Earnings Call: H1 2026

Aug 26, 2026

Summary

Q2 revenue grew 10% and operating profit rose 118.9%, supported by stronger traffic and lower expense ratios. FX losses drove a net loss; regional results diverged, while double-digit second-half openings remain planned.

Dear esteemed investors and analysts, good evening. Thank you for joining Super Hi International 2026 second quarter earnings conference call. The company leaders attending today's meetings are Mr. Li Yi, Executive Director and CEO, and Ms. Chu Song, Chief Financial Officer and Board Secretary. Today's meeting content may contain forward-looking statements, including, but not limited to, the company's statements regarding strategies and business plans, as well as outlook on performance prospects. The content of this earnings presentation and the comments in response to your questions represent management's view only as of today. Please refer to the latest safe harbor statement in the earnings press release, which applies to the conference call. The meeting is conducted in Chinese with an external agency providing simultaneous English interpretation. In case of any discrepancies, the Chinese transcript shall prevail. The presentation materials have been uploaded to the company's IR page. Please feel free to review them. Now we invite Mr. Li Yi, CEO and Executive Director of Super Hi International, to review the company's performance for the second quarter of 2026. Thank you, moderator. Can everybody hear me okay? Yes, we can. Please go ahead. Dear investors and analysts, good evening. I am Li Yi, CEO and Executive Director of Super Hi International. Let me present to you the key highlights of Super Hi International for the second quarter of 2026. This quarter, the company's earlier investment in employees and customers have further translated into operating improvements. Customer traffic and table turnover rates both improved year-over-year, while the employee cost ratio and several operating expense ratios declined, driving a significant year-over-year increase in operating profit. In Q2, Haidilao restaurants served 8.1 million customer visits, up 5.2% compared to the previous year last year. Supported by customer traffic, the overall table turnover rate for the quarter was 3.9 turns per day. Same-store turnover was 4.0 turns per day, both up 0.1 turns per day year-over-year. Both dining service at Haidilao restaurants and also our expanding revenue sources, the revenue from delivery and other businesses both doubled this quarter. Driven by the above business, the company achieved total revenue of 219 million CNY in the second quarter, representing a 10% increase year-over-year. This quarter, company's operating profit increased by 118.9% YOY. The operating profit margin increased by 1.8 percentage point YOY. Profit growth has significantly outpaced revenue growth, reflecting a continued conversion of company's earlier investment and the beginning of the operating leverage release. Now I will review the major operational initiatives of this quarter. First, continue to enhance the operational management of Haidilao restaurants. This quarter, we maintained management flexibility with each region autonomously adjusting operating strategies based on the local business conditions, market conditions, and consumer trends. At the same time, we further strengthened the professionalism and support capabilities of the HQ platform by introducing digital tools and new technologies. We enhanced our insights into the industry markets and consumers. Empowering frontline restaurants in areas such as menu items, marketing, and labor efficiency thereby making improvements in the precision and execution efficiencies. This second quarter is a traditional low season. Judging from the table turnover performance, we believe that these initiatives have delivered a positive response. Second, in term of product mix. In the first half of this year, the company fully integrated local consumer dietary habits with consumption trends and dining scenarios to drive menu optimization and new product development. For instance, in Southeast Asia, we introduced local flavors such as lemongrass, satay, and basil, extended soup bases, snacks, and beverage combinations around the core products to enhance the cross-selling. At the same time, we optimized the existing products by improving taste, presentation, and product combination, lowering the barrier for customer trial and enhanced product appeal. In addition, the company continuously conducts dynamic operations based on new product sales performance, customer feedback, and regional market characteristics, providing customer with a more value-oriented and differentiated consumption experience. Third, in terms of membership and marketing, as of the end of June, the number of overseas members reached 9.246 million. This quarter, we continued to improve customer management loop around sustained marketing, precise traffic acquisition, and member operations. On the other hand, each region combined local consumption habits, holiday occasions, the preference of younger customer groups to continue to enhance brand exposure and reach new customers through IP collaborations, new product launches, and new local events. On the other hand, we place greater emphasis on post-marketing customer retention by further strengthening tiered membership operations using member exclusive activities, differentiated benefits, customer communications, and in-store experience optimizations. We improved the member activities and visit frequency. We are continuously exploring more across the scenario and the multi-branded membership benefits, hoping to gradually transfer one-time marketing traffic into long-term membership relationships, further enhancing customer repurchase and the store operating resilience. In terms of store expansion, this quarter, we opened one new Haidilao restaurant in South Korea, one in Vietnam. In the first half of this year, we opened a total of three Haidilao restaurants. At end of Q2, we operated a total of 129 Haidilao restaurants overseas. To date, the number of signed but not yet opened Haidilao stores remain in the double digits. Meanwhile, based on the current construction schedules in July and August, we expect several new stores to be opened successfully in the second half of the year. In the full year, new store opening target is in the double digits. As of this quarter, the Pomegranate Plan has operated a cumulative total of 12 brands and 22 second brand restaurant overseas. We continue to optimize the Haidilao Malatang project, which originated in Canada, and we are now opening up the second Haidilao store in Japan. At the same time, the Izakaya project in Japan is also steadily improving its stability with the potential for further replication. Various country markets are exploring opportunities to independently incubate or replicate existing second brand formats. That is my conclusion for the business performance for this quarter. I would like to invite Xi Song to present the financial results. Thank you, Mr. Li. I will now report about the financial results. In the Q2 of 2026, the company achieved a total revenue of CNY 219 million, an increase of 10% year-over-year. Haidilao restaurant operating revenue was CNY 198 million, up by 4.6% year-over-year. Number of Haidilao restaurants increased by a net of three compared to the same period last year. Company served around 8.1 million customer visits in this quarter, an increase of 5.2% year-over-year, continuously to support the restaurant business. Beyond the dining business, the company continued to expand the revenue sources. Delivery service reached CNY 7.562 million, up by 105% year-over-year. During the period, each region continued to strengthen delivery operation investment, deepen collaboration with major delivery platforms in each country, secure more promotional resources, and online traffic favorabilities. They enriched their delivery product offerings to enhance product appeal in the delivery scenario. Other business reached CNY 13.39 million, up by 119.7% YOY, mainly contributed by sales of food and seasoning under the Haidilao brand and from the company's own central kitchens, as well as the active development of some new restaurant business under the Pomegranate Plan. Overall, in this quarter, delivery and other business together generated CNY 21 million in revenue, up by 114.3% YOY. The share of total company revenue increased from about 10% in the same period last year to nearly 9.6%, further diversifying company's revenue. In terms of cost and expenses, overall operating efficiency improved compared to the same period last year. In the second quarter, raw material and consumable cost was CNY 74 million, with a gross profit margin of 65.9%, down slightly by 0.1% YOY. Restaurant operating gross margin remains stable, mainly because of the central kitchen fee and the supply chain business that has grown significantly versus the last year. In terms of employee cost, CNY 74.951 million in the employee cost to revenue ratio decreased from 35.3% in the same period of last year, down approximately 1% decrease as past year's effort in employee capacity building, staffing, and store management optimization have gradually been implemented. The labor efficiency improvements have begun to materialize. Rent and related expenses were CNY 5.6 million, accounting for approximately 2.6% of revenue, down about 0.4 percentage, mainly due to revenue growth by reducing rent expenses, as well as adjustments in restaurant network layout reductions. In short term, utility expenses, CNY 7 million accounting for approximately 3.3% of revenue, down 0.3% YOY. Depreciation and amortization, CNY 21 million, accounting for 9.6% of revenue, down about 0.3% YOY. In terms of travel, communications, and other operating related expenses, about CNY 25.783 million, accounting for about 11.8%, remaining broadly stable YOY. Overall, the declines in the employee cost ratio and expenses ratio for rent, utilities, depreciation, amortization were important factors in the operating margin improvement this quarter. Raw material and other expenses ratios still have room for further optimization. In Q2, the company achieved the operating profit of $8.1 million, up by 118.9% from $3.7 million in the same period last year. Operating margin increased from 1.9% in the same period last year to 3.7%, up 1.8% YOY. As revenue grew, the employee cost ratio and several fixed operating expense ratio declined, driven the earlier investment in employees, customers, and the store management to gradually translate into operating efficiency improvements. Although operating profit improved significantly, non-operating items in this quarter were mainly affected by exchange rate fluctuations. The same period last year, there was a net foreign exchange gain of CNY 16.33 million. For this quarter, there was a loss of CNY 4.34 million, a negative swing of more than CNY 20 million YOY. A company reported a net loss of after-tax at CNY 1.93 million for this quarter, compared to a net profit of CNY 16.39 million in the same period last year. Although final net profit was affected by non-operating factors, the company's core operating profitability improved significantly. In terms of operating cash flow, companies are, for this quarter, with a net inflow of CNY 28 million, an increase of 6.2% compared with the net inflow of CNY 26 million in the same period as of 30th of June this year. Company's cash reserve was approximately CNY 266 million, and overall liquidity remains ample to be used for continued store expansion. In terms of key restaurant operating metrics, the company served approximately 8.1 million customers visits this quarter, up by 5.2%, and this reflects that Haidilao's turnover ratio as well as same day period is going up. Further improvement in the store customer traffic and overall spending per store for the quarter was at $24.3. Daily revenue was at CNY 17.4 thousand, down slightly by 1.1. This overall restaurant operations, the customer traffic, the table turnover have improved this quarter, though single store operating quality in certain regions have room for further optimization. By region, market performance diverged this quarter. Earlier, the table turnover in Southeast Asia and East Asia continued to improve. The turnover rate in North America and other regions faced pressure. For Southeast Asia, the restaurant revenue for this quarter was CNY 98.66, up about 3.9%. This is mainly driven by high customer traffic. In terms of average spending per customers, it was $18.6, flat year-over-year. Overall, Southeast Asian stores maintain a steady and upward operating trend. In East Asia, Haidilao restaurant revenue was CNY 33.7 million, up about 9.9% year-on-year. Average table turnover increased from 4.8 turns per day, 4.9 turns per day, continuing to maintain at a high level. This is mainly because the customer decreased the spending from $29.4 in the same period, down by $2 to $27.4. On a constant currency basis, the average spending per customer in both countries actually increased year-over-year, excluding exchange rate disturbances. East Asia continues to maintain a strong operating trend with good customer traffic and table turnover performance. In North America, Haidilao restaurant revenue was approximately $14 million, up about 6.6% year-over-year, with store count increasing from 20 to 22. Average table turnover four turns, and in terms of the average spending per customer increased from $39.1 the same period to $41, but the higher average check has not fully offset the impact of the lower turnover. North America still need to focus on improving customer traffic and operating efficiency. Other regions, the restaurant revenue was CNY 25.1 and down by 1.8%. Average table turnover is 3.7 turns per day, down by 0.2 turn per day. This is mainly due to geopolitical volatility in the Middle East is still affecting the operation, though the impact is currently assessed to be gradually diminishing. Average spending per customer in other regions increased from $39.7 in the same period to $41, primarily driven by exchange rate effects. Overall regional operating performance in the second quarter showed some divergence. The Southeast Asia improved. East Asia continued to maintain a high level. North America and other regions need to further enhance the customer traffic and per store output. Same store performance, there were 111 same store restaurants. Same store sales was approximately CNY 179 million, down about 0.8%. Among them, same store sales in Southeast Asia and East Asia increased by 2.5% and 0.9% year-over-year. Same store in other regions declined by 2.7% and 8.5%, the same reason as the consistent overtrend overall. Going forward, company will continue to focus on customers, customer operations, and in-store operations, driving further conversion of customer traffic improvement into per store sales and profitability enhancements. We will now welcome questions. Our first question comes from Mai Shang Wei from CICC. Thank you, Mr. Ni and Ms. Qi. Thank you for giving me this opportunity. I have three questions. Number one is that we can see that in China, right now there is an emphasis on empowering through an intelligent middle platform. Does the overseas operation have any new ideas or plans regarding middle platform constructions or organized structure adjustment? The second is about the Pomegranate Plan. How do you balance the mature single store model to share, and do you balance the long-term investment cost of the new brands with the company's short-term performance? Do you currently have any relatively mature mechanisms and methodologies to further improve the profitability? My third question is about further optimization measures there are for cost and expense controls going forward. Thank you, Mr. Mai, for your question. There are a total of three questions, and I will take them one by one. In terms of the middle platform capability building, overseas is similar to China, but the overseas characteristic is that each country has different consumer habits, labor regulations, supply chain tax, and marketing environments. There is no single set of operating methods that can be directly replicated across all markets. Therefore, the principle for overseas middle platform construction is the headquarters should build common capabilities well, whilst the regions and stores should run their local business well. In terms of division of labor, headquarters centrally build common capabilities such as digital systems, bulk supply chain, personal management, financial management, and membership system standards and infrastructure. Regional teams then adapt and implement these capabilities in combination with the local market conditions, whilst specific operational decisions are left to the frontline teams who know the local markets and customers. From an organizational perspective, HQ's role will increasingly become that of a supporting platform, and frontline autonomy and operation will continue to be preserved, but things such as food safety and service quality will not be relaxed in any way. Currently, there are two projects that are running relatively smoothly. One is the Haidilao Malatang. Currently, we have both in Canada and one in Japan. It is simple and fast casual and easy to run, low barrier. In terms of turnover, efficiency, and operating performance, both meet our expectations. We are also looking at the United States, Canada, and other markets. We will continue to verify its reproducibility. Other is the Japanese Izakaya. It is a product offering focused on sashimi, yakitori, and Japanese side dishes. At the moment in Tokyo, the customer acceptance and operation stability are continually improving, and the second store is being prepared in Osaka. Regarding the balance between long-term investment and short-term performance, we verify the certainty with a small cost. Each project starts with one or two stores. The investment per store is not large. The trial and error cost is controllable. It will not have a material impact on the short-term performance. During the process, if operating performance or customer experience does not meet expectations, we will make adjustments without blindly pursuing scale. The real significant spending comes in the scale replication, and we only allocate replication resources to models that have been verified and proven viable. Once proven, the company has already designed the return path and expectation for projects in the replication phase. Your third question about the cost control. Currently, it is not about compressing cost across the board, but to narrow the gap between the stores. There is still imbalance in operating performance among stores, and lifting underperforming stores to the average levels, this is a better way forward. If we continue to compress the store-level investment, this will ultimately harm customer experience, and that is not the efficiency we want, nor is it sustainable. We have identified two sources of improvement. First is operating leverage. As the second half enters the peak season, customer traffic and the table turnover maintain good performance. Revenue growth itself will dilute relatively fixed costs such as labor and rent and depreciation. Second is the daily refinement, staffing, and scheduling efficiency. Procurement and supply chain and inventory shrinkage, we will continue to optimize these areas as routine work, not dependent on peak season. Right now, we still focus on our investment in Pomegranate Plan, and we are not going to be stopping due to short-term profit pressure, but we will control the pace and strictly manage budgets. As you can see, with the new brands gradually contributing to revenue and the middle platform capability building complete, its major investment phase, this gap will gradually narrow. Thank you, Mr. Ni, for your comprehensive response. Our next question comes from Zeng Jin from Huatai Securities. Please. Thank you, Mr. Ni and Ms. Xu. This is Zeng Jin from Huatai. I would like to congratulate the company on your very stable performance. My first question is that with more Chinese hotpot and catering brands going overseas, how do you view the competition? Especially that you are quite competitive in the China market, how do you view the overseas competition? Especially for the Pomegranate Plan in this phase, where the brands are not yet established, how do you view the competitors' entry, for instance, in terms of your brand spots, and what are the localized approach that you would adopt? My second question is that we can see table turnover performance has been good. Average is slightly rising. What specific measures are used to improve the stores that need improvement? In addition, what are the planned measures that you have in mind? Thank you. Great. Thank you, Ms. Zeng, for your questions. I will take the first few questions, and Ms. Xu will answer the third question. Number one, in terms of overseas market, apart from Chinese cuisine and hotpot, we also look at the entire dining market. Currently, overseas consumers' acceptance of Asian cuisine and Chinese food continue to rise. There is a lot of room for development. Our main brand is in the hotpot segment in Chinese cuisine. We are still cultivating the market and raising consumer awareness. Far from a zero-sum competition at the moment. Therefore, more Chinese brands going overseas is a positive sign. It validates the real demand existing and will also accelerate the process of overseas customers getting to know and accept Chinese cuisine, expanding the overall category pie. But of course, we maintain a healthy respect for competition. We will focus on doing our own things well, continue to enhance brand appeal through product, through service, and customer experience, especially by diversifying our customer base and continually improving the proportion of local customers. For Pomegranate projects, they are relatively diverse, including incubating and operating restaurants serving local cuisine. It is not about the brand, but it is about the model and the capability first. For these projects, being the first to enter is not the most critical factor. What matters the most is to really prove the single store model and make it replicable. Second, in terms of the overseas brand building, we do not really need to increase the marketing spend to buy the buzz. We center on product service store experience to let buzz grow organically. Marketing expenses have always been kept at a reasonable level, and what we pursue is discussion conversion, not just impressions. There are three layers. The first layer is to place marketing creativity and execution locally. Teams in each region have considerable flexibility to collaborate with the local IPs, artists, and games to plan around the local festivals and major events, and to interact with the customers on the local online platforms, so that the activities are rooted in local culture and feel familiar to local customers. Second is to make the products themselves the carriers of communication. We launched a coriander-themed product series in some of the regions. Coriander as an ingredient is strongly loved or hated by people, and we built a complete product portfolio around this theme, extending from soup base to dishes and snacks. Generated excellent organic discussion and in-store conversion. We plan this every season, and with the same logic, the theme selection comes from the real interest of local customers while supply chain and R&D are centrally supported by the company. Number three is to capture and retain the buzz. If it only comes once, then the value is limited. We continue to connect the market activities, member operations, and online attention is directed to offline stores. After arrival, through membership benefits and refined operations, it is converted into repeat purchase and referrals. The buzz is the entry point. Membership and repurchase are the lasting accumulation. Finally, we must return to the fundamentals. No matter how front-end marketing changes, the metric we value is all about customer satisfaction. Customer willing to come again and recommend us to other people. This is where the brand influence truly takes root. Marketing can amplify the process, but cannot replace it. The third question about turnover performance and what are the specific measures that we have. I will have Ms. Xu to answer this question. Thank you, Ms. Zeng, for your question. I will take your third question. For Q2, our overall increased by 0.1 turn year-over-year. The trend is healthy, but there is indeed divergence among regions. East Asia and Southeast Asia perform better, while North America and other regions still have room for improvement. Take North America as an example. The issue for some stores is that customer base structure is relatively concentrated, and the coverage of mainstream local customers insufficient. For instance, if there are changes in the local immigration or visa policies, this can cause a fluctuation in traffic. In the short term, we will drive store traffic by adjusting menu combination, off-peak operations. But at the end of the day, it is really about diversifying the customer structure, solidly develop surrounding customer groups and member operations and localize the marketing, reducing reliance on any single customer segment. This is our long-term direction across all overseas markets. In other regions, there are external factors such as geopolitics, which are beyond our control. What we can do is to adjust operating strategies and control expenses in a timely manner based on local conditions. At the moment, we can see that the negative impacts are gradually diminishing. In terms of mechanisms, the HQ's role is to help stores accurately identify problems and using operating data to attribute underperforming stores by table turnover on a store-by-store basis, whether it is a customer base issue, a trade area issue, or operational issue, and we will be looking at solutions. For instance, whether we will be relocating, adjustment, and rather than continuing to invest just to maintain the store count. Thank you. That is very clear, and I would also like to thank both the CEO and CFO for their answers. Thank you. Next question, please. It comes from Wei Jiabao in CITIC. Ms. Li and Ms. Xu, this is Wei Jiabao from CITIC Securities. I have three questions. Number one is, what is the outlook for the average unit price per customer trend in Q3 and Q4, and why? What are the specific measures that you will be taking if there are price increase or decreases? Second, which region will be the focus for store openings in the coming quarters? Will you accelerate openings in the regions with a few current stores or enter into entirely new countries? Next question is on the investment and payback period and in each region compared with the past, are they improving, roughly flat, or increasing? What are the reasons for these changes behind those, if any? Thank you, Mr. Wei, for your question. Your first question with respect to the unit price for Q3 and Q4. Right now, we do not really have any plans for a uniform price adjustment. We will not simply pass all cost onto customers. Each market will adjust autonomously based on the local customer acceptance, the competitive environment, and product structure. We pay more attention to the value perceived by customers rather than simply pursuing higher prices. For instance, we add new products across different price ranges, adjust the set meals and combo products, and give customers more choices. So that is our unit price. With respect to store openings for the second half, we expect double-digit new stores to open in North America, East Asia, and Southeast Asia. In addition, there are still about a dozen stores with substantial progress, among which stores in North America and the U.K. are already in construction phase and will open successively over the next 2 years. Layout and business expansion in existing countries continue to be handled by each country in a bottom-up manner, and the project advancement pace in each country is basically consistent with its operating rhythm. For new entrants, HQ will more cautiously assess market conditions, consumptions, and specific site locations. There is currently no definitive entry plan for new countries. We are under discussion, but they are not yet definitive. On your third question, for new stores, currently, we are looking at a standard payback period of 3-4 years, roughly. Southeast Asia, relatively faster, and Europe and America, relatively slower versus the past. Each region has become more careful and prudent in site selections, and the overall store payback periods are more controllable, and quality has also improved. Single store investment fluctuates due to factors such as location, store size, and decoration style. In the meantime, decoration and labor cost in some markets have indeed risen over the past two years. We continue to control investments by optimizing store formats, the decoration design, local procurement, and construction management, and overall per store expenditure remains stable. Thank you. Thank you, Ms. Chu, for your answer. Thank you. Our next question comes from Fung Hong Securities, Ms. Janine Lee. Thank you for giving me this opportunity to ask a question. I have two questions here. Number one, which is about the localization of supply chain. For instance, Singapore and Malaysia in these areas in Southeast Asia, do you have central kitchens, and do you have plans for localization of central kitchens and supply chains in these areas? My second question is about the impact of exchange rate fluctuation on your net profit and hedging, because we can see that there is an impact to a certain degree on the net profit. What are the control measures that you have taken? Perhaps you could share with us on those points. Thank you, Ms. Lee, for your question. The first question on supply chain and central kitchens in Singapore and Malaysia. After many years of operation, local procurement and supply chain systems have become mature. For products that can be stably procured locally and meet quality requirements, we will localize as much as possible. For some core seasonings or products for the local supply is not yet stable enough, we will continue to source it from central kitchens or established suppliers. Central kitchens do not necessarily expand linearly with the store count. We will consider store density, delivery radius, and capacity utilization. Existing central kitchens have a surplus capacity. We will also try to do some external sales to improve capacity utilization efficiency. With respect to the exchange fluctuation for Q2, that was indeed quite pronounced, and this is mainly due to base effects. Same period last year, we recorded a larger foreign exchange gain. This year is a loss. Positive and negative combined amplified the year-over-year fluctuation. It should be emphasized that this is a non-operating, non-cash impact from a currency translation, does not reflect the changes in the underlying business excluding foreign exchange gain losses. Operating profit and operating profit margin should both improve significantly year-over-year. Therefore, we are self-focused on the operating profit measures. In exchange rate management, our approach has two layers. The first layer is natural hedging. That is, most of our revenue and costs occur in the same market, local collections, local procurement, local labor, and rent repayment. The higher the degree of the business localization, the smaller cross-border exposure that truly needs to be managed. The second layer is for exposures that do exist, such as centralized funds and cross-border settlements. Company will continue to monitor them, and based on the size of exposure, hedging costs, and local compliance requirements, evaluate appropriate fund and exchange rate management methods. However, we will not engage in speculative Forex operation just for the sake of reported numbers. Overall speaking, we are quite cautious. Thank you. Thank you, Ms. Chu. That is very clear. Thank you. Zheshang Securities, Mr. Chung-Ye Cheng, please. Ms. Chung-Ye Cheng, please. Hi, everyone. This is Chung-Ye Cheng from Zheshang Securities. I have two questions. Number one is about stores. If we divide them into mature stores, relatively new stores, and used stores, are there significant differences in the table turnover and store model among them if we compare? Which ones would perform better or vice versa? My second question is about incentives for overseas HQ management teams. We are going overseas early, and we have a large scale, relatively sound talent pipeline with more and more Chinese cuisine brands going overseas. Is it likely that there are people who will be poaching your staff and your talent? How do you ensure the team stability? Thank you for your question. On the first point, the store age itself is not the key factor determining store performance. The difference among mature stores come from the trade areas and the operational capabilities rather than how many years they have been open. The real impact of a store age is mainly in the first 6 months after opening. New stores need to go through a ramp-up period of team integration, developing surrounding customers and groups, and stabilizing operating processes. This is the normal pattern. Taking 2024 as a dividing line, among 107 stores opened from 2018 to 2023, about 50 achieved a positive cash flow in the first month of opening. Among the 27 stores opened from 2024 to June this year, the proportion rose to about 78%. In other words, the ramp-up speed of the new generation stores is significantly faster than before. The underlying reason is that in recent years, we have tightened requirements in site selection standards, investment calculations, store format design, and store manager reserves. Stores are opened more precisely, and preparation before opening is also more thorough. Your second question, with respect to the evaluation, there are 3 levels. The core of a store manager evaluation is about, on one hand, employees, on the other hand, customers, with a focus on customer satisfaction, employee development, and long-term store operating quality. Business results are included in incentives, but they are the only metric, because focusing solely on short-term profit can easily sacrifice the employee and customer experience. Regional teams are more results-oriented, looking at the operating performance, growth quality, and talent development. HQ functional teams are evaluated on whether they can truly help frontline improve efficiency rather than merely completing their own tasks and targets. In terms of talent stability, intensified competition is inevitable. Retaining people is not only about compensation, but also growth space and operating space. Haidilao went overseas early. Its greatest advantage is that it has already cultivated a group of local store managers and regional managers from the front line. They have a deep understanding of the local market and company culture. As new stores expand, new regions are entered, the new Pomegranate Plan businesses are explored. Outstanding managers will always have the next bigger stage. They can also share in the fruits of the business growth through incentive mechanisms. This is our most fundamental way to maintain team stability. Thank you for your question. I would also like to thank the management for your very clear answers, and I also wish the company a bright future. Thank you. Thank you very much, everyone. In the interest of time, this concludes today's conference earnings call. I would like to thank all the investors and analysts for joining us in today's call. Thank you, and we will see you next time.