Earnings Call: H2 2019

Mar 18, 2020

Annual report

The 2019. Who join us for this meeting, they are the chair of the board, Mr. Yulian. President and CEO, Mr. Zhu Xiaochuan. Board member Mr. Wang Wen Jing. Board member Mr. Jiangxi The new Executive VP and the Head of the Finance, Ms. Han Kuwipa, I'm the board secretary. My name is And I also believe the past 2 months is a piece of the unforgettable memory to all of us As Wenky, a urban service solution provider, we are always working on the front line working with the government to fight against epidemics. To assume the work and the life as quickly as possible. So today, right before we deliver you the annual results presentation of 2019, I would like to help you to work through how the 130,000 winky start to serve our client during the academic season. Currently, Venky has already served 202,006 6063 residential communities, 130,000 employees, which covers 6 139 retail and office properties, we have 962 construction sites and we have 60 672 sales offices. So during the epidemic season, how can we guarantee the safe and house of our staff and the client? And our partners, it's a big responsibility to Venky. To that deal with the all of the sudden epidemics, we have already organized our working committee and every day we organize the emerging meetings. At the same time, our team members and our head of each company is working 20 fourseven on duty because we have many positions within our team and we need a lot of emergency epidemic materials So that's why we started the work in order to get all the academic materials to fight against a battle. And to provide sufficient materials to our cities and to our staff and partners, we always give priorities to the house of our staff and client and also donated RMB100 1,000,000 to Wuhan City to fight against the epidemic. And the during the updac duration and 1 key property management has become a very important guidelines to support our residential communities. And in order to do our work very well, we published 52 of the principles and the notes in order to including the facial masks the short messages in order to make sure the protection work's been done very well. And every day, we have 53,000 people on duty every day and 100% of the registration of car traffic and human body temperature scan and entrance. And we also consume over 100,000 masks per day and over 6000 liter of the disinfection air costs. And, expenditures expected to increase is by RMB200 1,000,000. That's only for wanky property management. In order to take care of the home quarantine, and we also started to provide the banking property support and the homeowners can also use our app to buy vegetables and other daily necessities online. At the same time, we're also working with the government for the residential community management to provide the protective measures for the last mile service. And Vanki's property management and its covering has been highly recognized by our homeowners and the local government. Many of the homeowners, they voluntarily bring the materials, disinfect and food to our staff to thanks for our support. And we have 40 residential community owners who voluntarily bring us the food and the materials outside in Shenzhen. Beside the property management and all of our business lines are working together to guarantee the house of our staff. And for 1Q property and we frequently inspect the epidemic contamination measures the projects under construction suspended the property south venue adopt online contract deciding and offer 1 to 1 reception, VX Logistics offered a full access to 59 Logistics Parks in 27 cities across the country to support the local government, whereas CPG also offered 50% of the rental reductions to The retailers in 86 shopping malls throughout the countries in February and we also supported the retailers for their online sales. Our long term rental apartment port department also performed a disinfection and sterilization works offer the periodical rental relief for the certain tenants affected by the epidemic and our elderly care and education also carry out an academic contamination, a containment measures especially in Wuhan, the center of ice epidemic outbreak. And in Wuhan, we served 61 residential projects 127,000 Households related to 23,000 100 South home owners, 31 shopping mall's office projects, 2 hotels, 4 long term rental apartments. We have 5300 staff in Wuhan, We have 2 residential projects with over 3100 Households just next door to the southern China seafood wholesale market. And, in face of the epidemic, when kids 65 property service staff stay on duty in the face of the rats of the epidemic. And some of our staff have already taken their annual relief and left Wuhan, but in order to safeguard the health care of our homeowners, they even ride the bicycle even work in steps back to Wuhan to go back to their duty job. They provide the property service to the local community and residential street household to provide the support and services. And you can see, especially Wei Xu, our GM of the Property Management team and also started to provide the office in those residential communities. At the same time, we also help to provide the service to the mobile support and, our hotels in Wuhan also offered logistics support to the medical team reinforcing Wuhan from other provinces and cities. And we provide the disinfection room in order to provide service to our staff. They can also use teleconferencing to talk to their home in order to safeguard their house. Besides that, We also donated surgical masks, thermal scanning device, and ARPU refiners to the local government and major hospitals. As the dynamic has been well controlled and our work shift has been further shifted to the work re assumption. In order to guarantee the house of our staff, we accelerated the resumption for the work and production and currently we have 81% of the project resumed operation. 74 of the workers report to duty and we expect that 97% of the work reception rate would be sent by the end of March. At the same time, our Ranky surveys and Cushman week field GV implemented the standardization of the epidemic containment measures ensuring the safety of the more than 10,000 corporations. We also provided more than 10,000 units of the quarantine room to support work and production assumptions. Of enterprises in certain cities. That's a brief report on our work in fighting against the epidemic. And now it's time for me to walk you through the annual result highlights. And we divided annual result highlights into 9 parts. First of all, Our contract sell amount accounted for RMB630.84 billion, up by 3.9% Revenue is RMB367.89 billion, up by 23.6%. And net profit attributable is rmb38.87 billion, up by 15.1%. Contract amount of the aerial sold are not yet booked is RMB609.1 billion, up by 40.8% and our positive operating cash for 11 years consecutively, and our defendant's distribution exceed 10,000,000,000 for 2 consecutive years. In terms of the property service, we achieved a revenue of RMB12.7 1,000,000,000, up by 29.7% on a yearly basis. In terms of the logistics, our total Lisable GFA of 10,860,000 Crown Meters and we reached the number 2 in terms of the high standard warehousing of the scale and the scale of the cold storage ranked number 1 in China. Now I would like to report to you the industry overview. In 2019, and we still consume that the house is for living not for speculation strategy. According to the National Bureau of the Statistics of the China, we have already promoted the study development, and you can say that in those key areas, and the scale of the commodity housing is up in Tier 1 And Tier 2 Cities, but not in Tier 3 and Tier 4 Cities. According to the National Bureau of Statistics, China's sales area of the commodity housing in China in 2019 is 1,720,000,000,000 square meters representing 0.1% Yoy decrease with the sales amount of the JPY 15,970,000,000,000, up by 6.5% YY And you can see that the quarterly growth rate of the sales tower of the commodity housing in China was a negative 0.9 negative 2 point 3% 2.9% and 0.1% respectively. And you can see at the same time, The area of the commodity housing approved for presale increased by 4.2% YY and areas of the commodity housing sold increased by 8.8 percent Y oy and the digestion circle of the new housing available for sale in the above mentioned cities was about 9.7 months. So total investment in property development in China was 13,200,000,000,000,000 increased by 9.9% white online and, which was 0.4% points higher than in 2018. And then the area of new housing construction throughout the country was 2,200,000,000 square meter and that increased by 8.5% Y on Y. And also, we can see that which was 8.7 percentage points lower than that of 2018. And the supply land was cut off in the second half of last year a lot of more land aborted auction happened last year. And the land market has significantly caught on. The number of land transaction close at reserve price was increased significantly. Average residential and line premium rate declined 8.6 percent in the first quarter and GSE average transaction price of residential side increased by 15.3% Y on Y. And during the reporting period, the financial channels for real estate market were under continuous strict per supervision, growth rate of property loans dropped. At the end of 2019, the balance probably loans with major financial institution nationwide was up by 14.8% YY Now I will give you some instructions of our financial results. First of all, we will stick to a positive cash flow for realized positive cash flow for consecutive 11 years. In terms of revenue and net profit in 2019, revenue grew 23.6%. And then net profit margin was 27.3%. And if we break down by revenue in 2019, the revenue come from property development occupied 95.9 percent, net profit attributable to equity shareholders is up by 15.1%. Well, in terms of earnings per share, we earned fully diluted ROE In 2019, earnings per share is RMB3.47, up by 13% compared with last year. Fully diluted ROE is 20.7% compared is 1 percentage lower compared with 2018. Cash dividend distribution is 1,000,000,000 last year. Accumulated dividend distribution amounted to RMB169.17 1,000,000,000 and that was 2.67 times of equity financing over the years. Net gearing ratio was 23.9% compared continue to remain at low level in the industry. And cash and cash equivalents is about 166 point 1,000,000,000 will be much lower than that of the interest bearing liabilities due to within 1 year. And also, we continue to maintain a leading credit rating in the industry, financing costs maintained at a low level in the industry. We see the international ratings since Moody S And P Global Fitch SSNC, CCX, they've maintained a good long term rating for us, for example, CCX give us AAA ranking and give us stable outlook. In terms of financing, last year, the financing costs at low levels, for example, we completed issuance of 4th 1,000,000,000 of bonds designated for rental housing. Under issue, Kuba raises 3.65% and 3.55% risk we also issued SP and MTN, and we also issued U. S. Dollar bonds minimum coupon rate of the issuance of the U. S. MTN is 3.15%. And also, we issued more H shares shares. Now so that the, proportion of H shares to total shares kept percentage increased 11.91 percent to 13.96 percent. And also in terms of our interest rate liabilities, And in terms of bank loans, our financing costs as a LIBOR plus margin is no higher than 5.88% in terms bonds. The financing cost ranges between 2.94 percent to 5.35 percent. Other borrowings, financing cost ranges between three point 62% to 6.616%. And now let me introduce some of our interest bearing liabilities at the end of the reporting parent interest bearing liabilities amounted to RMB257.85 billion, representing 14.9 percent of total assets, so quite safe. And 63.6 percent of liabilities will mature in 1 year, and most of the borrowings are bank loans that accounted for 67.8%. And in terms of the international environment, we've diversified our financing channels, and we can see that Renminbi liabilities accounted for 65%. In terms of types, fixed rate types that was about 30% more than 30%. In terms of a target, bank loans more than 50%. Other borrowings about 20%, more than 20%. In terms of domestic and overseas, domestically liabilities 73% and overseas is about 30%. And so After the financial results introduction, I will introduce more about our business development situation last year. Position ourselves as a city and town developer and service and provider strategy, our amend business, including property development and property services, we will develop along with the customer and along with cities. All you can see in this chart, in the above, these are the 4 regions of our development, property development business. And the bottom part is our non property development that includes property services, logistics, long term rental housing ski resort overseas businesses, others include education, elderly care, on C and etcetera. And now about development businesses, the sales amounted of profit development reached RMB630.8 billion, up by 3.9%. And average selling price remained stable. If we break that down, by regions, we can see that the top regions are Shanghai, north end region and the north region and south region. Now we have occupied 4% of the market share in the nationwide commodity housing markets. We've ranked among the top 3 in 40 cities and in Shenzhen, Hangzhou Shanghai, Dongguan, Nanbo, Her Feiju, Changshun, Wenzhou, Gallon ranked number 1. And in we ranked 2nd, in 12 cities, including Quaming Tianjin, Tianjin, Nanon, Nanon, Nanin, and Wuxi. And then we ranked 3rd, in 7 cities, including Beijing, Tian. And now let's introduce about the booking revenue in 2019. About unbooked revenue of Wanky up by 20%. And up booked average price has been increased a little bit as well, and sold not So so far, not yet booked area has been increasing, remain stable. And we can see that the sold abandoned output area resources being up compared with the 2018. In terms of our products, we also still focus on the demand from people, on average people, residential come more than 80% commercial, about 20% to 30%. In the amount of residential, a lot of the more products focused on size is under 144 square meters. Now I will introduce about the construction situation. In 2019, we completed new construction floor area, and we completed 180 or 118 percent of the plant at the beginning of the year. And the construction finished remained stable. New construction floor area was 4 2.41000000 Square Meters and we are accounting that accounting for 118% of the plant at the beginning of the year. And then at the end of 2019, area under construction amounted to about 102,560,000 square meter, up by 12 point 43,000,000 square meter from compared with beginning the end of 2018. Completed floor area amounted to 13.8 1,000,000 square meter accounting for 98 beginning compared with beginning of the year. In terms of new investment, we will stick to in 2019, we acquired 147 new projects and the total plan JFA was 30 17,000,000 square meter. Plan JFA attributed works through the company is 24.78000000 square meter. And then Total line premium attributable is about JPY 115,96,000,000,000, with an average price of 6252 our renminbi post climate in terms of the GFA 71.5% of the new projects was located in the Tier 1, Tier 2 city. In terms of equity investment and 79.9 percent of the projects situated in First And Second Cities, Well, you can see on the left chart, you can see the breakdown of regions and then central and in the sequence, they are Central And Western Region And the Northern Region, Shanghai Region, Southern Region. In terms of the cities, you can see we have the biggest issue in Tier 2 Cities, In terms of line premium attributable, as slightly increased by last year, it's because that in we got more light in Tier 1 and Tier 2 sitting last year in 2019 in terms of Lent acquired, that was a stable compared with last year. By the end of the end of reporting period, purchased under construction has a GFA of 102,560,000 and GFF projects under planning is about 53,900,000 square and we participated a lot of other renewal projects. And the total GFF that is an attributable is about four point 93,000,000 square meter. And you can see that GFA, the Shanghai region of GSF. We have a land bank accounted for about 18% and the southern region, sorry, and Shanghai accounted for about 22% move region accounted for about 28%. Central Western region accounted for 32%. Last year, we also stick to the principle of our building quality products. In terms of quality products in Shanghai, we have In the home purchase experience center, we have integrated services experience includes like bar, parenting interaction, floral art, pet tree and bakery making, making it a city salon that can enhance home purchase experience as well as servicing the surrounding community. And also, we've conducted a project called pleasant community. For example, we have programs like and home, illuminating the way back home and renew of OHOM for that community of more than 3 years of age. And now I will introduce more about banking service last year, what we did in banking service in last year. Last year, Vanki services have made some experience in terms of office building. We've built a joint venture with Cushman and Wakefield we established a leading brand in a greater area for commercial property management. We've established a model of urban space integration services, and we have expanded that to Zhuhai Hunching New Area, Shuang A New Area, Guangzhou, Bioing, and Zhi text on. And the revenue reached 1,000,000,000, up by 29.7 percent, what, online. And then actively, the full income from new added projects was about RMB5.41 billion, up by RMB33 percent on Y. And among that, residential property services provided a full income of 3.34 1,000,000,000, and non residential was 1,000,000,000. And then at the end of the reporting period, the accumulated contract area management banking service was about to 1,000,000 square meter, up by 26%. And also proportion of projects with high occupancy and high income, and Vanket's management increased to 62%, 62.7%. And also, we've ranked as top 1 in China's top 100 comprehensive properties of this enterprise for 10 consecutive year, ranked the 1st place in the most 1st, property service brand of China's top 500 property developer for 6 consecutive years. We also was named a leading feature property service enterprise in Net enterprise headquarter for 3 10 k to 3 years. And now I will introduce more about logistics and warehouses. So group uses VX Logistics properties as is logistics and warehousing service platform after nearly 5 years of development, we served 850 customers scales with the high standard warehousing and coach and is ranking top 2 and top 1 in China. We serve clients as e commerce, e press delivery, manufacturing, catering, and retailing. During the outbreak of that pandemic, the significance of logistics as infrastructure has been further prominence and we wing the recognition from all works of the society and we say it's going to have a promising future. And especially last year, VX logistics property acquired 21 new projects with the aggregate JF A of leasable properties of 1.91000000 Square Meters. At the end of the reporting period, we access already covered 44 Cities and acquired 138 projects with GFA of Invisible projects of more than 10,860,000 square meters. And now we have a 53 projects that is stable operation. And especially last year, the VX logistics also started a new support program And jointly speaking, the size of the issue amounts is RMB573 1,000,000 and that has been called as VX logistics, properties, e fund, and logistics, warehousing, phase 1 has backed securities and especially at 2019 PRC Logistics Enterprises Annual Meeting, VX Logistics, when the social responsibility contribution award And we at CodeE Logistics business also awarded as the gold pigment award. And especially, I'd like to talk about our rental housing. We have additional of 56,000 units commenced operation 110,000 units in operation in aggregate and 81% of those situated in Tier 1 Cities like Beijing Shanghai, Guangzhou Shenzhen. The average occupancy rate of the projects in operation for 6 months or above was approximately 90%. And in March, last year, Under the city, goldstone, Shenzhen, Longan Venke plaza asset backed security sizes, RMB, 2,160,000,000 establishing the impression 1 commercial been found in November last year and JPY 3,000,000,000 providing support for subsequent development. And let's talk about the ski resort business And we now we've looked, and you can see our exceeding ski resorts ranking top in terms of the customers that has been named as a ski rerouting China by the World Ski award for the 3rd consecutive years. And we, as a company, the Yancey went out of peak village, the data center and the public ski resort for the 2022 Beijing Winter Olympics, We also provided elderly care and other segments. Our brand influence gradually extended and we Key Meisha Academy was up to in Shenzhen Private International School by 2018 Horan Toys. Last year, we also started to utilize the online intelligence construction site platform, for example, like the Your home purchase my home online best to share sales expert and in house selection, we also started our IT construction. We started to provide the intelligent product for the invoicing management. And we now also have the intelligent parking system which has already been approved by the National Intelligence Property Admission. We are also working with Microsoft in co establishing the Wengifuge Future City and our 1E technology has already obtained the certificate of National High-tech Enterprises. For Venky, we are a company of social responsibility In 2019, our total tax payment is KRW103 1,000,000,000 equivalent to daily tax. Tax payment of BRL286 1,000,000 on databases. Vicky service launched a rent plan of 20,000 individuals in advance, helping to stabilize employment after the outbreak. And then in Shanghai, Changshan, they are already become the city is culture icons after the urban renewal project we also started to promote green building and proliferation technology application and now the coverage with The green building was 100% and the green 46,600,000 square meters. The total arrival of the green building amounted for 193,000,000 square meters. There's 86% of the group's mainstream testing construction, At the same time, we also actively fulfill the social responsibility and we also we the gold price of the Homemade for its poverty alvation assets. And at the same time, you can see that our botanical core pavilion at the Beige International Hardicultured Expessions in a way we show our way and our greater and respect for life. Ladies and gentlemen, last but not least, I would like to talk about our development plan for the new year. And currently, the action will be highly complicated and full of uncertainties in the mid and the long run, the industry has already entered into a narrow of competition among business properties, the market has already shifted from a seller market into a buyer market, resulting more in intensified competition for customer and more companies are under severe challenges in short run the outbreak of the monorvo virus is also bringing further uncertainties to the company. So that's why the will be challenged by a wellness attitude, ability and actions, but we always believe this market is full of business providing us a lot of opportunities. For example, the safety renewal projects and the property along the railway base. And we also have a great event, especially during the outbreak, our banking service shipping highly recognized, and our rental housing business and the coach and storage are going to have a promising future. So we believe As long as we follow the growing ZT and the customer focusing on customer need and create quality products and service enterprise system healthy developments. Let's also talk about that. So in 2020, at here To the customer oriented cash flow based approach to strive with partners continue to create additional true value and achieve we're going to work on product and service and we're going to striving to minimize the impact of out, we take care of the fundamentals. First of all, we need to weather the pandemic, the strength and the immunity of enterprises, propel adequately, accelerate the program. The work of the employees' safety mind striving for minimalize their impact of outbreak on our operation, helping you to consolidate and improve Our fundamentals and other quality product, service and projects meeting the budget of the needs of the customer. Thirdly, we also need to lean operation to improve efficiency and effectiveness. Firstly, we need to manage our expenses with reference to the revenue and achieve effective management of investments in maintaining our leading credit rating industry, which the strategy of Citi and the town development solution provide working with our strategic partners to go for the digital strategy to support our business and development at the end of the presentation. Thank you very much. And now communication stage. And our meeting secretary, please give the notice to our investors right before the QA starts. Holding buses, please press button 1 to hold on and then star button and number one button to raise your question. And please help to close the video conferencing to avoid the signal interference. All the investors please speak to the microphone and slow And only two questions for each investor, and please help to finish your question at 1 try. Thank you. And then now I would like to Thank you. Thanks for Madam Zhu. Thanks for your presentation. I have a question how the epidemic is going to impact the property market and especially and the impact over the operation for banking, what kind of contouring measures should you take? In order to take care of the outbreak of Adamic. So you asked the question, the impact of academic on the whole industry, business operation, banking, and you also asked about The countermeasures from a wanky side, right? Okay. That's a question. You. Thanks for the question. I think I'm going to do a long ways, Mr. Tull, answer your question. I'm going to answer the first part of the question and then our already the impact of industry business operation of the company? Yes, for sure, the app value of truly, has some impact over our environment and economic development, but the trend is still didn't impact the investment department of the whole industry as a hei. And then we have already started from the Primary stage. And especially for the past you see that the platinum stage is already coming. For the past few years, the people were whether the industry is in the platinum industry, but I say here it is because of the 4 reasons. The first reason for the existing property, and we have already shifted the balance to the correlation from simple to comp to single to multiple and from the And especially with these cities are going to be divided as so differently in the near future, the epidemic outbreak means that more resources will be provided to those cities who has a very good urban management systems. From simple to complex means that our consumers, they are young, they have diversified value, and they also have different preference So that's why we have to provide diversified service and product to the young customers to cater their habitat. And especially for the young people, they are also the mainstream of our staff for banking currently half of our staff, both after 1990. And they are going to inject the diversified influence and the changes to their corporate culture So we're going to say more complexity in the near future. And the change of the need of the customer being more diversified. And now we have more young people in our team, and then these are all going to lead to more complexity And I also talk about one dimension to Fuq dimension. Why should I mention that? In the past, we only work on the project and the product design, but now you see that product design stage is already ended. And now we have to fully release our full competency. For example, the academic outbreak already tells logistics management and the public service are so In the past, we only focused on the micro picture, but now we have to focus on more details. The details leads to the very important decision. And especially you say that after having those new business available at your banking service, And in the past, like logistics, like our office, rental service is the port department. And now our calculating unit is already based upon a few RMB rather than 100 of the RMB you can say that we have to fix on those details in order to keep my value from the stabilization to correlation means that in the property stage, every company can enjoy the benefits. But now in the existing property stage, the competition is more intensified and only the top performance can compete with each other. So you can say that there are more intensified competitions between the players in this market. From simple to complexity means that we are also going to have more changes in the management strategy and measures. And at the same time, our management competency should also be fully adopted in the new range of intensified competition, we have to improve our management skills, especially to change our mindset to especially on the intensified competition backdrop. So you can say the 4 trends and the 4 changes I mentioned just now simply from these four points and the company as a whole means we have to improve our awareness of the competition in order to win in the near future. So for Venky, for the past few years, we did the following things. And through this moment of the day, our business development and strategy need to work with IT and the digitalization. Otherwise, it won't be able to for us to manage such a huge size of the business. So we need to combine this situation after pandemic. We need to consider changes on the customer side at the same time. We need to follow the tide of the digitalization to see whether how that can help our business development. So we will make more efforts in those two aspects. And second, In terms new vitality. And so you can see in the past 1 year all those changes in terms of structure and personnel. So we are doing this for the aim of matching the structure with our strategy. So this is to answer, our actions and respond to the outside environment. And at the same time, we need to also respond to some of the concerns that may be raised by investors. People say that when we are transitioning, making a transition and property, property service business should be introduced a bit more. Actually, we don't mention the word transition or transform too much. We don't think we are making transformation because we are always stick to the one theme in this real estate market. We just expand our course we expand our path, we didn't run it out of our path. We're still in the property markets. Our strategy is clear and consistent. We will develop along with customer develop along with cities. So these are the main themes in our development in this property market. We're expanding our niche market, expanding our segments. Why we mentioned this is because like we've changed from a golden stage to a silver stage. There are 4 changes in this industry happened. So when you comment in the industry, there are some change of course in scale in speed, but that's not enough. Those indicators not meaningful enough. And so can you tell us the number then? Can you tell us how you're doing with your best in can you you may ask like that, but I can say that business in for our business from a traditional point of view is not big in size additionally. For property services revenue is about JPY 12,700,000,000 and that's only occupied very small percentage in all the revenue. So in terms of sales, that's even smaller, the percentage smaller. So maybe all the analysts from your point of view, you may think our property services is big enough. And Sometimes I think for a child who is growing up, we can't just impose too much indicators to hire him or her to grow. For example, for some boy, he might be naughty. He might not perform in the school. He got criticism in the school by the teacher, And but maybe for the next term, he can catch up quickly, so you don't know. When our child is growing up, we need to give them more freedom. So that's more beneficial and helpful for his growth. So this is, for those new business like properties and services, of course, scanning recognition from others and also logistics warehouses that's getting importance in this environment, in this change. So we think when is mature enough by the time when we think it needs to get disclosed, we will do it. So please give us, be a little bit more patient, give those kids a little bit more freedom to grow, give them more opportunity. That's our hope. So, together with your question, I responded a bit more. And then specifically on the changes or inflow on this dynamic, I will give the floor to Mr. Zhu. Thank you for your question. I will make some addition in specific change. In terms of a industry, I think you have a lot of observation in conclusion. Clients can't go out of their home. And the sales officer closed, suspended for operation and construction or construction site are empty. So the work resumption has been impacted. In terms of banking, in terms of our client, we've impacted in terms of our alliance and financial and operating environment has changed as well. Sales, cash collection, construction, ongoing delivery, cash flow, they're all impacted. So I will make some conclusion terms of cells. In February March, these cells that will go down by 1,000,000,000 around that. In terms of construction and delivery, And there's some uncertainty, I think in Q1, they will be it. In so we will see some stress in terms of delivery terms because action site, work resumption, those have been largely impacted. But, right now, eighty percent of the production or construction has been recovered and 72% of our work has gone back to the work post. All those will be impacted on our cash flow. Cash flow inflow will be less this is coming from the impact on the sales side. Like I said, 1,000,000,000 of sales reduction due to the impact. So in response to the pandemic, we'll make more expenditures. And directly, the cost of fighting against the pandemic, that's going to be more total. It's going to be more than JPY 100,000,000, and also some positive changes along with the things evolving. 1st of all, visit from clients with same recovery recovery has gone recovered back to 50% of that in January. Southern part has been better than the northern region, maybe 60% to 70% in the Switzerland region, while in the North region is about 30% compared with the January. In terms of returning to work or work resumption, it's getting well, getting better. Like I said, 80% of the construction has been work resumption started, and in industry, overall, that's also been better than before. Afro Branky are we've doing better than before, now too. By the end of this month, we think the work resumption rate would be 90% as we estimate as a resident reasonable estimate in terms of contract or other method in, so our capability of getting people back to work is being recovered. And also strategy, we are in terms of strategy and organizational design, we've also made changes in business side. So Like we said, clients can't go outside of their home. Net sales office has been stopped, so we launched more online marketing. In 2016, we've made exploration into the Advaton already. Now we fully implemented. And for more, for the major projects about 500, those are being moved on the online sales office. The 22nd in February there is a project in Fuzhou and another project in Kaiju in 29th February. For those 2 new projects, the online sales opening, we think the subscription rate is about 86% and more than 90% respectively. So as we said, every house is different. It's unique and every situation is different. People will not fully trust the online sales people will still need to see it on-site checking the house, of course, every So we think online marketing and online sales is a supplement tool is helpful. It's not all what is not O plus O is, helping online and offline is helping each other. So we whether offline or all online will be the dominant method that would less up to the customer is up to their choice. And also, we've strengthened our step of our management terms of flow. We've been more granular in terms of the cash flow management. Now all B3 and all business units business to a group will designate one responsible person to specifically manage the expenditure and revenue and that's managed by daily, monthly, weekly. So the expenditure is to match the revenue So in the management will be more granular, the payment will be arranged more granually, also things just happen for 2 months and everything's progressing well, we've made a lot of progress and improvements. Now the our requirements, that is that the due to requirement needs to get specific to person, to individual. So we will take this chance to improve our management, to improve our to improve our cash flow management specifically to actually two parts is important, for example, like construction size delivery there are specific measures. When we see stress of delivery, we need to communicate with customers we will need to communicate well with the contractor. We, I know we've lost 40 days of work of construction. We have to get things back to back. And I think to ensure the quality. But good thing is that in China, domestically, the pandemic is getting better than before. The customers to minds, they're still there. But we will need a bit of time to release the demand. Did you see the demand getting released? I know the time difficult this time is difficult, we will finally write it over. If we are pleasant, we will just focus on cultivate our land cultivate our crop to our business, to our job well. We will centered around our customer. We will be cash flow based and make our action and response to the pandemic. So okay, thank you. Now let's introduce welcome to question from next investor. Please press star 1 if you have questions. Because we have limited time to ensure the quality of the conference, please speak to the microphone and speak slowly. And each one will have two questions at most. Thank you for understanding. Now let's welcome, Shenzhen from Huata 30s. Good morning. Now we've observed that in these two years, Vanki has made some internal changes, like you said, some internal structural changes and also some big some program related. I know there are a lot of things that hurt from the media, and maybe can you take the chance to introduce us about a little bit more about the change. And we also noticed in 2019 the sales and our bank has been stable. And how can you to improve the scale and the sales by utilizing this trend of structure change. Thank you for your question. Now I will repeat your question to see whether it has been accurately your question. If, noticed the changes in Venke's internal structure, you see the program of personnel reshuffle. And you also see that you also care about whether the growth of the bank is performance can reflect the changes effect. Yeah. How can you make the change helpful for the futures business growth sales growth? Thank you very much. Thanks for the question. Let me answer the question where you're talking about the structural adjustment, especially the program, Dajandra Hai, I know many people pay attention to that. For the past few years, we did a lot of work on that. Currently, our organizational structure is being much more simplified only 3 lasers, we have a GP, SP and the GMP, only 3 lasers of the employees. And we have than 200 GP, less than 2000 GP. And the rest of the part would be GRP. So we only have a very simplified 3 leisure organizational structure of the employees. So all of our employees has been called as partners of the enterprise and we're working together as partners as a whole. You can see that, Stuart, we need to touch on Daha, this program to help us to do the adjustments and the yin and outflow of our department and personal exchanges would be more active than what used to be. And we also have to flatten the organizational structure And we also have a full BG in 4 different regions. And by so doing, what we are trying to do is to make sure In the time when every company is competing for the overall competency in the past, you are doing the ground based battle or ground based attacking, And now we have to have a multi accordion working together and multi multi task force working together by having a land based force and the airborne force as well as multiple forces working together. And to make sure we have in the major aspect in order to take care of the market needs. So that's why I can see here in the moment of the day, What we did is in order to improve our overall competency and the competitiveness. And especially when we do the organizational structure changes. A key consideration we have is to make sure the organizational structure can work with And that's why the organizational structure, what you can see now, still need some time for further streamline and further improvements but I surely believe the strategy is the most important thing. And the best performer has already been dispatched to the frontline in order to lead our top force to take care of the market need. There are so many changes for the past few years and especially our ROE still at a high level, and that's our the result of our diligence. And that is also the result and the big fruit from our synergy. So I think and if the organizational structure is going to be further streamlined and improved, we're going to also intensify our personnel changes to inject more dynamics into our team And I see in the near future, the result will be shown. But please bear with us for a few period of time to see the final result. Thank you very much. And next, we'd like to welcome the next investor. Now let's welcome Ken from Siki to raise the question. I'm Kim from Citi. I have two questions. The first question is also talk about the sales and the gross profit margin of 2020. Just now you said that the February B and the March is going to lead to RMB51 1,000,000,000 cell spots, but you said they're going to be some rigid demands that are still going to be there in the second half of twenty twenty. So what's your comment on that? In other words, and if we take a look at the business growth for last year in 2019, your contract sales is about up by 4%. And for this year, is this growth going to be negative in terms of the contracted sales due to the organic reason? This is my first question. And how you're going to also comment on the gross profit margin? And the last year, you If you take a look at the gross profit margin on sales, is it going to have some downtrend pressure? And this is my first question. The second question Is there, we used to have some holding type of the assets, some please. So do you have the plan of seldom or the balance sheet and what would be your strategy? Thank you. Thank you very much. Whether I hear your question accurately. The first question, you're wondering about our sales target in 2020, whether going to be negative growth, whether we're going to have some downtrend pressure for the gross profit margin? And your second question, and you wonder whether we have the plan to sell the holding part of the assets or move it out of the balance sheet. Thank you. Thank you. Let me answer the first question regarding the impact of epidemic on our sales target of 2020 and the gross profit margin. And you say in February to March, our last 51,000,000,000, we will try our best to catch up with it in the, especially the demand will be gradually released within this year, but the pace of the release is still needed to be observed in the market. We were intensified effort a lot in order to offset the impact of the epidemic to ourselves as a whole. So you so whether there are going to be any decrease of the sales or negative growth of the sales target, I say it's Where in terms of the impacts over the gross profit margin in 'nineteen, the gross profit margin? Was down by 2% in our industry property market. Gross margin trend is a general trend. In our industry, the trend is already there in the industry. So what should we do? Actually, for Wenky, we have 2 to 3 countermeasures. The first one, at any point of the time, you have to trade your customer very well. You have to build a good product and good services that the customer is happy to pay for it. And that's one point. And then the second countermeasure is that we have to improve our lean management improve our efficacy and effectiveness of management, the gross profit margin made down but we can further improve our management efficacy and efficiency. And in order to offset the negative impact from the, a downtrend of the gross profit margin. But I have to say that as institutional impact us. And the downtrend of the gross profit margin doesn't necessarily mean the downtrend of the ROE. And especially past few years, the downtrend of the gross profit margin is the general trend in our industry. We are also taking active measures take care of that. And that's one of the basic requirements in our daily job. And then the second one, can you ask about the holding type of asset that whether Venke has the plan of selling its commercial properties for some of the long term rental apartment or move them out of the balance sheet. Well, I have to say for Venky and the most treasurable assets of our company is our reputation and our utility and many of the credit institutions gave us a very good performance in terms of payments. We value our reputation and credibility a lot. So for any business we do, it has to irrelevant to the urban development initiated by the customer. And all of our holding type of the assets are being divided by the 2 preconditions. You know, you see nowadays, consumers have more complex demand and the need, especially now we have more customer born up in the 1990s. They are young. And the second point is that there are more comprehensive cities, and many of the so called land resources that are for multiple purposes or multiple functionalities rather than for single, more so called complex properties that can accommodate different functionalities at the same time. It also brings us the multi functional properties to the market, adding type assets in our product pipeline. And I say that the holding type of the assets, and we have to improve our operation rather than to sell it or move it out of the balance sheet. If you can do the holding type of assets very well, then you don't need to sell it. You have to build efficiency and operational accidents is the key for the holding type of assets. Our holding type add that they are at a different phases, the land where some of them are under construction and some of them are Speaking for commencement, some of them are just open for public trial, where some of them has already got into the mature stage, they are at a different basis. So that's why they have different performance to the difference of the development basis. So jointly speak in for Venky, we would like to improve the operational excellency of those holding type of assets and plan of moving those holding type of the assets out of the balance sheet, we still want to improve the operation of the holding type of the assets. And personally, we also believe if time allows and the financing move out of the balance sheet or keep it on the balance sheet won't be detrimental, Thank you, Ken. I'm not sure whether I answer questions. Next, our meeting is actually please help to invite the next investor for question. Next, now let's welcome Oscar from OB Capital. Thank you management team members. I have two questions. The first question is more statistical. In 2019 according to our annual result, your, profit is up by 15%, but the dividend per assures almost not be changed, only around the 30 percent of the has been due to the payout of the defendants. And you can see that key now is a company that has been attached with importance by those long term funds companies. The bank is very important to those organizational investors, but you say that your payout rate is fluctuating all the time and So my question is that, are you going to fix the payout rate in the near future? If Venky is truly believe yourself to be a company in a stable operation with robust operation, then I believe a fixed payout rate is very important to build the confidence of the investors. So everyone can help to be happy and be confident. And my second question a few years ago, the management team talks about diversification and also see some new business advice, SAPG, the launch 6 VX and the banking service are all performing very well, but I still remember last year, the management team also rediscussed another issue that is we have to also, it's time for us to reconsolidate our fundamentals So I would like to ask the management team. Is it means you believe the property staff brings more benefits the company to stabilize its fundamentals and what would be your strategy? Thank you. Thanks for Oscar for your question. Let me repeat your question to see whether I hear your question accurately. The first question is that in 2019, the payout rate is down to some extent So what would be the payout policy in the near future in order to build the confidence for those long term investors And the second question is the diversification and the consolidation of fundamentals And you already want us to state our biden strategy for property sales and our diversified new business lines? Yes. That's a two question. Let me answer your question. Actually, after leases, getting this advantage for the past 28 years, the cash payout, dividend payout ratio is about 30% last 2 to 3 years is about 35% So I think without this pandemic, I think we will keep that around 35%. But since change their various attacking us and that's disrupting our policy and plans. So we need to increase our cash reserve so as to give us more strength to response to the future challenges or uncertainties. So among all the listed companies in China for Vanki, the payout, the dividend payout ratios has been the most stable one. We also hope that the pandemic disease can fade out and operation can go back to the right track, original track, and then things can be more predictable for everyone. So for this time of dividend payout, we've considered a lot of things for this request. So we then fix it around last years. So the dividend per share won't be impacted. So this is what I want to share with to you. And second, about our fundamental in our strategy of a diversification Actually, you can see that as I said, first question, like what I've said, in the properties market, we've entered into a silver market, we have seeing 4 changes. So we need to, compete with us with others in a deeper dimension. So the singular businesses won't cannot win forever. The market has changed from incremental market from exit competition. So in the golden market, development businesses very good as well. Well, in the silver market, if we solely rely on that, it won't work for long. So So today, you can see that for Venky, we will, keep our strategy for balance diversification we made deployment, like 5 years ago, and all those deployment have now become have already generated results that we can present it to you. And, what's the relation with our fundamentals? Actually, for all fundamentals development business, we have 4 regions. They have their own fundamentals guidebook. The fundamental is about the property market world by property service, they have their own fundamental as well. For example, we have the management of a district of community, management of office building, these fundamentals different, we will focus on the demands of the tenants if the So different business will have different picture, different fundamentals. You know the words? In different industry, different sector, we need to take good care of our customer, provide good services for them, good products for them. That's our fundamental. That does not represent. We are going back to what we're doing in the golden age like seek speed blank, singularly. So that's my answer. Am I answered your question? Okay. Thank you. If also that doesn't have any more question, now let's welcome the question from the next investor. Now let's welcome. As a management. I have two questions to for you. One is that you know, based on industry development, we have entered the silver stage, small and medium companies can can find it more difficult to surpass others as a leading company in the industry in this changing environment, this competition environment, in this policy, what are your advantage? Can you play it out fully, for example, is your advantage of a financing cost and increase your land investment. I think you and also my second question is in term And thinking about the future 3 years, what are the target strategic target of this for market shares, sales, etcetera. So that's my question. Okay. Thank you. Question, Mr. Lushal. Let me repeat your question to just to clarify. So first, the question is that you observed that in the industry whether the leading leader as a leader, Venkeith has this advantage, for example, investment or new construction, etcetera, And second, in the future, 3 years, what are the strategic target for this business group, for example, market share sales in such So I will give the floor to Mr. Zhu to answer your question. Thank you for your question. So to answer your first question about the competition landscape and our advantage as a leader in the industry, I think based on observation, we think companies will not focus too much on scale, for example, just like a customer makeup purchase. And the only logic thing is that take good care of our customer and provide good products to manage our cash. So for to the outside world, we think provide good products, good service and good projects that customer will have done well and manage our company will manage our cash flow well. No matter how big your company, so we're doing our own business. As a big, as a group, we might aim in kind of different problems related with different stage of development, for example, for bigger scale learning, it's hard for them to make transformation, transformation, etcetera, whether it could fund a challenge in terms of We are conscious of those challenges. We are keeping our effort strategy to be quickly responding to those challenging And based on our thinking into this efficient, there are 2 types of challenge, meaning. First of all, customers wants to individualized treatment or individualized products and services. So m equals 1 for a company for a successful company, every customer is unique. And the second is in terms of our resources allocation, that means R equals G, whether we are capable to coordinate and integrate all kinds of resources in term, even like global resources, coordinate or partners to take good care of our customers, so provide differentiators, individualized service and products to customers. These are the challenges we're facing, and we are keeping to revising our strategy, and we are learning from the kind of good practices from peers, from leading companies in the industry, we are interacting in exchanging with there's exemplary companies and improving ourselves in different industry. So these are the possible challenge and that a big company might encounter in our way of solving it. In terms of the existing and, like, new business, like Mr. Yu Liang mentioned, they are centered around property market, a real estate and centered around customer's needs and that's centered around the need of a city's development. So for a different segment, different business type, they are there will be a leader, there will be requirement for that. We will focus not just on the sides, but also the influence, well, for the inside people inside the Venke, we have to while request this to build up the capability first and then we will request on the scale. So the scale will respond to your improvement of capability dynamically. So for some business, like, is it big enough? We will put it like such a part like independent army, for example, banking service. And well, in the past, it was listed or affiliated under the core region we will if as long as we put our mind to do something, then we will make it, like, leader in the industry. So within a reasonable time horizon, we can't make it to our target. We will put new personnel leader to lead the team to see how that works out. And if that doesn't work, again, then maybe we will consider we tried both. And then the business still didn't work out well, then we will close it timely to cut the losses. So this is revision of a strategy dynamically, we will have our tolerance for for error. And so because the capital is given by you, by investors, So that's my answer. I'm not sure whether that answers your question. So I might ask something. Actually, yes, we are revising strategy. In terms of revision strategy, that doesn't mean that that won't answer the specific question of the strategic target of each business line is not like, strategy deal with numbers, we have seen that we need to be leaders in different segment, different business line if all business lines can take care of take good care of their customer, then I believe that This business is valuable, creates value for other in terms of how much value you can create, and I believe market will offer fair price. Of course, it's hard for us to set a fixed target like the value should be this and that 3 years ahead. And so I think the core is to take good care of our customer fundamentally. The revision of our strategy won't be like we're dealing with number, numerical targets for businesses. If like revision of strategy, it means revision of numbers, then that's not a good strategy. Okay. Thank you for your question. Now let's welcome the question from next investors. Now let's welcome Mr. Jalko from China Motion Securities. Can you hear me? Hello? Hello? Yes, please raise your question. Good morning. I'm from China Motion Securities. My question is that observed your financial results we've seen some numbers and also mentioned by you that you're losing weight. You're getting muscles. I know they're the industry has changed in a silver stage, like people getting ages after thirty five years old, then requirements will be different. Last year, we've seen that in the third quarter, you are getting more aligned aggressively. And this year, there's some changes, for example, like a dividend payout that's come down a little bit. So is this change reflect your change in strategy and also Does that mean that that that all reflects your judgment in the futures market direction So the losing weight has been periodically finished. Will you start gaining more muscle now? Okay. Let me repeat your question. Please correct me if I'm wrong. You mentioned you observed that the quarter last year, you we Vanki has increased land acquisition and you also mentioned the changes in the dividend payout ratio does mean that these changes in those numbers means our changes in terms of strategy and in terms of judgment assessment of the market's development? And also, have you finished with a losing weight where you start gaining muscle now? And what you mentioned in the change in internal structure, does that mean a change in gaining muscle? Gaining muscles, right? Yeah, our action in terms of gaining muscle, right? Now I will give the floor to Mr. Jiangsu for your second question. I will answer your question in terms of losing weight and gaining muscle and injecting new blood that refers to our changes in terms of our internal structure. Structural service strategy, strategic goal So the ultimate target is that it serves the business development, of course, things are based on the strategy plan as well. And we've mentioned the solution weight gaining muscles, important principle is to match the right, relevant duties with the right relevant personnel, presumably So we, 1st of all, we decide what we need to do and that's needed and then that's appropriate. So that's also based on our judgment of strategic direction. And in terms of your other question, I will give the floor to Mr. Thank you for your, support and care, and thank you for your observation of us. You've seen that we've acquired more land third quarter last year. So first of all, in the investment, our strategy of investment hasn't changed. It's still centered around development along with CD, along with the population provide services to urban citizens. So no fundamental changes. And in terms of the over year investment, although investment last year, we've made, successfully that 31% of the investment is listed and about, liability. About 28% is 2nd hand land, but 30% is the land from the auction. Well, so that means 69% of the land we acquired from like agreement from overdue coordination between primary market and secondary market So you know, these things will be reflected a few months later or maybe 1 or 2 years later if we do it like through agreement, we have to follow the case like years till we get the line, then we see the number changes in Q3. Maybe that's a coincidence. Maybe in that quarter, maybe one specific or 2 specific piece of land has been delivered, been obtained. And that's why you see a big size in Q3 last year. And that's a brief clarification from my side. Where the second party that's in the next 3 to 5 years, are we going to change our judgment? Well, for Venky, we believe, after the epidemic outbreak, in the medium and long term, in China, the property market demand will still be there. So the key is that how should we serve our customer better? How can we provide quality product to serve the customer to improve our overall competency, if we have a good capacity of serving the customer, providing the customer with high quality especially the healthy residential product. Then I think in the next 3 to 5 years, Vank is still going to have a big opportunity of competing in this market. So that's my answer to the question. You also mentioned about the payout. I won't repeat his answer because the chair has already given you the answer. Okay. Thank you. Midi Secretary, please help us to invite the next speaker for question. Due to time reason, we were only allowed to answer a question for 2 to 3 investors. So next investor, please. Next, let's welcome back, Haiqing, from Tata Fund. Thank you very much. Thanks for the management team. I have Only one question. After the annual presentation, I said your rental income, and it is up, and it is good. But I can also say that, your depreciation is still growing very fast. So I'd like to ask for your new business, what is the size of the income? It's growth. And I also would like to know the general investment plan for those new business. Thank you. And please allow me to repeat your question. You ask questions about our new business income size its profit and its gross momentum. And do you also want to know our investment plan for those new business? Yes. And, if possible, can you please walk us through each of the new business, respectively, and to be more specific, Okay, sure. And, let's welcome Mr. Zhu to answer the question, please. Thank you. Thanks for doing QIAGEN for your question. Yes. And for our business, right beside the fundamental business, if you read our financial report, you will say that The fundamental business accounted for 92.5% and the new business accounted for 4.8%. Many people take care of our business beside the fundamental business. And just now, the Chairman Mr. Yidian spent lot of time sharing those information with all of you. And as you said, it's new business, but actually it's new for Venky, but it's no longer new for many market players because those businesses already been verified in the market. Internally, at Bank, we have a principle that are 29 working principles inside Venke, we have to respect the market. And follow the momentum, a change according to the trend, we were never foresight and speculate the market to March. So you'll see many of the businesses still come from the customer and from the urban development of One City to be objectively speaking and if you are a company, if you are the investor, you truly want to get some specific number on those new business lines. And I welcome you to come to our company and to have some survey and we also welcome our investors to come to Venkley personally. And so that we can provide you more specific numbers regarding those new businesses. From the income side, it's less than 5% of the total from the investment side. Side, along with other corporate business, we are taking the prudent attitude of making investment in the new business. And we also did some arrangement according to the accounting rules. For example, the new business we always take the cost accounting principles. So the income revenue are also carrying the feature of the new accounting rules. And if you are already interested in those specific numbers, and you can take a look at the investment properties in the consolidated, table and some of equity are also related to those new business. Well, in terms of the investment of those new business, does one key have its own plan or its target grows? Well, I see those new businesses have already been have already been verified in the market, and it is also growing logically. We're internally at WANKIE. We believe all of the business need to be by the business logic, it can grow from 0 to 1 so that we can nurture from 1 to 10 and a 10 to 100 for its future development. And if they for those new business, no matter from the investment and the size of the business, foutered to meet the requirement for individual disclosure, for independent disclosure, It's very easy for investors to talk to us, and we welcome you to come to the company to get access to more specifics about those new business lines. So I welcome Dunkaiji from Dutch and found to come to one banky and to talk to us. So that you can get access to more specifics. We welcome you to come to the company. Okay. Thank you. I have one more statement. Sorry. I find out why we are well performed in new in slides. It's because we always consolidate the outsider point of view to help us to consolidate our business. Because we have a well consolidated, fundamental business, so it's not quite easier for us to penetrate into new business, but we always have our expert outside opinions to support us. And for one could master forum, and we're going to welcome some industrial analysis to come to our master forum to share with us the industrial trend, the features of that one industry so that everyone can benefit from that in order to divide our new business lines. So it's more like an invitation to our analysis. I welcome our analysis and our is to come to us to share with your opinions on one industry so that we can develop our new business better. Our meeting's actually, please help to invite the next investor for question. Next, let's welcome Changzhou from State Securities. Thank you. I have two questions. The first question In 2019 last year, our gross profit margin was down and the land base is also up aggressively. Can you talk about the backdrop story. And, does the cash flow in 2019 truly grow compared with 2018? And the second question is that for the company, it's r e, somewhat, r y, somewhat, slowed down a little bit. And, according to the market principle, the GV, and, it business side should be expanded and its ROI should be improved greatly. But why the ROI of the GV is still fluctuating and down a little bit. And is it going to be up in the near future? So that's a two question I have. Thank you. Thanks for Chunghong. Let me repeat your question. The first question, you said, Land VAT is up what's the reason. And the second is because the ROI is done. Why? Okay. Yes. Two questions. Now let's welcome Mr. Wang to answer the two questions. Let me answer the question on the Land VAT app. And the next question would be leave to Ms. Han, VA Land VAT, yes, in our annual report, land availability is up by 2% in the total, and, it's also accountical 42%. And actually, and it's very obvious Now what should it be? Just one reason because we have more high profit project that are taxable. And if you take a look at the gross margin of the taxable items, you can find out 40% of gross profit. Compared with 2018 in 2019, the numbers been doubled. And the fundamental reasons because some projects in the Tier 1 city, and we acquired a land many years ago. And, and that's why You see, our gross profit margin is up, but the land base is up. That's the reason we encountered this problem last year. But for banking, in terms of the taxation, we are always a legal tax payer and we also legally pay all the tax. And write the tax down. 1st of all, we always follow the law and regulation to consolidate our tax. So we never trying to find some tricky ways of doing that. Otherwise, our profit won't be true and we will also be identified and the suspected by the regulators. It's going to be a risk for the company. And then secondly, we want to build a too much is and what is truly happening. And because that's the company's performance, the performance is related to the KPI, our shareholders and our investors, we're always part of the law of building our tax payment. So what you can see from a table is the objective and the true picture of the project operation. Thank you very much. Thanks for Trungso. You were asking about the ROI Yes. In this year in 2019. And the ROI compared with last year 6,300,000,000 was down a little bit, and it's a normal fluctuation, our ROI comes from some of the projects who are working with and its revenues that has not yet been built into the balance sheet. To follow the prudent attitude, we also have to improve our profit attributable, and it's around a two point 1,000,000,000. And we also disclosed this information in the annual presentation that JPY 2,100,000,000 have been put back And you were saying that our ROI would almost be the same as last year. It's a normal fluctuation. Because uptime is limited. Now let's welcome the last question. Please press star in 1 white if you have any questions. Please, because time is limited to ensure the quality Please speak to the microphone and speak slowly. And each of you will have two questions at most. Please finish your questions at once. Now let's welcome the overseas investors. Let's let's welcome Lin Nan from Abidra Abdavi. Hi. Thank you for the presentation. So I just have one question on the land investments. So I know your plant, new construction start, in 2020, we present a substantial over 30% declines compared to last year. So my question is, so given WAN Chi's already low land bank level, growth continue to hold a cautious stance on the land acquisition. Also, it will be helpful if you can share your assessment on the land market in the first half of this year overall, in terms of opportunity and the competition. Thank you. Okay. Thank you. Thank you for your question. Let me repeat your question. So you've observed of new construction, some that's come down about 30%. Also, you've asked whether our plan for line acquisition, whether that will be cautious and you asked about the opportunities and our projection for the land market. Is that true? Is that your question? Correct. Now I will give the floor to Mr. John Xu. So first of all, I would like to say that for Venky, we will speak to our principles about our cautious investment that has never been changed. And also you've mentioned some new construction That's gone down by 31% compared with last year for new constructions. Thus, all construction are arranged based on a new projects. And that's made based on the over year supply from the market. So this year, you've seen that the total gfe under construction is about 100,000,000 square meters. So I think the supply is enough. And And I think the new construction will ensure the sales of this year is enough to ensure the sales of this year and we will make changes to our construction dynamically. We've been controlling this ratio, controlling our construction planning dynamically. We've been closely watched the line acquisition ratio and sales ratio, So this is our arrangement in terms of the new construction. And in terms of aligned acquisition, you've we've kept the ratio land bank at a reasonable level, and we've kept adequate resources, and that's enough to support the development in the future 2 to years. That's the overall construction and overall land acquisition strategy. I'm not sure whether to answer your questions. Now, because time is limited, then I think this is going to be the end of today's annual results announcement you for your support and care for Vanky. If you have other questions, please send your questions to our mail box to IR at Vanky, or you can talk with us on our public account on WeChat.