshore lending, consumer used car financing and lending in micro business. Our traditional co-product, for example, SME financing business, was also benefited from the much better Taiwan macroeconomy. For Taiwan operation, diversified product and service in different niche market help continue to drive growth in Taiwan and achieved nice portfolio growth. Taiwan's loan portfolio growth has outperformed our original target set in the beginning of 2022.
Slide 16. The slide shows the change of Taiwan's solar asset. Taiwan's solar net asset reached TWD 47.3 billion at fourth quarter end of 2022, representing 31% year-over-year increase and quarter-to-quarter was up 9%. The solar asset account around 9% of Taiwan's total asset as of the end of 2022.
Next slide, Slide 17. This page represent trend of our Taiwan loan yield and funding cost. In recent quarters, the loan yield and funding cost increased, reflecting the benchmark increase rate arising last year. However, the blended spread has been stabilized as we gradually factor in the new funding cost for the new business deals.
Moving on to Slide 18, revenue for our Taiwan operation for the first 12 months of 2022 reach TWD 45.96 billion, representing 26% year-over-year growth. The solar revenue account 13% of Taiwan's revenue for 2022. For the quarter-over-quarter comparison, on the right-hand side. Fourth quarter revenue grew by 3%. In the fourth quarter, less solar income was booked due to less sunshine hours in the wintertime.
Turn to next slide, Slide 19. Taiwan's net profit for 2022 reached TWD 14.8 billion, which grew buys 24% year-over-year, which is quite in line with portfolio growth. For the quarter-over-quarter comparison, profit was done 18% if compared to previous quarter due to higher interest expense and higher expected credit loss booked in the fourth quarter.
On Slide 20, the left-hand side shows Taiwan's fourth quarter delinquency ratio stayed at 1.9%, reflect that asset quality has maintained stable.
Slide 21. The allowance to loan portfolio in Taiwan was 1.7% at the fourth quarter end, which remains sufficient.
Next, let's take a look at our China operation on Slide 22. China's total loan and receivables reached TWD 218.7 billion at the year end, which grew by 10% year-over-year end 2% quarter-over-quarter. Business momentum in China in the first half of this year was affected by the lockdown restriction and concern of the economic outlook, but began sound growth in the second half. Therefore, China achieved a lower end of our target last year. However, we have seen a positive sign of slightly quarter-over-quarter trend in terms of portfolio growth since the second half of last year if we look at the exposure in local currency, RMB.
Turning to Slide 23. We still managed to maintain a stable interest spread in China. The slide shows you the loan yield and cost of funds trends for our China operation. Funding cost even shows slightly decrease in the first quarter.
Next slide, Slide 24. China's revenue for 2022 total TWD 29.7 billion, increased by 8% year-over-year. The year-over-year revenue growth was in line with portfolio growth. On the right-hand side. The sequential increase of top line growth of 3% was driven by better business momentum in the fourth quarter.
Slide 25. China's net profit in 2022 was TWD 13.07 billion, increased by 4% year-over-year. The lower profit growth versus portfolio growth was because of higher expected credit loss to reflect the slightly increase of delinquency. On the right-hand side, China's fourth quarter net profit was up 2% quarter-over-quarter. And Chailease's slower profit growth and revenue growth rate for fourth quarter compared to previous quarter was due to the same reason.
Turning to the next slide, Slide 26, on the left-hand side. China's delinquency ratio as a fourth quarter end slightly increased to 2.7% from 2.4%. China delinquency ratio increase, reflect the impact from the pandemic lockdown as well as the economy slowdown. However, the current delinquency ratio is still within the normal range, giving our relatively high spread pricing strategy. And hopefully it will pick out sometimes during this year and with the continued business momentum pick up as we have seen for the past few quarters.
Next slide, Slide 27. China's allowance to portfolio ratio is 2.4% at fourth quarter end.
Moving to ASEAN regions on Slide 28. Right now our ASEAN operation including Thailand, Vietnam, Malaysia, Cambodia, Philippines and Indonesia. For current quarter for the majority of ASEAN operation in terms of portfolio breakdown. The total loan and receivable at the fourth quarter end of 2022 was TWD 102.5 billion. And it was up by 33% year-over-year and 8% quarter-over-quarter. Thailand, Vietnam and Malaysia remain as the main growth driver for ASEAN this year.
Slide 29. The left-hand side shows the revenue of our ASEAN operations. It was TWD 10.47 billion, which grew by 33% year-over-year. On the right-hand side, the revenue for the fourth quarter was about TWD 2.96 billion, which was up 9% quarter-over-quarter. Business momentum in our ASEAN operation was strong in the fourth quarter, and overall business in 2022 was less impacted by the pandemic compared to previous year.
Let's turn to Slide 30. On the left-hand side, total net profit for 2022 was TWD 2.74 billion, representing 19% year-over-year growth and negative 4% quarter-over-quarter. For year-over-year comparison, ASEAN net profit growth is lower than portfolio growth due to higher expected credit loss and higher interest expense in ASEAN in 2022 compared to 2021. For quarter-over-quarter comparison, ASEAN's fourth quarter net profit decreased a little than previous quarter, and this is also due to higher expected credit loss and higher interest expense compared to previous quarter.
Slide 31. The left-hand side shows ASEAN's fourth quarter delinquency ratio increased to 3.3%, up 0.5 percentage points from the previous quarter. In the fourth quarter, the allowance to loan portfolio in ASEAN also increased from 2.9% to 3% to accommodate the change in delinquency ratio. And this brings to the end of my presentation. Thank you for your attention.
And now I would like to turn the call back to the operator to start our Q&A section. Thank you.
[Operator Instructions] And our first question is come from Yafei Tian with Citi.
I have 3 questions. The first one is on the net interest margin trends. You see a very modest Q-on-Q 4 bps of decline in the spread. And then China's spread has widened, Taiwan largely stable. So point towards the ASEAN spread compression over the quarter. So can you help us to understand a little bit more what's driving that meaningful spread compression to ASEAN? And more broadly, when you think about margin trends this year, it looks like there has been a downward trend on the spread compression driven by higher funding cost. Can you also help us to get a bit of outlook in terms of future spread trends from here? So that's the first question.
The second one is asset quality. In Q3 call, the CFO mentioned that the China credit cost is going to be about 1.7% for the second half or fourth quarter. I don't remember exactly. But it looks like 4Q credit cost has come higher than that number in China. So given that the higher delinquency ratio, et cetera, can you confirm for the GP or the credit cost that you provide going forward is going to be around 1.7% or higher. The final question is really a number one. That's on Page 36 of the consolidated income statement. Looks like there is a relatively sizable nonoperating revenue and expense for this quarter. Can you confirm what is that related to, please?
Okay. Let me start with the first question about the spread trend and our -- how we manage our spread in different operating region. I think if you participate in our Chinese session, actually, our CEO has talked about this. I think in terms -- everyone knows that our first priority is to manage the satisfactory and stable spread for -- from the product line, from the operating region point of view. And in Taiwan, we know this interest rate continued to increase for the past year and probably it will stay at this relatively high level. But this is one of the area that we are impacted by this interest rate increase. And the other will be the ASEAN. And luckily, in China, we don't have this kind of problem right now. And on the other hand, we even enjoy a little bit of the funding cost improvement.
And so I think we mainly focus on China. And because ASEAN -- I mean, Taiwan about this funding cost management and spread target management because you know our effective asset duration for China operation actually is much shorter than 3 years. It's about 18 to 20 months. And as you know, actually, we have quite good pricing power when we do the new deal. So we can quite quickly respond to this new increase of funding cost for the new business deals. So we are confident that actually probably we will have some shorter-term impact from this increased funding cost in the near term. But right now we are already quite successfully passed to our clients for the new business deal. And going forward, hopefully, this interest rate environment will be getting more stabilized.
And we can still maintain quite good spread on the long-term point of view. So this is for Taiwan. And for ASEAN, yes, ASEAN also has quite pressure from this increased interest rate and funding cost. But the good thing is that compared to China and Taiwan, the ASEAN operating scale is still small. And actually, we are still in the learning curve, in the process of the learning curve for most of the ASEAN markets, like Malaysia and Cambodia, et cetera. So we still have some flexibility to fine-tune our pricing strategy when we introduce more product there. So I think again the company still has confidence to maintain quite stable like spread level because we have very clear view about what kind of risk appetite we want to take for each market. Yes. That's about the spread.
And the second question is the China provisioning expense. And yes, right now because our CFO previously guided about this whole year GP level but because compared to the first half last year, actually we need to increase the GP to match the whole year level. So you will see that our provision expense gradually increased in the third quarter and fourth quarter. But going forward right now because we already see the stabilization of our monthly account receivable collection rate, which we regard as an early indicator of the asset quality development.
And so I think there's a chance this delinquency ratio is really pick up sometime during this year. I think we -- there is still some possibility for us to adjust down the GP ratio compared to the fourth quarter. But currently, we still maintain the same level. Like for the first quarter, the GP ratio still similar to the fourth quarter of last year, yes. And nonop, majority of our nonop is related to the tax rebate from our China operation. So the number is quite big. Last year we booked about RMB 300 million tax rebate.
Sorry, Sharon, can I just follow up on the China tax rebate. It seems to fluctuate depending on which quarter it is booked as the size of the tax rebate, which makes it quite difficult for us to model. Can you give us some clarity in terms of how to estimate the potential tax rate rise from China. And usually, which quarter does it come through, so on and so forth?
Okay. Basically, we cannot predict what time the Chinese government or Shanghai like government will approve this rebate application. But our experience is that usually it will approve -- we will get a rebate in the first quarter or -- first quarter and second quarter will be the majority, probably by 80%. We're booking either Q1 or Q2. And on the size wise, I think overall as well as our operating performance continue to grow and profit continue to grow, we pay more tax. Actually, we will get more tax rebate in terms of the amount. But I think we need to apply for this program every 3 years, and they will have some fine-tune about this calculation formula. So basically, yes, you can say, actually, we did this as a cash basis.
[Operator Instructions] Our next question is coming from Gurpreet Sahi with Goldman Sachs.
So a couple of questions, please. First of all, on the group growth target, can I confirm that what does 10% to 15% in Taiwan and China and more than 15% in ASEAN means? Like what is our target at the group level? Is it around the low teens?
[indiscernible] because the good level of both China and Taiwan accounts for 80-something percent, right?
Yes.
Yes. In terms of profit, even higher percentage [indiscernible] around midteen.
Okay. Cool. And then the other questions are around China delinquency. Like we are saying that delinquency will peak sometime around this year. And then monthly collection rates are up. Can you give us more data? And why do we have so much conviction that there will be peak in delinquency this year, like what if it doesn't happen and it happens next year?
Can you repeat your question? Sorry.
Like what gives us confidence that China delinquency will peak? Because the kind of delinquency number that we saw in the fourth quarter relative to the third was kind of concerning.
Okay. As I mentioned, internally we also monitor some of the early indicators, like monthly account receivable collection rate although it hasn't really back to the pre-COVID level, but actually it already shows some slight improvement sequentially month-over-month. And at least we think it already become stabilized. And from -- starting from this point and -- and also we see some underground like sales activity become more active. And probably if we can really go back to higher growth compared to last year, I think especially during the pandemic like lockdown period, either is total lockdown or micro lockdown, it all costs some operating disruption. So with all these positive signs, we think probably there is a chance that this delinquency will be pick up during some time of this year. Yes.
Okay. Are we allowed to share the collection rate? Has it crossed 99% yet?
No. I think currently the most updated number I have is for January, still around 99%. But it's just the first month. We need to see this continue to be like 2 or 3 months above 99%. Then we will be more confident. Okay. And then finally on the GP, general provisioning level that we are saying, what is the level because we did some catch-up in the third, fourth quarter. So is it a 2% level that we are doing in the first quarter of this year? I think this year so far as currently our provision ratio is the same as like fourth quarter.
Which is what, 2%?
Around 2%, yes.
And our next question is coming from Brooksley Kang with Bank of America.
I have 3 questions. Firstly, I think what we heard is that the collection rate didn't deteriorate in January. Talk about the growth on the ground. So if I look at the revenue in December, which could be an indicator for growth underlying, it's not fast. Does January have any improved growth in terms of portfolio, especially in China? And secondly, January profit growth showed decline. Is there any particular reason for the decline? And if there's any impact from an earlier Lunar New Year this year? And finally, I think Thailand has also seen a rise in delinquency, and we are taking more provisioning there. Is there any highlight and specific reason for that?
Okay. For the January result, actually from our sales volume, we are quite satisfactory actually, which is I think quite in line with our expectation of slightly recovery on the ground. But actually, because in January we have this big event is reopened totally, the China policy, reopen policy. So the COVID infection rate has increased in a very short term, significantly, and it's really hurt our operating manpower capacity during that month. But actually, under this kind of a situation, we can achieve this kind of January of sales volume result. We are quite satisfactory. But then we have this Chinese New Year long holiday in February. So we haven't really seen a trend from the trend yet.
But basically, our gut feeling is that January actually is not bad, yes. And in terms of the January profit, it's also because of the -- for Taiwan it's more because of the increase of the funding cost because if you do year-over-year comparison on January last year and this January, the Taiwan already increased like 60 bps the benchmark rate. So the funding cost increased a lot for our Taiwan operation if you compare January profit year-over-year for the same period of last year. And for China, it's more about the credit cost provisioning expense. Yes. And for Thailand delinquency ratio, yes, it was a pick up compared to third quarter, last year third quarter end. But actually, our Thailand current delinquency ratio is about 3.4%, still much, much better than the third quarter, I think, than a year ago, which is like more than 4%. So I think probably this would apply reasonable but, yes, we need to continue to see, if we continue to pursue better growth, whether this is a sustainable like delinquency ratio that we can maintain.
Sure. My following up on the Thailand. I think apart from the delinquency, we are taking more allowance provisioning in Thailand. I recall that we also used to take higher provision because of some macro concern back then a few years ago. Then how is the situation now?
No, I think we apply the same provision policy. And for all the operating rating, I think the policy is the same, and we set aside provision for delinquent cases and also set aside general provision based on our risk model, which the provision ratio needs to come from our risk model, which is a factor in all the historical data.
[Operator Instructions] And our next question is coming from Anupam Mathur with Goldman Sachs.
Yes, this is Anupam here. I also had few questions. Firstly, what is our -- what was our monthly collection rate in 4Q '22? Like we mentioned in January it was 99%. But what was the collection rate in China in 4Q '20?
Can you say that again, are you talking about the monthly account receivable collection rate for China?
Yes, yes. For China, what was it in 4Q '22?
4Q '22 still around line 98-point something and 99%. It hasn't really stabilized yet in the fourth quarter last year.
So like 98% to 99%, and January also is 99%. So should we expect China delinquency trend to increase again?
Yes. Increase a little bit, probably from 98.9% to 99%. So to us, actually we need to continue to monitor for more months to make a more -- we need more, yes, more data.
Right. But my question is, if the collection rate is stable, and we saw a 30 bps increase in delinquency ratio in fourth quarter '22, so should we expect similar 30 bps increase in delinquency ratio in first quarter '23 also because the collection has is roughly the same?
Fourth quarter '23? First quarter.
No.
First quarter has another factor we need to take into consideration, which is the slower growth rate for the portfolio growth, which is the denominator of the delinquency ratio calculation. So initially, we don't expect delinquency ratio will have shown a significant improvement in the first quarter usually if the asset quality maintains stable or only minor change.
Right. But what I'm asking is, in third quarter '22, our delinquency ratio was 2.4%. In fourth quarter '22, our delinquency ratio was 2.7%, which was an increase of 0.3%. Now monthly collection rate has remained largely the same. So should we expect another like 0.23?
This monthly collection rate is -- will just serve as a very early indication, and there's no like translation formula from this collection rate to delinquency rates. And there is some time lag, there is some time lag. So if we can continue to see this 99% collection rate, it can deteriorate further and become stabilized first and then slightly improved to 99.2%, 99.3%, then you will see the improvement of the decrease of the delinquency ratio then. It will take 1 or 2 more quarters.
Understood. Understood. So is our delinquency ratio picking up further in Jan and Feb?
Delinquency, yes. So that's what I mentioned, that probably this delinquency ratio, there's a chance to be picked out in first quarter for some time in this year because the first quarter always is slower growth month in terms of portfolio.
Okay. And what level are we expecting to peak out? Like previously we used to talk about normalized delinquency ratio of 2.5% to 3%. So should we expect like it can go much higher than 3%? Or like how to think about this peaking out?
Because we still have 1 month to go, right, and more than 1 month to go. And I think even if we -- the first quarter and delinquency ratio continuing to pick up slightly, more than 3%, it will only like 3 -- like only increase some 0-point-something percentage point, should be below 3.5.
Okay. Okay. Understood. And on the credit cost in China, so for this year, are we looking at higher than last year or similar to second half credit cost? Like what sort of levels are we looking to book?
You mean the overall credit cost for this year compared to last year for China?
No, for the -- yes, for China, yes, because first half was low and second half was higher, so what do you expect?
I think it really depends on how the asset quality continue to evolve during this year. Because last year we have a better half in the first half, right? So for the whole year, the average credit cost is around like -- it's below 2%. But in the second half, actually, it's more than 2%. And right now we are starting from this level of the second half, the fourth quarter level, which is around 2% or a little bit more than 2%. So if we maintain this 2%. So the average will be of course higher than last year's average. But I think there is still possibility, as we continue to emphasize, there's still possibility that our asset quality can show some improvement. I think only after first quarter or since second half, there is still a possibility, but right now it's really too early to say.
Understood. Then my next question is on Taiwan. So Taiwan we mentioned that fourth quarter we had higher provision, but delinquency trends have been quite stable. So I'm just wondering, are we expecting some deterioration in asset quality, and that's why we are booking more and more provisions? Or like what is the reason for higher provisions in fourth quarter?
In Taiwan, we have more diversified wider range of the product offering. And different products will have different targeted delinquency ratio. And so this mix change will also like cause some difference of the delinquency ratio. But yes, I think we -- everybody expect Taiwan GDP should be go back to normal level, right, this year. And last 2 years, the Taiwan macro economy was so good. And I think that's the reason why last -- for the past 2 years Taiwan portfolio grew like more than 20%. But this year, our CEO guided for like 15% to 20%. And so we start to -- we increased a little bit of the provision for our Taiwan operation, but still quite within our expectation, yes. This kind of delinquency ratio and the provisioning ratio is still quite normal for us.
So should we expect 2023 provisioning to be similar to fourth quarter '22 in Taiwan also?
Sorry, I can't hear you clearly.
Sorry about that. So in Taiwan, our fourth quarter provision was slightly higher. So for 2023, can we expect again elevated levels of provisioning in Taiwan also? Or is it just like 1 quarter adjustment?
I think if we look at the annual level, I think this year, '23, should be a little bit higher than '22.
Okay. Okay. And just one last question I had was on ASEAN. We have started seeing some pickup in delinquency. So I'm just curious like why are we looking to again grow very strongly when we are seeing some pickup in delinquency. So I'm just wondering like how are we balancing growth and asset quality in ASEAN?
Actually, ASEAN to us, still we take it seriously. We want to prepare it as another future growth driver for the whole group. And we already put a lot of effort in most of the ASEAN countries for many years, like 20-plus years in Thailand, 15 years in Vietnam and even like 5, 6 years in Malaysia. They all make good contribution to the group already. Although it hasn't really become significant contributor to the whole group. But I think so far with all the product strategy that we are implementing in those ASEAN countries, management still believe that there's a quite a good chance that we can replicate our successful like business model here in Taiwan that we are very good at, serving those niche segment market, earning the reasonable risk premium with quite excellent risk credit risk control capability. So I think that that's basically how we look at the ASEAN opportunity, yes.
[Operator Instructions] Excuse me, Kimberly, we don't have questions at this point of time.
Okay. We can end the call. Thank you, everyone.
Thank you. Thank you. Thank you, everyone. The conference call has been concluded. Thank you for your participation.
Thank you.
Thank you.