Dear analysts, good afternoon. Before we start, we're going to play some ads for our new products.
[Presentation]
We just saw two videos. The first one is already in your gift pack, which is a very family-oriented product. The second video, you have already tried it outside. We just call this meatball. It's actually plant-based. It is offered by Pure Farmland, which was launched yesterday. Now let's get started. Allow me to introduce— well, let me welcome all of you to our interim results announcement. I will introduce members of the management to you. We have Chairman and CEO, Mr. Wan Long. Executive VP and CFO, Mr. Guo Lijun. President of Shuanghui Development, Mr. Ma Xiangjie. [ Non-English content] Executive VP and Finance Director of Shuanghui, Liu Songtao. CFO of Smithfield Foods, Mr. Glenn Nunziata. Then Finance Director, Ms. Joanna Yan. I'm Luis Chein. I believe you already know me. I'm the Director and also the emcee.
First, allow me to introduce Mr. Guo to introduce the financial summary. There are some empty seats over here. Over here, please. All right.
Dear investors and analysts, I'm going to report to you 2019 interim results of WH Group. Hogs produced in the first half, 10.58 million, up by 4.5%. Hogs processed, 2.8 million, up by 1.4%. Packaged meat sold, 161,000 metric tons, up by 0.4%. Revenue realized $11.127 billion, down by 0.4%. EBITDA, $1.032 billion, down by 7.1%. Operating profit, $765 million, down by 11.8%. Profit before tax, $685 million, down by 18.1%. Profit, $565 million, down by 14.5%. Profit attributable to owners of the company, $463 million, down by 16.9%. Earnings per share, $0.0315, down by 17.1%. Interim dividend approved by the board, per share HKD 0.05. Total amount is $ 94 million to be issued in early October. Segment revenue, packaged meat is our core and also the main contributor of revenue and profit.
In the first half, packaged meat took up 52.9% for our revenue, 99.5% for our operating profit. Fresh pork, 41.3% contribution to revenue, 13.5% contribution to profit. Hog production, 3% contribution to revenue and -5.9% contribution to profit. Revenue by region, U.S. contribution 57.9%, and operating profit contribution 38.4%. China contribution 33.7% to revenue and 55.4% to profit. Europe contributed 8.4% to revenue and 6.2% to operating profit. In the first half, operating cash flows $ 399 million, $ 265 million increase. Capital expenditure, $ 272 million, down by $ 54 million. $ 3.5 billion interest-bearing liabilities. Total equity 39%.
Looking back at the first half of the year, we have faced a number of unfavorable factors, including ongoing trade disputes, the spread of African Swine Fever in China, Europe, as well as increase in the supply of meat in the U.S. WH Group's operations were under pressure in the first half. The second quarter improved over the first quarter. Ongoing outbreaks of ASF led to the accelerating decline in hog and breeding sow inventories. The hog prices continued to rise as a result of constricted supply. By the end of June, based on some official figures, hog inventory dropped by 25.8%. Breeding sow inventory decline was 26.7%. Hog prices in the U.S. fluctuated dramatically due to the continuous increase in pork supply and ongoing trade frictions.
The problem of oversupply hasn't been eased, hence the price gap between hog and pork narrowed, affecting the profit of our hog production and fresh pork. In the first half, hog prices in China continued to increase. The average hog price was CNY 14.3 per kilo, increase of 16.1%. At the moment, hog prices have already gone beyond CNY 22 per kilo, which is a historical high. In the U.S., average hog price during the first half was $1.15 per kilo, an increase of 0.9%. Looking back at the first half, China business, both sales volume and profitability of fresh pork business hitting record high. ASF caused to surge in cost, which affected the performance of packaged meat business. Price adjustment of packaged meats made progress, while the increased costs were not completely offset. New product launch achieved significant results. Marketing innovation made new breakthroughs.
In the first half, operating profit for China business, $ 425 million, down by $ 49 million. A drop of 10.3%. Packaged meat, $ 288 million, down by $ 79 million. Fresh pork, $ 125 million, down by $ 30 million. H og production dropped by $ 8 million. U.S. and Europe business in the first half, profitability in the packaged meat business in the U.S. achieved a record high with continuous improvement in product mix. Increased hog supply and accelerated trade disputes affected the hog production and fresh pork business in the U.S. packaged meat business in Europe remained stable. Hog production business achieved growth. Completed acquisition of a Polish hog processing facility, further expanding our fresh pork business and enhancing our competitiveness in Europe.
In the first half, for U.S. business, operating profit $ 294 million, down by $ 36 million. A drop of 10.9%. Packaged meat, increase of $ 52 million. Fresh pork, $ 15 million loss, a flat trend. Hog production, a drop of $ 63 million. For Europe business, we realized operating profit $ 46 million, down by $ 17 million, 27% drop. Packaged meat, $ 27 million, realized a flat trend. Fresh pork, a drop of $ 20 million. Hog production, an increase of $ 4 million. Looking ahead, our strategies and outlook. Since WH Group was listed five years ago, its achievements have highlighted the group's advantages and anti-risk capabilities. As a consumer product company with a vertically integrated business model and diversified geographic presence, the packaged meat business has always been our core business.
Facing the challenging operating environment due to ASF and trade frictions, we will proactively adjust our business strategies based on the market situation to achieve steady growth. We believe the group will further consolidate our global leading position and bring higher returns to our shareholders by adhering to our strategies. For the Chinese business, we will spend our effort to implement controls to prevent ASF risk. We will increase selling price to improve profit, accelerate product mix optimization, focus on new product development and marketing innovation. We'll ease cost pressure through management innovation and technological innovation. We'll expand sales network to increase market reach, capture opportunities through our industry integration to further expand our business scale. For U.S. and Europe, we will continuously utilize our advantage of having a vertically integrated business model to achieve high profit, accelerate product mix optimization and packaged meat business to boost scale and profit.
Accelerate technical transformation of fresh pork business to improve efficiency, adjust export strategies, and expand export channels. Withstand market volatility through hedging. With the newly acquired production facility in Europe, we'll accelerate integration and transformation to achieve synergies to increase scale and profit. That's the end of my report. Thank you.
Thank you, Mr. Guo. Now we will proceed to Q&A. First question over here.
I'm from Goldman Sachs. My name is Lincoln. I want to ask about the export issue. Mr. Guo, at the moment, so far this year, Shuanghui has imported how much meat? How much from the U.S.? Especially in the past two months because of the price gap being widened and 62% tariff. What is happening at the moment? Looking forward in the next 6-12 months, what is your plan for importation?
Based on the information from the government in the first half, pork imported 1.31 million tons, 138,000 coming from the U.S. In the first half of the year, the total volume compared to last year is more or less the same. There aren't any major changes. That's the first point. Secondly, looking forward, we will follow the latest development of the trade war to decide how much to import. Of course, we have to follow national policies, and also, we have to make sure it is a win-win situation for all the parties. If there is good profit, we'll move in and do more. When profit is dwindling, we'll import less. That is the plan. With the deepening of the swine flu situation, things are a bit tight and hog prices have increased.
We are exploring other sources such as South America, North America, and also Europe, so that we can have more diversified channels of import. Thank you.
Thank you, Mr. Guo. Second question over there.
If we look at second quarter result, fresh meat division for U.S. made huge losses. What's your outlook towards that in the second half of the year or even beyond second half? Can you talk about, in the longer term, what's your plan to improve the profitability of the fresh meat division in the U.S.? Thank you.
It's good to see you again. You're correct, our fresh pork business did not perform well in the second quarter. What caused that was predominantly market movement. Again, U.S. fresh pork is a spread business. It's the difference between market U.S. meat prices and market hog prices. In the second quarter alone, meat prices rose 11%, but hog prices rose almost 19%. When that happens, obviously, that gap closes. The profitability that we generated in Q1 was more than offset by the losses incurred in Q2. I don't have a crystal ball and can see clearly what the back half of the year looks like. Obviously, a lot has to do with the U.S.'s ability to export pork despite these trade conflicts.
Obviously, when you are a producer of pork and we produce, I've said this to this crowd before, in any given year, we're producing 20%-30% more pork than we consume. Those export markets are important. When tariffs are in place, it does make that trade difficult. Obviously, with pricing moving the way it has, volumes from the U.S. to China are picking up, and we're hopeful to see some rebound here in the back half of the year. I'll tell you, Gordon has said this before, the trade war has created a very volatile U.S. hog price market, and it is very difficult to predict. In any given week, we may go from a $100 contract to a $78 contract. We've had weeks this quarter where we've gone limit up for three days, and we've gone limit down for three days. It's just too difficult to predict.
What I can tell you is, when we see our pork value chain move up and down, what we expect is for our U.S. packaged meats business to capture any of those gains from the lower fresh pork and hog production value chain. Just like the first half of the year, we have a very strong outlook for our U.S. packaged meats business. We do hope to see some recovery in U.S. fresh pork, but I don't have enough data and visibility to predict that for you. We continue to focus on our U.S. fresh pork business. We believe that we have some changes in the way we manage that business to optimize profitability. We continue to invest in those plants.
We are moving towards modernizing and automating plants so we can reduce our reliance on high-cost labor that we experience in the U.S. We have some labor availability challenges in the U.S. with the new pork plants coming on board. We will continue to develop new industrial and export markets and customers so that when we do face a political or sociopolitical issue like a trade war, that we can find different markets for that pork. That will continue to be a focus for us in the U.S. fresh pork business. We are extremely focused on optimizing profitability in that part of our business.
Okay. Thank you.
Third question. No questions? First row over here.
Glenn, please. When we look at the, actually not just China, the pork prices actually go up and if you look at Europe and South America and Brazil, everywhere, it is global animal protein shortage. I wonder that, if you look in the second half, because at the end of the day, I wonder if we can find, if the trade channel between China and U.S. has shut, then wonder we can go through other countries. I don't know whether it is Europe or South America, to export the U.S. pork there because of the pricing gap. Do you see those things happening or do you see the opportunity?
Sure. Just to remind you, we ship our pork from the U.S. to over 40 different destinations around the world. In some years it's been as high as 50. The top four destinations have historically included China, Japan, Mexico, South Korea. There are other very important markets. With this ASF factor in China, it's also in Europe by the way, and the impact it's having on global trade, what we're finding is we have an opportunity to capitalize on backfilling nations who are now shipping to those destinations. We're fully taking advantage of that. We have a very strong fresh pork sales export team. We have continuously, over the last decade, developed relationships with new markets. I will tell you, our trade to China is up year- to- date this year, but we're also up in Canada, we're also up in Central America, we're up big in Australia.
We're finding other markets for this pork. This ASF factor and the trade dispute with tariffs between China and U.S. is going to cause some shifting in that normal global trading partner platform and we're going to take advantage of that and backfill the pork where it's needed.
Do you see a significant increase in the second half for U.S. export because of their pricing gap? Because now the U.S., I think probably the only major pork, hog production country where the pork prices, the futures at least, the lean hog futures declining and pork price is not going up as much as other region. Do you see that arbitrage is coming and then that stimulate the U.S. export to other countries?
I do. Well, first of all, with the introduction of tariffs, whether retaliatory or our tariffs, in the middle of 2018, the back half of 2018 was a soft export period for us. Just given that comparable period, I expect to be up second half to second half. You're right, whenever market arbitrages present themselves, typically trade wins. That price needs to move a good bit to allow for that sale to absorb that tariff, if you will. Like I said, these backfilling opportunities have already presented themselves, and I'm hopeful that the back half of the year, that'll expand.
Okay. Thank you, Glenn. [Non-English content]
All right. Next question. Before you ask your question, please tell us who you are and who you represent because we have to keep some good records.
I'm from Morgan Stanley. My name is Lillian. A question about China. Hog prices have gone up in China. From the market, we know that the epidemic is not getting any better. What will happen in the second half in relation to hog prices? How are you going to manage Shuanghui's cost issue? In Q2, we already see some clear signs, some pressure on profitability. What will happen in the second half and next year in terms of profit level?
I will take that question. Actually, it's two questions about prediction of hog prices and also our measures, right? In August last year, the African swine flu started. Since the outbreak of the epidemic, the situation has been quite serious. There is a drop of hog inventory by 25% and decline in breeding sow inventory by 26.7%. These are very serious declines. At the moment, hog prices will hit historical high, creating great impact on us. In the past, concerning hog price predictions in China, we have been quite accurate. But I can't say too much now because the epidemic is a new situation, and it has widespread impact. At the same time, we are looking at the trade war. I think hog prices will maintain a high-level next year. Beginning from Q2, we have adopted a number of measures.
From our announcements, you can see that our profit has dropped. Profit went up in Q1 because hog prices have not increased by such huge margins yet. The Q2 profit dropped. Raw material cost, not just pork, other raw materials have gone up in their prices. In that process, we have adopted or launched some new measures, but it takes time for the measures to take effect. So far, our measures, most of them have become effective already. Looking ahead in the second half or next year, we are fully confident. Perhaps let me report to you what measures we have adopted. There are five. First, we have readjusted our product structure and cost structure. High-end products percentage was rather low in the past. Beginning from last year, we have moved towards high- quality and high- profit offerings, so that we can offset the impact of higher cost.
And then, we have to better control our cost using our synergies. We can use the price gap, and we can also move things around in relation to our raw materials. Thirdly, we rely on technological and industrial innovation so that we can optimize our formula products, so to speak. We can increase profit level at the same time. We have seen some clear impacts or very positive data. Number four, we enhance internal management so that we minimize wastage and lower various expenses.
Number five, and also the most important one, is increasing selling price. When hog prices go up, of course, we have to increase the prices of our products as well. This year, we have already adjusted our prices upward three times. The impacts have not yet been fully reflected at this moment. But I think they will be fully reflected by the end of the year. Thank you.
Thank you, Mr. Ma. Can we take the next question? In the second row. From Citibank.
Management limited visibility on the U.S. business, quite understandable. Nobody have a crystal ball on this business. My question is, in this backdrop, what's management's intention of using of the hedging tools? In the past, we know that you never disclose the percentage of sales will be hedged. Given this situation, the intention is more using hedging tools to protect the downside of the earnings or if things too volatile, you were probably waiting for better visibility before using more hedging strategy? Thank you.
I've said this to you before, and I guess you're going to force me to say it again. We don't disclose our hedging techniques. I appreciate you keep asking every year. It's a good question because, given the volatility in these markets and our reliance on commodity markets in the U.S., whether it's corn or soybean, or hog contracts, we always look for ways to mitigate risk. Risk being the long-term increase in grains and the long-term decrease in hog prices, right? What we're trying to do is remove the volatility away from our hog production profitability. When markets bounce as sporadically as they have, it's been very difficult to hedge in using that strategy, right? We have not changed our approach. I've said this to you before, we're not paper gain chasers. We don't speculate, okay?
We're very simply looking for opportunities at the right price point to lock in grains and to lock in selling prices for our hogs. In years past, when we have not faced trade disputes like this or ASF, in any given period, and this is disclosed, we can go out a year to 18 months on some of those contracts. What we found is there's a little less liquidity in those out months when the markets are this volatile. All that means is it's difficult to find a counterparty, right? Because everybody's bullish ASF, everyone's bullish global meat prices, not just pork, but meat prices. It could be difficult to find a counterparty.
[inaudible] more in the cloud for a lasting time, or you have a lack of the counterparty, and not finding the right counterparty?
The answer is we have not changed our strategy or approach to hedging. It is a tool that is, in my opinion, mandatory to manage the type of business we have. We continue to focus on the commodity markets. We continue to use our hedging tools to help mitigate risk.
Okay. Thank you, Glenn.
Next question. Over here. To the front.
Hi, Glenn. I'm from Macquarie, Huang Linda. I have a very simple question, is that regarding for the supply in United States. If my number is wrong, please correct me. I used to read the article saying about that the supply increased by 6% at the end of June in the United States. If the current trade situation continues and there is no any of the breakthrough, do you see that the hog production industry in United States started to do the capacity scale back or like a production reduction? If you have already seen that happen in United States, when are we going to see the supply and demand equilibrium will happen?
I have heard that number, so I can't tell you it's correct, but I've heard numbers ranging between 4% and 6%, so that's a fine number. The truth is, regardless of what number you want to say, U.S. pork supply, U.S. pig supply is up. It's been up for a number of years. The hog production expansion started coming out of 2014, when the U.S. contracted a disease known as PEDV, and there was a reduction in the herd size. Expansion coming out of that disease continued for quite some time because hog producers knew that fresh pork plants were coming on board over the last couple of years. We've had four new pork plants in the U.S., so producers continued to expand because they saw the new shackle space.
The trade disputes we've had with Mexico and China have had an impact on how hog packers, processors, have been able to export. But I believe that the impact on Chinese supply from this ASF situation will continue to evolve. We'll all become a little bit smarter as time passes, as processors and packaged meat producers utilize whatever pork they have on hand today. But typically, what we see is when demand disappears, ultimately supply will contract. I can't comment on what my industry peers are going to do. I can't. We did just see new pork plants come on board. I imagine we're not going to see anything of that significance here in the near term. But typically, what we see in historical times is when demand starts to shy away, that supply will start to contract some as well.
I will caution you, though, the biological processes associated with hog production have a long tail on them, okay? It's not something where you can shut the back door of your plant and they disappear. These pigs are in the process. It's going to take a little bit of time for any contraction to become visible. You asked me if I've seen any, and I have not seen any contraction yet in the U.S.
Okay. Thank you.
Next question.
I would like to ask about importation from the U.S. to China. Considering the whole process at the moment, I have done the math. 60% importation means that you can make a good profit. Is there going to be any arbitrage? As long as there is more profit there, import more, and vice versa. Is that what you do in real life? Let's just talk about national policies. Are there any special policies restricting how much pork you can import from the U.S.?
U.S. pork importing to China, we're facing 62% tariff. For some other products, well, we are still enjoying some advantages. Some byproducts. These byproducts, they don't have much value in the U.S., despite the tariff, we can cover our cost for operation and transportation for these byproducts. We continue to import them. In the first half compared to last year, the total volume of importation is more or less the same. Secondly, our importation must be advantageous to us. Other than the increased tariff, there are no policy-related restrictions at the moment.
Next question. In the first row, I think.
My name is Janice. I would like to ask about slaughtering business in Mainland China. At the moment, there's a lot of pressure on hog and also breeding sow. We have seen some pork-related cycles in the past without much fluctuations. This year, the situation is a bit different. The cycle is very long. What will happen to the slaughtering business if you can't slaughter as much? Is that going to lead to a protracted profit dropping for an extended period? Some hog production enterprises are also moving into slaughtering. To a certain extent, integration upstream may promote integration downstream. If producers become slaughterers, what strategies do you have to tackle that change?
Allow me to respond. The first question, you are asking about slaughtering profits, right? When the inventory drops. Well, this time the decline is rather serious, the price gaps will be expanded. Because of economies of scale, the impact on our profit is partially offset. If somehow producers are also doing slaughtering, I think it's a good trend for the entire industry's development. Sometimes we face difficulties. Some local enterprises, they enjoy very low cost, and they don't really follow the rules of the game. We are very much standardized. Sometimes it's very difficult to deal with these players who don't really play by the book. If we're talking about a large enterprise doing hog production, they want to move into slaughtering as well, they will play the game by the book. The overall playing field will become more equalized for all the players. It is actually good news.
If you look at Shuanghui, we have no say when it comes to hog prices. How can we affect hog prices when the volume of hog processed by us is just about 3% of the entire China? We have no ability to affect hog prices. I can't affect it, and hog production players, they could be very large in scale still, they cannot affect hog prices either.
Thank you, Mr. Ma. Can we take the next question? No more questions? Okay, you can ask a second time. Thank you.
On U.S. hog production, because if you look at the market future contract implied return for hog production, actually it get worsen again in third quarter and the fourth quarter, if I look at the right pricing. It actually go back to the negative territory, if you look at the implied return. What's the implication for our hog production return in the second half? Because second quarter, we have a pretty good quarter for hog production.
That's right.
What's the trend for now we are seeing for our own business?
You are correct. In Q1, as a reminder, we had a pretty significant loss. The loss in Q1 was larger than the loss in all of 2018. The profitability for a hog producer in Q2 was above $10 a head. If you took hedge positions, you can do better than that. You're right, as of Friday, actually this is Monday. As of Monday, the market is back to negative. We can sit here and debate the merits of how that reconciles to the ASF situation in China, how that reconciles to the export data. Regardless, the market has turned negative. We have taken some hedge positions to help protect the back half of this year. We took those when the market was available to us. We believe that we will see profitability for the full year of the U.S. hog production.
Great. Thank you. Go on.
Next question. The first row. In the first row.
Thank you. I'm Christine Peng. A follow-up question. We are a bit confused, I think. Currently, the Chinese government towards the trade war, other than tariff, are there any administrative control? Because we have seen some news or rumors. Can you tell us what happened in July and August? I saw something in the slide. The price gap is about three times between U.S. and China. You should be importing a lot of pork from the U.S. That will make sense logically. What happened in July and August? What is the latest trend for U.S. pork being imported to China compared to the last half year and also the next half year? What will be your prediction?
Importation. Some products, byproducts, are still creating advantages to us. Other than tariff driving up some cost, there are no policy restrictions. If you look at the first half of the year, China imported, according to official figures, U.S. pork at 1.3 million tons around the world, up by 8%, from U.S. 138,000 tons. In terms of volume, compared to same period last year, it's more or less the same. We are still importing at the normal level. You talked about the price gap. In the past that would mean very good news, but today we're talking about rather substantial tariff, not much profit for us to make for some products. For byproducts, we are still importing them at the normal range. We'll continue to import. Yes. As long as it's good for us, we'll keep doing it. Concerning import and exports, the first half is showing a flat trend.
Looking ahead, further development of the swine fever and increase of hog prices, the volume of import may be affected because while there are price gaps, the gaps may be widening. Tariff is standing at 62%. I think we should stop right there, right? The next step, I think, when the trade conditions stabilize, of course, we want to put an end to it. We still have room to expand import from the U.S.
I just want to ask for a figure. For the whole year or in the second half, do you have any targets? What will be the volume?
There are no administrative restrictions, 62% tariff, but the price gap is 3x . It's hard to say, because the trade war is changing the situation all the time. It may continue, it may improve over time. Everything, every new bit of development will affect our strategy.
As long as it's good for us, we'll keep doing it, okay? In the first half, if you look at our report, the price gap between the two countries. Under normal circumstances, we will of course leverage on the price gap. At the moment, the tariff is quite substantial, and it is substantial enough to remove advantages for some sort of products. We'll continue to import. I believe we will import more this year compared to last year because of the bigger price gap and also packaged meat cost has gone up. We are importing from Europe and other places to lower the cost, and U.S. wants to export more. U.S. wants to expand export, and China wants to expand import. We have global synergy. I still feel very positive and confident with our outlook.
Thank you, Mr. Wan. Time is almost up. Last question, please. If there is any. If not, okay. First row.
I'm sorry. I want to follow up and seek more information. The problem is hog prices in recent months have gone up in China, CNY 10 and then CNY 14, CNY 15, and today, CNY 22. If you consider 62% tariff, the price gap recently has been expanded even with a tariff and transportation cost. Still, for Shuanghui, you can help to offset the increase of your cost. In the first half, okay, the import volume is a flat trend. What about July, August? Chinese hog price surged, things have changed. 62% tariff, despite that, you can still save a lot of money. Are you going to import substantially more from the U.S. to cover the cost? Or are there some administrative control, perhaps?
I think you're getting something wrong. Hog prices increase doesn't mean all the products will go up in cost by the same percentage, because different products are priced differently. U.S. has to think about domestic demand and export to other places. There are many variations, many factors that we need to consider. As long as it's good for us, we will keep doing it, okay? You can ask it 10 different ways, but we will give you the same answer. The current hog price is already quite different compared to the reporting period. Looking forward, hog price in China may go through another roof. With greater price gap, we will make adjustments to import and export. We look at that every day. We will definitely consider what is best for our business. Don't worry. We face a lot more pressure than you do.
We will continue to look at the situation very closely. We will continue to follow the latest trends to readjust our policies. Please rest assured. Other than U.S., we continue to expand international trade, Europe, North America, South America. We continue to explore new channels for imports. Thank you.
All right? Okay. Okay. Final question, really, and then we'll wrap things up. Citibank. A quick question, all right?
In Q2, we can see cost pressure is rather big for packaged meat. What about inventory? Do you think hog prices will continue to rise, so you are not using much of your inventory? Or what is happening to your inventory? What is your policy? Inventory level.
I don't want to divulge too much information. The figure you can find out in our report. Raw material costs went up in Q2. It's not just pork. It's also other types of raw materials. Hog prices will go further up in second half. Why should we use our inventory ahead of time? Last time someone asked, "How long will your inventory last?" It's hard to answer. If I anticipate hog price to go up, I will leave my inventory there and use it for six months. Or if it's vice versa, I can use all the inventory in one month. It really depends on what is happening in the market. We know in the second half, hog prices will be higher. That's all I can say.
Thank you, Mr. Ma. That's the end of today's presentation. Thank you very much.