Earnings Call: H2 2021

Mar 30, 2022

Ladies and gentlemen, good evening and welcome to Meitu's 2021 annual results earnings conference call. I am Coco, Senior Investor Relations Manager of Meitu. Joining me today to discuss our results are Mr. Wu Xinhong, the CEO, Mr. Gary Ngan, the CFO. I would like to take this opportunity to remind you that our remarks today may include certain forward-looking statements. A number of risks and factors beyond our control may cause the actual results to differ materially from those contemplated by these forward-looking statements. During this call, we will present both IFRS and non-IFRS financial measures. We may also discuss general market conditions for our industry, and such information may come from a variety of sources outside of Meitu. For a detailed discussion of the risk factors we face and non-IFRS measures, please refer to our public documents on corp.meitu.com. Investors who are using Zoom App or Zoom PC, we suggest you can add your name or institution name. This will help us to invite you in the Q&A section. Now I would like to turn the call over to Mr. Wu Xinhong. He will present in Chinese, followed by a translation in English. 好的，谢谢Coco。非常感谢大家来参加今晚的分析师电话会。我们2021年的收入按年增长了39.5%，达到了人民币16.66亿元。而且每一个业务的收入同比2020年都有不同程度的增长，其中VIP订阅和影像SaaS业务的增长幅度远超过其他的业务，达到了146.9%。 In 2021, total revenue grew by 39.5% year-over-year. The revenue reached around RMB 1.66 billion, and each of the business segments grew on a different level. The VIP subscription and image SaaS business have the largest growth. It grew by 146.9% year-over-year. 截止2021年底，我们在全球拥有约400万的付费VIP会员，比2020年底的170万增长超过一倍多。VIP会员高速增长的核心原因是，我们提供VIP功能往往能让付费用户觉得物超所值，并且让他们获得与众不同的权益。 For a year ended 2021, the number of global VIP members reached 4 million, with an increase of more than 100% compared to 1.7 million at the same period in 2020. The main reason behind the high growth of the VIP member is that our VIP features convey a sense of value for money and uniqueness for our paying VIP members. 好，基于庞大的用户基础，通过深入研究我们目前的影像app用户，并针对高付费意愿的用户需求，推出特定的应用功能，譬如对高级质感滤镜的审美需求，对日常精致生活的展示需求，对个人品牌塑造的形象需求。我们都有相对应的高阶功能去满足他们的社交传播需要。 By studying our users, we deliver the functions catered to demands of the high-paying intention users, such as providing high-quality filters and assisting them to show the exquisite lifestyle and a good personal brand. 除此之外，基于我们多年积累的AI影像处理能力，VIP功能可以实现某些人手无法达到的效果。因此，VIP会员比普通用户有着高质量的产出。我们也会持续地创新迭代产品，满足用户在图片、视频的美化以及拍照摄影等影像服务的高级需求。 Except for this, the VIP features can realize some effects that cannot be done manually. Therefore, compared to the regular users, VIP members can have a more efficient process and higher quality outcome. We will keep on iterating our products to meet user demands. 随着VIP订阅服务步入正轨，我们在探索中发现，我们可以把在过去影像领域积累的经验和能力扩展至解决工作相关的社区设计需求中。我们从影像工具向设计工具延伸，通过桌面版、移动版以及网页版等多个平台，为有做工作设计需求的企业及个人提供设计解决方案，且产品具备远程协作、共享修图等等的功能。 With the initial success of the VIP subscription services, we found that we can also apply our experiences and capabilities to address work-related demands. We expand our product offerings from image tools to design tools. We launched the design solutions for corporate and personal work demands across several platforms, including desktop, app and web versions. These solutions throughout the remote and share collaboration functions. 在前不久举办的美出圈美图影像节中，我们正式发布了六款涵盖从生活及工作需求的产品。譬如与生活方式相关的服务，我们推出了Wink，就是像修图一样修视频，以及Chic，它是一个潮流期刊相机。 According to the Image SaaS strategy, we launched the six new subscription-based products officially in the launch event lately. These products cover both lifestyle related and work related demands. For example, for lifestyle scenarios, we launched a video processing app called Wink, and also the plot camera called Chic. 与工作场景相关的服务，我们推出了拥有海量海报模板的美图设计室功能，还有一分钟拍出专业证件照的美图证件照功能，以及简单好用、设计不求人的美图秀秀Mac版。最后还有一站式AI修大片的美图云修等产品。这些新产品上线后获得了用户和行业的好评，部分产品的用户数量正在快速增长。我们会持续地投入研发，不断完善与生活及工作相关的影像产品矩阵，为未来收入增长带来新动力。 For the work related scenarios, we launched a poster design function called Meitu Design Studio, a professional profile pic editor called 美图证件照, a design solution called Meitu for Mac, and also a one stop AI photo processing solution called 美图云修. Some of the products received positive reviews and user number was climbing. We will keep on investing in R&D to deliver a comprehensive product portfolio to stimulate new growth drivers. 以上是我们基于VIP定位业务及影像SaaS战略的思考。接下来我想谈一下业绩的一些亮点。根据App Annie的统计，2021年2月，美图海外在非游戏厂商出海收入排行榜在中国的第四名，在影像的出海赛道是收入排在第一名。 Those are our thoughts on the VIP subscription and image SaaS strategy. I would like to mention some other highlights in 2021. According to the statistics of App Annie, in January 2022, Meitu's overseas team ranked fourth in the overseas revenue list of Chinese game makers, and ranked first in the overseas revenue list of Chinese image makers. 目前我们针对海外市场的增长策略已经调整为侧重付费用户的增长，投放策略以转化用户付费为主。这个策略也促进了海外订阅收入的增长。2021年海外收入同比去年增长了54%。从以上的成绩我们可以看到，虽然在2021年印度等地区封禁多款中国App，导致我们海外MAU有所下降，但并不影响我们海外的收入。 In 2021, our overseas growth and promotion strategy focused on the paid users growth, and this strategy achieved good financial results with a 54% increase in overseas revenue in 2021. This shows that although the overseas MAU declined due to the Indian ban policy on Chinese apps, we still make progress in revenues. 接下来我们谈一下美图公司国内影像产品的运营情况。庞大的用户基础是美图的核心资产。在国内用户方面，美图秀秀和美颜相机的月活维持在领先的水平。根据QuestMobile的数据统计，2021年12月，美图秀秀和美颜相机在国内影像双赛道，也就是图片美化和拍照摄影这两个赛道都保持了第一名。未来，在国内整体用户增长策略上，我们会针对不同移动应用平台投入资源，尤其是强化在Android端的精细化运营。 Next, I would like to talk about the operations of the domestic image products. Massive user base is the core asset of Meitu. In terms of the domestic users, MAU of Meitu App and BeautyCam kept on leading the domestic image industry. According to the statistics of QuestMobile, in December 2021, both Meitu App and BeautyCam ranked first in the domestic image MAU list. For the future user growth strategy, we will input resources on different mobile app platforms, especially enhancing the Android versions app performance. 在影像生态建设方面，我们去年在美图秀秀推出的美图配方功能得到了越来越多用户的使用。2021年的12月，使用美图配方并保存的日均用户数是去年同期用户数的2.8倍。通过美图配方这个功能，用户可以记录自己修图的手法和效果，整理出一个又一个的配方，供其他用户一键采纳，并且分享出去，形成裂变式的传播。 For building the image ecology, we launched a function called Meitu style on Meitu App last year. We have seen more and more users rely on this function. In December 2021, number of this function users become 2.8 times of the number at the same period in 2020. This function can record a user's added method and effects and save as a template. Other users can one click apply this template and then spread out. 我们持续升级美图配方功能，新增了智能推荐、抠图配方等等，也开展了一系列的活动，比如说配方创造营，还有配方高手海选赛，去激发用户持续创作，并促进配方数量的持续增长。未来我们会通过配方的场景精细化以及创作者分层机制等策略，夯实美图配方生态。同时，我们也适当进行美图配方的商业化尝试，比如说付费的配方等等，创造新的收入增长点。 In 2021, we kept on upgrading the Meitu style, adding features like recommendation, cut out and so on. We also have related events such as template creation camps, template competition to trigger the users' creation passion and the template number growth. In the future, we will improve the Meitu style function with methods like refine operation and profit share mechanism. We will also try the monetization of this function to create a new growth engine. 除了影像业务的持续耕耘，我们积极在美丽产业SaaS，也就是美业SaaS的赛道进行布局。主要产品与服务包括通过美图控股的公司Meidd，去提供针对化妆品门店的ERP及供应链管理解决方案，还有透过美图宜肤，去提供针对护肤品品牌、医美诊所、美容院等客户基于AI测肤的消费者洞察解决方案。 Except for the image business, we also proactively develop the beauty SaaS. We provide ERP and supply chain management solution cater for cosmetic stores with our subsidiary Meidd. We provided AI skin analysis based customer insight solution cater for skin care brands, medical aesthetic clinics and beauty salons, via Meitu Eve. Meidd为国内下沉市场的化妆品门店提供ERP服务，帮助商家管理诸如像进销存等等的数据。目前已经在250多个地区服务了超过11500家门店。在此基础上，通过分析ERP系统上面的数据，全面掌握化妆品市场的供需趋势。借助这些信息，Meidd减少了上游供应和下游销售网络的信息不对称的情况，从而提升了整体的效率。2021年，供应链业务较2020年增长了四倍以上，增长的趋势非常明显。 Meidd provided the ERP services to cosmetic stores in the sinking market, helping the merchants to manage data such as marketing, sales and inventory data. Now it has served over 11,500 stores in more than 250 cities. Based on that, Meidd obtains a complete grasp of the cosmetic market supply and demand trend by evaluating the data on its ERP system. With this information, Meidd reduce the information asymmetry between the upstream supply and downstream sales networks, improving its efficiency as a whole. In 2021, the business line from supply chain management increased by 4 times compared to the level in 2020. 美图宜肤为全球的护肤品牌、医美机构、美容院去提供基于AI皮肤分析的客户管理方案。在独有的AI算法的支持下，我们可以有效评估肤质，也就是皮肤质量，并推荐护肤的方案。基于皮肤分析及客户管理系统，去创建完整的客户皮肤分析档案，进行售后客户的管理，最终去帮助我们的客户提升销售转化，促进品牌营销。 Meitu Eve provided the AI skin analysis based customer management solution for skin care brands, medical aesthetic clinics, beauty salons and so on. Supported by the unique AI algorithm, it can analyze the skin data and then recommend proper skin care products. Also, it builds a complete customer skin profile and proceeded the post-sales customer management. This will finally help clients increase the sales conversion and promote the brands. 虽然两者的解决方案侧重点不同，但最终都是一个目的，即促进客户成功。不管是在客户管理还是数据洞察分析，我们希望提供的服务能够最终帮助客户实现更好的营销。好，那以上就是我今天准备的内容。接下来呢，请Gary跟大家同步一下2021年的财务情况。好，谢谢大家。 Although these two solutions target on different areas, they are sharing the same goal, which is the customer success. We hope our services can assist the customers to better promote themselves, no matter with customer management or data insight analysis services. My section is finished now. Please welcome Gary to talk about the financials. Thank you, Xinhong. First of all, I would like to talk about the profit and loss for 2021. In the year of 2021, revenue was RMB 1.66 billion, significantly increased by 39.5% year-over-year. The revenue growth is mainly driven by our new business of VIP subscription and image SaaS. This business segment has increased 146.9% year-over-year, and has been continuing to grow. It is now our second largest revenue contributor, representing around 31.2% of total revenues, higher than 17.6% in 2020. This also shows that Meitu is reducing its reliance on a single business stream. Moving on to online advertising. Revenue was around RMB 766 million, increased 12.5% year-over-year. The online advertising business is relatively stable throughout the past two years, and we are now proactively expanding our customer base. Meanwhile, our promotion model becomes more diversified, and we have introduced more creative solutions for our clients, such as holding these themed activities to interact with our users to realize brand marketing. In terms of the VIP subscription and image SaaS business, this is a much more natural business model because it fits better with the form of the image app. As we previously mentioned, the VIP subscription services currently is addressing mostly the lifestyle related scenarios and the image SaaS business is addressing more the work-related demands. Revenue from this segment reached RMB 519 million in 2021. The vast majority or about 90% of the revenues within this business line is coming from the VIP subscription services. To give everyone a little bit of a background, we started this VIP subscription service in our overseas applications back in 2019. After achieving very promising results in overseas business, we applied this business model to our domestic Chinese app in late 2020. As we can see throughout 2021, the domestic VIP subscription revenue has grown very significantly. It grew about 14 times compared to 2020. In the future, we will launch more and more new features and products to deliver a comprehensive product portfolio. We are very positive about the future of this business segment. Finally, from the IMS and other revenues, in 2021 also increased significantly with about a 20% year-over-year. The IMS business is obviously the highest proportion within this business line. It accounts for about 86.3% within this business line. The absolute dollar amount is about RMB 258 million. Just to touch a little bit upon the recent acquisition of Meidd. We have completed the acquisition in January 2022, and after the completion, we now own about 63.35% of Meidd, and its financial results will be consolidated after its completion. In 2021, there is actually no contribution from Meidd. To just give everybody a sense of its current state of operation, its revenue currently is about RMB 15 million per month. Now moving on to gross profit. The total gross profit was about RMB 1.125 billion, increased by about 41.7% year-over-year. Gross profit margin was 67.5%, increased by one percentage point over last year. The increase in gross profit margin is mainly because the VIP subscription and image SaaS business revenue contribution has been increasing, and this business carries a very high gross margin. That is why there is an expansion in gross margin. Moving on, I will talk a little bit about the expenses structure. Sales and marketing, R&D, and administrative expenses have respectively increased by 36%, 35%, and 28.7% in the full year of 2021. As we all know, Meitu's main expenses are mostly related to staff costs. As we are expanding in every business segment, especially in the VIP subscription and image SaaS, there is inevitably some increase in staff cost. Marketing cost has also increased in 2021. Just to conclude, this year, we have achieved the second consecutive year of annual profit in terms of adjusted net profit. The adjusted net profit for this year was $85.1 million. I think this is mainly because of a very large increase in gross profit, driven by the VIP subscription model. Finally, in terms of cash, as of December 2021, we have around RMB 1.26 billion of cash and other liquidity on our account. Although the global economy is somewhat uncertain, we can confidently say that our strong balance sheet and cash reserve can fully support us in seizing some of the next growth opportunities and generate long-term value for shareholder. This concludes our prepared remarks, and we can now open the floor to question and answer. Thank you. Thank you, management. Now we can enter the Q&A section. Investors who are using Zoom App or Zoom PC version, please click the hand-raising button to raise your questions, then we will unmute your voice. Investor who are dialing in this meeting, please press star nine for raising a question, and then you will hear a phone prompt. Please press star six to unmute your voice. Before asking questions, please tell us the name of the organization and yourself. I repeat. Now we can enter the Q&A. Okay, now we have a question from the investor called Melody Chan. Thank you, management, for taking my question. I have a question on our VIP subscription business. As mentioned earlier, our business has grown very fast. How should we think about the business trend in 2022? If we are going to invest more in the R&D part to further drive the business. Okay. Let me just take this question. If you look at the VIP subscription and image SaaS business, as I just mentioned, about 90% of that is coming from the VIP subscription part, which is a mainly To C business. It is consumer facing. As I said, it is more related to the lifestyle related demands. The remaining 10% is about the image SaaS business, which is catering more for the work demand. I think if you look at the growth rate, which is about 140+%, it is clearly showing a very strong momentum, and this momentum has continued be showing in the first couple of months in 2022. That is the first point. Secondly, I think from the work demand point of view, I think there is a lot of exciting products that has been already announced and upcoming, as Xinhong has earlier mentioned, such as the Meitu for Mac and the poster related features. I think from the point of view as the business potential, I think the work demand part of this business is going to be very strong because having to use these features for work means that you are also generating money by yourself. I think the users are actually much more likely to pay for the work-related features when compared to the features related to lifestyle. We have seen in many different similar products, both in China and in overseas markets, that the work-related SaaS business actually carry a much higher paying percentage compared to lifestyle-related features. Got it. Thank you. Thank you. Investors who are using Zoom App or Zoom PC version, please click the hand-raising button to raise a question, then we will unmute your voice. Investors who are dialing in in this meeting, please press star 9 for raising a question, and then you will hear a phone prompt, please press star 6 to unmute your voice. Before asking questions, please tell us the name of the organization and yourself. [Foreign language] We have an online question. [Foreign language] How is the development of the overseas business development? What is the plan for the next phase? 兴红，你想回答这个问题吗？还是我来？ Gary，要不然你先来回答。 OK，那我先用中文回答，然后再翻译英文。 OK。海外的业务进展其实也非常的好，它的增速当然没有中国的VIP订阅这么快了，因为它起步是比中国要早的，但是它的增长速度也是双位数的一个年度增长。那海外的策略呢，其实我们从上次的中报也有跟大家同步过，现在这个策略也是跟之前是一致的，就是我们会把精力放在发达国家，然后去重点关注一些付费意愿比较高的用户，然后对他们进行精准的投放，通过这种精准投放和产品的设计来逐步把他们转化成为付费的用户，以此来去驱动我们的海外业务。不好意思，我再补充一点，就是说我们海外的业务同样是往影像SaaS去延伸，因为最开始我们海外的产品像AirBrush、BeautyPlus都是To C的影像工具。那现在呢，我们就会基于影像SaaS去挖掘一些新场景。 OK, I will just combine the two answers into one. First of all, the overseas revenue has also been growing very quickly. It is in its double digits in the year of 2021. Obviously, it is a little bit slower than the Chinese business, because it has started much earlier than the domestic business. As we have mentioned in the first half of 2021's results call, the strategy of the overseas business is to focus more on the developed countries, and we will try to use a very targeted way to market our apps to attract these high-paying intention users, and try to convert them into paying users. Finally, Xing just added that similar to the domestic business, the overseas business is also adding more business-to-business elements to it. It is very similar to what we are doing in China, because previously, overseas apps like AirBrush and BeautyPlus are mostly To C, it is to consumer, but now we are also going to expand our product offering to cover business needs. Thank you. Investors who are using Zoom App or Zoom PC version, please click the hand-raising button to raise your question. Then we will unmute your voice. Investors who are dialing in in this meeting, please press star 9 for raising a question. [Foreign language] We have an online question. The question is: I would like to know if you project that subscriptions will surpass the online advertising. If yes, do you think it will happen in 2022 or 2023? 我们有一个线上的问题，这个问题是：未来订阅相关的业务是否会超过在线广告的业务？如果会超过的话，请问预计的时间是大概率会发生在2022年还是2023年？ Thanks for the questions. I think it is probably going to be very close. The two business is going to be very close in 2022. I think that the assumption is it will surpass that of advertising by 2023. Thank you. We have an online question. The question is: [Foreign language] OK, the question is: What is the trend of the VIP members number growth in or after 2022? And how about the R&D investment plan afterwards? Thank you. VIP的会员增长数，我给一个方向性的指引给大家去参考一下。在中国，目前付费渗透率大概是一个点出头。在海外的话，应该是接近大概七八个点左右。我们目前在现在的阶段，应该是会觉得中国现在的付费渗透率还是在业务发展的初期，所以它应该会陆陆续续去往这个七个点去靠，但是未必能够在很快，比如说一年或两年内达到这么高的一个水平，因为毕竟海外的付费渗透率的水平一般来说会比较高一点。研发投入方面的话，我们是会继续投入到研发里面的。但是我觉得因为收入的增长是非常非常的快，如果从指引上面来说，研发投入占收入的比例应该会逐步的下降。So let me just translate what I said just now. In terms of the VIP members, I will give a little bit of a directional guidance. If you look at the paying penetration in the domestic app right now, it is about 1%, plus a little bit, and the overseas is about 7%-8%. I think that basically tells that the domestic business is still in a very early stage, and it is very likely to move towards 7%-8% in the long term. Obviously, it is not going to be next two years to reach this kind of level. Also, typically speaking, the overseas market has a slightly higher paying percentage in its mature state. In terms of the R&D investment, I think it will continue to grow, but because the revenue growth is very rapid right now, I think it is safe to assume that the R&D expenses as a percentage of revenue is going to be a bit lower in 2023. 2022, sorry. OK, thank you management. Investors who are using XunApp or XunPC version, please click hand raising button to raise the questions. OK, we have an online question. The question is: [Foreign language] So the growth of the revenue for 2021 is mainly driven by the growth in the VIP subscription and image SaaS business. What is the reason that users want to become VIP members? Xinghao, [Foreign language]. 好的。首先我们对用户一直有去调研，发现其实用户现在个性化的需求非常强烈，有很多新的场景未被满足。所以我们针对VIP会员去提供了很多个性化的一些服务，让他们觉得首先物有所值，然后获得VIP专属的权益，能够有一个非常好的荣耀感或者优越感。从几个方面，从功能、权益和用户的心理去满足。因为现在用户除了社交平台分享以外，他还有更多的影像的需求，比如说像设计服务，我们会提供各种各样的设计模板。然后再比如说，对于个人品牌的一个打造，个人营销等等。所以我们会去挖掘更多的VIP专属的服务，让用户有更强的意愿。好，谢谢。 Let me just translate the answer. We have done a lot of user survey and we realize that there is a lot of these personalized demands that are not being satisfied at the moment. That is why there is a lot of features that we have launched to satisfy these demands. Ultimately, the idea is to sell the VIP membership such that the user feels that it is very value for money, and also they are able to derive some sense of uniqueness, and having something that other people do not have if they do not become a member. This is sort of how we think about in terms of the user psychology and also from the features to drive this VIP business. On top of that, because we have talked a lot about the social elements or the demands for the social interaction for the VIP business. At the same time, we see there is a tremendous potential in the design related or work related demands. For example, aside from creating posters, some people also have the demand for building personal brand or do some personal marketing for himself. These are the different reasons and how we think about what kind of features that we create to drive the VIP business. Thank you. 另外我想补充一下，我们也看到现在年轻的用户对于付费的意愿已比之前有很大的提升，这个也是我们VIP业务未来的一个基础。 Just to add on, we actually have seen the younger generation has a much, much higher intent to pay compared to years ago. I think this is also one of the biggest drivers for our VIP subscription business. Okay, thank you management. We have an online question. The question is: [Foreign language] Do you management have any expectation on the operating cash flow in 2022? When will the operating cash flow to be a positive figure? I think it is quite likely that in 2022 our operating cash flow will be positive. 美图衣服和影像SaaS，这个是我直接回答还是Coco你要翻译一下？ [Foreign language] We have an online question that: Do we have any competitor with the Meitu Eve and the image SaaS business? Xinghao, [Foreign language]. OK。首先美图宜肤和我们的影像SaaS，比如说像美图设计室、美图云修在市场上都有很多的竞品。我们认为一个充分竞争的市场能够让团队变得更强，跑得更快。当然我们在无论是美业还是影像的SaaS，应该都是一个特别先锋的探路者，我们在很多领域是走在行业前面的。对，然后我们可以稍微预告一下，下个月我们将正式发布美图宜肤的一个新产品，在技术上取得了很大的突破。所以我们还是非常有信心去面对未来激烈的竞争。Coco，第二个问题也是OK，翻译还是我来。好，我先翻译一下。 No。 OK。 First answer first. There are actually quite a number of competitors for both Meitu Eve and the image SaaS business. Our view is that a competitive market, actually it's very good to drive the team to work harder and move faster. Obviously, I think Meitu is a pioneer in a lot of both technology and the product offering in these two business segments. For example, next month we are going to launch the new version of the Meitu Eve Panoramic AI Skin Analyzer, and there will be some very world-leading technology involved in this new product. OK, [Foreign language]. Meitu has a lot of data and technical experiences in the portrait AI. Can we apply these type of technologies in the field of the avatar creation? What's the point of view of the management? 好的，我先回答一下。美图一直聚焦在人像上面。我们知道像美图秀秀、美颜相机一直在做真人形象管理服务。比如说我们的人像的照片或者视频，提供一些美化服务。然后我们一直在想，有没有一个路径可以从真人形象到虚拟形象，因为我们看到年轻人对于自己的虚拟形象开始有一些认知和个性化的需求。我相信未来在所谓元宇宙的世界里面，大家对于自己的avatar也是希望变美，比如说有提供捏脸、捏身材、换装这样的一个个性化的服务。当然了，我们现在正在布局的虚拟形象编辑器考虑的更多，也考虑未来开放更多能力给到一些合作伙伴。让他们用非常低的门槛去打造自己的，比如说虚拟偶像、虚拟主播。当然也会开放给我们的C端用户，让他们去定制个性化的虚拟形象，在虚拟世界里面可以做很多的互动，比如说视频聊天、视频会议，然后包括直播等等。所以这个业务会在今年的年底内测，明年正式发布。谢谢。 As we all know, Meitu has always been focusing on helping users to manage their face, facial image, and we used to help people manage their real face, obviously. We are thinking more about, is there a pathway to switch from helping people to manage their actual face to their virtual identity? And that is why we have a product, which in a nutshell, is an editor for virtual avatar that will be coming out into closed beta by the end of this year. This editor is going to help both our business partners, for example, make it easier for them to create virtual idols. This editor will also help end consumers to help them to create avatars that can perform things like video chat or live streaming, things like that. This product will come into closed beta by the end of this year, and we currently plan to launch it next year. OK, thank you management. We will take the last question. [Foreign language] What is the point of view from the company on the market cap management or do the management consider any stock share buyback? OK, let me just take this question. Previously we have bought back some of the shares, so we would not rule that out. But currently we have no plans to repurchase shares. 还有一个问题。 Coco。 We will take next question. The 2021 MAU has not increased year over year. Has the industry growth peaked? Are there future growth plans? 我们有一个问题是关于MAU方面的。2021年MAU这一边并没有增长很多。那么是因为这个行业已经到了增长的顶峰，还是说我们在MAU未来发展方面会有一些规划去促进发展？ OK，我先来说一下，Gary可以补充。我们2021年全年MAU其实保持一个相对平稳的状态，更多是受海外，应该说是印度地区封禁中国app，导致我们在海外有很大的比例的用户失去。这个拉低了整个MAU的数值。但是我们其实海外在很多较为发达的国家，我们的整个付费用户的增长是非常喜人的。所以刚才其实也提到，我们在海外其实已经调整了增长策略，以付费用户为主。另外，我是觉得整个影像大盘，无论是国内还是海外，MAU还是存在很巨大的增长空间的。之前没有太大的增长，可能一方面就是刚刚说的印度的封禁对我们的极大的一个冲击，另外我们正在做一些影像新场景的探索。目前已经有一些初步的成效，但还没有最终体现在数据上。我相信在今年应该是能看到大盘MAU的一个整体增长。Gary，你看有什么补充。没有了. Let me just quickly translate that. If you look at our 2021 MAU, it has not increased. The main reason is because the Indian MAU, because the Indian government has blocked all Chinese app. If you take that effect out, our MAU actually has remained relatively stable. Our view is that the MAU industry, there is still a lot of potential to grow. But I think in order to capture that potential, we will have to find different scenarios in order to basically try to address the demand in various different image scenarios from our users. We actually have launched several products which has generated very good traction as we have mentioned earlier in the call. It's not being reflected in the 2021 results, obviously, but I think we should be able to see that in 2022, there's a good chance that our overall MAU can go back into a growth trajectory. OK, thank you management. Due to the time constraints, we will close the meeting. [Foreign language] Thanks for joining tonight's conference and thanks again for your participation. Should you have any questions, please contact Meitu IR team. [Foreign language] 好，谢谢，感谢大家。 Thank you, bye bye. Thank you. Bye bye.