Ladies and gentlemen, thank you for standing by, and welcome to Hua Hong Semiconductor's fourth quarter 2019 earnings conference call. Today's call is hosted by Mr. Junjun Tang, President and Executive Director, and Mr. Daniel Wang, Executive Vice President and Chief Financial Officer. Please be advised that your dial-ins are in a listen-only mode. However, at the conclusion of the management presentation, there will be a question-and-answer session, at which time you will receive instructions on how to participate. The earnings press release and fourth quarter 2019 summary slides are available to download at our company's website, www.huahonggrace.com. Without further ado, I would like to introduce you to Mr. Daniel Wang, Executive Vice President and Chief Financial Officer. Mr. Wang, you may now go ahead, please.
Thank you, April. I think there's still a lot of people who couldn't dial in. I think they were asking if there's a different conference ID. I think the one they're using is 789450. But I think the right number is 789540. I think let's just get started. Good afternoon, everyone. Thank you all for joining our fourth quarter 2019 earnings conference. Today we will first have Mr. Tang, our Executive Director and President, make some remarks on our fourth quarter performance. President Tang will address in Chinese, and Kathy Chien, our Deputy Director of Investor Relations, will be the translator. After that, I will discuss our financial results and provide guidance for the next quarter. This will be followed by our question-and-answer session. I will now turn the call over to our Executive Director and President, Mr. Tang.
[Non-English content]
Good afternoon, everyone. Thank you for joining our earnings call. It's my pleasure to share with you our company's 2019 fourth quarter results. As most of you are probably aware, management set a very challenging revenue target of $242 million for the fourth quarter. We knew i t was not going to be easy. Our actual revenue of $242.8 million was a great accomplishment in a challenging market environment, which our team worked very hard to achieve. Especially important for our future was meeting our commitment for wafer shipments valued at $7.4 million from our new 12-inch fabrication facility in Wuxi. Gross margin was 27.2%. The margin decline was largely due to lower capacity utilization and an increase in labor costs. The new facility started production in Q4. We are very proud of accomplishment of initial start-up of production in Wuxi.
[Non-English content]
Memory flash, power discrete, RF SOI, and power management IC technologies are being used to support overseas and domestic leading customers in the growing 5G smartphone market. Using the 8-inch fab now, our technology development team has been working on more advanced technologies for the 5G smartphone market to be produced in the 12-inch Wuxi Fab this year. We see tremendous opportunities for production of products such as MoCA ICs, MCU, power discrete, CIS, logic and eNVM devices in this newly- built facility. Interest from customers has been exceptional. For the management team, our priority is to ensure a smooth and timely production ramp-up for this 12-inch facility so that it will quickly contribute to revenue and margin growth for the company.
[Non-English content]
2019 was an incredible business performance was strong and [audio distortion] achievement. While the global [audio distortion] our overall revenue [audio distortion] representing a 0.2% increase [audio distortion] to the increased demand for [audio distortion] particularly in China [audio distortion], other parts of Asia and Europe. Gross margin was 30 points [inaudible] and increased unit cost of raw materials, partially offset by an increase in average selling price. Net profit as a percentage of revenue was 15.6%.
[Non-English content]
Hello, this is the operator. We are currently experiencing some technical issues. Please continue to stand by. Thank you.
[Break]
Hello, speakers. You may now go ahead.
Sorry about the technical issue just now. I continue to be excited leading this exceptional group of people. I look forward to the challenges ahead of us as we continue ramping up the production facility in Wuxi. I am confident with the support of our shareholders and the board of directors, we will take the company to a new level.
[Non-English content]
These have been found, and our operations are stable and smooth. Now, I would like to hand the call over to our CFO, Mr. Daniel Wang, for his comments.
Thank you, Mr. Tang, for your inspiring comments. Now, let me begin with a summary of our financial performance for the fourth quarter and a recap of the whole year 2019, followed by an outlook on revenue and margin for the first quarter of 2020, and then we will move on to the question-and-answer session. Now, first, let me summarize financial performance as of the fourth quarter. Revenue reached $242.8 million, 2.5% lower than the prior year, primarily due to decreased wafer shipments, but 1.6% above Q3 2019. Cost of sales was $176.8 million, 7.4% above Q4 2018, mainly due to increased labor costs, unit cost of raw wafers, and depreciation expenses, and 7.1% above Q3 2019, largely due to increased labor costs and depreciation expenses.
Gross margin was 27.2%, 6.8 percentage points below Q4 2018, mainly due to lower capacity utilization and increased labor costs, unit cost of raw wafers, and the depreciation expenses. A 3.8 percentage points below Q3 2018, primarily due to lower capacity utilization, increased labor cost, and depreciation expenses. Operating expenses were $71.4 million, 83.8% above Q4 2018, and 77.6% over Q3 2019, largely due to increased labor, engineering wafers, and depreciation expenses for Wuxi Fab. Other income net was $24.1 million, 107.8% up year-over-year, primarily due to, one, increased general subsidies. Two, decreased foreign exchange losses. And three, increased share of profit of the associate. Profit for the period was $14 million compared to $48.6 million in Q4 2018, and $44.4 million in Q3 2019.
Net profit attributable to shareholders of the parent company was $26.2 million, compared to $49 million in Q4 2018, and $45.2 million in Q3 2019. Basic earnings per share was $0.02 compared to $0.042 in Q4 2018, and $0.035 in Q3 2019. Annualized ROE was 4.8%. This is the first time our 12-inch fab in Wuxi made contribution in revenue. We also provide the operating results by segments. First, let's have a look at the Hua Hong 8-inch business. Revenue was $235.4 million, 5.5% below Q4 2018, and 1.5% lower than Q3 2019, primarily due to decreased wafer shipments. Gross margin was 28.2%, 5.8 percentage points below Q4 2018, and 2.8 percentage points below Q3 2019, primarily due to lower capacity utilization, increased wafer cost, and depreciation expenses.
Operating expenses were $38 million, 15% above Q4 2018, largely due to increased labor and research development expenses, and 41.3% over Q3 2019, primarily due to increased labor expenses and impairment provisions. Profit before tax was $43.6 million, 26% lower than Q4 2018, and 26% below Q3 2019. Now, let's have a look at Hua Hong Wuxi. Revenue was $7.4 million. Operating expenses were $33.4 million compared to $5.8 million in Q4 2018, and $13.3 million in Q3 2019, mainly due to increased labor, engineering wafers, and depreciation expenses. Now, out of that $33.4 million, $17 million of the fixed costs, including depreciation, were reclassed from cost of goods sold. So out of that $33.4 million, there was a reclass from COGS of $17 million. Profit before tax was -$24.8 million. EBITDA was -$17.6 million.
We pay a lot of attention to EBITDA in the next two years for Wuxi. We expect EBITDA should quickly turn positive as our revenue starts to grow. Now, please let me provide you with more details on our revenue from Q4 2019. From geographical perspective, revenue from China was $153.5 million, contributing 63.2% of our total revenue, an increase of 12.6% compared to Q4 2018, mainly driven by increased demand for MCU and the super-junction products. Revenue from Asia was $32.5 million, a decrease of 5.2% compared to Q4 2018, chiefly due to decreased demand for MCU and general MOSFET products. Revenue from the United States was $31.9 million, a decrease of 22.6% compared to Q4 2018, chiefly due to decreased demand for super-junction and general MOSFET products.
Revenue from Europe was $16.8 million, a decrease of 11.8% compared to Q4 2018, chiefly due to decreased demand for smart card ICs, partially offset by increased demand for general MOSFET. Revenue from Japan was $8 million, a decrease of 55.7% compared to Q4 2018, largely due to decreased demand for logic, super-junction, and MCU products. With respect to technology platform, revenue from embedded non-volatile memory was $98 million, a decrease of 1.4% compared to Q4 2018, primarily due to decreased demand for smart card ICs, partially offset by increased demand for MCU products. Revenue from discrete was $87.8 million, an increase of 1.2% compared to Q4 2018, mainly driven by increased demand for IGBT and super-junction products, partially offset by the decreased demand for general MOSFET products.
Revenue from analog and power management IC was $30.3 million, a decrease of 3.4% compared to Q4 2018, mainly due to decreased demand for analog and LED lighting products, partially offset by the increased demand for power management IC products. Revenue from logic and RF was $23 million, a decrease of 16.6% compared to Q4 2018, mainly due to decreased demand for logic and RF products. Revenue from standalone non-volatile memory was $3.3 million, a decrease of 7.2% compared to Q4 2018, primarily due to decreased demand for flash products. Now, take a look at the cash flow statement. Net cash flows used in operating activities was $7.3 million, 107.9% lower year-over-year, and 110.3% lower quarter-over-quarter, primarily due to decreased receipts from customers and increased payments to suppliers and increased labor expenses.
Capital expenditures were $129.2 million in Q4 2019, including $96.3 million Hua Hong Wuxi and $32.9 million for Hua Hong 8-inch business. Other cash flow generated from investing activities were $133.2 million, including one payout of $105.1 million of investment in financial assets at fair value through profit or loss. Two, $94.5 million of receipt of government grants. Three, $2.9 million of interest income, offset by $70 million invested in time deposits. Net cash flows used in financing activities were $1.6 million, including one, $2.1 million of repayment of a bank loan, bank borrowings, two, $0.6 million of lease payment, and three, $0.1 million payment of interest expenses for bank borrowings, offset by $1.2 million of proceeds from share option exercise. Now, let's move to the balance sheet. Cash and cash equivalents was $476.3 million on December 31st, 2019, compared to $474.7 million on September 30th, 2019.
Restricted time deposits increased from $0.8 million of September 30th, 2019 to $70.8 million on December 31st, 2019 primarily due to investment in time deposits. Trade and notes receivables increased from $140.4 million on September 30th, 2019, to $165 million on December 31st, 2019, primarily due to stronger revenue in both Q3 and Q4. Other current assets increased from $110 million on September 30th, 2019, to $122.7 million, primarily due to increased VAT-deductible tax. Property plants and equipment was $1.558 billion on December 31st, 2019, compared to $1.563 billion as of September 30th, 2019. Total assets increased from $3.576 billion of September 30th, 2019, to $3.613 billion on December 31st, 2019. Our total bank borrowings decreased from $27.6 million on September 30th, 2019, to $25.8 million on December 31st, 2019, primarily due to $2.1 million of repayment of bank borrowings.
Total liability decreased to $530.7 million on December 31st, 2019, from $556.1 million on September 30th, 2019, primarily due to decreased government grants for the investment in fixed assets. A debt ratio decreased to 14.7% on December 31st, 2019, from 15.5% on September 30th, 2019. Now, I would like to give you a recap our performance for the entire year of 2019. Revenue was $932.6 million, an all-time high, and an increase of 1.2% over the prior year. This was incredible and a major achievement. While the global semiconductor market declined 12% in 2019, according to SIA, our company revenue even had a small increase. Gross margin was 30.3%, 3.1 percentage points lower than 2018, mainly due to decreased capacity utilization, increased labor costs, unit cost of raw materials, and depreciation expenses.
Operating expenses were $178.6 million, 37.3% above 2018, largely due to increased labor, engineering wafers, and the depreciation expense for Wuxi Fab. Other income net was $77.7 million, up 94.4% from 2018, primarily due to one, increased general subsidies. Two, decreased foreign exchange loss. Three, increased fair value gains on financial assets at fair value through profit or loss. And four, increased interest income. Net profit was $155 million compared to $185.6 million in 2018. Net profit attributable to shareholders of the parent company was $162.2 million compared to $183.2 million in 2018. Basic earnings per share was $0.126 compared to $0.171 in 2018. ROE was 7.4%. Finally, let me give you a very high-level outlook for the first quarter 2020. We expect revenue to be approximately $200 million, and our gross margin to be between 21% and 23%. The Q1 guidance is relatively conservative, largely for two reasons.
First, the actual impact of the coronavirus is not clear for now. Not all of our employees have returned to work due to quarantine requirements, which is also the situation for our customers and suppliers. The logistics situation has not returned to normal. Although our orders are looking good and our business operations are moving smoothly, we cannot accurately estimate the impact of the coronavirus. It is very dependent on when the epidemic can be thoroughly controlled. To be prudent, we will give conservative guidance for now. Secondly, we have two fabs conducting annual maintenance in Q1. January 10 through January 14, that was for Fab 1, and January 6 through January 8, it was for Fab 3, which will cause some loss in overall fab utilization for the quarter. This concludes my financial remarks. Now, I would like to open the call for question and answer. Operator, please assist. Thank you.
Thank you, all speakers. The question-and-answer session will be conducted electronically. You may submit your questions via the webinar. Please do so via the question- and- answer widget, which is located on the top right-hand corner of your screen. Or should you have minimized this during the webinar, please click the purple Q&A icon on the bottom of the webinar console to reopen this. Type your question in the bottom area and click the submit button to the right of the Q&A window. If you would like to ask an audio question, please do so by pressing star five on your touch- tone telephone. Should you wish to cancel your request, please press star five again.
Operator? Operator?
Yes.
Hi. Once the investor types up a question, can you read it to us?
Yes. We have one question in the Q&A box. Would you like me to read this to you?
Please do.
Thank you. Our first question-
So we can verbally answer.
Thank you. Our first question from the webinar comes from Donnie Teng of Nomura. What is our capacity expansion plan now for Wuxi Fab, Hua Hong 8-inch fabs, and Huali in 2020F and 2021F?
Can you repeat it one more time? I am sorry. Can you just repeat it one more time? Fab capacity for Wuxi-
No problem. I am also sending it to you in our team chat. The question is, w hat is our capacity expansion plan now for Wuxi Fab, Hua Hong 8-inch fabs, and Huali in 2020F and 2021F?
Let me answer the question, please.
[Non-English content]
For our Wuxi Fab, currently we have 10,000. We expect we will get to about 20,000 by mid of this year. Let us look at the market condition. If things are doing well, we can continue to ramp up the capacity. For our 8-inch fab, we still have some room there. We can potentially add another 10,000 - 20,000 of the power discrete capacity. Huali, we cannot really tell because we are not running Huali.
Great. We have several questions on the webinar. Would you like to answer one from the webinar or would you like us to select one from the audio line?
[Non-English content]
We can just select the one from the audio line.
Great. Let's start with Leping Huang of CICC. Please go ahead.
Thank you to take my question. First, I am really thank you that Hua Hong can separately disclose the detail of Hua Hong Wuxi and Hua Hong Shanghai. I would like to know how much revenue scale you need to reach the EBIT level breakeven? Thank you.
Look, thank you very much for the question. The design capacity, the current, the $2.5 billion investment is really for 40,000 wafer capacity. We expect at 25,000 wafer capacity, we should be able to break even. Depending on, of course, the price at the point, but I would say 25,000 or, if the price is a little bit lower, then we might have to get to 30,000, and then we have to basically improve the price over time. But that would be the range. I would say 25,000 wafer capacity.
The second question is that we see a shortage of the mature, probably mature node process in the market, especially in China market, and Hua Hong historically is very strong in power-related products. Considering these market conditions, what is your latest capacity plan, the CapEx plan to capture these business opportunities? Thank you.
[Non-English content]
Wuxi 12-inch fab just catch the great opportunities with the growth of 12-inch market, and our investment plan is just moving smoothly according to the original R&D report. We just plan for IC plus power discrete. According to the investment plan, we will reach 20,000 capacity by the end of 2020, and this investment plan is accelerated according to plan. We take the advantage of our three 8-inch production lines, communicate thoroughly with our customers and put a lot of effort in our R&D research for the new products. We are targeting to start the mass production as early as possible.
Thank you.
Thank you.
Thank you.
We have another question from the audio line, from Robert Hsu of JP Morgan. Please go ahead.
Hi, Robert.
Hello, Robert. You are now on the line. Please go ahead. A s we are not hearing any response, I will just mute your line for now. You may press star five again if you wish to ask a question. I am going to move on to another person. That is Mr. Sebastian Hou of CLSA. Please go ahead.
Thank you for taking my questions. My first question is a follow on the Q1 guidance on the revenue side. I understand that Daniel explained the two reasons, but I am curious about the first reason regarding the coronavirus impacts. I thought that semiconductor fabs is quite automated, around a 24/7 different maintenance. You have cycle time for two months. Basically, for the March revenue, probably represents your wafer start in January. Supposedly there shouldn't be much impact. If there's any order cut from customers, will probably more reflect in second quarter. I am just curious, are you just trying to be more conservative, or are you already seeing some customers revising down order forecasts already?
Thanks, Sebastian. That was a good question. I knew you were going to ask that question. As I said, I am going to repeat that. Everything's going smoothly. Order is looking good at this point. In fact, all three 8-inch fabs are operating at the very decent level. We're talking about all above 90%. Now, you have to realize, literally, the consumer spending has stopped, because of the virus for the past two or three weeks, and probably for the next few weeks as well. So literally there's nobody buying things, including electronics. A t this point, although everything is moving smoothly, but you know, in reality, it's going to eventually affect us, in the supply chain. I don't know when this is going to happen. Hopefully, things are going to recover. Hopefully, we're going to be recovered from the virus soon.
It'd be great. I believe there'll be a strong rebound when that is over. But for now, we're just being very conservative, because we're dealing with a lot of design houses. With the way it is going, I am sure they're under a lot of financial stress.
Got it. Thank you. My second question is on the Wuxi Fab. Just want to clarify one thing. The 20,000 wafer per month, this capacity plan, is going to be reached by mid this year or end of this year?
It would be middle of this year.
Got it.
Well, basically, since Mr. Tang joined the company, we have already accelerated the pace of capacity expansion. So basically, the orders were all out last year. I would say 60% of the equipment is already in. So I think by middle of this year, we should have all the 20,000 capacity, the additional 10,000 capacity installed.
Got it. So that is actually six months earlier or six months ahead of the original schedule.
Yes.
I'm curious about this. Is this driven by the committed customer demand or takeoff?
We actually have quite a number of things that are going on there at this point. As President Tang said earlier, the interest from customers for the Wuxi Fab, the Wuxi capacity, has been enormous. Exceptional. More and more people are interested in building products there. So we're looking at four or five things that are currently under qualification. We're talking about 90-nm technology, 55-nm technology, as well as power discrete for various products. So, things that Mr. Tang has already mentioned in his earlier remark.
Got it. Thank you. Just a follow-up on the Wuxi Fab, the financial metrics. So if I look at the breakdown you offer, thanks for offering that on page five of your press release, Daniel just mentioned, among your operating expense, about $33 million, you said that $17 million of that is actually depreciation. But I'm curious about what's the normalized operating expense for this fab going forward?
Sebastian, absolutely. I'd love to answer that question. You have to realize, we're looking at this $33 million. Out of that $33 million, about $17 million was reclassed from the COGS. Out of the $17 million, part of that were depreciation expenses. And then part of that were related to just other things, labor, facility, and others. The reason we did that, according to accounting policy, for the part of idle capacity, if you don't use them, you can actually reclass them to your OpEx. That's what we did. This will probably happen early this year, let's say for the first part of this year. And then once we start to ramp up the capacity, and you basically are going to see normalized operating expenses. Am I making myself clear?
Sure. What is the estimate? Do you have an estimate about the OpEx level when it normalizes?
In my view, let's say once we start getting to 20,000, 30,000 wafers capacity up to 40,000, I would say that we see the operating expenses will be around $30 million a quarter. Mostly , I think maybe $10 million will relate to administrative and about $20 million will relate to R&D because we have to do engineering wafers, masks, that sort of stuff.
This $30 million per quarter is based on the 20,000- 30,000 wafers per month capacity, that kind of scale.
Good day, Sebastian, this is the operator. Apologies for the inconvenience. It appears that our speaker has just disconnected. Please stand by. Thank you.
Okay.
Hello, everyone. Thank you so much for standing by. Please continue to stand by. We are just getting our speakers connected. Sorry for the inconvenience.
Excuse me, speakers, are you there?
Yes.
Please go ahead. Thank you. We still have Mr. Sebastian Hou on the line.
Sorry, Sebastian.
No worry. I just have another two questions. Very quick, the housekeeping question. I will just go back to the queue so the others ask questions. My question is, d o you have an initial outlook for 2020? I know it's hard given the coronavirus thing, but what's your initial take on 2020, the revenue outlook and margin outlook?
It is difficult. I think, I'd probably give you a better picture sometime in Q4 when things become more clear and evident. But we had a great plan initially. We were hoping that, clearly the market was coming back. You know what? Let's discuss that maybe in a few weeks from now, another three, four weeks.
Sure. Let me ask something that you can-
I think that's probably fair for everyone. I just don't want to give any bogus numbers.
That's understandable, but let me add something that is more controllable. For example, can you give us some, on the cost side, what's your depreciation guidance and capital-
That I can give you. For depreciation expenses, f or the Wuxi Fab, I think we're talking about somewhere around $110 million for the year with the capacity ramping up to 20,000- 30,000. And then, for the Shanghai side, it's probably going to be around $130 million for the 8-inch business.
Thank you. Got it.
I do not know if you are interested in capacity spending, but— Hello?
Hello.
For capacity spending, we are thinking about, on cash basis, I think Shanghai is about $150 million overall, including some improvements, upgrades, small expansion, plus maintenance. For Wuxi, last year we are talking about overall was around $791 million on cash basis, and I think this year we are probably around $800 million.
My last question is, what is your best estimate or even a wider range of the estimate about the total revenue contribution from Wuxi Fab for this year, full year?
This year?
Yes.
I think we expect, we're doing a lot of qualification for various products. I think the ramp up, probably really the true ramp up, we're talking about significant revenue probably is going to be in the second half. We're going to be having some small revenue in the first, second quarters. L et's see. Somewhere around $100.
$100 million?
Yeah.
Got it. Well, thanks so much.
All these things can change.
Thanks for the colors.
Thank you.
Once again, if you wish to ask an audio question, please do so by pressing star five to enter the questions queue on your touch-tone telephone. We have a question coming from Edison Lee of Jefferies. Please go ahead.
Hello. Hi. Hi, can you hear me?
Yeah. Jefferies.
Hi. Thank you very much for letting me ask the question. The first question is about your comment on increases in raw material costs. I think you mentioned that one of the reasons for lower margin last year was due to higher unit raw material costs. Maybe can you give us a little bit more details on that and your outlook for 2020? Number two is, based on your comment that the revenue contribution from Wuxi can be $100 million for 2020, and you are expanding capacity to 20,000- 30,000 wafers by midyear, what sort of utilization rate is that $100 million based on? Can you give us some rough idea? Number three is the end demand. In 2020, where do you think the weakness or the risk could be on the different types of products in terms of end demand? Thank you.
Actually, I think we expect the raw materials should be able to coming down because we went back last year twice. We renegotiated with our vendors. We are able to get it down compared to 2019. So it should benefit us throughout 2020. As far as for the utilization for the Wuxi Fab, I think, we will do our best to make sure we are going to keep that fab as much utilized because it is in the ramping-up process. We are doing a lot of qualification for various products. So I would say, if it is anywhere between 60%- 70% would be decent.
On end demand?
End demand, I think power discrete MCU continues to be very strong. I think pretty soon if we're going to recover from this virus thing, we should expect the smart card IC business should also be able to recover.
A follow-up question. How much exposure do you have to smartphones, especially 5G smartphones? Because a big upgrade cycle should be coming.
That's a good question. I think it's smart cards, it's the things with MCUs, some logic devices like optical image stabilizer, power amplifiers. These are the things we have been making in the past. I would say it'd be great if we can get to 15%-20% of our overall revenue.
That's the target for 2020. What was the contribution in 2019?
I think it's small. It's probably around 10%.
10%. Thank you very much.
Our next question is coming from the web from Mr. Randy Abrams. T he question is, i s there a way to quantify how much you discounted your 1Q shipments for the virus? If production is getting resumed, do you expect a strong rebound in 2Q?
We have given a conservative number, because of the virus, as I said. I would not comment on a reduction. That was a good question. What is the discount here for the Q1 shipment? If it's in a normal case, I think, we could easily have a better 10%-15% upside. As I said earlier, as soon as we've recovered from this virus, I think there could be a very sharp spike for the business. I certainly look forward to have that in Q2 2020.
Just another question again from Mr. Abrams. What is your expectation for growth in 12-inch Wuxi shipments in 1Q, and what is the utilization trend for Hua Hong 8-inch? Also, second question, how should quarterly OpEx trend from here through 2020 relative to $33 million for Wuxi in 4Q 2019?
For the 12-inch fab, as far as the growth goes, as I said, we expect it will mostly be in the second half. As far as the 8-inch utilization, I think it should soon stabilize. Initially when we had the 12-inch fab, some of the products will be migrated from the 8-inch to 12-inch. That was also the reason why there was a lower utilization in Q4. We expect, once it becomes stabilized in the next several quarters, I think our utilization rate will get back to above in the high 90% range.
Great. Thank you. That's all the time we have for questions. I will now hand back to Mr. Daniel Wang for closing remarks.
Can you still hear me?
Yes, you're still online. Go ahead, sir.
Well, thank you all for joining us today, and we certainly had another wonderful conversation. We hope you'll join us again next quarter. I wish you all stay safe and healthy. Finally, I wish you all have a very happy Valentine's Day.
Ladies and gentlemen, thank you for your attendance. You may now disconnect.