Earnings Call: Q1 2021

May 6, 2021

Welcome everyone to Far East Coast 2021 First Quarter Earnings Conference Call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a question and answer session. Please follow the instructions given at the time if you would like to ask a question. For your information, the broadcast replay will be available within an hour after the conference is finished. Please visit www.fargestone.com.tw under the Investor Relations section. And now, I would like to introduce Mr. Gary Lai, the IR Officer. And Gary, please begin. Good afternoon, everyone. Thank you very much for attending Far Easton's Q1 2021 results conference call. Our President, Qi and CFO, Sharon, both joined the call with us today. Before Qi's brief presentation, please kindly pay attention to the Safe Harbor statement in the first stage of our presentation. Maybe pass to Chi. Thank you, Jerry. All right. Good afternoon, ladies and gentlemen. Thank you for joining us. We have very good Q1 to report. Again, let me start with mobile market in Taiwan, just a brief overview. As you are all aware, the total mobile customers in Taiwan has been pretty saturated and we are looking at 29,300,000, dollars slightly addition from the previous quarters. And then in terms of the mobile service revenue, I think a good sign of hope is, as you have been hearing, that we said mobile service has been declining. But then finally, I think it showed a sign of turnaround or rebound. And this can show in the chart on the right. So from the quarterly revenue in the NTE $1,000,000 and you can see that in terms of the Y o Y. So in the Q1 'twenty one, it is the YOI believes to be minus 1.3% versus previous quarters. We were like in the 5% or even more percent as an industry. However, I'm happy to report that, FET actually has Y o Y turned positive in March, just last month. Okay. And then in terms of the next page, in terms of the mobile service performance for FET specifically, even though the market has been very stable or relatively cold, and we still managed to continue to grow our postpaid subscribers. So for the Q1, we managed to grow 1% of the postpaid customers. And then on the other hand, for the churn rate, then we hit another record low at 1%. So this gives us a very stable base and then to grow our revenue and then to promote our 5 gs programs even more. And then in terms of the ARPU on the right hand side, as you know, FBT has been leading in our ARPU for both trade and blended ARPU. And not only that, in March, we also have our blended ARPU turned while the line turned positive and ahead of peers and then also 3 months ahead of our own original projection as we projected in our last IR call with you all. So it's 3 months ahead of our original target. And then talk about 5 gs. So our 5 gs adoption continues very steadily and still more than 90% of the 5 gs customers that they signed up for the higher rate plan that is the $9.99 or 13.99 dollars And then the average monthly fee for renewal customers has shown more than 20% of uplift. So this is where we really have been looking for and expecting this 5 gs monthly fee uplift to help with our overall revenue. And then it is definitely doing its trick. And then currently, we already have more than 6,100 NR stations 5 gs NR stations deployed. And then the coverage nationwide is about more than 70%. And then for the metropolitan areas, it is over 80%. And for Taipei, it's close to 90%. And then we target the nationwide coverage to be more than 90% before the end of the year and hopefully before the Q4. Okay. And then in terms of our 5 gs performance, and you probably have heard that FET has the best or the fastest 5 gs network in Taiwan. And we won it again, so 2 times in a row and then certified by OpenSignal and BTEC Ookla, respectively. And then also Taiwan moves up to number 2 worldwide in the 5 gs download speed and then we definitely had something to do with that. So we are happy to report. We definitely had a very good start with 5 gs. How we position ourselves in 5 gs is a winning position and we are very happy about it. Okay. And then in terms of our new economy, we also showed a very strong Q1 and looking at 11% year over year growth. And then in the major growth areas that include the cloud resale, and then this is actually for both of our coming from our major subsidiaries, the cloud resale company. And then also for FET Cloud that we homegrown and then provided a service is also growing. So, combined, we're looking at 48% year over year growth in the Q1. And our e commerce, while it's small, but then still it shows significant momentum here with a 26% posted growth year over year. And then we continue to lead in our direct carrier billing area and then it also shows a good growth of 12%. And the media services continues to grow at 29% year over year. And some service highlights, we 5 gs is new, so our marketing department has been very creative and innovative in terms of operating various services that are closer to our customers. So, for example, one major initiative actually is company wide, so it's not just a marketing campaign. We actually see that as a major effort for us to get closer to our customers and to build better customer engagement. And so we kick off or deploy this customer loyalty program, which is also a platform that we call FAT Mobile Circle. And then it is already since this deployment that was in November last year, we had a soft launch. We already have 220,000,000 downloads. And then we have more than 1,000,000 active FTP users. This definitely helps us to engage our users more. And then because we offer quite a variety of services with discounts or with rewards and like we use FEP points and then where they can burn the points and then use towards our shopping and some of the bills that they pay for FET services. And also this helps actually boost our shopping revenue as well because it can lead the user, the traffic to our shopping. And then we see 1,000,000 of dollars that they were able to convert into the sales for our EC, Friday shopping. And then also, in terms of our video subscription, Friday Video, so our digital entertainment services, through this mobile circle engagement, we actually see thousands of increase in terms of the new acquisition of these new users. So we are very happy with this loyalty program, which will continue to enrich the content and then also offer more things that our customers will need. And this is members only. So it's an exclusive program for FET users only. And then we want our customers to feel they are special. Be a BET user, it is special. And then this is how we do it through this mobile circle. And then we have a couple of other campaigns like we have a gaming program. As we know, the gamers, they are usually very loyal and then they demand high quality of network, which we do provide good quality of network service. And then they are also they tend to use high end kinds of devices. And then so we have this program, we partner with NCSoft Mobile game Paradise 2M. And I have to admit, I'm not a gamer myself. So then we have a picture on the side. Hopefully, some of you recognize that. Apparently, as I was told, that was a very famous game. It's a very popular game. And then, so we have some promotion going on using this partnership with Paradise QM. And then also, we have this Ba Jangmadu pilgrimage. This is a goddess, right, a local goddess and a lot of and actually this is one of the most popular religious events in Taiwan. So we actually have a special package provided for customers who have signed up for our 5 gs program like a 13 month plus and this is only for the local customers that are in the Central Taiwan area. So it's specifically designed for the customers there. And we actually got half of the takers were non FET users. So that was a very good acquisition, the new acquisition. So it was all good. And also we have unveiled Taiwan's first real 5 gs smart factory. It is by us and the Delta Electronics and Microsoft. And then this event took off in, I think, in March in Taoyuan and then actually see the smart manufacturing in work. So you see how they use the 5 gs connectivity to direct their automation within the factory. So it's very amazing and we were hoping to use this as a real life demo and then that will attract more interest in some of the manufacturing industries. And although every industry has different model, but then in terms of the need and the kind of flexibility that 5 gs and then reliability that 5 gs could provide over the WiFi, that is universal, that is the same. So we do see that in the manufacturing area that we do see more opportunities with the 5 gs private network offering. Okay. And then also, again, in our telemedicine, as we are number 1 ahead of our peers and probably the only one that is really making significant progress. And then we are recognized by our government welfare department for our efforts in Taichung. And then so the government actually has made Taichung an exemplary case and then asked the other regulation to follow the same suit. So for all the hard to reach suburb areas that they will all follow the same model and then we but the government is having the budget allocated for those areas to also be equipped with 5 gs telemedicine kind of capabilities. We are definitely an incumbent and as a major player there. And then we see at the same time, not only we're expanding the areas where telemedicine is available and also the type of telemedicine services, the kind of special areas that it can cover that it is also expanding. And my team is my product manager is working very diligently with the medical device vendors or manufacturers and to find the right kind of equipment and with the doctors to expand the kind of services that telemedicine can cover. So it is very encouraging and very rewarding experience working with our 5 gs and to help with the telemedicine and to help balance the resources between the urban and the rural areas. Okay. And then we have some awards that we and some recognition we received year to date, including that we were ranked top 5% corporate governance company and that is evaluated by Taiwan Stock Exchange and it is 7 years in a row. And also we were granted the S&P Global Silver Class in the sustainability yearbook 2021. And also, many thanks to probably some of you, if not all of you, for voting for us and for myself. And so, we are really flattered and pleased and very humbled that we were awarded best CEO and best investor relations by Finance Asia. And we just found out like a couple of weeks ago that was a really pleasant surprise. But then thank you all for your support. And we will continue to do better. Okay. And then we also won the 2020 Smart Type A Innovation Award from Type A City for our Smart Card project. And that is using 5 gs and to help those device makers to actually do all kinds of testing, the network entry testing. We provided the sites and then with a good 5 gs coverage for them to do that. And then we also our 5 gs launch commercial that the TBC, we work with Maryville Round Company. It's a small agency that we picked kind of in the last minute. I mean, it really worked out. So we won this IS Design Award 2021 and it was a very special global award and we are really happy with the recognition. And also, we received Best Innovators Marketing by the Excellence Magazine. Okay. With that, I'm going to pass it to our CFO, Sharon Lin, for the financial update for you guys. Thank you, President Qi. Good afternoon, everyone. Now let me go through the financial performance for the Q1. The total revenue for the Q4 is RMB 20,800,000,000, 7.5 percent year over year growth due to the good iPhone 12 sales and ICT purchase delivery. EBITDA for the Q1 is about RMB6.8 billion, which will contribute 102.5 percent of the guidance, but 3% lower year over year due to the higher 5 gs handset bundled subsidy and decreasing voice revenue. Moving to the next page, it shows the Q1 financial results comparing with our guidance. Total revenue for Q1 is RMB20.8 billion. The achievement rate is about 103 percent. Besides financial good reception and also help from our beta new economy revenue such as ICT purchase, media sales and direct care daily. Operating cost and expense for Q1 is RMB 18,450,000,000, 102.6 percent of the guidance due to the higher revenue. Q1 EBITDA RMB 6,800,000,000. The churn rate is 102.5 percent from the better revenue, margin and the cost of spending. With lower funding cost than our original plan, net income for the Q1 is RMB1.8 billion. Earnings per share is RMB0.56 cents. The adjustment rate is about 110%. Please turn to the next page for the Q1 key financial indicators. As of the end of the March 2021, the ending cash is about RMB 4,500,000,000. The total borrowing is reduced to RMB69.9 billion. Net debt is RMB36.9 billion. Net debt to EBITDA is RMB2.33 billion and in a downtrend. Free cash flow for the Q1 is 3,900,000,000. Cash CapEx is about 2,200,000,000 and is aligned our plan. Thank you for your time. Let me turn the presentation to the President Xu for the IBC 2nd quarter priority. Okay. So when we talk about 2nd quarter priorities, usually, it's going to be our year long priority. So we will continue to deploy more 5G stations and we are looking at to have more than or around 9,000 or so before the Q4. And then so our network coverage nationwide will be 70% plus to 90% -plus in 4th quarter. And then we will accelerate our 5 gs adoption or penetration. So we and we will promote our 5 gs services. We are making some differences in some changes in our current offer. So we already are seeing very encouraging increase of our daily sales in terms of the 5 gs sign up, very encouraging. And then we will grow our new business in smart city, smart manufacturing and smart telemedicine area. That's our three major areas in the new economy and that will make good use of our 5 gs and also our IoT solutions, also AI and the big data, which are the main areas that we have been focusing on. And also, we are awaiting the Fair Trade Committee's approval for our joint effort with APT Telecom for the 3.5 gs spectrum sharing. We already got approval from NCC. So we are awaiting for this fair trade committee's approval. It is they are collecting information as we speak and then hopefully soon that will they will start a formal review. And then it should be we should hear in a couple of months for their final read on this. And then we will continue to drive down our operations costs. And of course, we'll continue to improve our customer satisfaction. And then by use of our mobile circle, we'll continue to serve more services that is to our consumers' liking. And then we do some segmentation analysis and then do personalized recommendation using AI. And then that will help us improve. So for every customer that will log in or sign in to the mobile circle, they will have different experience and then whatever information we push out to them will be more helpful to them than just a planned app, okay? And then also what's coming soon is our Annual Shareholders Meeting that will be held on June 23, 2021. Okay? With that, I conclude my presentation and then we welcome your questions. Yes. Thank you, President The first to ask question is Neil Dennison, HSBC. Go ahead please. Hi there. Thank you. Good afternoon. I've got two questions, please. The first one relates to the 5 gs, in particular, the postpaid return to growth, which I think you said has happened about 3 months earlier than planned. So what I'd like to ask is, what has changed since you made that estimate? Is it faster adoption of 5 gs? And how does that affect your revenue and EBITDA for the remainder of the year? So you said that it does a little bit lower on higher bundled plans. Presumably, the year on year comps get a bit easier because of the roaming in the second, third and fourth quarters. So that's the first question. Just trying to understand that. Okay. I got a first question. What was the second? So the second question is on the roaming I'm sorry, the spectrum sharing deal with AT and T. So my question is whether you expected it to take this long to get the Fair Trade Committee's approval. And assuming that approval does come through, does that mean you can start to work with APT immediately or other things that you and APT need to set up. So there will be a little bit of a time delay before you actually implement that. Thank you. I got it. All right. Thank you for clarifying your question. Sure. So for the number one question, the one that we said we are 3 months ahead of our own projection is the blended ARPU. And then so well, first of all, when we do the initial projection, we tend to be more conservative. But then secondly, we do see so in terms of the bundle rate, right, so we have more bundle sales and also the percentage of users that sign up with a higher rate plan, that is also better than our initial estimate. So, these contribute to the better outcome or the sooner than we expected. Okay, that is the first question. And for the second question, so according to the policy for the Fair Trade Committee, once they enter, they start an official review of the case, They have like a 2 months is their KPI. So they need to kind of close the case and then provide a ruling or their recommendation before the end of 2 months. So they have 2 months to do that. So that's why I say I hope they will start the official review soon. Once they feel they have got enough information, they have a before the committee reviews it, they are, of course, a working staff that is reviewing the documents that we send and then say, well, maybe send this and that. So this is what they're doing. And then we have provided what they recently asked for and we haven't heard from them. And so hopefully, they will start that process soon, if not already. And so from that point on, it should be at most 2 months and we will hear from them. And then to your question, once we hear them, so we didn't just wait. So we already the network team from 2 companies have been experimenting, actually doing the construction and getting where things need to be connected. We already have more than 200 stations where the connection is already done. So they are like standing by. So once we get the official approval, we can just turn it on overnight. So it is vaccine. So there's no further delay than we get some work started. No, we're already ready. We are ready for this to start. But then, of course, there is some kind of service on the APT team may need a few days to get their services, whatever, but I cannot really speak for them. But then in terms of network readiness, we are ready for that. It can be turned on. Okay? Got it. Thank you. Did that answer your question? Okay. Yes. Sorry, just to clarify on the first one. So the EBITDA or the profit implications, you're selling more higher value plans than expected, which is greater profitability over the life of the contract. But in terms of timing, does that imply a little bit more near term weakness or not weakness, but your pressure on EBITDA? The timing. Well, I guess so the fact that I think in terms of the competition or the market, market so far has been reasonable. So I think that also helps. And then because 5 gs was so new, so I have to say when my team, they were doing the projection and my people was giving me the projection, they usually want to end more. So tell me like a 3rd quarter, right? So but I will push for more. But then as it turns out, we do actually do better than we initially have planned for. So I think the market being not crazy, that certainly helps. Got it. Thanks very much. Sure. And next we'll have Sarah Wong of Morgan Stanley for questions. Go ahead please. Thank you for the opportunity to ask questions. So I have three questions. So the first one is on Q4 results. So it beats the guidance. So would management please share like what's the surprise? Is that mainly from the 5 gs or we also see some like positive surprise from the ICT side? And then the second question is on the 5 gs ARPU lift. Just want to get the definition of a 20% more than 20% uplift. So is that apple to apple meaning the same person like previously like they pay or the same person they pay 20% more before and after migrate to 5 gs? And then I recall this number, it's higher than previous say 15%. So is that because yes, is that because like 5 gs pricing is the same, but we're seeing more lower ARPU customers migrating to 5 gs? And then the third question is that, so far it seems the 5 gs adoption or ARPU within Taiwan is quite encouraging. But given like Firestone, our 5 gs network quality seems to be better, download speed better and also spectrum bandwidth is also more sufficient than peers. So, do management see any further upside from the 5 gs either consumer or enterprise? Or do we see any divergence in the 5 gs performance going forward compared with peers? Okay. Thank you, Eric. So I think there are 3 questions. The first is our revenue that is beating our own 4 target, right? So yes, we do this is contributed by our good growth with the new economy. And then on the telecom side, we do see more bundled sales than with higher rate plans. And then I have to say at the same time because the iPhone, right, so iPhone continues to be very attractive, very popular and iPhone is higher priced. So, if you follow revenue side, so that does make it look even better. So, for the above target performance, I would attribute to both new economy growth and also the strong bundled sales with 5 gs. And then iPhone certainly is the choice of the consumers the major choice of the consumers at the time and then that helps uplift the revenue as well. Okay. And the second question you were asking about the uplift and then you were definitely right. And then, yes, so like as we started when we first launched 5 gs and then our top tier of users that we want to start attracting are those already are high rate plan because they are less price sensitive or they can their affordability is high. They want to try the new thing. So they're already on the higher rate plan. So when they change to the $13.99 the uplift is there is uplift, but it's still not as much. But then as we finish with that tier, that batch, right, and you go down to the next year, And then so, yes, you have more consumer with a lower rate plan currently. And then once you are successfully moving them or upgrading them to 5 gs, then you see a bigger uplift. So you're definitely right there. And then, the way to calculate it, and you are also right, so this is the bunch of renew customers. And before 5 gs, and then their current rate was so much. The average rate plan for the monthly fee for this bunch of our renewal customers is so much. And then after this upgrade and what's the for the same set of the customers and what's the same the new average of the monthly fee. So the difference is the uplift. That's how we calculate it. Okay. And then the third, I think you're asking, since we are we have very good high premium network and then we do good optimization and we did a lot of technology oriented optimization. We use AI big data to make our network very efficient and then also best performance. And then we do see that as an advantage in our attracting the consumers, right? So in use.mazu children, like I said, I would say, we actually half of them, the takers of the package were new customers. And then I believe not because of the religious event itself and the offer itself is very innovative. We've actually put there the same to the instant burner. And then so that is like a blood, right? That has been blood. And then that is the package. So we only have like a limited edition for that. But then the new customers that we were able to get, they were not FET customers. If we did not have already a good reputation with our premium quality of our network, we wouldn't be able to do just that. So definitely, the quality of network as we see in a lot of the marketing analysis or the user insight, network is one of the most, if not the most, the most important factors in terms of determining the consumers' choices. So, the quality of network definitely is very important. So, we do see that as our advantage. We are riding on that momentum as we have won this number 1 5 gs network 2 times in a row again, right? And then so we are working really hard. And then on the enterprise side, the 5 gs quality and then the coverage, both are very important to provide reliable 5 gs service for industry, whether that is a telemedicine or that is for private network, 5 gs network. The quality of the network, it does matter. And as we will see more applications, consumer applications, that will be available on our cell phones, people will consumer will really see it is necessary to have a 5 gs service because otherwise your other new applications will be compromised, your experience will be compromised. So we do see that our advantage was we build the network and then the investment we made in our network and our NT team's diligence and their innovation in this area that will continue to be a driving force for us to do well with 5 gs. Thank you. And just two quick follow-up questions. So first, on the 5 gs consumer sentiment or momentum we saw recently, so do you think the ARPU lift will even further widen going forward, meaning like are we seeing consumers willing to pay for the high speed 5 gs services or like actually some of them still think the pricing is quite expensive and then we expect the offerings will be relatively stable at least targeting the same pricing to your customers for some period of time going forward? And then the second question is on the 5 gs enterprise side. So you've mentioned there's several applications, smart cities, smart manufacturers, smart telemedicine. So are these customers mostly public sector customers or private sector customers? And then do we see any early business model basically how we charge them? And also, like for example, in this year's guidance, have we like take that into account, say incremental revenue contribution from the 5 gs enterprise applications? Okay. All right. So the first question is about ARPU, right? So ARPU is an average. So the more customers upgraded to 5 gs with more uplift, and then, of course, this ARPU will only be getting better and better. And then so that will be continuing to improve. And then we already have more than 10% of penetration for the postpaid subscribers. And then that is with the recent boost, I'm seeing, I think very soon this percentage will increase very soon. So that will only help the ARPU even more just because how ARPU is calculated. We are kind of changing the pool, right? You have less you shift more 4 gs consumers to 5 gs with higher rate plans, and this will just help the outlook totally. And also, on the other hand, because the 4 gs network is congested, that's why I said when the consumers say, well, I have 4 gs phone, that is already enough. I said, well enough for them. But then for us, the carriers, I believe for my peers, that's also the case. In order for us to continue to maintain good quality of the network experience, we have to continue to invest if our users stay on 4 gs network. But then since now we have built 5 gs network and with more than 70% coverage, very soon before the end of the year, it's going to be 90%. So there's no reason why we wouldn't better utilize our 5 gs network for more users to upgrade to 5 gs and that will help relieve the congestion of 4 gs as well. So that is a win win situation. So we need to look at it both ways. And then so moving more 4 gs users to 5 gs is a good thing. And the users will definitely have better experience as well. We actually see from our 3rd party survey for our customers, the customer satisfaction score, for those that we surveyed the 5 gs users, the average satisfaction actually is higher than the 4 gs users. It is just a fact. So 5 gs is better if people only have the chance to use that. And we will have more creative offers and to encourage people to try. Okay. And then I think you were asking about the pricing models, right, kind of like for the enterprise. Yes. So, well, first of all, for the smart manufacturing, that is mostly, mainly private sectors. But then when it's smart city and then a lot of, if not all of it, I should say smart city in most cases, if not all of it, is from the government, right? So whether it's the central government or local government, they have the funding to fund various projects that is smart CD related or smart government. We actually have some government agencies doing some big data and then meeting some data platforms, those kinds of projects, and we got those as well. So and then telemedicine is a combination because as medical area is also restricted, right, or is heavily regulated. So the government will have the policy on the insurance, on the reimbursement, things like that. And then they said regulation, they said the policy, like all suburb areas, will need to have for those the underprivileged residents and all that, they need to have same access to the medical resources. So they have this program that for all the like 400 or so they identified with the counties that they will be given this kind of 5 gs telemedicine service, right? So that is really the government is doing. And also part of it is also for the hospitals, right? For the hospitals to participate in these telemedicine programs, they need to be able to use some kind of communication program and that's what we provide. So we actually at BT has a telemedicine communication platform that we built with our software. And then, so the remote doctors in the far end hospitals, in the urban hospitals and also the local health centers, medical personnel and then also the patients, right, they can all combine and then communicate on the platform, upload the image that is taken from the local health center for the patients with the telescope, right. So, those kind of image uploads through this communication and when the foreign doctor can see it right away, right? And then just as if they see the patients in person. So, those kinds of communication capabilities, real time, no latency, and then the good resolution to see these things clearly. And those are the capabilities we provide as part of the telemedicine service. And then so, in terms of pricing or where we actually would make our money, right? So, if you think about it, first, you need to deploy the 5 gs and there is some infrastructure you have to build. And some of them, we use part of our macro network. But still, for the specific health center, we may still need to provide some telecommunication infrastructure. So, there is some initial construction service fees that we may get. And then but then in terms of the telecommunication or the communication program, the software that we build or the platform, we do the license. So, you can do the license by the hospital, like it's an MA kind of thing, unlimited to use or it's a per license, per doctor. And then so we have different kinds of models that are being worked. And then since this is the beginning, and then eventually when the telemedicine service is also granted for urban folks, then we can charge the patients with some convenience fee by using the application we provide. So there are actually quite a bit of different opportunities where we see the monetization is feasible, not to mention the kind of CSR benefit this service will provide. Okay. And then for smart manufacturing, so this is the initial construction because it's not just construct, you really have to design a robust network, right, 5 gs network, the connection to make sure what they need to do in the factories or in the different floors, for example, can be all covered. So there is that initial design phase and where our team will need to come in. So it's kind of like a network planning, network engineering. So, there is an initial setup fee. And then once we put our equipment there, usually they will put they will pay us like the OpEx, right, monthly service fee for paying continue to use the private network. And then there is also the managed service part, if they wanted to manage their private network proactively, instead of just calling us when some hardware crash or whatever. So there's a managed service model as well. It all varies, but then for each of them, we will work with our clients and we have very flexible pricing committee and then we will see what the users' needs are. And then as this is all new and then we are also learning what may be a better model that works better for some kind of customers in some vertical versus the other. But then we have actually pricing committee formed just for the 5 gs private network as we were deploying this. So we have foresight seeing this is new and we are learning it and we want to be agile. So we put a pricing committee together. So this won't take long when we interact with our clients. But that's kind of like a so in summary, Sarah, the pricing for these smart industries, different kind of service, it all varies. And then you probably next question you're going to ask you, what about the margin? I would say the margin varies too, right? Margin varies too in the audience. Got it. That's very comprehensive. Thank you. Okay. We're now in question and answer session. Thank you. Thank you. We thank you very much for all your questions. There are currently no questions at this point. And then I'll pass the call back to Mr. Gary Wai. And Gary, please proceed. Okay. And I have just like a departing remark for our audience here. As we said in our last IR call, when we announced our dividend, that will be still 3.25 percent. And then we said, because we see that we believe we have hit the bottom, right? I think the worst has passed. And the Q1 performance certainly is reassuring. And then we believe that we will continue to do good to do well. And then looking for a strong year ahead of us. For what we have seen so far, it is very encouraging. And thank you for your support. And if there are questions you didn't get a chance to ask, our IR team is always standing by and feel free to reach out to them or myself. Thank you. Thank you again. See you next quarter. Thank you. Bye bye. Thank you. Bye. Ladies and gentlemen, we thank you for your participation in Far Easton's conference. There will be a webcast replay within an hour. Please visit www.farreastone.com. Tw under the Investor Relations section. You may now disconnect. Goodbye.