Ladies and gentlemen, good morning. First of all, thanks for attending COSL's interim results presentation 2017 today. I'm Paul Sham, Managing Director of Wonderful Sky Financial Group. Please allow me to introduce to you the management on stage. Mr. Lv Bo, Chairman of the company. Mr. Qi Meisheng, CEO and President. Mr. Li Feilong, Executive Vice President and CFO. Miss Jiang Ping, Company Secretary. At today's presentation, Mr. Li Feilong will walk you through the financial figures and operational review for the first half of 2017. He will share with you the company's outlook in the latter half of the year and the future. After that, we will open the floor for questions. Now may I pass the time to Mr. Li? Mr. Li, please.
Thank you. Good morning again, ladies and gentlemen, all friends. Thank you for attending COSL's Interim Results 2017 today. Please take note of our disclaimer for materials included in this presentation. Today's presentation will be divided into two parts. First is 2017 interim results overview. In the first half of 2017, crude oil prices slightly rebound, still maintain at low levels. The market expects that supply remain a challenge for heavy equipment. The oilfield services industry was still in a slow recovery. Facing the challenge of lower crude prices, the company further explore the domestic market and global market to better satisfy customer needs. Meanwhile, COSL also formulate specific business strategies to face the short-term industry challenges and improve its mid to long-term core competitiveness. In this context, COSL has achieved a series of operating achievements in the first half of 2017. The utilization rates of equipment segment increased.
The contribution of technology segment increased. The international competitiveness of geophysical and surveying segments was improved. Despite the industry equipment segment oversupply, the utilization rate of COSL's vessels and other facilities still stand out among peers. In the first half of 2017, the company's financial performance and indicators show varying degree of improvement. The company recorded operating income of RMB 7.1 billion, representing an increase of 1.6% over half. As you can see, the operating profit, excluding the impairment, has been coming out to a positive. Net loss decreased by RMB 8 billion. Profit was gained specifically in the second quarter. Both the cash flow and dividend payout policy were stable. In terms of financial performance, the operational revenue increased in the first half of 2017. The revenue and profit were further improved in the second quarter.
For segments revenue distribution, the well services and marine support segments were outstanding with an increase of 35% and 16% respectively. Performance in different cycles reflected the defensive uniqueness of the company's integrated business trend. During the period, COSL achieved market breakthroughs in Middle East, Far East, and other regions with 72 new overseas contracts. Our safe and efficient services once again won the 2016 Outstanding Contractors Award. Hai Yang Shi You 936 successfully received commendation from clients for high-quality, high-temperature, high-pressure well services. In the context of low oil prices, COSL's R&D team focus on reducing costs per well, stabilizing and simulating the production capacity of mature oil fields. Besides, we provide safer, high quality, and efficient technical solutions for high temperature, high pressure, and high difficulty wells. With the above mentioned efforts, the company achieved noticeable growth of technical segment revenue.
Cost is always the eye-catching issue which reflects the competitiveness of a company. In the first half of 2017, the company reduced costs by RMB 1 billion by strengthening materials management, lowering rental expenses and labor costs, and controlling administrative expenses, et cetera. COSL will better tap market opportunities by maintaining a competitive cost structure and seeking more methods to reduce costs. Safety is on COSL's top priority. Our OSHA index stood only at 0.046 in the first half of 2017 by inspecting hidden dangers and conducting emergency management. A premium QHSE record plays key role in realizing COSL's objectives. During the period, COSL will fully affirm by the capital market from you guys. In the next section, I would like to share with you the outlook for the company.
Already mid to long term, oil and gas will continue to play an important role in energy structure. For COSL, opportunities ahead outweigh challenges. We will further maximize synergies and cost advantages of segments. Adhering to prudent financial policy, we will aim to realize our goal of equilibrium revenue from each market and target a 50/50 mixture of revenue contributions from the technology and equipment segments. Amid times of low oil prices, oil and gas companies need to utilize the limited CapEx to launch more exploration and development activities. COSL will actively satisfy the requirements of low oil cost per well and effective management of low permeability material, transboundary, and high-risk costs. Thus, bringing the new increasing points for COSL in the future. This is an updated summary of contract status for the rigs we operated. Workload is expected to increase in the second half for 2017.
COSL will continue to explore new services models, rapidly promote the exploration in six regions, and closely follow CNOOC overseas projects. We have signed a number of long-term contracts launched in 2018 and 2019. Breakthroughs in both the equipment and technology segments will be achieved. Over the mid to long term, the further growth in demand for integrated oilfield services, it will be of high necessity and urgency to promote the synchronized development of the equipment segment and technology segment. Therefore, we will continue to maximize the synergies and cost advantages among different segments The company's existing rating is still on the forefront of the service industry. Moreover, we have a good credit rating and healthy cash flow, which ensure the company to take flexible business models and opportunities in terms of lower oil prices.
In conclusion, the company is adhering to its target of achieving a 50/50 mix in domestic and overseas revenue contribution. We should further transform our cost advantage into core competitiveness. With our unique integrated oilfield services, sound financial structure, and experienced management and operational teams, we are confident that we will stand out from competition. Thank you again, for all of you, for your support and understanding with the company. This is the end of my presentation. I welcome your questions. Thank you.
Thank you, Mr. Li. Now we will open the floor for questions. Please note that we will provide consecutive interpretation during the Q&A sessions. Please raise your question one by one and allow some time for the interpretation. I am glad that some of you have raised your hand. My colleague will bring the mic to you very soon. Please do let us know names of your good self and your company. Yes. First question, please. May I have the mic for this gentleman?
Thank you very much. It is Scott Darling from JP Morgan. Well done on the results and also the lovely video as well at the start. Two questions from us. Is your drilling and geophysical segments profitable as we speak this quarter?
Yes.
Do you expect them to be profitable for the full year? That is my first question.
Thank you. May I have the interpretation, please? Thank you. Second question, please.
My second question. On your uncontracted rigs, correct me if I'm wrong, when I was here in March for your year-end results, you seemed to have 11 uncontracted rigs. If I look at end June data in this pack, you seem to have 15 rigs uncontracted. Have you seen rig roll-off and what's your sort of outlook for further contracting of rigs in the second half of this year? Maybe some overall views on day rate outlook as well would be good for us. Thank you.
Okay.
Thank you for your question. Regarding your first question about the profitability of our drilling business, we do expect that towards the year-end, given our efforts in both the domestic Chinese market as well as the overseas market, as well as some of the contracts that we are currently negotiating, we do expect that our revenue from here would grow and making us profitable towards the end of the year, if we are successful in these measures.
关于第二个问题，非常感谢JP Morgan的这位先生对公司的长期关注。确实，公司在去年发布的时候，有11个平台的合约未确定。为什么到今天大家看到15个？是因为咱们现在在激烈的市场竞争当中签的合约，基本上都比较短期，有的几个月，有的半年，也有一些长期的，一两年的也有。所以在统计的时候，可能在我们视点上统计，持有合约的数量就会发生一些变化。如果是从全年的统计来看，我们看平台的钻机天数，就会看到我们公司其实在钻机天数会继续增长的。
Also thank you for your question. Also thank you, this gentleman from JP Morgan, for your consistent and long-term regard of us. Indeed, towards the end of last year, we did report 11 uncontracted rigs. As of today, there are 15. That is true. However, I'd like to explain that this is because, given the very competitive market, the contracts that we are able to sign these days became quite short. Some of them are six months contract, some of them are one to two years contract. Therefore, if you look at any given point of time, you may see rather big changes. However, given the whole year, if you look at the operational days of the rigs, you should be able to expect to see some growth in this area.
我想就CEO刚才说的补充，回答一下这个问题。全球现在海上的钻井都还处在一个比较挣扎的状态。我们确实也面临同样的问题。但是可喜看到的是，尽管我们上半年钻井板块的营业利润还是处于一个亏损的状态，但是我们第二季度已经进入了一个盈利的状态，我觉得这是一个好的趋势。
I have a little bit of supplement on top of our CEO's explanation. While the international deep water or marine drilling, the entire industry is actually struggling at this point. The same for us, of course. However, a good news is that despite that in the first half, the drilling operating profit remains at a loss. We are already seeing blue figures, profitable figures starting quarter two. This gives actually a good trend.
因为钻井是对油服公司来讲，它是非常重要的一个业务板块。从全球来看，800多条钻井船和钻井平台，油服现在43条，43个大批占全球钻井平台和钻井船的份额。相比来看，基本上和全球的钻井平台和钻井船的使用情况大致相当，好一点。但现在从我们下半年的工作量和平台的租用的签署情况来看，会好于上半年。所以从全年来看的话，今年钻井业务板块整个的运营和它的收入效率，还是会好于全年的。再补充一点。
Also, the drilling segment is a very important segment to any oilfield services company. Looking at the global situation, there are 800+ drilling rigs as well as drilling vessels. Ours, we have a total of 43 of these, and our contribution to the global number would be somewhere around 5%. If you look at the utilization rate, comparing ourselves or our vessels with the rest of the world, you will find that we are still a bit better than our peers. In the second half of the year, we do anticipate that the utilization rate and the amount of work that we will be able to get will continue to improve. Therefore, for the entire year, we do expect that this year's annualized operating income, as well as the profitability of the drilling segment, would be better than last year's.
Okay. That's the second question. Yes, this gentleman, please.
Thank you for the presentation. Neil Beveridge, Bernstein. Two questions. Firstly, on well services, you showed a significant improvement on performance in the first half of this year with a significant reduction in costs. A lot of that was down to insourcing of technology. Can you talk a little bit about how much more room there is to take down costs within the business as you insource more technology with COSL With COSL equipment.
Thank you. May I have your name and your company please?
Neil Beveridge, Bernstein.
谢谢你的这个报告，我的名字叫Neil Beveridge，来自Bernstein公司的。我有两个提问，第一个是有关这个油田技术板块的。我注意到你的头半年的业绩比过去好了很多，而且这是通过大幅地减去成本，而且这个减成本是通过把一些技术的项目内包来达成的一种减成本的一种状态。那么我想问还有多少的空间可以进一步通过这种内包的这种方法来进一步去减成本呢？而且是否同时是用COSL的设备呢？这是我的第一个提问。
My second question is around the 2020 target for 50% of the revenue for international. I mean it's clearly a more challenging service environment that we're in. Is it the right thing to do to be pursuing such strong growth overseas? Is it better to be thinking about trying to boost margins at this point in the cycle? Just finally, if you just comment again on your outlook for the rig rate market for the second half of this year.
Thank you very much。我的第二个提问是有关你们设的2020年，全球来自国际的这种收入跟本地的中国的收入要是一半一半的这个目标。根据我们现在面对的这么有挑战性的这么一个环境的话，你是否还觉得这个目标是一个对的目标呢？这是要在国际市场里面去拿这么强大的这种增长，还是应该去聚焦在现在这个经济周期里面，去把利润扩大化呢？还有，如果你可以讲一下下半年的这个钻探的市场就很好了，谢谢。你说吧。
好，我说这个。关于第一个问题，确实像你所说的这个，可以看到我们今年上半年的收入和去年相比，增长并不是那么明显，但实际的增长是比我刚才说的1.6%是要高一些的，因为去年的收入里有一个过去的补偿收入。
Your first question, indeed, our revenue for the first half when compared to that of last year, you would not see a very evident growth in that. The actual growth is bigger than the 1.6% that I have just now talked about. In it there are also compensations of revenue from previous year.
所以今年上半年我们能够实现亏损减亏的一个重要的原因是节省成本。
In the first half of this year, the fact that we were able to realize significant cutting in cost is, I mean, reducing our loss to a great extent is through cutting cost.
和去年相比，我们的成本是降低了14%。
When compared to last year, our cost came down by 14%.
如果看到我们的成本结构，几乎所有的成本项目都和去年相比有不同程度的下降。
If you look at our cost structure, basically, each and every component of that cost structure, if you compare that to last year, there are different levels of improvement.
但主要的原因，这个节约的成本里面，40%是我们的材料的成本的降低。
Of course, the main area that we were able to cut cost, in fact, by 40% would be our material cost.
当然，为了实现这个目标，我们也是采取了很多的措施，包括你刚才所提到的，原来是外包的一部分，我们自己做。
In order to realize this target, we have actually put in a lot of different measures, including the one that you have just now talked about turning outsourcing into insourcing.
也包括我们通过更多的公开的招标来获取在同样质量的更低的价格的材料。
What we also did was through public tendering or bidding, we were able to get lower prices for the same quality material.
应该说降本是成本控制，就像我报告所提到的，是我们公司永远的一个主题，也会坚持进一步坚持我们的低成本的这个结构、这个策略。
I think I should say that cost control, as I have reported previously, would be a continuous, almost a forever thing, theme that we would go after. We will of course continue to go for a low cost structure as part of our strategy.
我们也进一步会提高我们的作业效率，通过提高我们的作业效率来降低材料的消耗。
We will further through enhancing our operating efficiency to reduce the consumption or wastage of our material.
同时提高我们自己研发的产品和装备的使用率。
We will also enhance the utilization rate of those equipment that we have researched and developed ourselves.
当然这个可能需要一个相对比较长期的努力。
Of course, this would require a long-term effort.
这个空间还会有，只是需要我们更多的努力。
Well, I would say there is still room for further cuts, but we will need to work harder.
第二个。
谢谢。关于第一个问题，我再补充一点。公司上面这个成本这一块为什么减少了分包？也是由于公司的技术板块的业务的能力，特别是技术研发的产能的增加，从而减少了外包的原因。这是补充一点。关于第二个问题。
Sorry. One point of supplement regarding the cost cutting. The reason why we had turned from outsourcing into insourcing is that our technology advancement has been able to allow us to increase our capacity. Therefore, we were able to cut down on the amount that we outsource.
关于第二个问题，公司到2020年力争海外和境内的50%的目标不变。而且公司也会确保力争朝这个目标靠近。关于您提到的在目前这个形势下，公司是追求高增长还是追求高盈利，公司永远是把盈利作为公司的第一发展理念。公司在制定中期目标的时候，也是因为考虑到我们要加大技术板块的贡献，我们技术板块也会要从过去的三分之一增长到50%左右。因此未来这三年，不仅是海外要增加，同时我们主要依靠技术板块的贡献来提高这个占比。
Regarding your second question about our target for year 2020, one which would balance 50-50, the revenue from international business versus mainland Chinese business. That target remains unchanged, and we will do each and everything to ensure that this target is coming closer and closer to us. Well, your question relating to given that the current market challenges, should we go for higher growth or higher profitability? Well, I can tell you that to be profitable always remain a target of the company. What we would do as part of our strategy is to enhance the technology sector to be a bigger and better revenue contributor to the company, turning it from one-third before to a 50% contributor in the future. In the next three years, we will not only expand our overseas market, we will also expand it through an enhanced technology sector.
最后一点，关于问到下半年市场跟上半年市场来比。从公司目前来看，公司下半年市场一定会比上半年市场好，否则的话，我们年初制定的可盈利的目标就会越来越远。
Your question regarding whether the second half of the year would be better than the first half. Definitely. Otherwise, our annual target would never be met.
Thank you. Yes, this gentleman, please.
Aditya Suresh from Macquarie. Two follow-up questions.
May I have your name?
Aditya Suresh from Macquarie.
All right.
Two follow-up questions. First, on cost, the 40% reduction in material cost certainly surprised our expectations. Can you confirm if this is a sustainable benefit of any inventory impacts in there? I guess related to that, is this 36% EBITDA margin, which you report in the first half, can that be maintained into the second half and beyond?
Okay. Could you please translate?
我的名字叫Aditya Suresh，我是来自Macquarie的。我有两个跟进的问题。第一，就是这个40%的成本的减少，确实是令我们感觉到惊讶的，也是超过我们预期的。那么我想问这种状态是否可以持续呢？这是对存货会否有影响？还有在头半年这个36%的EBITDA的利润率，是否可以预计持续到下半年呢？
The second question is on rates. Can you confirm if it is merely a CNOOC impact, this 13% increase in jackup and 24% increase in semi-sub rates? Is that merely CNOOC or are there other customers who have been willing to provide you a higher rate? Also, can you comment on the rates for COSLInnovator in Norway? Thank you.
Thank you. This gentleman, can you repeat the two numbers please? 34%, is that right?
I was just asking about the improvement in jackup and semi-submersible rates. Is that merely a CNOOC impact or are there other customers who are giving you a more favorable rate?
Yes, you mentioned some percentage there. Do you want me to
jackup plus 13%, semi-sub plus 24%.
还有我想问一下日费方面，请你确认一下，因为我看到你的这个自升台的日费是增加了13%，这个半潜式是增加了24%。我想问的是这个是否仅仅是中海油的日费才是这样，其他的客户是否也有同样的情况呢？就是这个日费是否也是一样呢？还有，请你是否可以给我们讲一下在挪威的这个COSLInnovator的情况又怎么样？
Innovator 是 平 台 [Foreign language].
挪威国家石油公司。
好，我先回来第一个问题。刚才我说了，我们今年上半年的成本比去年下降是14%，其中材料下降是40%，并不是总成本下降40%，我先更正一下。
Well, I like to make a correction first. Regarding the first half of the year, when compared to last year, our cost came down by 14%, not 40%. Our total cost cutting were able to give us a saving of CNY 1 billion, of which 40% came from our material cut. Not our total cost came down by 40%.
上半年刚才说我们的减成本取得了明显的效果。这里面到下半年，刚才提到下半年会不会还能够维持这个状态，这是大家非常关心的。
Well, just now we were talking about the effectiveness of our cost cutting for the first half of the year, many of you are concerned whether this can continue into the second half.
在我们这个成本结构里，有一部分成本是有一定的季节性的。
Within our cost structure, some elements have certain level of seasonality with it.
比如说我们一些维修的成本和我们的研发的成本。
For example, our maintenance cost as well as our research and development cost.
所以下半年我们可以预计到的是，部分的成本可能会有所增加。
Therefore, for the second half of the year, we can expect that some of the cost would increase.
但是我们和去年相比，成本下降这个趋势不会改变。
However, when comparing to last year, the trend of cost cutting will not change.
关于第二个问题，我先来回答前面的这个部分，提到我们钻井平台的日费率的问题。刚才提到是我们自升式，应该说我们整体上自升式平台的价格总体上和去年相比是持平或者是略有上升。
Your second question was relating to rates. Well, overall, regarding our
Jackup。
Regarding our jackup rates. Overall, the price versus last year would be somewhat stable or having a little bit of increase.
这里边有一些结构上的调整，部分的自升式平台的费率实际上是有一定的下调，有一部分有一定的上升。
There are still some structural changes in here. Some of these rigs have rates that are coming down while some have rates that are going up.
包括国内和海外都是如此。
The same applies for both the domestic market as well as the international market.
另外，我们半潜式平台的费率总体上还是在略有下降的状态。
As for our semi-submersible rigs, all in all the daily rates seems to be coming down.
但是各位可能看到是我们披露的，我们叫钻井的平均日收入，这个并不是实际的费率。这也是请各位关注一下，这个不是一个平均日费率，这个是平均收入。
Well, you may have noticed this from the information that we have disclosed. Please note that The figures that we have disclosed were actually the average income of the rigs, and not the actual daily rate of the rigs.
这个平均日收入会受到我们结构上不同费率结构的工作天的影响。
The average income of the rigs is subject to the various impact or changes coming from our cost structures or various components of our cost structure.
关于COSLInnovator，请我们的CEO来回答。
能否请这位先生再重复一下刚才关于COSLInnovator的问题？
Please repeat your question regarding the Norway.
I'm just wondering if you make a comment on the rate realized for COSLInnovator. Is it above the $188,000 per day which you have reported for the first half?
我想知道的其实就是这个COSLInnovator的设备，它的费率是否已经高过第一季度所披露的$188,000块。
关于COSLInnovator费率的问题，我知道你们可能都注意到最近有一个公告，我们COSLInnovator获得一个新的合同。我们过去是按照公司的政策，不单独披露每个平台的费率。那么这个新的合同也是根据当前的市场情况来签订的，所以显然和我们以前最早的COSLInnovator费率相比，肯定是有比较大幅度的降低，但是依然是和现在的市场是比较吻合的。
Regarding COSLInnovator, perhaps you have seen some news about our COSLInnovator machinery getting a new contract. Well, our policy before has been one that do not disclose the individual rates for each rig. I can tell you that this new contract that we have signed is in accordance to the market circumstances. Well, if you compare this to the earliest contract that we have signed for COSLInnovator, of course it is evident that the rates have come down significantly. I have to say that this new contract matches with the market that we have now.
Thank you. Okay, this gentleman, please.
Thank you for the presentation. I'm Andy from Morgan Stanley. I have two questions. First question is regarding the business model. If you look at the revenue breakdown for the company in the past several years, we find interesting change. The drilling revenue actually is getting smaller, while if we look at the well service, the revenue is getting larger. Like in 2015, the well service is just half of the drilling. If we look at the first half of this year, it's already become similar. My question is, can we say that COSL is strategically changing the business model from assets heavy to assets light and enhancing the technology content? In that case, we are actually positioning ourselves more like an oil service company like Schlumberger, Halliburton, rather than a traditional driller. This is like strategic positioning.
Okay, thank you.
我的名字叫Andy，我是来自Morgan Stanley的。谢谢。那么我有两个提问，第一个是有关贵公司的业务模型的。如果你看一下你的收入的明细，在过去几年会看到很有意思的一些改变。过去钻井的业务板块，它的收入是比较小的，但是油田技术的板块却是挺大的。但是到了2015年，如果你看油田技术服务板块仅仅是钻探的一半，但是在今年的头半年，两者之间已经是差不多打平了。所以我的提问是，是否公司的策略是已经改变了，要从重资产变成轻资产的这么一种商业的策略，是否等于你们要加大这个技术的含量，从过去一个传统的钻井的公司变成一个综合服务以技术为先的一个公司呢？
我先说一下吧。刚才这位Andy先生提这个问题非常好，从油服自身的战略发展方向和战略定位来看的话，它是希望从它的装备的收入和它的技术服务的收入能够各占50%，这是我们努力的一个目标和方向。实际上现在目前来看的话，我们也在加大在技术方面的投入，而且在油气方面也取得了突破，包括比如说随钻测井，包括旋转导向钻井这样的一些技术都取得了突破，这样为我们的技术的提升
为油公司提供更好的服务，也创造了条件。
This is actually an excellent question. Thank you very much. Our well services sector, the positioning and the direction of development has always been one that we want to balance the revenue from our equipment segment as well as from our technology segment. I mean the equipment and the technology plays an equally important role. This is a direction that we will continue to work hard to achieve. We are also stepping up on our investment in technology. We actually have quite a few technology breakthrough. For example, the logging while drilling technology is one of them, and we also have some breakthrough in the rotary steerable drilling systems. As our technology is being enhanced, we would be able to provide better services to oil companies.
主要就是平衡好我们的装备和我们的技术，是吧？这两个方面，这样更好地提升我们的总体的综合的服务能力，这是我们需要努力的。
We also would need to work on balancing our equipment business with our technology business, so that we are a better integrated service provider.
我再解释。公司确实你看得非常清楚，公司确实这些年在董事长带领下，我们调整了咱们下一步的战略。为什么这么调整？我们觉得从这几个方面，一是因为我们看到装备板块已经处于过度竞争的这个状态，所以公司也选择走技术板块。另外一个技术板块对于我们公司来说比装备板块有更多元的空间。因为我们装备板块无法从海上到陆上，但是我们技术板块咱们可以从海上到陆上，从国内到国外，所以技术板块的发展比装备板块的发展多了一圆空间，所以公司也是看到这个决定，就加大技术板块的发展。
I also like to make an explanation. Indeed, our strategy has been somewhat adjusted. There are several reasons. The first one is that the equipment sector, we have been seeing way too much competition in this sector. Therefore, we have chosen to go down the path of the technology sector. Comparing the two, I believe the technology sector would give us a lot more room to grow. For example, if you are talking about equipment to be used on land cannot be used at sea. Equipment that are to be used in mainland China is not absolutely adapted to overseas market. However, if you are talking about technology is beyond the limitations of sea or land, China or international. Therefore, we are pushing our efforts into expanding our technology capabilities.
Okay. I'm afraid due to the time constraint, we can take no more questions, but may I ask if the management have anything to add?
我想因为时间的关系，我们不能再提问了。请问管理层有没有进一步的补充？
行，我最后再简单说一下。从现在COSL的情况来看，它现在面临着一个比较扭亏的这样一个需求和压力。但是从今年这个情况来看，COSL还采取了很多有效的措施，就包括刚才讲到的，比如说努力降低成本，努力地开拓国内外的市场，加大考核的力度，努力提升技术和服务的质量，在这些方面还是见到了成效。从今年上半年的运行情况来看，一季度公司亏损，但是二季度公司收入相对一季度来讲的话增加了10个亿。同时二季度也实现了季度的盈利。从我们下半年的工作量和我们下半年的整个的工作的安排来看的话，会好于上半年，特别是三季度，三季度也会好于二季度。所以我们对全年努力实现公司的扭亏还是有非常强的这样一个信心。我们也是希望——
Well, perhaps I'll say a few last words. If you look at COSL right now, indeed we are under a lot of pressure. If you compare this to last year, you will see that we have given a lot of effort and we have put in a lot of different measures in order to tackle this. For example, we have cut down on our cost, we have aggressively expanded both the domestic as well as the international market. We have brought up our technology standards and we have also enhanced the quality of our services. All of these efforts have been effective. As you can see, in quarter one, we were still at a loss. Quarter two, we saw a CNY 1 billion additional revenue that has brought us from loss to profitability. In the second half of the year, judging from the workload that we already can expect, we do believe that the second half would be better than the first half, and quarter three would be better than quarter two. Towards the end of the year, we do expect to turn from red to blue, and we are quite confident in doing this.
还是希望大家继续关注支持COSL。到年底的时候，我们也力争给大家一个比较满意的这样一个答卷。同时也希望大家持续关注2018年、2019年公司，我相信还会取得更好的业绩。谢谢大家。
Well, last but not least, I thank you and invite you to continue to pay attention and follow us. I also thank you for your support all along. Well, hopefully we will try our very best towards the end of the year to provide you with a result that can be satisfactory. Also, please continue to track us and see how we do in 2018 and 2019. We are quite confident that we will be in a much better light by then.
Okay, thank you very much. With that, I'm pleased to announce the today's presentation is successfully ended. Thanks again for joining us and goodbye and good day. Thank you.