Earnings Call: Q3 2016

Nov 21, 2016

Earnings release

Ladies and gentlemen, thank you for standing by, and welcome to the third quarter 2016 Kingsoft Corporation earnings conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question, you will need to press star one on your telephone keypad. I must advise you that this conference is being recorded today, Monday, 21st of November, 2016. I would now like to hand the call over to Francie Lu. Thank you. Please go ahead. Thank you. Ladies and gentlemen, good morning. I would like to welcome everyone to our 2016 third quarter earnings call. I'm Francie Lu, the IR Director of Kingsoft. I would like to start by reminding you that some information provided during the earnings call may include forward-looking statements, which may not be relied upon in the future for various reasons. These forward-looking statements are based on our own information and information from other sources, which we believe to be reliable. Please refer to the other publicly disclosed documents for detailed discussion on risk factors, which may affect our business and operations. Having said that, please allow me to introduce our management team who join us today. Dr. Hongjiang Zhang, our Executive Director and CEO, Mr. Francis Ng, our Executive Director and CFO, and Mr. Zou Tao, our Executive Director and CEO of Seasun. Mr. Zou will become our CEO starting from December this year. Now I'm turning the call to our Executive Director and CEO, Dr. Hongjiang Zhang. Thank you, Francie. Good morning and good evening. Thank you, and welcome everyone. Kingsoft has performed well in our focus areas in the last quarter. The mobile game segment has started to bring profit contributions to the company. Kingsoft Cloud developed rapidly in its different vertical sectors. Our Cheetah Mobile's content strategy began to bear results. Despite the provision for the investment impairment in relation to the 21Vianet, our operation profit recorded a strong year-over-year and quarter-over-quarter growth. We are fully committed to execute the mobile globalization and All in Cloud strategy, and are actively coping with the challenges ahead. Overall, our total third-quarter revenue reached a new high at CNY 226.8 million, representing a 48% increase year-over-year and 26% increase quarter-over-quarter. Operating profit before the share-based compensation cost achieved RMB 348 million, representing an increase of 83% year-over-year and an increase of 84% quarter-over-quarter, which mainly reflected the profit contribution from our mobile game businesses. Driven by the solid performance of Cheetah Mobile's utility product, its total revenue resumed sequential growth, and its mobile and overseas revenues have hit the all-time high. Cheetah Mobile's utility product continues to see steady revenue growth as well as attractive profitability even as the overall utility segment continue to mature. In particular, Clean Master maintained its number one position in the U.S. tool application category in early November, according to App Annie. More importantly, two of Cheetah Mobile's content-driven product, Live.me and the News Republic, continued to gain in popularity this quarter, in particular in the U.S. market. According to App Annie's October data, Live.me was the number one grossing social application in the U.S. on Google Play and was ranked as one of the top five social apps on Apple App Store. In addition, News Republic was ranked as one of the top three news and magazine apps in the U.S. on Google Play in October. Looking forward, Cheetah Mobile will continue to leverage its more than 600 million global mobile MAU and further expanding its mobile content strategy while delivering more personalized and richer content to its users in attempt to improve user engagement and establishing a substantial, sustainable, and profitable growth model for the long term. We are delighted to report sustained growth of the company's flagship game, JX Online 3, and the outstanding performance on JX Online mobile game series in the past quarter. With the launch of an expansion pack and a successful anniversary event, the quarterly revenue for our JX Online 3 surged to a record high, representing a year-over-year increase of 61%. The slot mobile game, JX Online 1, which was launched on May 31st, 2016, has gained wide popularity from the gamers and ranked high on Apple's App Store top grossing games. The second JX Online mobile game, JXSJ, tops the sales and the download chart of Xiaomi's platform right after its launch on September 20th this year. JX Online 3 mobile game, the third JX Online mobile game, and Kangjie Han and Indomitus Online, the mobile game joint developed with 60YX and NetDragon respectively, will be launched in 2017. We will continue to combine the rich experience and the resource in PC and mobile games to keep adding to the legacy of classics, and provide game players new and hassle-free online game that they can play and share experiences with each other. The vertical business of Kingsoft Cloud developed quickly in the past quarter. Kingsoft Cloud further consolidated its industry leading position, praising the stable operation of popular mobile games into Alliance H2 and the JXSJ and QYZ with the overall quality of video cloud enhanced and optimized. It not only continued to penetrate the mobile internet market, but is also able to connect with conventional video websites, including iQIYI. Hence, further expanded the video cloud customer coverage in the industry. In the third quarter, Government Cloud continued to make progress on the secure project from the Beijing Municipal Government, in particular, the Beijing Municipal Commission of Housing and Urban-Rural Development, The People's Daily, and so on, representing a solid step forward in its market expansion. Now let's talk about our WPS family. The global MAU of WPS reached a new record of 228.5 million in September. On November 6, the global MAU of WPS Office Android version exceeded the 100 million mark for the first time in history. Both the annotation feature of WPS Office 6.0 edition PDF and the collaborative function of the WPS Office Cloud were regarded as recommended tool by the Apple App Store in July this year. WPS released a new edition of its mobile mailbox, boasting the breakthrough of enhanced WPS Cloud service, and the new edition of WPS Mail was launched to the market in large scale for the first time in the third quarter. In September and October, WPS made a strategic investment in and cooperated closely with other new SaaS companies in the office collaboration sector, including Yiqixie and BestSign, aiming to optimize product features, enhance customer stickiness, and build a tighter co-alliance with our partners. Efforts were also made in exploring and perfecting the monetization of the traffic on PC and mobile. Currently, Beijing Kingsoft Office Software, Inc., and its subsidiaries, which mainly engage in office software and other related software businesses, are preparing for a listing on one of the stock exchanges in China, and that is progressing smoothly. As the third quarter result showed, all the business lines of Kingsoft are developing according to the overall strategy of the company and meet our goals. Going forward, we expect our revenue will continue to grow. We pledge to actively embrace the opportunity and challenges that the global mobile and internet area will bring. Now let me turn the call to Francis, our CFO. Francis? Thank you, Dr. Jiang. Good morning and good evening, everybody. As usual, let me go through the Q3 result using CNY as a currency. Revenue increased 26% quarter-over-quarter and 48% year-over-year to CNY 2.23 billion. The revenue split was 35% for our online game, 50% for Cheetah Mobile, and 15% for cloud services, office software, and others. Revenue from our online game business increased 66% quarter-over-quarter and 139% year-over-year to CNY 792 million. The impressive quarter-over-quarter increase was primarily driven by the outstanding performance of JX Online 1 mobile game. The robust year-over-year increase was mainly due to the great contribution from the newly launched JX Online 1 mobile game and the strong and healthy growth of JX Online 3, driven by continuous improvement in optimizing user experience. Daily average PCU increased 8% quarter-over-quarter and 75% year-over-year to 1 million. The quarter-over-quarter increase was largely due to the launch of the second JX Online mobile game in September this year, and the year-over-year increase was mainly due to the successful launch of the first and second JX Online mobile games. APA, our average paying accounts, increased 7% quarter-over-quarter and increased 36% year-over-year to 4.5 million. The quarter-over-quarter decrease was mainly due to the natural decline lifecycle of JX Online 1 mobile game, and the year-over-year increase of APA was mainly due to the launch of the first and second JX Online mobile games. Revenue from Cheetah Mobile business increased 9% quarter-over-quarter and 12% year-over-year to CNY 1,104 million. The increases were mainly driven by the higher demand from advertisers, including direct sales customer for Cheetah Mobile's mobile advertising service worldwide. The monetization of live casual games through in-games advertising and the initial monetization of Live.me in overseas markets. Mobile MAU from Cheetah Mobile decreased 2% quarter-over-quarter and increased 8% year-over-year to 612 million in September 2016. In September 2016, approximately 80% of our mobile MAU were from overseas markets, compared to approximately 74% in September 2015. Its mobile user installation, as of September 2016, has reached 3.5 billion, representing a 12% increase quarter-over-quarter and a 78% increase year-over-year. The increases reflect Cheetah Mobile's existing utility apps and casual games are gaining popularity by providing faster, simpler, and safer mobile Internet experience for users worldwide. Revenue from the cloud services, office software, and others business increased 21% quarter-over-quarter and 77% year-over-year to CNY 331 million. The sequential increase was mainly attributable to the incremental revenue contribution from Kingsoft Cloud, driven by the growing user demand, especially from the mobile game and video industry, and increased sales of traditional WPS Office. The robust year-over-year increase was primarily attributable to a strong revenue growth of cloud storage and computing business as a result of increased customer usage and user base. Cost of revenue increased 40% quarter-over-quarter and 113% year-over-year to CNY 786 million. The increases were mainly due to the higher sharing costs associated with JX Online 1 mobile game, increased investment in content for Cheetah Mobile's content-driven products, and the higher bandwidth and internet data center costs associated with the increased usage and traffic of Kingsoft Cloud and Cheetah Mobile. Gross profit increased 20% quarter-over-quarter and 27% year-over-year to CNY 1,441 million. GP margin decreased by 3 percentage points quarter-over-quarter and 10 percentage point year-over-year to 65%. Our R&D expenses, net of government grants, increased 17% quarter-over-quarter and 35% year-over-year to CNY 491 million. The increases were mainly due to an increase in personnel-related costs driven by the increased investment in big data analytics, new product development, and cloud business. Selling and distribution expenses decreased 2% quarter-over-quarter and 1% year-over-year to CNY 472 million. The quarter-over-quarter decrease were primarily due to lower expenses on promotional activities as a result of Cheetah Mobile's implementation of stricter cost control. Administrative expenses decreased 1% quarter-over-quarter and increased 12% year-over-year to CNY 146 million. The quarter-over-quarter decrease was due to the lower professional fees in the third quarter of 2016. The year-over-year increase was mainly due to an increase in headcount and related staff costs. Share-based compensation decreased 19% quarter-over-quarter and 34% year-over-year to CNY 83 million. Operating profit before share-based compensation costs increased 84% quarter-over-quarter and 83% year-over-year to CNY 348 million. The margin of operating profit before share-based compensation costs increased by 5 percentage points quarter-over-quarter and 3 percentage points year-over-year to 16%. Our net recorded losses are of CNY 170 million, compared to a loss of CNY 960 million for the second quarter of 2016, and the losses of CNY 50 million for the third quarter of 2015. The losses in the third quarter of 2016 were mainly due to the additional provision of impairment on carrying value of investment in 21Vianet, as it has been further decreased in its market value in the third quarter. The losses in the second quarter of 2016 were mainly due to the provision of impairment on the carrying value of investment in Xunlei Limited and 21Vianet, respectively. As there was a significant or prolonged decline in market value and investment in Xunlei and 21Vianet below costs, which we have explained it last quarter. Finance income decreased 15% quarter-over-quarter and decreased 13% year-over-year to CNY 44 million. Income tax expense increased 3% quarter-over-quarter and 34% year-over-year to CNY 35 million. Excluding the share-based compensation cost and the non-tax-deductible provision for the provision for impairment losses of investment, our effective tax rate would have been 8% in the third quarter of 2016. As a result, our profit to owner apparent was CNY 142 million, minus CNY 808 million and CNY 48 million for the three months ended September 2016, June 2016, and September 2015, respectively. Profit to owner of parent before ESOP was CNY 186 million, minus CNY 755 million, and CNY 190 million for the three months ended 30th September 2016, 30th June 2016, and 30th September 2015. Our statement of financial position. We have cash and non-restricted deposits of CNY 9 billion as at 30 September 2016, representing cash per share of CNY 7. Net cash from operating activity was CNY 188 million, compared to CNY 344 million last quarter and CNY 240 million the same period last year. We recorded CapEx of CNY 228 million for the third quarter in 2016. Now, let me turn the floor back to the analysts for any questions that you might have. Thank you. Great. Thank you. Operator, we are ready for the Q&A session. Yes. Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Please note there may be a short silence while we await for questions to queue up, and please ask your question in English and translate to Mandarin if possible. Our first question comes from the line of Wendy Wong from Macquarie. Please go ahead. Thank you, management. First, can you share with us the momentum and also the economics of the second mobile JX title since its launch on September 20? Also, for the third mobile game that is to be launched in 2017, how will the economics be among the different parties? My second question is on your WPS and cloud business. Because you do not provide the breakdown in the press release, so can you maybe share with us the percentage growth for the respective segments for the WPS and cloud? Thank you. Hi, Wendy. Since we have Mr. Zhao on the phone as well, would you mind translating the question in Mandarin again? Sure. OK, let me answer the question, Wendy. [Foreign language] Let me answer first question. The momentum for our second JX mobile game, which launched on September 20, are growing very healthily. Bear one point in mind is that the style of this game is we wanted to establish a game with a longer longevity, just like our JX3, so you will notice that this is a very strong characteristic of a subscription mode in that game. You would not, and we are not expecting that game to have a very high ARPU at the beginning. I would say that if you look at the number itself, which will be significantly lower than the first JX mobile game, which is more a item billing game in itself. [Foreign language] The related question is that the profit sharing between various parties. You probably noticed that we partner with Xiaomi as the publishing platform for the JX2 mobile game, compare to we partner with Tencent for our first mobile game, and the profit sharing between the parties are very similar. [Foreign language] Let me answer your second question is about the split and respective growth for our Kingsoft Cloud and WPS business since it is still grouped together. While we haven't split it, as I mentioned early in the previous quarter, we will be splitting the Kingsoft Cloud revenue and financial very soon, since it hits the fastest growing segment among all the businesses within Kingsoft. I can reveal at this point of time, while I do not reveal that separately, which will be done very soon when we split off the respective financial for Kingsoft Cloud and WPS. I can share with you that the growth rate of Kingsoft Cloud actually exceeded the growth rate of WPS, and also in the composition, Kingsoft Cloud's revenue also exceeded the WPS revenue. [Foreign language] Thanks Francis. Just want to follow up on that. I think on the cloud last quarter you mentioned the growth is more than 200% year over year. So this quarter, is cloud still maintaining this kind of momentum? And also, are we targeting the 2017 to be the break-even year for the cloud? 我翻译一下，就是根据您刚刚的回答，想了解一下云业务上个季度，因为你们有提到你们是超过200%的增速，那这个季度是不是也是维持了这样一个趋势？然后另外就是说，2017年的话，你的这个云业务会不会达到一个盈利的一个平衡点？ OK, Wendy, thank you for your question. Actually in previous quarter, I already reported to you all that the growth rate of Kingsoft Cloud business will continue to be on high speed. The second half will be not as fast as the first half. The overall growth for 2017 approximately will be about 150%. That will imply that the second half will not be as fast as the first half. We are not growing at 200% in the first quarter and fourth quarter, but you expected that the overall 2017 will still be growing at around 150% growth. The second question is regarding the breakeven point, whether we will achieve in 2017. Dr. Jiang and myself have repeatedly elaborated that achieving the breakeven point is not our first priority, given that this is a very big market, and the first priority was definitely finding a position in the competition landscape. I can also share with you that the investment or loss, depending on what perspective you are looking at, are narrowing in third quarter compared to the first half of 2016. 那我回答一下，在之前的季度，姜博士跟我都一起讲，第二季度的话，那个growth rate不会有上半年那么快。我们整年的话，预期整年的growth会大概是在150左右，那么我们上半年是200。所以意味着我们下半年的话会稍微缓一点。但是2017年的话呢，还是会保持一个高速的增长。第二个问题的话，你问到我们会不会在2017年达到收支平衡，那么这一点的话，我们也是多方强调的，在云业务是一个大的、长期投入的业务，是非常大的市场。我们会把争取在市场上面高速成长、快速成长，在市场竞争的位置的重要性，比在未来短时间争取收支平衡要来的重要。这个是我们有非常大的投入的一个东西在这边。所以我们不会把2017年作为breakeven的目标。但是我可以跟你讲一下，我们第三季度比2016年的上半年，或者是2015年的全年所谓的亏损或者投资，as a percentage of revenue是一直是收窄的，也意味着我们的整个规模的效应也陆续显现出来。好吧，谢谢。 All right. Thank you. Our next question comes from the line of Thomas Chong from BOCI. Please go ahead. Hi, thanks management for taking my questions. I have a couple of questions. The first one is about JX Online 3. Given the strong performance of the PC game with 61% year-on-year growth, how should we think about the growth momentum in future quarters given the PC game market as a whole is quite stable on a year-on-year basis? Secondly, is about the mobile game. Can management give us some color about what is the gross billing of the first mobile JX Online? Because I think last time we talked about 500 million in June, so just want to get a sense of how the gross billing is trending. My third question is about JX Online 3 mobile. I know it is going to be launched next year, but is there any more details? Should we expect it to be launched in the first quarter? Thanks. 我来翻译一下。第一个问题就想问一下PC版的JX Online 3。想问一下，我们看到我们做得非常好，有61%的增长，想问一下未来几个季度会不会可以有这个增速？第二个问题，就想问一下手游方面的，记得6月份第一款手游的流水大概就是5个亿。想问一下现在的流水大概是多少？另外，就想问一下我们的手游JX Online 3，我也知道在17年会推出，想问一下在17年是不是在第一季度我们可以玩这款游戏？谢谢。Okay, thank you, Thomas. Let me answer the question. [Foreign language] You asked about the growth momentum for our JX Online 3. You mentioned that we achieved over 60% year-over-year growth, whether that momentum will continue in 2017 and beyond. Let me answer your question in this way. At the beginning of the year, we set that, and we still strongly hold the belief that JX Online 3 is a very important business segment. Even though everybody is talking about the trending of mobile games, everybody shifts to mobile games. Our JX3 is a very significant cash cow for our business. We are very confident to continue to nurture this game to have a longevity life. You see that we have achieved a very high growth in 2016, which actually exceeded our expectations. We do expect that we have all the chances to keep this as a very long-life PC game. Apart from the fact that you notice that there is a very high growth on our revenue and profit, if you look at our non-financial metrics, our average paying account and all the MAU are still growing, also very healthy. In addition, we actually launch a so-called big revamp project, which will significantly revamp the user experience in particular on the graphic, and that will help us to further maintain the popularity of the game. You could not expect that we will be repeating the 60% growth as we did in the first half or the first three quarters of 2016. You could expect that we will maintain a long longevity and healthy growth for this game. As for healthy growth, we could say that we will definitely exceed the market growth for the PC game in this category. 第二个问题，我想回答的是关于刚才问的问题，就是说我们上半年的前三个季度有一个非常惊人的成长，在我们的JX3这个网游端上面。这个是源于我们自己本身在年初的预期，因为我们launch了几个expansion packs是非常成功。但是一方面，我想大家不能够期望我们在2017年同样保持在这个数字的增长。但是我们可以讲的话，我们还是非常有信心，这个JX3是我们一个非常健康、非常重要的现金流。再加上你看到我们其实也是做了一个所谓的重置计划，这个只会大幅度地把我们的用户体验，尤其是在graphic，就是显示方面有一个大的提升。所以我们只能讲，我们就非常相信这款游戏，我们是会有一个长的生命周期，第二，我们也会超越行业上面的增长，就是说专项PC的行业增长。这个是第一个问题。The second question you asked is about the trend of our first mobile game. We recorded a CNY 500 million gross billing in the first month, June 2016. What is the trend beyond the first month? I am very happy to share with you that is very healthy. As you could see that actually in our result announcement, we already said that we achieved over CNY 930 million gross billing in the first quarter. We still maintain a very strong showing, which is approximately around CNY 250 million to CNY 300 million in the following months. We are very happy with that result。第二个问题的回答，就是关于我们第一款的手游，首月有超过5亿人民币的冲击，在后面几个月里面的话表现怎么样？我可以很高兴地跟大家汇报，这个是非常健康，我们都保持在2.5亿到3亿流水的一个表现。这个是我们非常满意的。第三个问题，the first question you asked about the launching of our third JX mobile game. We just discussed with our partners the launching of the JX mobile game will be in the first half of 2017, which might be a little bit delayed due to the scheduling of the gaming, of wireless gaming. It might not be the first quarter, but we very highly likely will be in the first half of 2017. 第三个问题的回答，就是关于我们第三款手游的上线的时间。我们可以跟大家讲的话，我们还是准备在2017年的上半年，很有可能是第二个季度，而不是第一个季度。因为我们跟我们的合作方也讨论过一些档期的问题，所以这个可能不会在一季度，但是可能会在四五月份，或者是第二个季度，像这样子。这个第三个问题。谢谢 Francis。不好意思，还想很快地跟进一个问题。想问一下刚刚提到那个 JX Online 3，现在我们做得怎么好？主要就是在 APA 还是 ARPU 来拉动 61% 的增长。另外想问一下，上季报的话，mobile games 占到你的 online games revenue 大概是多少？谢谢。 Thomas。我们现在数据还没有分开来，我们现在还没公开这个数据，我先不回答这个问题。好的，谢谢 Francis。 Thank you. Our next question comes from the line of Evan Zhou from Credit Suisse. Please go ahead. Hi, good morning. Thank you for taking the call. I just have two very quick questions. The first one is we would like to know how do you recognize revenue from gaming, especially the deferred part? The second question will be, what will be the margin outlook going forward as we will have more revenue contribution from mobile gaming? [Foreign language] 好的。你讲到递延的问题，那么我先用英文来回答吧。You ask this question about how we defer our revenue in the gaming business. First of all, it will depend on different situations. Say for example, for our PC game, we will be deferring according to the estimated life cycle of our in-app purchase equipment. As for our mobile game, it will depend on the relationship between the different parties. Say for example, in the mobile game, in the first one and two mobile games that we launch, we basically performing the developer part mostly. So the platform will have more influence significant in the operating of the game. So that the part of deferral will be very minimal. [Foreign language] The second question you ask is about, given that the mobile game revenue are going up very rapidly, what is the impact on our profitability or margin going forward? 第二个问题你问的是在我们手游起来以后，越来越多的话，对于我们的收入或者是利润率、毛利率方面有什么变化。首先第一个，我可以跟大家讲一下，在过往我们端游方面，我们大部分都是既是开发商，也是很多那个绝对部分都是由我们自己去分发的。所以我们在这个方面的话，我们的毛利以及我们的经营利润率在端游方面都是非常高的。在过往当中你会看到，我们有一些投入在手游，这个也是并在一块的话，会把我们的经营利润率在前两年拉低一点，但是要是单纯看端游方面的话，都是高毛利率跟高经营利润率的一个business。那么其实我们新增的mobile game也有两个挺不一样的表现。一个是在第一款手游方面，你会看到我们是跟一个游戏工作室去合作，所以我们对于这个游戏工作室，在我们从gross billing拿过来的收入，就是我们对分成以后的收入，百分百会计我们的revenue，然后在我们的cost of sale里面，我们会有一个分成的话，我们也会记在那边。所以相对来讲，这个gross margin不会有我们的端游那么高。但是我们第二款游戏，或者是第三款游戏，我们这两款游戏都是纯粹西山居自己研发的，没有跟外面的团队合作，所以这个没有在gross margin会有影响，所以也是一个非常高的gross margin跟net margin的一个business。 Great, thank you. Our next question comes from the line of Yang Lu from Deutsche Bank, please go ahead. Good morning management, I have one simple question. I suppose you have noticed Ali Cloud has cut its prices for Southern China. What Kingsoft strategy cope with the new challenge, and what kind of impact are you seeing in the longer term for your cloud operation? Thank you. Yeah, thanks for the question. Let me take it. Could you repeat the question again in Chinese, please? 我有一个小问题，可能大家都注意到，阿里云最近有对中国南部地区的云服务大幅地降价。我想知道金山软件会采取什么样的策略去应对，以及这个事件对公司近期以及长期的影响。谢谢。 Yeah, Francis, let me take your question. [Foreign language] So we definitely notice the move that Ali Cloud made, but let me emphasize on two things. First, Kingsoft Cloud in term of price has always been competitive. So the particular move by our competitors at this moment will not put up much pressure on us. And number two, I want to stress is the quality of service, and that's what the enterprise customers really pay attention to. And number three, in term of this particular move, if you notice the details of this move, you will see that it's more a marketing tactics than a real price deduction. So this is how I see this, and this is the first thing I want to stress on. The second one I want to stress is that, we compared to our competitors, are taking very different approaches in penetrating into the market. And we focus on verticals, and we focus on building deep partnership, deep relations with our customers, in particular in the game and mobile video space, as well as in the healthcare and public government cloud. So we will continue this strategy. So overall, we feel that our customer pay more attention on quality. Well, our prices are still competitive. Number two, our vertical focus strategy actually help us win out from our competitors. [Foreign language] So overall, we feel that our customer pay more attention on quality. Well, our prices are still competitive. Number two, our vertical focus strategy actually help us win out from our competitors. [Foreign language] 好，谢谢你。 Right, thank you. We're coming to the close of the call. We just like to check with the speakers if they have any closing remarks. Yeah, let me make a very short closing remark. I just want to say, ladies gentlemen, all the friends and colleagues in the market, in the analyst and fund sectors, I want to thank you for all your support in the last five years. This is my last conference call with you at the capacity of CEO of Kingsoft. I wish you all good luck, and hopefully we will meet each other again in some other venues. Thank you, bye bye. Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect. Thank you.