Good day, ladies and gentlemen. Thank you for standing by. Welcome to the JD Logistics Fourth Quarter and Full-Y ear 2022 Results Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a Q&A session. Please note that this English simultaneous translation line will be in listen-only mode for the duration of the call, including the Q&A session. If you wish to listen to the management's original statement or ask a question during the Q&A session, you will need to be dialed in to the Chinese language line. I'll now turn the call over to Mr. Mao Jun, Head of the Investor Relations at JD Logistics. Please go ahead.
Thank you, operator. Good day, ladies and gentlemen. Welcome to the Fourth Quarter and Full-Y ear 2022 Results Conference Call . Joining us today are our Executive Director and CEO, Mr. Yu Rui, and CFO, Mr. Shan Su. Before we start, we would like to remind you that today's discussion may contain forward-looking statements, which involve a number of risks and uncertainties. Actual results and outcomes may differ materially from those mentioned in today's announcement and this discussion. The company does not undertake any obligation to update this forward-looking information, except as required by law.
During today's call, management will also discuss certain non-IFRS financial measures for comparison purposes only. For a definition of non-IFRS financial measure and a reconciliation of IFRS to non-IFRS financial results, please refer to the annual results announcement for the year ended December 31st, 2022, issued earlier today. For today's call, management will read the prepared remarks in Chinese and will only be accepting questions in Chinese during the Q&A session.
A third-party interpreter will provide simultaneous interpretation in English on a separate line for the duration of the call. Please note that English translation is for convenience purposes only. In case of any discrepancy, management statements in their original language will prevail. I would like to turn the call over to Mr. Yu Rui. Please go ahead, sir.
Dear investors and analysts, welcome to JD Logistics fourth quarter and full-year 2022 earnings call. I'm Yu Rui, CEO of JD Logistics. Thank you for joining us. In the fourth quarter of 2022, the COVID-19 pandemic continued to impact the logistics industry. Amidst the numerous challenges, we continued to maintain operational stability and flexibility, fully demonstrating our competitive advantages.
In the fourth quarter of 2022, our total revenue amounted to RMB 43 billion, up 41.1% year-over-year, with an adjusted net income of RMB 1 billion, rising by 19.2% year-over-year. Despite a multitude of headwinds such as the macro dynamics, we still achieved high-quality growth, turning a positive profit for the full-year of 2022. Our total revenue for 2022 reached RMB 134.4 billion, up 31.2% year-over-year. Excluding the Deppon, it was RMB 123 billion, rising by 17.5% year-over-year. Notably, revenue from external customers for the year was RMB 89.1 billion, a year-over-year increase of 50.8%, accounting for a larger share at 64.9% of total revenue.
Leveraging our supply chain infrastructure and networks, supply chain technology, as well as industry insights and capabilities, we continued to provide customers with high-quality services to create second-class customer experience in the industry. Our warehousing and distribution model, aided by intelligent inventory deployment from our geographically diverse warehouses, can realize multi-region warehousing and meet customers' needs for multi-channel inventory management in a wide range of scenarios, helping customers strengthen their risk resistance capabilities, enhance fulfillment quality, improve delivery timelines, and elevate consumer satisfaction. Take Volvo as an example. We customized a flexible, nimble, digitalized supply chain system for Volvo based on the sales and flow characteristics of after-sales spare parts, setting up each regional warehouses across the country for fast, medium, and slow-moving products respectively to enable refined inventory management across multiple product categories.
During the COVID-19 outbreak in Shanghai, we quickly prepared resources to deploy Volvo's after-sales spare parts inventory from its central warehouse in Shanghai to the eight regional warehouses according to the parts sales flow characteristics, ensuring that each warehouse had sufficient inventory to meet sales requirements for a period of time in the future and reasonably high order fulfillment rates for Volvo during the extraordinary circumstances of the outbreak. JD Retail is another example. In our services to JD Retail over the past decade and more, we continuously help JD Retail improve inventory turnover ratio and enhance customer satisfaction. In 2022, inventory turnover days of products under its online retail business were 33.2 days with an industry-leading inventory turnover ratio. During the most challenging moments of the COVID-19 outbreak in 2022, we overcame many difficulties and made an all-out effort to protect people's well-being.
We mobilized thousands of in-house delivery personnel nationwide for targeted reinforcement of delivery fulfillment in Shanghai in April and Beijing in December. Notably, we jointly explored the Jiuxianqiao model with the local governments and communities in Beijing. It's an innovative last-mile service model wherein our in-house delivery personnel work as community volunteers in addition to making deliveries to residents in a lockdown neighborhood, ensuring smooth supply deliveries over the last 100 meters to customers. Moreover, we launched night deliveries and a priority delivery mechanism to make sure orders for medical supplies, maternal and baby care products, and fresh produce are prioritized for delivery.
Following the adjustments in pandemic prevention policies and in response to the sudden surge in demand for basic necessities and medical supplies, as well as last-mile delivery capacity shortages, we immediately coordinated resources throughout our nationwide logistics network, making every effort to ensure smooth operations in all regions during the peak period. We noticed that more and more enterprises have started to reflect on the supply chain and logistics management issues exposed during the pandemic and have been making changes accordingly. These changes include, for instance, enhancing risk resistance capabilities through nationwide geographically diverse warehousing, elevating end-to-end visibility and intelligent management, and further reducing costs and improving efficiency. These measures will constantly increase enterprises' needs for integrated supply chain or ISC logistics services.
For this reason, given our leading position in the ISC logistics services industry, we have confidence in our ability to capitalize on the market opportunities in this vast and highly fragmented industry and continue to lead the industry's high-quality development. For the full-year of 2022, revenue from our external ISC customers reached RMB 29.2 billion, a year-over-year increase of 14.5%. Such solid performance is primarily attributable to the continual increases in both the number of our external ISC customers and Average Revenue Per Customer, ARPC. In 2022, our external ISC customers reached close to 80,000, increasing by 7.1% year-over-year, while the ARPC from these customers reached RMB 365,000, rising by 6.9% year-over-year.
Meanwhile, we continue to expand the breadth and depth of our collaborations with existing customers. In 2022, the percentage of our external ISC customers with annual revenue contribution of no less than CNY 10 million accounted for over 50% of our revenue from external ISC customers. 26 external ISC customers contributed more than CNY 100 million each in annual revenue. These 26 customers have been with us for an average of over four years, illustrating their strong stickiness and satisfaction with our services. We mainly focus on six industries, FMCG, home appliances and home furniture, 3C, apparel, automotive, and fresh produce. Among them, FMCG accounted for the highest percentage of our external ISC logistics revenue. Through our collaboration with leading customers, we have built many industry-leading benchmark projects and constantly deepen our understanding of industry needs. In 2022, we made significant progress in FMCG.
We provided end-to-end supply chain services to Yili Group, one of China's largest dairy producers, including supply chain consulting and planning, digitalized systems development, supply chain operations, and basic logistics services. We helped address their problems of fragmented multi-channel inventory management, reducing their inventory turnover days and lowering the proportion of near-expiration inventory for goods with a high requirement for freshness, such as liquid milk. Deepening our partnership with Yili Group helped us build a benchmark in the FMCG industry, and more importantly, provided practical experience and pathways for the supply chain upgrade of the dairy industry, effectively helping us to further grow our market. In 2022, we continued increasing our investments in network capabilities in key cities, effectively improving the timeliness of standard products such as express and freight delivery services and enhancing customer satisfaction.
As such, prompting rapid and high-quality business growth. In 2022, revenue from other customers, including express and freight delivery services, increased by 78.3% year-over-year to RMB 60 billion, of which RMB 14 billion was contributed by Japan. According to survey results published by the State Post Bureau of the People's Republic of China in 2022, we have constantly maintained best-in-class customer satisfaction rating, ranking number one in the third quarter. Leveraging our solid infrastructure and innovative technology-empowered service capabilities, we fully capitalize on the high-speed development of live streaming e-commerce platforms. We deepened our cooperation with Douyin by extending our service scope from express delivery to supply chain, offering high-quality logistics fulfillment services to consumers and merchants. During the 2023 spring festival, we also became the official logistics partner of Kuaishou, providing nonstop picking up and delivery services.
With respect to logistics technology, we have insisted on prioritizing both the development and application of technology innovation, constantly solidifying our competitive technological advantages in supply chain software, hardware, and system integration. In 2023, our R&D expenses were RMB 3.12 billion, accounting for 2.3% of total revenue. To improve the efficiency of logistics operations, we focused on exploring and investing in the large-scale applications of various logistics robots throughout the end-to-end supply chain process, including automated guided vehicles, autonomous mobile robots, and high-density storage systems to reduce costs and enhance efficiency. Our self-developed industry-leading warehousing automation solutions have increased the operating granularity to the SKU level and further shortened the fulfillment time through the optimal picking route matched by algorithm, realizing high levels of automation and flexibility end to end.
Furthermore, in 2022, we commenced the operation of our highly automated BeiDou smart flow picking innovation warehouses in Xi'an and Suqian. We continued to improve our logistics infrastructure and network to build a safe, reliable, and efficient logistics supply chain system. As of December 31st, 2022, we operated over 1,500 warehouses, including warehouses managed by Deppon. Meanwhile, the aggregate gross floor area or GFA of our warehouse network, including warehouse space managed through the Open Warehouse Platform, exceeded 30 million square meters. Since JD Airlines officially commenced operation at the end of August in 2022, our three all-cargo airplanes have started regular operations on several routes, including Shenzhen-Hangzhou, Nantong-Beijing, and Shenzhen-Yuxi. Going forward, we'll gradually build an air freight logistics network with key domestic aviation hubs as pivot points that cover major cities in China.
We completed our acquisition of the Deppon Logistics on July 26th, 2022. Since then, we have been advancing our business and network synergies according to plan, including, but not limited to examining and validating our business models, as well as achieving resource synergies, cost reductions, and efficiency enhancements across our networks, routes and sites. Currently, everything is progressing in line with our expectations. We believe we'll continue unlocking and expanding our synergies for a long period of time to come. As a logistics enterprise with a strong sense of responsibility, we have placed more emphasis on social responsibility and sustainable development while continuing to fortify our core service capabilities. In May 2022, we published our first ESG report since our listing. In November 2022, we received an industry-leading ESG score in the S&P Global Corporate Sustainability Assessment.
We also continued taking actions to promote rural revitalization and inclusive access to logistics services by providing effective, high-quality supply chain services to over 1,000 agricultural production zones in China. Meanwhile, we have maintained a steadfast commitment to executing the concept of green and sustainable development in our operations. In 2022, we cooperated with business partners to release industry's first carbon-neutral guide for logistics parks and the Delivered with Original Package certification standard. While putting into use battery-swapping vehicles powered by new energy sources on a large scale in our day-to-day operations, we also use clean energy vehicles in our transportation services to Anhui and other customers. Enhancing the sustainable high-quality development of a green supply chain for society. Looking ahead, we are fully confident that demand for ISC logistics services will further be unlocked.
Guided by our commitment to driving superior efficiency and sustainability for global supply chain through technology, we'll make continuous efforts to improve our capabilities on multiple fronts. To begin with, we'll further expand and increase the density of our foundational logistics networks to enhance our operations and deliver compelling fulfillment, timeliness, and customer experience. Second, we'll continuously strengthen our solutions and product competitiveness for core industries to provide more customers with ISC logistics services both domestically and abroad. We also increase the depth and breadth of cooperation with existing customers to capture more market share in the ISC market. Third, regarding logistics technology, we'll maintain the deep integration of cutting-edge technology and logistics operations to reduce costs, enhance efficiency, and optimize customer experience. At the same time, we'll explore commercialization avenues for more technology products to help a growing number of companies realize high-quality development through digital and intelligent means.
Lastly, with respect to operational management, we'll continue to elevate our refined operation capabilities, constantly promote deep dives by the management team, and achieve operational quality and efficiency in enhancement. In addition, we remain dedicated to social responsibility, fully leveraging our advantage as a player in the real economy to advance the industry's synergistic development and contribute to the high-quality development of the real economy. Thank you. Next, I'd like to invite Mr. Shan Xu to discuss the details of our financial performance. Thank you, Mr. Yu. Hello, everyone. This is Shan Xu, CFO of JD Logistics. I'm pleased to present JD Logistics' financial performance for the fourth quarter and full-year of 2022. In the fourth quarter of 2022, the persistent spread of the nationwide COVID-19 pandemic continued to impact the macroeconomy.
In a tough challenging environment, we remain dedicated to advancing our prudent financial strategy with a constant focus on improving the health of our business. We adopted a series of effective and refined cost and expense control measures to improve pro-profitability and cash flow. We are greatly encouraged by the fact that we achieved a net profit in our business, excluding Japan, for the third consecutive quarter in the fourth quarter, as well as on a full-year basis in 2022.
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Essential results, including and excluding Japan, respectively. In 2022, our total revenue reached RMB 137.4 billion, up 31.2% year-over-year. In Q4, our total revenue reached RMB 43.01 billion, up 41.1% year-over-year. This included RMB 8.57 billion from Japan and RMB 34.44 billion excluding Japan, which maintained a relatively steady year-over-year increase of 13%. In Q4, lingering pandemic outbreaks across various regions of China continued to weigh on our logistics fulfillment and the pace at which our customers resumed production. This posed an ongoing challenge to the growth of our revenue, especially revenue from our ISC business. In Q4, revenue from ISC customers totaled RMB 21.414 billion, up 4% year-over-year.
This included our ISC revenue from JD Group, which amounted to RMB 12.92 billion, increasing by 1.8% year-over-year. Our revenue from external ISC customers continued to grow by 7.7% year-over-year to RMB 8.23 billion. This included Deppon's revenue from its warehousing and supply chain business, which totaled RMB 260 million during the quarter. Excluding Deppon, our revenue from external ISC customers was RMB 7.96 billion in the fourth quarter, rising by 4.2%. The total number for external ISC customers contributing to revenue was approximately 61,000 in the fourth quarter, with ARPC up 6.3% year-over-year to RMB 135,000 in the fourth quarter, reaching a new high.
In the fourth quarter of 2022, revenue from other customers experienced a significant growth, totaling CNY 21.86 billion, up 115.7% year-over-year. Revenue from Japan's express and freight delivery business amounted to CNY 8.3 billion during the quarter. Excluding Japan, revenue from other customers was CNY 13.56 billion, increasing by 33.8% year-over-year. Our continuous rapid growth was primarily driven by the implementation of our core strategies, including improving customer satisfaction with customer experience-centric services, enhancing business health, and reinforcing our express and fleet delivery capabilities in key cities. In the fourth quarter, revenue from external customers as a percentage of total revenue reached a new high of 70%, including the incremental growth from Deppon's consolidation mentioned earlier.
Excluding Deppon, revenue from external customers as a percentage of total revenue was 62.5%. This clearly demonstrates our success back in the ongoing steady expansion of our business from external customers. In addition to revenue growth, our overall growth margin improved quarter- by- quarter in 2022, highlighting the effectiveness of our continuous refined cost management, customer mix adjustments, and business health improvements. Our cost of revenue in the fourth quarter was RMB 39.19 billion, rising by 41.4% year-over-year. Along with the increase in costs incurred to support our expanding business, the increase also reflected costs from Deppon, which were consolidated after being reclassified according to our standards. Let's move to the main cost of revenue. Employee benefit expenses were RMB 12.78 billion in the fourth quarter, up 29.9% year-over-year.
In addition to Deppon's consolidation, this increase was due to a rise in the number of our frontline operations employees from 303,000 at the end of 2021 to 314,000 at the end of 2022. The growth in the number of our employees was mainly a result of adding more in-house personnel to the key processes of our operations, including last mile delivery, to ensure high quality services and elevate our customers' experience. In the fourth quarter, total employee benefit expenses accounted for 29.7% for total revenue, down 2.6 percentage points from 32.3% in the same period of 2021.
In addition, excluding Deppon, employee benefit expenses as a percentage of revenue improved year-over-year in the fourth quarter, largely due to economies of scale from business growth and more refined management. Another important component for cost of revenue was outsourcing costs, which reached RMB 17.1 billion in the fourth quarter, up 48.3% year-over-year. This accounted for 39.8% of total revenue, up 1.9 percentage point year-over-year. Increase in outsourcing costs, both in absolute amount and as a percentage of revenue, was mainly due to Deppon's consolidation. Excluding Deppon, our outsourcing cost as a percentage of revenue improved year-over-year. Notably excluding Deppon, the transportation expenses of third-party suppliers included in the outsourcing cost as a percentage of revenue declined further year-over-year.
This was primarily driven by refined transportation resource management and investment in big data and intelligent technologies. Third, our total rental cost was RMB 3.08 billion in the fourth quarter, up 21.9% year-over-year. This was primarily due to an increase in the number and geographic area of our logistics facilities, such as warehouses, as well as Deppon's consolidation. As of December 31st, 2022, we operated over 1,500 warehouses, including the warehouse managed by Deppon. Meanwhile, the aggregate GFA for warehouse network, including warehouse space managed through the Open Warehouse Platform, exceeded 3 million square meters. Total rental costs in the fourth quarter constituted 7.2% of total revenue, down 1.1 percentage points compared with 8.3% in the same period of 2021.
The decrease was partly attributable to Deppon's lower rental costs as a percentage of its own revenue, which led to a lower consolidated number. Another factor was the economies of scale for own business without Deppon. Apart from the main cost of revenue mentioned above, depreciation and amortization costs and the vehicle usage costs, such as fuel costs and total toll fees included in other costs, also rose as a percentage of revenue after consolidation. This was due to Deppon's higher costs related to cell phone vehicles as a percentage of its own revenue. In terms of expenses, our operating expenses in the fourth quarter were CNY 3.04 billion, growing 37.8% year-over-year, accounting for 7.1% of total revenue, a decline of 0.12 percentage points year-over-year.
Among them, selling and marketing expenses were CNY 1.18 billion, which made up 2.7% of total revenue and 3.9% of revenue from external customers, a decline of 1.1 percentage points year-over-year. In terms of R&D expenses, in the fourth quarter, our R&D expenses were CNY 890 million, accounting for 2.1% of total revenue and a higher percentage of total revenue excluding Deppon. We have continuously maintained R&D expenses at a considerable percentage of our revenue to boost our core capabilities, laying solid foundation for the expansion of our customer base, investments in operational resources, refine operations, and power external customers.
With respect to general and administrative expenses, our expenses were CNY 890 million, accounting for 2.3% of total revenue, an increase of 0.3 percentage points year-over-year. In terms of net profit, we recommend that you consider our non-IFRS measures, which we believe better reflect our operations given that non-IFRS profit largely excludes factors such as share-based payments, amortization of intangible assets resulting from acquisitions and fair value changes of financial assets, measured at fair value through profit or loss. In the fourth quarter, our non-IFRS profit was CNY 1 billion at a profit margin of 2.3%. This included CNY 330 million contributed by Deppon. Excluding Deppon, the non-IFRS profit was CNY 690 million at a profit margin of 2%.
On a full-year basis, our non-IFRS profit amounted to RMB 870 million at a profit margin of 0.6% or RMB 280 million at a profit margin of 0.2% excluding Deppon. We achieved a turnaround from a net loss of RMB 1.23 billion in 2021 to a net profit for the whole year of 2022. We also continued to monitor our cash reserve and cash flow to maintain healthy, sufficient capital to support business development and meet our operational needs. In the fourth quarter, our net operating cash inflow under IFRS continued to improve year-over-year. Our CapEx increased and accounts for a higher percentage of revenue for the fourth quarter compared with the same period of 2021.
For the full-year of 2022, our CapEx was RMB 4.69 billion, making up 3.4% of total revenue. We mainly incurred capital expenditures from automation investments in new warehouses, automation and intelligence upgrades of existing warehousing facilities and sorting centers, and transportation equipment procurement. We steadily and effectively deploy capital according to our business development needs, constantly improve our network layout and operational efficiency. As of December 31st, 2022, the combined balance of our cash equivalents, restricted cash, term deposits, and wealth management products exceeded RMB 35.6 billion, indicating sufficient cash reserves overall. Looking back, in a challenging macro environment full of uncertainties, we firmly executed our core development strategy, focusing on enhancing our key capabilities and making ongoing investments to expand our market presence and deepen our penetration among external customers.
We also completed the acquisition of Deppon Logistics in 2022. Looking ahead into 2023 as adjustments to and optimizations of pandemic prevention control policies lead to gradual resumption of social and production activity, we are confident we can maintain our steady growth momentum and realize long-term sustainable development. At the same time, to refine operations and realization of economies of scale will steadily improve our profitability and create value for our shareholders. That concludes my prepared remarks. Thank you. Now we'll enter the Q&A session. We'll only be accepting questions in Chinese, and management will answer questions in Chinese. Operator, please start the Q&A session when ready. We are starting the Q&A session. To ask a question, please press star one. Once again, to ask a question, please press star one.
The first question comes from Ronald from Goldman Sachs. Please ask your question. Thank you, Mr. Yu and Mr. Shan. I have two questions. First, regarding your supply chain services to JD Group. What are the prospects for this business in 2023? Second, regarding services for external customers, you mentioned cooperation with Douyin extending from express delivery to supply chain services. Could you tell us if in 2023, maybe in the beginning, the situation is not that good, but gradually it will go up. Basically, what is the trends of the business in 2023? Well, I'll answer this question. First, regarding our cooperation with JD Group, our focus will be the following in 2023. Number one, we will continue to improve our operating e-efficiency. Every year, we will discuss with JD Retail's team to explore how to work better for us to improve their customer experience.
The second direction for our cooperation has to do with our logistics fulfillment support to their core business, especially in lower-tier markets and regarding certain product categories. The third direction of our cooperation. There are a lot of merchants in their retail business, and we hope to get the business from more merchants in their retail business. These are the three general areas for our cooperation with JD this year. As to our business trends for this year, from my perspective, although the pandemic had a huge impact on us in 2022, we still saw opportunities to expand our supply chain business, including working with live streaming e-commerce platforms and in our traditional supply chain business, there were opportunities. In 2023, given the relaxation of pandemic control policies, I think it would be positive for us to further expand our business. That's it from me.
Thank you, Mr. Yu. I would like to add about it, our business with external customers. In terms of revenue contribution, nearly 22% of our external ISC customers contributed over CNY 10 million in revenue. Regarding 2023, it's too early for us to give a specific estimate, but overall, it's positive for our further business expansion. Again, it will be conditional upon the development of the macroeconomy. That's it from me. Thank you, Mr. Shan. Thank you. Next question. Next question comes from Thomas, from Jefferies. Good evening. Thank you, management, for taking my question. I have two questions. Firstly, regarding the competitive industry landscape. Over the next few years, how do you think the industry will go? What the industry will look like? In terms of the number of external ISC customers. Could you elaborate from both quarter-over-quarter and full-year perspective?
Okay, to answer your first question about industry trends. In 2022, there were some unexpected circumstances, but overall, there weren't that many big changes in the industry. When we were first listed, we did a thorough study of the industry, and we don't think the industry has changed that much. In terms of the operations of industry players, I think cost reductions and efficiency improvements will be the long-term trend for each industry player. For simpler transportation services like express and freight deliveries, such efficiency improvements and cost reductions may not persist for long without further actions in to improve the whole supply chain operation and also for, without adopting advanced technology. Regarding your second question regarding the number of external ISC customers, I will ask Mr. Shan to answer the question. Well, starting from Q1, we have remained cautious.
So far, we haven't seen large-scale recoveries and resumptions of economic activity. Okay, thank you. Next question. Next question comes from CITIC Securities.
Thank you for taking my question. Could you please tell us the recovery trend of orders over the past month or two? Has the revenue from your ISC services increased at an accelerated pace?
What impact has this had on your overall business? First, our recovery over the past month or two in terms of the number of our orders. Regarding our express delivery services, our overall growth was much higher than industry average over the past month, over the past month or two. We still believe that in Q1, we have been conservative in our operations and in our estimates, because we haven't seen very large-scale recoveries in the industry. Secondly, JD Group is obviously a highly important customer for us, and they will issue the CNY 10 billion subsidy. Their revenue and GMV growth may transform to our revenue. For us, as Mr. Yu mentioned, we'll continue to improve our service quality and customer experience to improve our penetration in JD Group to provide better services.
Regarding the JD Group's CNY 10 billion subsidy, the changes in their business strategies will affect our revenue from them. We will support their strategic development. Thank you. Next question. Next question comes from Sam. Hello, I'm Sam. I have two questions. As Mr. Yu mentioned, JDL attaches great importance to service quality. Last year, due to the pandemic, JDL has acquired some high-quality customers and also reduced your price discount. Now, with the relaxation of the pandemic control policies, will the competition in the industry become stronger? Secondly, Mr. Yu mentioned that JDL will work more with JD Group in lower-tier markets. What impact will this have on your CapEx? Regarding our first question, price competition in the industry, we'll maintain our price discount strategies stable this year. There won't be big adjustments.
The key for us is to improve our service quality and timeliness to improve customer stickiness. Regarding our question of working in the lower-tier markets, we have been making consistent investments in this area, including building networks in lower-tier markets, and even in the counties and villages. Looking forward into 2023, there won't be a lot of additional investments in this area. We will proceed according to our plan to continue to invest in this area. Regarding CapEx, we'll continue to make CapEx investments, that accounting for 3%-4 of our total revenue, and we'll dynamically adjust our CapEx based on our business needs and also between quarters. Thank you. Thank you.