Earnings Call Transcript - BZUN Q2 2024

Operator, Operator

Good morning, ladies and gentlemen, and thank you for standing by for Baozun Second Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. As a reminder, today's conference call is being recorded. I will now turn the meeting over to your host for today's call, Ms. Wendy Sun, Senior Director of Corporate Development and Investor Relations of Baozun. Please proceed, Wendy.

Wendy Sun, Senior Director of Corporate Development and Investor Relations

Thank you, operator. Hello, everyone, and thank you for joining us today. Our second quarter 2024 earnings release was distributed earlier before this call and is available on our IR website at ir.baozen.com as well as on PR Newsware Services. They have also posted a PowerPoint presentation that accompanies our comments to the same IR website where they are available for download. On the call today from Baozun, we have Mr. Vincent Qiu, Chairman and Chief Executive Officer; Ms. Catherine Zhu, Chief Financial Officer; Mr. Arthur Yu, President of Baozun E-Commerce; and Mr. Ken Huang, Chief Financial Officer, Baozun Brand Management. Mr. Qiu will first share our business strategy and company highlights, followed by Ms. Zhu, who will discuss our financials, and then by Ms. Yu and Mr. Huang to share more about our e-commerce and brand management segments, respectively. They will all be available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of the U.S. Security Act of 1933 as amended, the U.S. Security Exchange Act of 1934 as amended and the U.S. Private Security Litigation Reform Act of 1995. These forward-looking statements are based upon management current expectations and current market and operating conditions and relate to events that involve known or unknown risk, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results to differ materially from those in the forward-looking statement. Further information regarding these and other risks, uncertainties or factors is included in the company's filing with the US Security Exchange Commission and its announcement notice, or other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this call is as of the date hereof and is based on assumptions that the company believes to be reasonable as of this date. And the company does not take any obligation to update any forward-looking statements except as required under applicable law. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB. In addition, we may elect to use adjusted in place of non-Generally Accepted Accounting Principles or non-GAAP in order to reduce overall confusion that may arise from our discussion about financials related to the Gap brand. It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Vincent Qiu. Vincent, please go ahead.

Vincent Qiu, Chairman and Chief Executive Officer

Thank you, Wendy. Hello everyone and thank you all for your time. I'm pleased to share that we continue to achieve success in executing our plans. In the second quarter of 2024, Baozun Group achieved a 3% year-over-year revenue growth, reflecting our ongoing efforts to strengthen our core operations and adapt to the evolving market landscape. BEC has shown solid momentum, with top line returning to growth after 10 consecutive quarters of year-over-year contraction. We're encouraged to see a turning point that highlights our effective revitalization efforts in both services and product sales. Notably, we successfully integrated Location, a top Douyin partner, into Baozun's livestreaming business unit. This is a strategic breakthrough as it strengthens our position within the Douyin ecosystem and further enhances our omnichannel value proposition. BBM is narrowing its losses while accelerating its store expansion and fine-tuning the unit economics of new stores. We are seeing better performance from our new stores, which gives us confidence in further expansion in these markets. This progress was achieved despite the top-line pressure BBM is facing from cautious consumer sentiment. Additionally, in light of Gap's strong global trend, we have deepened our interactions with Gap Inc. and developed plans to better leverage this trend and its global resources. Our aim is to balance these resources with our localization efforts to drive growth. This quarter, Baozun technology is once again being recognized for excellence, receiving another prestigious Gartner Award in Direct to Consumer Solutions. Tailored for the Chinese market, our DTC solutions offer a comprehensive commerce platform that is secure, scalable, and flexible. This award underscores our ability to build innovative solutions for brands' private domains, empowering their further growth. On the ESG front, we continue to advance our commitment to sustainability. During the quarter, two of our logistic parks were certified as carbon neutral. We also partnered with Nike on an innovative shoe recycling program. Through these efforts, we are not only reducing our carbon footprint, but also setting industry standards and making a positive contribution to environmental protection. With the improving momentum in e-commerce and a continued focus on strengthening BBM's fundamentals, we remain fully committed to strategic transformation. Looking ahead, we are confident in our ability to drive further growth and deliver long-term value to our shareholders. Now let me pass this to Catherine for financial updates.

Catherine Yanjie Zhu, Chief Financial Officer

Thanks, Vincent. And hello, everyone. Now, let me share with you our second quarter 2024 financial results in more detail. Please turn to slide number 3. Baozun Group's total net revenues increased by 3% year-over-year to RMB2.4 billion. Of this, e-commerce revenue contributed RMB2.1 billion, while Brand Management generated RMB294 million. Breaking down the e-commerce revenue by business model, services revenue increased by 10% to RMB1.6 billion in the quarter. This growth was primarily driven by a double-digit year-over-year increase in revenue from store operations in apparel and accessories category, as well as from digital marketing and IT solutions. BEC product sales revenue continued to show progress with the year-over-year contraction narrowing by 4% to RMB559 million. With the business optimization nearly complete and the ramp-up of our newly introduced exclusive distribution business, we are on track to return to growth in our BEC product sales in the second half of 2024. BBM product sales totaled RMB292 million for the quarter, a year-over-year decline of 10% compared to the same period of last year. The contraction was mainly due to weaker consumption sentiment in the fashion apparel industry, and Ken will elaborate more on that later. Please turn to slide number 4. From a profitability perspective, our gross margin for e-commerce product sales was 11.7% for the quarter. The decrease in gross margin for e-commerce product sales was primarily due to a change in category mix and a higher proportion of cash rebates from brand partners compared to more weight on procurement rebates in the same period of last year. Gross margin for BBM totaled 52.3%, while our group's blended gross margin for product sales was 25.3%. Now to bottom line items, please turn to slide number 5. During the quarter, our adjusted income from operations totaled RMB10 million compared to RMB1 million a year ago. This included an adjusted operating profit of RMB60 million from the e-commerce segment and a reduced operating loss of RMB50 million from BBM. As of June 30, 2024, we maintained a steady balance in cash and cash equivalents, restricted cash, and short-term investments, totaling RMB2.9 billion, in line with balance in the previous quarter. Lastly, we continue to execute our share repurchase program. Year-to-date, we have repurchased approximately 2 million ADS for $4.9 million through the open market, reflecting our confidence in the company's future. As of today, the remaining amount of Board authorization for our share repurchase program, which is effective through January 2025, stands at $15 million. Let me now pass the call over to Arthur to update you on BEC, our e-commerce business.

Arthur Yu, President of Baozun E-Commerce

Thank you, Vincent and Catherine. And hello everyone. Now let's review the BEC business performance for the second quarter of 2024. Please turn to slide number 6. Despite the challenging microeconomic environment and slowdown of e-commerce growth in China, BEC delivered good results in the second quarter this year. Total revenue growth turned positive for the first time since 2022, increasing by 6% year-on-year. This growth was primarily driven by a strong performance in our service business during the 618 campaign and stabilization of our product sales business. In the second quarter, BEC's service business grew by 10%, driven by strong performances across key categories of sports and fashion apparel. Notably, during the 618 Shopping Festival, traditional marketplaces such as T-Mall resumed growth, with especially strong momentum in outdoor and sportswear. As a result, BEC achieved double-digit GMV growth for all the brands we operate during the campaign, significantly outpacing overall market performance. In terms of channel performance, Douyin experienced exceptional growth in this quarter following the successful integration of our newly acquired Location business, which is now contributing over 5% of our BEC revenue with triple-digit year-over-year growth. Little Red Book related revenue also achieved triple-digit growth from a low base, showing good potential to become another growth driver for BEC. We believe that these two live streaming and content-based platforms not only provide brands with a new sales channel but also allow them to conduct more effective brand marketing to build their brand image. In addition to our offerings on Douyin and Little Red Book, we further enhanced our services in digital marketing, IT system, and logistics, underpinned by our recent investment in data and technology. During the quarter, we engaged with a large FMCG client to revamp its order management system. In terms of logistics, we onboarded a world-leading outdoor brand to provide a comprehensive B2B logistics and warehousing solution in China. Our expansion of service capabilities helps us to extend and strengthen our relationship with existing clients and provides us with a competitive edge when acquiring new clients. As a result, our new business development efforts delivered strong performance with over 30 new wins this quarter. Our existing client's renewal rate reached a historical high at 95% in the first half of this year, ensuring our future revenue stability and potential growth. Now let's turn to product sales business. During the quarter, BEC's product sales business has reached the end of our rationalization process, with only single-digit decline year-on-year. The revenue was impacted by weak performance in the small appliance and electronics category during the 618 campaign, which was offset by strong performances in the beauty and healthcare categories. We also continued to add new brands under the exclusive distribution model, where we enjoy a higher gross margin with full control over sales and marketing activities. This quarter, we signed an agreement with the UK kitchenware brand, Joseph & Joseph, to become the exclusive distributor in China. Overall, our exclusive distribution brands have achieved good momentum in the initial phase, and we anticipate further improvement in revenue and profitability following the ramp-up period. Lastly, to enhance bottom-line performance, we continue to drive cost optimization and efficiency improvement through lean and Six Sigma projects. This quarter, we rolled out Six Sigma training to more frontline staff, combined with upgrading our lean operation system and increasing the adaptation of AIG C2s. We also completed a project to integrate our business processes, systems, and operations among our group companies, including the integration of the newly acquired Location business. In 2024, we expect to complete over 100 lean and Six Sigma efficiency projects, which are projected to deliver a financial benefit of more than RMB20 million. In the first half of this year, we continued our strategic plan to turn around the BEC business and successfully delivered financial performance in line with our expectations. We are confident that this strategy will help us achieve our full-year target and transform the BEC business back to growth in a sustainable and profitable manner. Now, I will pass to Ken for an update on BBM.

Ken Huang, Chief Financial Officer, Baozun Brand Management

Thank you, Yu, and thank you all. It's my great pleasure to speak with you. Please turn to Slide number 7 for additional updates on BBM. During the second quarter, weak consumer sentiment led to a double-digit decline in retail traffic, particularly in the fashion apparel segment. Despite the headwinds, we advanced our localization strategy by fine-tuning the customer experience, improving conversion rates, and expanding our offline network. We also implemented a cost optimization initiative to further reduce expenses. As a result of these efforts, we were able to narrow BBM's total revenue to a 9% year-over-year decline and achieve a 70% year-over-year improvement in our adjusted operating loss for the quarter. In the 18 months since taking over Gap China operations, we have embarked on a strategy to move away from perpetual discounts by enhancing product design, segmentation, and supply chain efficiency. This quarter we enriched our core categories, such as T-shirts, by introducing functional features such as quick dry, cooling, and sweat absorption. Overall, despite the weak consumption environment, we maintained a healthy gross margin of 52.3% for the quarter. We also accelerated the pace of our offline network expansion by opening nine new stores, resulting in a net increase of two stores and bringing our total to 126 stores. In addition to opening new locations in Tier 1 cities such as Shanghai and Guangzhou, we also entered several new Tier 1 and Tier 2 cities, including Changsha, Xi'an, Shenyang, and Guiyang. Leveraging insights gained from traffic and consumer feedback, we have continued to refine our store experience and site location tactics. We focused on quality neighborhood locations and high traffic areas with an average new store size of 500 to 600 square meters and a higher store inventory capacity to increase sales efficiency. Additionally, we introduced the expansion strategy in collaboration with local partners in second-tier cities, allowing us to leverage local resources and enhance investment efficiency for further expansion. The new store openings have exceeded our expectations. It's encouraging that the new stores in Guiyang, Dolphin Plaza and Shenyang Joy City are generating unit sales and profits higher than average. The early success of these stores also boosts our confidence in the market potential of these emerging locations. We aim to continue strengthening our presence, tapping into new markets, and capitalizing on emerging growth opportunities. Overall, we are on track with our target to open more than 50 stores for full year 2024. After accounting for our proactive optimization and the natural retirement of some existing leases, this expansion will increase our offline network by more than 5% in space footage compared to the end of last year. Recently, we have also deepened our interaction with Gap Inc. and developed plans to better leverage the brand's upward trend and global resources across product development, supply chain, merchandising, and marketing. Both sides see positive long-term opportunities for casual style in China, and we aim to closely collaborate to balance our localization efforts with Gap's global themes. Our store displays now emphasize categories and stylish outfits to create an appealing atmosphere, highlighting Gap’s three key categories: denim, khakis, and sweatshirts. I'm happy to report that despite the current macro challenges, our fine-tuning initiatives have led to positive sales growth in August. With the improved customer experience and the growing contribution from new stores, we expect our top line to return to growth in the second half of 2024. In summary, as we enter the next phase of our BBM journey, our focus has expanded to include top-line growth while safeguarding margins. Although we have observed a slower recovery in consumer sentiment, we remain committed to executing our strategic plans. Our goal is to build a profitable business that appeals to mass-market families in China by delivering localized products that align with Gap's DNA of casual and quality. We invite you to follow our progress. That concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session.

Operator, Operator

Thank you. We will now begin the question-and-answer session. The first question comes from Thomas Chong with Jeffreys. Please go ahead.

Thomas Chong, Analyst

Thanks for taking my question. My question is about the recent consumer sentiment and expectations for Tmall and the non-Tmall. So how do we see the competition of the e-commerce segment in the second half of the year? And any thoughts on the upcoming Double Eleven? Thanks.

Vincent Qiu, Chairman and Chief Executive Officer

Okay. Thank you for the question. And I think first of all, from the first half of the year, we have seen a recovery in terms of Tmall growth compared with last year. Although Douyin’s growth rate is slowing down, it still has double-digit growth. We think this trend will continue through to the second half of the year. And another trend we have seen is the emergence of true omnichannel operation for e-commerce. For example, some potential channels like the Little Red Book or Kuaishou, they are attracting more attention from brands. A significant proportion of our brands are operating on a full-channel basis online instead of a single channel. For Double Eleven, what we anticipate is that the event will start earlier than last year, and the duration will be longer, based on our experience in the 618. Additionally, the planning is becoming more complex, which creates a value-added opportunity for Baozun to help our brand partners to be successful. Internally, we have already started the planning process for Double Eleven. We think with our assistance, we can replicate the good performance we have delivered during the 618.

Thomas Chong, Analyst

Thank you.

Operator, Operator

The next question comes from Jarvis Ying from CITIC. Please go ahead.

Unidentified Analyst, Analyst

Good evening, management. Thanks for taking my question. Congrats on the solid quarter. I have two questions. The first is that recently we have seen some e-commerce platforms shift from price competition to GMV growth. Does this trend influence the advertising strategy of the brands operated by Baozun? My second question is that we have seen a good performance of Gap Global this year. Can management share some details about the future trend of Gap fashion design? Will Baozun consider introducing more global styles? Thank you.

Vincent Qiu, Chairman and Chief Executive Officer

Okay. So for the first one, the return to GMV focus is a good opportunity for Baozun because for the large-scale brands we operate, that's good news for us. All platforms, especially Tmall, are now paying more attention to the big international brands we represent. So we think that's a positive sign for us. Now about the Gap, can I pass it over to Ken?

Ken Huang, Chief Financial Officer, Baozun Brand Management

Yes, it's true. We also see Gap Global's performance is quite strong. We also see Gap investing a lot in their new designs and marketing. So we plan to increase our global adoption of Gap products. But we will do it season by season based on market feedback to ensure our strategy change will have a positive impact on our financials. This includes three parts: first, we will adopt Gap's Global products that have successfully launched in the global market and have a good cost. Second, we will utilize their designs using localized fabrics, fittings, and details such as color trends to meet Chinese customers' needs. Finally, we will continue to expand our self-development on some special categories and in local IT collaborations to maximize our self-designed product sales potential. Thank you.

Unidentified Analyst, Analyst

Thank you.

Operator, Operator

The next question comes from Wang Zhao with CICC. Please go ahead.

Wang Zhao, Analyst

Hi. Thank you for taking my questions. I have two questions. The first one is, we have observed that you have been engaged in share repurchase in recent quarters. Could you please share your outlook on future share repurchase and long-term plans for shareholder return? My second question is, could you please share some new changes in the services provided to foreign partners, such as the progress of creative content e-commerce? Thank you.

Vincent Qiu, Chairman and Chief Executive Officer

Thank you for your question. This is Vincent. I'll take the first one, and then Arthur will answer the second question. Yes, we are continuing the share repurchase, and in the visible future, we will maintain this pace to secure a good chance for the investors for their benefits. In the future, shareholders' benefits will also be very important for us. So not only through share repurchase, we will also strive for better performance across each category of our business and try to turn around the whole business to positive this year and also BBM holistically next year. All of these we think are essential parts of our shareholder returns. We will also develop synergies between the business units like BBM and BEC to innovatively deliver some new services and solutions for existing clients to create new value for them in the future. That is basically our approach in delivering good returns for shareholders. Now, Arthur, for the second one.

Arthur Yu, President of Baozun E-Commerce

Okay. For the second one, as you have seen, we delivered a 10% year-over-year growth in service revenue. That was primarily underpinned by improving service quality and expanding the service scope we're providing to our clients. As you mentioned, clients are moving to an omnichannel model at the moment, and with our data and technology, we can provide a true omnichannel solution, including all the different channels and how to operate on those channels. That is greatly appreciated by our clients, especially in the current climate where increased competition is making e-commerce landscape very complex. Our clients need us to drive online sales through our services. Regarding the creative content parts of the business, for this quarter, we have successfully integrated the Location business that we recently acquired. The outcome has been very good because we combined the creativity and innovation of a small entrepreneurial business like Location with the efficient foundation of Baozun Group to unleash the potential of the Location business. That part of the business has grown triple digits this quarter, and our outlook is strong in that area.

Wang Zhao, Analyst

Thank you.

Operator, Operator

The next question comes from Alicia Yap with Citi. Please go ahead.

Alicia Yap, Analyst

Hi, thank you. Good evening, management. Thanks for taking my questions. Two questions. First, can management comment and share if any of these reasons for intensifying competitive landscape among the e-commerce players in China might have affected or even benefited Baozun, given our relatively diversified exposure to both the Tmall and non-Tmall channels? Second, can management also share your view on the latest consumption trends for the second half, especially wondering if you have seen improvement in Gap's offline store traffic? For your online business, based on conversations with the brands, how do you expect your digital marketing solution revenue and warehousing business might trend in the second half? Thank you.

Arthur Yu, President of Baozun E-Commerce

Okay. Thank you, Alicia. It’s Arthur. I will take the first half of the question, and then I will pass on to Ken to comment on the Gap part. I think it's a good question regarding the intensified competition landscape impact. I would say the intensification leads to issues like higher return rates and more discounts being offered; however, it has also offered an opportunity for Baozun. I believe the impact is more positive than negative for a few reasons. Firstly, the omnichannel capability of Baozun is our strength, supported by our investment into technology over the last ten years. That competitive advantage is difficult for our competitors to replicate. Secondly, as different e-commerce platforms start to compete with each other and introduce new rules, Baozun's advisory role is becoming more important to our clients. We can use this opportunity to work more closely with our clients to define their overall e-commerce strategy instead of just being an operator for a single channel. Lastly, this situation strengthens Baozun's position between the brands and platforms. In the first half of the year, we were approached by quite a few e-commerce platforms wanting to collaborate with Baozun to innovate for our clients based on what they truly need. Given the more than 400 clients we're dealing with, we believe the competition is creating challenges but also presenting significant opportunities for Baozun. Thank you.

Vincent Qiu, Chairman and Chief Executive Officer

On the Gap question, I will pass it to Ken.

Ken Huang, Chief Financial Officer, Baozun Brand Management

Okay. Regarding the traffic question, actually, it's improving, especially in August. We expect to see year-on-year sales increases in August, and we also anticipate a year-on-year increase in Gap sales for the second half. I believe traffic varies significantly in different cities, malls, and neighborhood stores. There are substantial opportunities for Gap, comparing to other competitors. Gap still has considerable room and flexibility to optimize our channels, thus we will continue to take advantage of this opportunity in the second half to optimize our store locations and boost our sales growth next year. Thank you.

Operator, Operator

The next question comes from Jack Hou with Huatai Securities. Please go ahead.

Jack Hou, Analyst

Okay. Thanks management for taking my question. I have a question regarding the competition. With the intensified competition in the e-commerce sector, we have seen e-commerce platforms continuously focusing their efforts on merchant support and efficiency improvement. For example, the launch of marketing tools across almost all e-commerce platforms. What’s management's view on Baozun's core competitiveness and barriers in the next stage of development? Thank you.

Arthur Yu, President of Baozun E-Commerce

Okay. Thank you for the question. It's Arthur here. There are a couple of areas we would like to build our competitive advantage. First, we focus on our clients. Since 2022, we launched the Net Promote Score program, aimed at offering good and stable services to our clients. As a result, we have improved our renewal rate among clients. On top of that, we enhance our service offerings, underpinned by investments in technology and data. For me, that is our core competitiveness in the current market situation. Secondly, looking internally, we are launching various lean programs aimed at improving operational efficiency. These initiatives provide us significant advantages from a cost perspective. On one hand, we offer excellent service; on the other, our service is affordable, providing good value from a financial standpoint to our clients. This results in our ability to capture more market share under the current environment. Finally, our recent push towards high-quality product sales and establishing an exclusive distribution business model will give us more scope to operate and leverage our strengths in e-commerce, marketing, and digital solutions. We aim to operate as a digital-enhanced distributor for global brands in China, and given the current market climate, we anticipate this will be another driver for our business.

Jack Hou, Analyst

Thank you.

Operator, Operator

The next question comes from Johanna Ma with CMBI. Please go ahead.

Unidentified Analyst, Analyst

Thank you. Hi, management. Thank you for taking my question. Two questions here. The first is, can management share some updates on your observations of consumer consumption trends and your outlook for the second half? Will there be any adjustments to our business strategy related to this? The second question is for our BBM business. How should we think about the loss reduction trajectory amid the current macro backdrop? And regarding the long-term growth strategy, can management share with us your investment plan or key priorities for investment to drive long-term growth? Thank you.

Arthur Yu, President of Baozun E-Commerce

Okay. I will answer the first one, and I will pass on to Ken for the second one. Regarding the trend for quarter consumption, the overall trend is still weak due to the cautious spending by consumers and the broader macroeconomic environment. However, when looking at the 618 performance, the brands we supported with careful planning for the campaign were able to achieve good growth momentum. For example, the brands we operated during the 618 delivered double-digit year-over-year growth, so even in a soft market, if we execute well, we can find growth opportunities.

Ken Huang, Chief Financial Officer, Baozun Brand Management

Okay. So the second question regarding the current macro backdrop, we actually see an opportunity for Gap's business because Gap is targeting the mass market, and currently we see that the mass market trend remains acceptable. As mentioned earlier, this also presents an opportunity for us to optimize our channels and stores. Therefore, we will continue with our cost optimization actions while enhancing our products, including adopting more products from Gap Global's successful experiences and investing in new Tier 1 and second tier cities to boost our sales and reach our target market and audience. We are optimistic about our progress toward Gap's financial targets and three-year business plan.

Vincent Qiu, Chairman and Chief Executive Officer

For the long-term strategy and investment priorities, this is Vincent to share some insights. Despite the challenges posed by the macro economy, I believe our long-term growth will be driven by three factors: BEC's growth, BBM's growth, and the synergy between them. We are encouraged to see that BEC has already turned back to growth in the first half of the year, which is a positive development. Additionally, we're confident that BBM will also get back on track and experience growth in the second half of the year. Regarding key investment priorities, there are several key points to make. First, we will act cautiously when evaluating potential acquisitions to ensure brands can succeed in the market. The macro economy may not be very optimistic for the visible second half of this year, so we need to exercise caution. However, that does not mean we will avoid opportunities; we will seek potential good opportunities with prudence. Secondly, we need to maintain a healthy financial position for Baozun as a group, as this is vital in today's environment. Thirdly, we need strong operational capabilities. When we want to invest, we need both financial resources and a strong team to effectively integrate target businesses into our core business, as we successfully did with the Location integration. These are the critical considerations when we think about our long-term growth and investment strategies. Thank you.

Unidentified Analyst, Analyst

Thank you.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Wendy Sun for any closing remarks.

Wendy Sun, Senior Director of Corporate Development and Investor Relations

Thank you, operator. On behalf of Baozun management team, we would like to thank you for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call.

Operator, Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.