Earnings Call: H2 2017

Mar 5, 2018

Honorable guests, good afternoon. Welcome you all to the 2017 Annual Results Announcement for Analysts. First of all, please allow me to introduce the management team who are present here today. They are the Chairman and CEO of the company, Mr. Cai Yunge. Executive Director and Executive Board Member, Mr. Wang Tianyi. Executive Director and CFO, Mr. Huang Jincong. Welcome. Executive Director and Deputy General Manager, Mr. Hu Yanguo. Welcome. As well as Executive Director and Vice Deputy General Manager, Mr. Qian Xiaodong. Welcome. Today, our CFO, Mr. Huang, and Mr. Wang Tianyi, the Chairman of the company, they will talk to us about the results highlights, financial highlights, competitive advantages, and development strategies, as well as a Q&A session. First of all, let's welcome the Chairman, Mr. Cai Yunge, to come onto the stage and to say a few words to kickstart today's announcement. Thank you, our host. Our dear new and old friends, good afternoon. I welcome you all to attend the result announcement for China Everbright International during this busy period. First of all, as the Chairman of the group, I am very honored and proud to announce to you, in the past one year of 2017, with the support from the industry and from all our investors, with the hard work of everyone working for the company, we have been able to submit a beautiful performance to our market. In 2017, the ecological development has become a thousand-year national strategy. The government has launched a series and various policies which has given perpetual impetus for the environmental business in China. China Everbright International as the main leader contributor of the environmental business, we are actively following the national policy to grasp this historical opportunity to make sure all the six sectors of our business are developing at the same time. In the meantime, we adhere to the principle that for enterprises, not only there to create materialistic value, but also to shoulder the responsibilities of the environment. We have been well received and recognized by the industry and market. In addition, we were very dedicated to promote the Chinese waste to energy technologies to go global. We have also participated in many international forums, and we have obtained a lot of say in these areas. Later on, our CFO and Mr. Wang Tianyi will give you a detailed presentation. 2018 is the 15th year of China Everbright International's transformation into environmental business. In the meantime, it is also the beginning year of us to launch into our fully-fledged environmental business for China Everbright International as the leader in this industry. In the meantime, we are also the flagship company for this market in terms of the real business, and we will work hard to make sure that we have top quality as well as the large scale. We will continue to adhere to the craftsmanship spirit and improve the professionalism and internationalism of the company, and we hope that we can create new highs of the company in this year. Thank you very much. Thank you, Chairman Cai, for your speech. Now we invite the Chief Exec. First of all, we invite Mr. Huang, the CFO, to talk to us about the financial highlights. Good afternoon, everyone. First of all, my section would be the first two results highlights and the financial highlights. For result highlights in 2017, revenue surpassed HKD 20 billion, with total market value exceeding HKD 7 billion. Total consolidated revenue amounted to HKD 20.043 billion, a surge of 43%. Company listed its Greentech business on the main board, Hong Kong Exchange, through a spin-off and raised fund of HKD 3.3 billion. As of December 31, 2017, total market value of the three listed companies, China Everbright International, China Everbright Water, and China Everbright Greentech exceeded HKD 70 billion. Second, our total asset value exceeded HKD 70 billion, with profit surpassing HKD 3.5 billion. In the past year, for total assets, the CAGR was 24%. Profit attributable to shareholders CAGR at 47.49%. It fully reflects our strong growth of the company. The third highlight, our profitability continued to rise with payout ratio at a high level. In the past 15 years, the shareholders' equity has grown by 21.9 times. Return on shareholders' equity and payout ratio since 2006 has maintained at above 10%, and it has reached to the height of 20-plus percentage. In the past few years, the payout ratio has always been at over 30%. For six business sectors, they strive to develop. For these six sectors, they have very precise development areas, and they fully utilize the coordinated synergies to make sure that Everbright International could develop even faster. By end of 2017, our total investment reaching about 70 billion, and out of which, environmental water accounting for 23%, Greentech 27%, environmental energy 47.9%. Number 5, we have expanded our geographical footprint, achieved growth in scale. By end of last year, we have secured 268 environmental protection projects, including 171 projects that completed construction, 40 projects under construction, covering overseas markets such as Germany, Poland, and Vietnam, as well as 18 provinces in China. Number 6, market expansion and construction works hit a record high, secured 54 new projects and signed three supplemental agreements for project capacity expansion in 2017, creating a new record high with a total investment exceeding 19.7 billion RMB. The number of project construction sites reached 80 at its peak, of which 40 projects commenced construction with a total investment of 15.8 billion RMB, 45 projects completed construction with a total investment of 11.5 billion. As at end of 2017, 39 projects under construction, total investment 19.1 billion. Financial highlights in 2017. With the increase of the construction business, we have obtained revenue of 20 billion, an increase of 43%. Gross profit grew by 34%, reaching 7.1 billion. For EBITDA, grew by 36%, reaching 6.86 billion. Profit attributable to equity holders, 3.5 billion, an increase of 26%. Basic EPS, 78.3. Considering the situation, we advise that dividends per share to be paid would be 24 cents in total, an increase of 17% compared to last year. Looking at the past few years' financial history, actually, not only that the company has done well in terms of its financial highlights, as well as the gearing ratio is very healthy. Shareholders equity, 6.1 billion. Cash on hand, 1.9 billion. Apologies. As of end of 2017, shareholders equity, 22 billion. Cash on hand, 10.8 billion. Our gearing ratio is at 61%. For 2017, our main revenue comes from construction service. In 2017, the growth of construction service revenue grew by 47%. By end of 2017, we still have another 97 projects. The total investment involved would be 36 billion CNY. For the next few years, we still predict construction service revenue would still be our main source of income. Operation service revenue grew by 45%. During the year, we had 45 projects completed, and we predict that going forward, they will maintain at an increasing trajectory. Financial income grew by 27%. It is because of the business of the environmental licensing business and in terms of franchise business. In profit of the three business sectors, the environmental is our largest sector. EBITDA contributed to the business, grew by 28%. It includes our second phase in Nanjing. For the Nanjing project, the total capacity was 4,000 tons, and it is the largest so far in China and Hangzhou, prior to the participation of Everbright International. With our high-quality service, we have obtained the support of the citizens and the government. We have successfully completed the Ningbo project, and with the Hangzhou and Nanjing projects, we have further consolidated Everbright International's advantage in the waste to energy sector. For Everbright Water, the EBITDA grew by 17.2%, reaching 1.187 billion CNY. For Everbright Greentech, in 2017, it grew by 51%. By end of last year, Everbright Greentech has 15 biomass projects, 10 projects under construction. We predict that biomass projects going forward would still be the main income of Everbright Greentech. The percentage of each business: environmental energy 69.5%, Everbright Water 10.2%, Everbright Greentech 20.3%. Overall speaking, our revenue and profit continue to create new heights. We have enough cash on hand. We are continuing to maintain our healthy level of gearing ratio, which all a solid foundation for the further development of Everbright International going forward. I pass the floor on to Mr. Wang Tianyi. Dear new friends and old friends, thank you very much for participating in the annual result announcement of Everbright International. Just now, we have heard of the speech given by Mr. Cai Yunge. He has recognized the efforts made and the achievements that we have received, and he has also put forward requirements for the management of Everbright International. It is encouragement to us, but also pressure to us to make us work harder. Just now, we have also heard from our CFO. From his introduction, we have seen that Everbright International has maintained its healthy and a high-speed development in terms of our business. For example, our revenue growth and our asset revenue growth surpassing 20 billion CNY, total market value exceeding 70 billion CNY, et cetera. I can say that this series of beautiful performance of the company has further consolidated the status of Everbright International in China, as well as further consolidated our influence worldwide. We are now equipped to be a top company in the world in our industry. I believe that this all reflects our competitive advantages, because we want to build a world-class business, then you need to understand your advantage. Through our summary of our performance for the past few months, and we have come up with five competitive advantages of our company. The first one is the advantage of scale. We say that to operate a company, you still need to operate at scale, because scale represents your efficiency, represents your responsibility, your capacity, your ability, especially for an environmental company. How big of a scale you have means that how big of a responsibility you need to shoulder. For example, for waste to energy, if we account for 11% of China's business, it means that we shoulder 11% of the responsibility. If we improve that to 20%, that means that we will shoulder one-fifth of social responsibility in China. You can notice for the past 15 years, our asset CAGR growth at over 20%, our revenue growth at a CAGR of over 30%, and profit over 40%. Our market value has exceeded 100 times growth. This is very important, and we can see looking at the current situation, Mr. Wang has said, in the 18 or 19 provinces in China, over 120 cities and counties, we have invested over 73 billion RMB in these projects. Through this expansion, we are now becoming the largest waste-to-energy investor and operator in Asia. We are also number 4 among water treatment companies in China. We are number 3 among hazardous treatment companies in China. Total capacity, 674.2 thousand tons a year. Number 4 among biomass companies. Total power generation capacity, 992 megawatts. You know that in the 19th CPC, it has specifically mentioned that the Chinese economy has changed from a high-speed growth model to a high-quality growth model. This is our second advantage, which is advantage of quality. We have three firsts. We know that our neighboring city, Shenzhen, in 3 days, they are able to build a tall building. But a few years ago, Shenzhen's government has said that the speed is no longer what they are proud of, but it is the quality. We can feel that in Shenzhen, in a wide variety of areas, Shenzhen's quality ranks top in China. Therefore, for Everbright International, in our beginning, we should be basing ourselves on the principle of quality. Our quality is well reflected here. For example, three first, four withstand, five triple A level projects, one Luban Prize, multiple demonstration projects. For example, the three first. We are the first company to promote and adopt the EU 2010 standard, which is the highest standard in the world. We are the first to connect with local environmental protection regulation departments, and the first to provide an hourly disclosure of emission standards through the internet. For example, five triple A level projects. In China, we have over 200 projects, and we make sure that all our companies, they are able to withstand the various aspects of indicators. For example, factory appearance, odor management. Our factories are all odorless. For example, Shangri-La. If you go into any Shangri-La, you can smell the same smell in Shangri-La Hotel around the world. This is what we're trying to build as well. For noise control, we are minimizing the noise level. For emissions, I believe that this is the indicator of the highest value. It means that we are able to surpass the strictest emission requirement. With these four withstands, it means that we have always maintained at the forefront of our industry. We have over 1 million people visiting our company for the past 15 years in total. We have five triple A level projects in Suzhou, Wujiang, Changzhou Xinbei, Weifang. Our Jinan waste-to-energy project was the only awardee of the Luban Prize in the environmental protection industry in 2016. For example, Zhenjiang Sponge City project, Yijiang waste-to-energy project, Yongzhou waste-to-energy project have been designated as PPP demonstration projects by the United Nations or China. Some projects have been named as the national level, provincial level basis for promoting environmental protection, education science, education, industrial tourism, and recycling economy. The third advantage is our technological edges. From the inception, whilst investing in our operation, we have continued to enhance our awareness of R&D and technological development. After a few years of efforts, our technological edges are appearing. We are working hard to drive our business forward by technology. In Nanjing, we have purchased an R&D building, and we already formed an R&D team with over 300 people, applied for 400 patents. We are building a new path through technology imports, plus collaboration with institutions and research institutes, in-house research and development approach. We have developed and produced the technologies and equipment for grate furnaces, V-shaped treatment, and gas emission purification. We have filled the void of furnaces in China with a 750 ton per day grate furnace, and it will let us see more efficiency. In the meantime, we have jointly established a national lab with Zhejiang University, the National Engineering Laboratory for Waste Incineration & Equipment. This is our technology advantages. Our another advantage, perhaps most people would not want to mention it, but it is very important to us, which is our cultural advantage. After a few years, if you have followed our company, you can see how much money we have made, how many projects we have obtained. Actually behind of this is thanks to our team of 8,000 staff and their hard work. We know that if a company doesn't have a good cultural recognition, this company will not be able to go far, because culture is the soul of a company. It has immense power to let everyone work together, and it serves as a catalyst for the company to move forward. Only by having a good culture, people will feel proud of themselves, and people will have self-ownership of their company. After over a decade of development, we have built a good culture. For example, our core value, our Chairman has mentioned this, and this is something that was promulgated by my predecessor, Mr. Chen Xiaoping. An enterprise is not only the creator of wealth, but also the safeguard of environmental and social responsibilities. This is also our management philosophy, integrity, pragmatism, efficiency, and innovation. Our investment philosophy, no blind expansion, no destructive competition, no inefficient investment. Construction ethos, producing quality projects and building a quality brand. Operation philosophy, striving for excellence and to achieve nil discharge. When my team sends me new updates of our projects, I often tell them to continue to strive for excellence and achieve nil discharge. Of course, with the standards continue to improve, achieving nil discharge will become a pursuit of our company, not only limited to low discharge. I talked about all these advantages, and all of these combined together, this will be our brand advantage, which is Everbright International. From 2017, we can see that Everbright International, we have seen a lot of new rewards. For example, we were included in the Dow Jones Sustainability Index for a second consecutive year, chosen as a constituent stock of the Hang Seng Corporate Sustainability Index for a fourth consecutive year, a Silver Class Distinction from RobecoSAM, the Hong Kong Corporate Governance Excellence Awards. I went there and received this award, and the first company that was called upon the stage was Everbright International. We are also a constituent of the FTSE4Good Index. Mr. Chen Xiaoping has continuously been selected as Asia's Best CEO, Most Honored Company in Asia, and Mr. Chen Xiaoping ranks number 14 of the top 100 CEO in the world by Harvard Business Review. We have also received other awards such as Corporate Social Responsibility, Best Social Responsibility Brand of the Year. Going forward, this is very important for the company. Just now, our Chairman has mentioned that in the next 15 years, we will build our company to become a world-leading environmental company. Surrounding this, I would like to share with you our development strategies. Three areas. First is our three considerations, and second, focuses, and number three, six areas of work. For the three strategic considerations, I will look at it from three aspects. First, market status. What is the market status of our company? Two sentences. We are the leading enterprise in the environmental protection industry in China and a world-renowned environmental protection company. I believe that those two sentences are very genuine to describe our company. We are number one in China. We are leading company in China, and second, we are a world-renowned environmental company. In terms of strategic timing, we are now positioned in golden era of opportunities that cannot be missed. Because from China at the moment, we focus on the ecological building of the environment as a sustainable development strategy of the company to follow the strictest environmental rules. We are now talking about, we are now going to develop on a mass scale through the 13th Five-Year Plan. We have released 17 trillion of environmental market and the three main areas of treatment, we have those sectors, for example, for blue sky, soil remediation, et cetera. Again, environmental sector is still the industry that will generate the most opportunities. Number three, strategic positioning to become a green alliance, to establish a green alliance in our One Belt, One Road. To continue to work in this area, this will continue to bring us overseas opportunities. We believe that this is historical era with great opportunities. To follow the logic, logically speaking, in the next 5-10 years, we should try our best to become a leading player in the environmental protection industry globally. In order to help us realize these considerations, we would like to focus on the five key areas. They are our development strategies as well as the benchmarking strategies. One, we have compared ourselves with our peers. The first one is increased business scale. Second, broaden service scope, expand overseas business, enhance technological strength, foster flexible system. For increasing business scale, this is of vital importance, and we hope that our asset will become over 100 billion, and our profit can be over tens of billions. For a company of this size, I believe that that will be a good size of company. At the moment, we have asset value of 200 billion. But if we want to realize profit of tens of billions, we still need to put in more work. In terms of broadened service scope, we need to work in areas such as debt, for example, in the industries that we are already in. We need to continue to expand our market share. For example, waste to energy, 11%, which need to be further improved. For example, wastewater treatment at the moment, 5 million tons, and we hope that we can enter into the tens of million tons of wastewater treatment per day very soon. For the length, it means that we continue to lengthen our industry chain. At the moment, for WTE projects, we need to go to the upstream and to go to the beginning. For example, waste classification. In terms of the breadth, it means that we continue to add new business. For example, air pollution treatment, soil remediation, and desalinization of the sea, et cetera. For example, expand overseas. At the moment, it's less than 2% of our business, overseas business. To become a global company, of course, our overseas percentage is very small, and we need to actively and stably expand our overseas market. Enhance technological strength. We need to continue to invest in R&D in the next five years. We hope that our R&D investment would be no less than 1 billion, and we need to have forward-looking R&D research. For foster flexible system, a company's development needs good teams and needs good incentives. At the moment, our incentive mechanism is efficient, and it follows the market. With the bonuses, our healthcare, our provident fund, and our incentive mechanism, et cetera, through our fast development of the past 15 years, and you can see it through the active hard work of our staff. Going forward, we will continue review and explore a much more efficient mechanism for incentives. Number three, the six major areas of work. The first one is the boost scale and efficiency. Second, strengthen quality and service and brand. Number three, drive growth through innovation. For boosting scale and efficiency, we build all our projects into select projects with high quality. On this basis, we build the factories and projects driven by our concepts. In addition, for Everbright International, even if we have over hundreds of projects, but we will not allow one single project that does not meet the requirement. So all the projects, their shortcomings will be fixed this year, and we are truly dedicated to building a good brand image for Everbright International going forward. We will continue to strengthen our works in all these areas and focusing on three aspects, which is quality, efficiency, and scale. The three degrees, which means our length, breadth, and depth, and our threeizations, which means internationalization, professionalism, et cetera. So we hope that Everbright International could contribute greatly to the industry and to give good returns to our investors. Thank you very much. Thank you, Mr. Wang, for your introduction. Now we move into QA session. Those who wish to ask questions, please put up your hand. Before putting forward your question, please tell us who you are, where you're from. In order to give more opportunities to everyone present, everyone is limited to two questions only. We invite the first question, this gentleman in the front row, please. Good afternoon. I am Liu Jianda from Citibank. Just now, Mr. Huang talked to us about the future development of the company in terms of scale. I would like to know, for example, in the next 3 years, do you have a target, a plan? For example, the market share that you want to grab in China, and for 2018, what is your CapEx compared with 2017, what is the growth? My second question, for 2017, with some WTE projects, and what is the processing fee difference? The next 2 questions I would ask Mr. Huang to answer. The first question for the first 3 years in terms of our various sectors development, and just now we have heard that the ratio is about 11%, and water, 5 million tons. It is relatively small in terms of biomass and hazardous waste. We rank number 3 and number 4 in China, including water. Going forward, we will need to continue to improve our ratio. What is the specific goal for the next 3 years? I think for the specific numbers, I do not think we should be very mechanical about it, but the improvement of the ratio in each sector, that is definitely something that we are dedicated to do. In terms of the CapEx and the WTE processing cost, I will invite Mr. Huang to answer. For 2018 prediction, actually, 2018, we are fully confident. From my introduction just now, in 2017, we have new projects, 40, and these projects will continue to give us revenue, and the constructed projects, 45, and this will continue to push up our operating services revenue. By end of the year, we still have another 97 projects under preparatory stage and under construction. Those projects, we believe that they will be starting the construction in 2018. With such a large base of projects, and for the future, we are still fully confident. In terms of 2017, the processing cost in 2017 compared with 2016, it is roughly the same. It is very stable. Thank you. For WTE processing fees, with the fierce competition in China overall speaking, there is this trend of being stable while it slightly decreasing. However, for Everbright International, we have our technologies. We continue to innovate our technology. For example, improve our efficiency and continue to lower the power consumed per kWh of electricity generated. So far, for the new projects that we have obtained, including some IRR, we have not seen any decrease. For the processing cost, I believe that Everbright International is in a better position to deal with matters compared with our peers. Next question. This gentleman in the front, please. Thank you for your excellent speech. I am Thomas Chu from Deutsche Bank. I would like to ask, first one, on your dividend. Your dividend payout is still very high, slightly lower than last year. However, what is the reason of this, and what is your future dividend payout plan? We have also heard that overseas expansion, and for the mid and long term, for the overseas business, how big of a ratio would that be? In terms of overseas business, would you be actually involved in the project's construction or mainly for selling of equipment? In terms of dividend payout ratio, actually, for 2017, it is above 30%. It is still within our normal range. Actually, for many years, we have always adhered to the principle that we share our good results with our shareholders. 30% still reflects our commitment to our shareholders. This year's total share has actually improved compared with last year, the return on shareholders' equity. For overseas business, we have just now said that it is less than 2% at the moment to build us into a global company. Of course, there is still a lot of gap, and we want to be active, and we want to be stable. 2%, it is very low, but what is high? What is appropriate? I believe that there is no fixed ratio. Just now, I mentioned about Veolia, which is a world-renowned company. It accounts for one-third in France, one-third in Europe, and one-third of the world. Of course, the structure is not something that we could simply copy, but the improvement of overseas business will definitely be our goal for going global. What would we do for developed countries and developing countries can all be our goals. For example, for developing countries, perhaps the return is not high. For developed countries, there's and the risk is low. For some developing countries, for Southeast Asia, I believe that perhaps we will have some different investment strategy. In terms of risk lowering, it would be the equipment export. This we already have. Second, for technology output. This is our order, and we will also take it on one paces to look at our overseas market and to explore overseas market at a stable rate. Thank you. Next question, please. This lady in the front row, please. Good afternoon. I'm Hou Jing from Morgan Stanley. I have two questions. The first question I would like to ask, going forward for 257 platform you are positioning. Last week, in Everbright Greentech and Everbright Water, you have already talked about their positioning. Could you please also elaborate on 257 platform? Second question, just now Mr. Wang said, for WTE sector, you will carry out some further extensions. Could you please elaborate on that? Well, for Everbright International, prior to the spin-off of Everbright Water and Everbright Greentech, we were one company. Of course, after the spin-off, we need to have certain separations and anything that's related to water will be put with Everbright Water. For Everbright Greentech, this is its English name. Besides biomass, besides the industrial waste to energy, perhaps going forward, you can think about it along this line, green and technology. For Everbright Greentech going forward, combining with the building of ecology, those would be the two themes of our work. For Everbright International, our main business at the moment is waste to energy and the building of industrial zones, and this will become a very important area of our business. Second, in terms of equipment manufacturing, it is in Everbright International. We still have a large room of growth for this sector. Thirdly is our environmental technology. That's also with Everbright International. Going forward, we have very important areas that we haven't entered into, which is air pollution, air treatment, and I believe that this will also be put with Everbright International. Going forward, we hope that these three sectors would have a clear division of labor, but also a good synergy for corporation to continue to create good returns for Everbright International as well as for our shareholders. Thank you very much. Next question, please. We have this gentleman over there. I am David from Credit Suisse. The first question I can see, for wind power and solar, we have seen some subsidies were not there in time. Is there such a situation with WTE? Second, in the foreseeable future, do you see the on-grid tariff having any changes? For the WTE projects, it mainly comes from two parts. One is the processing fee. Another one is the electricity tariff. For the processing fee, in certain local governments, they have reduced the processing fee. However, for us, it has not impacted us greatly, and for our projects, we have received our payment on time. For the tariff subsidy, at the moment, there is some tariff that we have not obtained, but we are following closely with the central WTE tariff subsidy. Our projects meet the requirement of the seventh batch of subsidy, and we believe that the payment will be made within this year. We are very confident about such payment. Regarding tariff subsidy possible changes, I think, first of all, we need to be clear. Incineration, the central subsidy, what is that for? What is it subsidizing? It is subsidizing the cost of environmental companies or returns of environmental companies. Without such subsidy, perhaps the return would be too low. On surface, it looks like it is subsidizing power generation, but actually, it is subsidizing the cost of the environmental companies. For the central government to think about this, they will be looking at this from the environmental protection perspective, whether this should go up or go down. Second, for national subsidy, and with national subsidy plus local subsidy and minus your cost, that will be your profit, correct? Well, if your profit is too high, then you need to adjust the national subsidy. If the cost continues to lower, then you need to adjust the national subsidy. If it is the local subsidy going up, then again, the national subsidy should be adjusted. At the moment, these scenarios have not existed, so we have not actually seen any ridiculous profit, which means that the national subsidy will not be taken away. Because this is the national policy, we should not be trying to lower the profit of environmental companies simply by cutting the national subsidy. I think in these scenarios, perhaps the local government subsidy should be adjusted higher. Whether these can be strictly followed to realize a good return, that is something that we should follow, and this is what my answer would be for your question. Our next question, please. This gentleman in the second row. I am Li Ming Hang from HSBC. I would like to ask for the coverage ratio. I can see that in terms of the gearing ratio, it is slightly higher, and I would like to ask, do you have a gearing ratio upper limit going forward? How do you find a balance in this respect? Thank you. For environmental business, this is an area of business that we follow closely. In theory, 66% for a project perspective, that is a healthy gearing ratio in terms of the environmental business. Because of its nature, you need to have 30 years of operation with the local government. With the improvement of the business and from this perspective, I believe that the gearing ratio could be over 66% to even be at 70%. Some of the investors, they have even told us for the infrastructure business, the gearing ratio could be further improved. At the moment, 61% among our peers. This is not high, so going forward, we still have a lot of room to further improve our gearing ratio. In the meantime, we are doing a very good job at managing the debt level. We are following and monitoring our debt and our interest. At the moment, our gearing ratio, again, 61%, is a reasonable, healthy level. Thank you. Next question, please.