China Yuchai International Ltd (CYD) Q4 2025 Earnings Call Transcript

Good day and thank you for standing by. Welcome to China UCHI International Limited Second Half 2025 Financial Results. At this time, all participants are in a listen-only mood. After the speaker's presentation, there will be a question and answer session. To answer questions during the session, you need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference call is being recorded. I would now like to turn the conference over to Kevin Thies. Please go ahead, sir.

Thank you for joining us today, and welcome to China Uchai International Limited conference call and webcast for the 2025 second half and year ended on December 31, 2025. Joining us today are Mr. Wei Ming Ho and Mr. Chun Xin Lo, President and Chief Financial Officer of CYI, respectively. In addition, we have in attendance, Mr. Kelvin Lai, General Manager of Operations of CYI, and the Chairman of MTU Uchive Power Company Limited, MTU Uchive Power. Before we begin, I would remind all listeners that the route that's called, we may make statements that may contain forward-looking statements within the meaning of the private securities litigation reform act in 1995. The words believe, expect, anticipate, project, target, optimistic, confident that, continue to, predict, intend, aim, will, or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that may be deemed forward-looking statements. These forward- its statements include but are not limited to statements concerning the company's operations and its financial performance and condition and are based on current expectations, beliefs, and assumptions which are subject to change at any time. The company cautions that these statements by their nature involve risk and uncertainties and actual results may differ materially depending on a variety of important factors such as government and stock exchange regulations, competition, political, economic, and social conditions around the world and in China, including those discussed in the company's Form 20S and under the headings Rich Factors, Results of Operations, and Business Overview, and in other reports file with the Securities and Exchange Commission from time to time. All forward-looking statements are applicable only as of the date they are made, and the company specifically disclaims any obligation to maintain or update the forward-looking information, whether of the nature contained in a press release made today or today's conference call or otherwise in the future. Mr. Ho will provide a brief overview and summary, and then Mr. Liu will review the financial results for the second half and fiscal year in December 31, 2025. Thereafter, we will conduct a question and answer session. For the purposes of today's call, the 2025 second half of fiscal year numbers are unaudited, the 2024 second half year are unaudited, and the 2024 fiscal year financial results are audited. Financial results are presented in RMB and US dollars. All the financial information presented is reported using the IFRS accounting standards as issued by the International Accounting Standards Board. With that, Mr. Ho, please begin your prepared remarks.

Thank you, Kevin. We are pleased to report a strong sales and profit growth in the second half of the full year of 2025. For the second half of 2025, our revenue in the second half increased by 33.5% year-over-year to R&B $11.8 billion, or US$1.7 billion. Our gross profit increased by 58.4% year-over-year to R&B $2.2 billion, or US$317 million, and our gross margin rose to 18.9%. Our operating profit increased by 193.1% year-over-year to R&B $469.2 million, or US$66.7 million. basic and diluted earnings per share improved by 108.1 million year-over-year to RMB 4.57 or year 65 cents. For fiscal year of 2025, revenue increased by 28.9% to RMB 24.7 billion or year-to-all 3.5 billion. Gross profit increased by 44.3% year-on-year to 4.1 billion RMB or US dollar 578.7 billion US dollar. And gross margin rose to 16.5%. Operating profit improved by 82.7% to RMB 1.1 billion or US dollar 155.2 million. Leapsic and diluted earnings per share increased by 74.4% to R&D 14.32 for year's dollars 2.04. Our revenue growth in 2025 second half and year was generated by higher unit sales in nearly every reporting category. Rough profit and margin were enhanced by the increased unit sales volume, especially for heavy yield gear and high cost-powered engines. Our off-road engine unit sales in 2025 increased by 30% year-a-year with marine and genset engines and industrial engines each recording unit sales growth of over 24% year-a-year. The fast-growing demand for backup generators to provide reliable electric power for data center operations created rapid growth for our engine. Combined sales of MTU-HI Power and HI-branded high-house power engines, the data centers exceeded 2,000 units in 2025, up from 750 units in the prior year. To meet the expected increase in demand for our power charity engines, production capacity expansion is well underway. Exports were an important sales channel as our globalization has been increasing. Our agreement in Vietnam includes EHI's support for construction of a partner's production facility, which complements our Thailand production operation. Buses powered by EHI natural gas engines were delivered in Mexico, bringing the total EHI engine count to 2,400 units, firing buses in the Nouveau-Leon region of Mexico. Our Foundry began batch delivery of advanced casting to Germany, demonstrating the acceptance of our casting product quality by the customers. We are expanding our international sales and service support offices. As we believe, potential new international partnerships will strengthen our global reach. Our strategy remains to sell into multiple end markets with a growing and diverse product portfolio. R&D expenses increased by 37.3% to R&B $1.4 billion or US$192.3 million in the fiscal year of 2025. Each high continued to enhance engine efficiency and performance of its National 6 and Tier 4 emissions compliant engines and power generation engines. Progress continued on developing new energy products including alternative fuel engines using hydrogen, metal, and ammonia combustion technology. So our R&D expenditure, including capitalized costs, was R&B $1.5 billion on US$270.1 million. Our strategic alliances and joint ventures produced a 9.4% year-over-year growth in profit in 2025, propelled by higher sales and profits mainly by MTU HR. Recently, we took proactive steps to strengthen our technological capabilities and supply chain resilience by improving access to key components and advancing our participation in critical technology development. We have acquired a 27.97% equity interest in the Aniyue at Tienkong Henyang Industrial Technology Company, which is a national high-tech industrial leader specializing in injection system, including common rail system, unit pump, and mechanical pump. In addition, we became a limited partner in the Guangxi-Yi Double Growth Fund, a private equity fund focused on investing in emerging and investing in innovative technologies. Our indirect subsidiary Guangxi-Yi Marine and Genset Power Company filed an application for listing with the Hong Kong Stock Exchange in January 2006. The potential listing is subject to review and approval by the Hong Kong Stock Exchange and relevant regulatory authorities and market conditions. We believe this action will provide more resources to enhance their operations growth. Highlighting the company's confidence in future revenue, profits and cash flow generation. We paid a cash dividend of 0.53 per cent, 0.53 per ordinary share in July 2025 to show our commitment to building shareholder value. Cash and bank balances were over R&B 7.9 billion all-year dollars, 1.1 billion, as of December 31st, 2025. With that, I now would like to turn the call over to the Chun Seng Lu of our Chief Financial official will provide more details on the financial results today.

Thank you Wing Wing. Now let me review our unported six months and two-year results entered December 1st 2020. For the first month, our revenue increased by 33.5% to RMB $11.8 billion or US$1.7 billion compared with RMB $8.8 billion in second half of 2024. Total number of engines sold increased by 28.7% to 210,913 units compared with 163,843 units in second half of 2024. The increase in the total number of engines sold in second half of 2025 was primarily driven by 49.2% year-over-year rise in truck and bus engine unit sales which significantly outpaced the 13% year-over-year growth in market shares of truck and bus vehicles excluding gasoline and electric power vehicles as reported by the China Association of Automobile Manufacturers . Truck engine unit sales in half 2025 rose by 59.4% led by a 146.1% year-over-year gain in heavy-duty truck engines. Off-road engine unit sales increased by 7.5% year-over-year led by strong growth of more than 22% in both industrial and marine engine set unit sales offsetting lower bicultural engine unit sales. Gross profit increased by 36.4% to RMB $2.2 billion or US$370 million up from RMB $1.4 billion in second half of 2024. Gross margin increased to 18.9% in second half of 2025 compared with 15.9% in second half of 2024. The increase was mainly due to higher unit sales volume, a change of sales mix. with highly unique sales of heavy duty and high cost power engines and continuing cost station initiatives. After operating income decreased by 24.1 percent to R&B 224.5 million or US dollar 31.9 million compared with R&B 401.5 million in second half 2024. The decrease was mainly due to lower government grants. Research and development expenses increased by 48% to R&B $804.9 million or US dollar $124.5 million compared with R&B $591.1 million in St. Health 2024, mainly driven by higher experimental costs, increased personnel expenses, higher mode costs and impairment related to fuel cell development. Total R&D advantages including stabilized costs were R&D $934.2 billion or US$128.6 million representing 8.3% of the revenue in second half 2025 as compared with R&D $726 million or 8.2% of the revenue in second half 2024. Selling general and administrative expenses increased by 4.9% to R&B $1.1 billion or US$157.7 million from R&B $1 billion in second half 2024. This increase was mainly due to increased percentage expenses and higher consultancy fees partially offset by lower accounts receivable provisions compared with the same period last year. SG&A expenses represented 9.4% of the revenue in second half 2025 compared with 12% for second half 2024. Operating profit rose by 193.1% to RMB 469.2 million on US dollar 66.7 million from RMB 160.1 million in second half 2024. Operating margin was 4 percent compared with 1.8 percent in second half 2024. The increase was generated by higher unit sales volume, a change of sales mix with higher unit sales of heavy duty and high horse power engines and lower as you can expand as percentage of the total revenue. Finance costs decreased by 20.2% to R&B $39.6 million or US$4.2 million from R&B $37.1 million in St. House 2024, primarily due to lower bank term loans and reduced bills discounting. The share of financial results of the associates and joint ventures decreased by 15.1% to R&B 49.7 million or US dollar 7.1 million compared with R&B 58.5 million in second half 2024. The decrease was mainly due to reduced profits at YNC and G&Co limited. Income tax expense was R&B 213.5 million or US dollar 30.4 million compared with R&B 26.4 million in second half The tax increase was due to higher profit in second half 2025 as compared with second half 2024 and higher different tax expenses. Net profit attributable to equity holders of a company increased by 107.4% to R&B US$121.6 million or US dollar 24.4 million compared with R&B 82.7 million in second half during 2024. Basic and Directed earnings per share was R&B 4.57 or USD 65 cents compared with R&B 2.19 in second half during 2024. Basic and Directed earnings per share for City Health 2025 and City Health 2024 were based on the weighted average of $37,515,322 shares and $37,809,834 shares respectively. Now we will review the unaudited financial results for the fiscal year entered December 31st 2025. Revenue increased by 28.9% to R&B 24.7 billion or US dollar 3.5 billion compared with R&B 19.1 billion in FY2024. The total number of engines sold in FY2025 increased by 29.4% year-over-year to 461,309 units compared with 356,586 units in FY2024. Truck and bus engine units rose by 42.8% compared with CAM data for for vehicle market sales growth, excluding gasoline and electric power greater of 4.5% for 2025. Proper truck engine unit sales growth by 50.7% year-over-year compared with a 5.9% year-over-year increase from CAM data for truck unit sales. Heavy duty truck engine sales increased by 80.1% year-over-year in 2025, followed by a 34.2% year-over-year increase in medium-duty truck engines and a 67.6% year-over-year improvement in light-duty truck engine sales. Off-road engine unit sales increased by 13% year-over-year with both industrial and marine and genset unit sales growth of more than 24% year-over-year, offsetting lower agricultural engine unit sales. Gross profit increased by 44.3% to RMB $4.1 billion or US$578.7 million from RMB $2.8 billion in FY2024. Gross margin increased to 16.5% compared with 14.7% in FY2024. The increase was mainly due to highly unique sales volume, a change of sales mix with highly unique sales of heavy duty and high-force engine power, high-force power engines and continuing cost reduction initiatives. Other opening income decreased by 22.5% to RMB 445.9 million or US$63.4 million compared with RMB 575.7 million in FY2024. This was primarily due to lower bank interest income and reduced government grounds. R&D expenses increased by 37.3% to R&B $1.4 billion or US$192.3 million compared with R&B $984.7 million in FY2024, primarily driven by higher experimental costs, increased personnel expenses and impairments related to field self-development. Yeechai has continued with its initiatives to enhance the engine efficiency and performance of its national sixth and tier four emission standard compliant engines and power generation engines for data centers and marine applications, while also advancing its new energy solutions. Total R&B expenditure including capitalized costs was R&B $1.5 billion or US$217.1 million representing 6.2% of the revenue in FY2025 compared with R&B $1.2 billion or 6.2% of the revenue in FY2024. SG&A expenses increased by 14.3% to RMB $2.1 billion or US$294.7 million representing $8.4 million of the revenue in FY2025 compared with RMB $1.8 billion or 9.5% of the revenue in FY2024. This was mainly due to higher personnel expenses and consultancy fees as well as increased the sales and service expenses that partially offset lower accounts receivable provisions. Operating profit increased by 82.7% to R&B 1.1 billion or US$ 155.2 million compared with R&B in FY2024. The operating margin was 4.4% up from 3.1% in FY2024. Finance costs increased by 20.8% to RMB $61.8 million or US$8.8 million from RMB $78 million in FY2024, primarily due to lower banking loans. The share of financial results of the associates and joint ventures increased by 9.4% to income of RMB 111.1 million or US dollar 15.8 million compared with income of RMB 101.5 million in FY2024. The improvement was mainly driven by higher profits of 18.3% at MTU Yechai Power Company Limited, and increased profits at Guam Si Programme Yechai Automotive Technology Company, partially offset lower profits at YNC Energy Co Ltd. Income tax expense increased by 106% to R&B 329.7 million for US dollar 46.9 million compared with R&B $128.8 million in FY2024. The tax increase was driven by higher profit in FY2025 as compared with 2024 and higher tax expenses. Net profit attributable to the company's shareholders increased by 66.3% to R&B $537.4 million or US dollar $76.5 million compared with R&B 323.1 billion in FY2024. Basic and direct earnings per share rose by 34.4% to R&B 14.32 or US$2.04 compared with R&B 8.21 in FY2024. Basic and direct earnings per share for FY2025 and FY2024 were based on the weighted average of 37,518,322 shares and 39,335,763 shares respectively. Now we will go through some banished highlights as of December 21st 2025. Such a bank taxes were RMB $7.9 billion or US$1.1 billion compared with RMB $6.4 billion at the end of financial year 2024. Trade and build receivables were RMB $10.4 billion or US$1.5 billion compared with RMB $18.8 billion at the end of FY2024. Eventories were R&B $5.6 billion or US$791.8 million compared with R&B $4.7 billion at the end of FY 2024. Trade and build payables were R&B $11.1 billion or US$1.6 billion compared with R&B $8.5 billion at the end of FY 2024. Short-term and long-term loans and borrowings were INB $2 billion or US dollar $287.4 million compared with INB $2.5 billion at the end of financial year 2024. I will now turn the talk over to Kevin for a comment for Q&A section.

Mr. Liu, please note some officers of China and Uchai are remotely calling into the conference call. This may result in a slight delay in providing answers to some questions. We apologize for any inconvenience and thank you for your patience. If you would like to ask the question in Chinese, please kindly translate your own question to English before turning to the management for answers. And before we start the Q&A, we would also like to announce that management will be attending the forthcoming Jeffries Conference on March 19th, the HSBC conference on April 14th to the 16th, Bank of America Merrill Lynch conference in the Shenzhen on May 13th, JP Morgan conference on May 20th to 22nd, and the UBS conference in Hong Kong on May 26th to 29th. If you are interested in a one-on-one or a small group meeting, please contact the salespeople at these banks. Given the tight meeting schedule and travel plans, we will not be able to accept meeting requests outside the conference venues. Now, operator, we are ready for questions.

Thank you. We will now begin the question and answer session. As a reminder to ask questions, please press star one and one on your telephone and wait for your name to be announced. To cancel requests, please press star one and one again please press star one and one and if you'd like to ask

question please press star one and one okay I've seen the questions online okay so I'll read the questions from So the question is that thanks for the determination and congrats on the strong results year over Can you potentially share more on much higher expenses in the second half where effective tax rate is at about 44%? Okay, I'm Jun San, I'm the CEO of CY, so I will take these questions. So I think this question, tax expense, we should look at the full year, right? So from a full year basis, there's a 7% to 8% higher due to the different types. So on a year-on-year basis, we roll off about a net basis of 100 million. So that is actually a non-tash item, you know, that is also due to the sanity of accounting that you know we look at the future profits for all entities and eventually then we need to impair those different tax assets that you know should be shown to be accessed. So the company has started to write off those different tax assets, reduce it to the level of the sustain for the future profit. that's also part of the accounting requirements that we have done that yeah so uh if you understood that you know so we will come down to about 20 to 21 percent uh if i can touch rate uh on a year-on-year basis so the changes is probably only about one two percent if you look at 2025 and 2024 okay i hope that answers your questions uh why lean thank you we do have

questions from the phone line. The first question comes from Wei Shen of UBS. Please go ahead.

Wei Shen Thank you for a good morning and good evening. Thank you for taking my question. My question is about the other operating income. I found that in 2024, it decreased a lot, and I'm wondering what's the reasons and what's the outlook in 2026. Thank you.

Okay, I'm Jun-san here. So your question is on the valuation, the question is on the operating income, right? I don't want to confirm your question. Okay. So the reduction is mainly due to the lower government grants. So, in 2025, probably, you know, a lot of people on the call may know that the incentive policy issued by the Chinese government. So that has reduced substantially, it's actually half of the government grant that we have received in 2024, you know, in 2025 compared to 2024. So, if your question, next question is that whether that will continue in this trend, right? That one, again, you know, we won't project that, you know, what would be the incentive from the government. But for now, you know, I would think that the trend probably will remain as 2 to 2.5.

My next question is about the share of the joint venture profit in 2025 because we only have the combined results. We don't have the details. Karen, do you have the numbers for the NTU joint venture? What's the profit growth for the joint venture?

Sorry. Oh, yeah, you go ahead, yeah.

Okay. Well, we'll let Kevin Lai answer, then he's the chairman of MTU, he can tell you all about Okay.

Thank you. Thank you for the question. The joint venture last year, and then they generate the net profits about 211 million RMB. So, they're increasing by 22% and then from the year 2024. But there's the sales volume and also the revenue is a much higher, about 30% plus increase. The reason why the profit is not as good as the volume sales or the revenue generated because of the product mix has been changed. And we sold less the 20-cylinder engine and the profit and also the revenue is a, it's little bit lower than the other version yeah got it thank you thank you for the questions one moment for the next question our next questions we have the line from fiona lian from bank of america and please go ahead hi uh good morning and good evening uh this is fiona from bank of america so i also have two questions for uh the management team uh the first one is that uh in the second

half in 2025, we see that the company's gross profit margin improved quite a lot year over year. So could you please elaborate more about the reasons behind? Is it because we have more delivery to the power generation clients so that we have a better product mix and has the higher gold margin. That is the first question.

Okay, let me answer that question. Actually, if you look at the unit sales that we had disclosed in the announcement, the unit sales actually got up by about 30%. So that's one of the major reasons why the profits improved is due to the increase in volume. And two, also because of a high horsepower engine, we sold more than we did last year. I mean, again, significantly more, if you look at our numbers, again, in the announcement, it got up from 1050 to 2000. So those are two major contributions to the improved performance. Of course, with a higher volume that we have, higher unit sales, that will kind of leverage the fixed cost of that, that contributes to the better cross margin too.

Okay, so I have a follow-up question. So given the better product mix in 2025, so what's our guidance for 2026?

Well, it's going to be quite challenging, difficult to provide good guidance in China. You know, in China, the sales, a lot of it is due to double 4.6, fewer by double 4.6, right? So, we haven't seen much yet. Last year, one of the biggest reasons for the increase in revenue or unique sales is because of the government policy, the replacement policy. So, that one has actually a dry stroke, quite a few of our vehicle sales and also quite a few of our non-vehicle sales itself, volume. So whether or not the government is going to continue with that, and how strongly we are going to push that next year, it's going to be seen, and that will also determine the impact on the overall unit sales growth plan. But however, there is a very bright spot. We see a lot of big demand in the data centers last year, and that has been maintained, and we expect it to improve this year but it's hard to give you a percentage of the growth so I think we expect that to improve by double digits this year for the data centers so overall I think this year's non data center sales is going to be more or less the same if the government if the government continues to be uh if the uh we call uh policies oh thank you uh so my second question is about our r d expenses uh so in 2025 we see that the

r d expenses are increased um over 30 percent and so looking at 2026 uh what do you expect the uh R&D expenses growth rate, and what's our key R&D focuses looking at 2026 and 2027?

Okay, R&D expenses are just growing by about 5% of our revenue, right, so it goes The other one that we we should talk about is that what type of research we are working on. There are a few things that we are working on. One of them is the new energy side of things. We are still developing and continue to develop on the new energy side, particularly in the range and standard EV and trying to try to get our system which is already commercialized to be stack into or develop into our customers vehicle and other areas would be new kind of new areas new energy systems things like ammonia metal and hydrogen power combustion engine other than clean cells right so if you and also the Chinese government is now also considering introducing introducing national seven emission standards in the coming two to three years so that for that we are also starting to do some R&D to get ourselves ready for that for that emissions requirement so there are quite a few areas that we're working on in addition to a continuous improvement on the product getting more efficient and more field efficient as well so there are quite a few areas working on thank you uh that's very clear and that's all my questions thank you for the questions one moment for the next question our next question comes from yin se of cicc please go ahead

thanks and congratulations so i have two questions to ask the first one is uh about about the future business of the HPP engines. We noticed that Caterpillar has announced its reciprocating generators can be used as prime power for data centers. So how does Yuchai view this industry trend? And do we have some existing natural gas engine products and technologies to support this industry trend. This is my first question. Thank you.

Dr. Okay, yeah, let me take this question. Yeah. The high horsepower engine, the business forecast and then the still depends on the development of those internet service provider and then the how fast and they build the data center. So we do expect there will be We still grow in the year 2026 when comparing to 2025, but we don't have the exact figure because so far and then we don't receive, I mean, all the order from the wireless customer. Regarding on your question, regarding on the natural gas generator, from Yu-Chai we do have our natural gas engine for the power generation. We have the technology and we have the right product as well. And our product of the natural gas engine will be very similar to the diesel engine. And then they have using our 16 VC engine and that will be generated, I mean, the about two megawatt for the power generation using natural gas. But so far, and then the application of the natural gas for house powers, mainly on the industrial application at the moment, because in the region of China or Asia, and I mean the customer, and then we were considering the cost of the engine, and then they are not using the natural gas engine for the data center at this stage.

Very clear, and thanks. So my second question is about our significant market share gain in truck and bus engines, especially in 2025. So how do you view the 2026 outlook for domestic truck and bus industry sales and whether market share growth can be sustainable? This is my second question. Thank you.

Okay, so you're talking about vehicle engines, the major vehicle for OEMs in the market, some of them are using our engines. In particular, I think we have been working with these vehicles OEMs for quite a while to get our engines certified and designed for the vehicles. And one of the two of them has already come to fruition last year. Excuse me. So that's why we see a big growth in our heavy-duty truck segment of market. So with that, we expect that to continue to 2022, barring any unforeseen. So yeah, we do expect to see some continued growth in that area.

I get it.

Any questions? As a reminder, if you'd like to ask questions, please press star 1-1. Our next question comes from Stephen Liu of Guotai Hightower Security. Please go ahead.

Hello.

Good morning and good evening. Thank you very much for taking my questions. So I've got two questions. The first one is about your backlog, especially for those associated with the data center business. So, if we compare your backlog right now and, like, half a year ago, so I'm just wondering, is that getting larger, or if you look at the demand and supply, so is the supply getting more and more constrained, it's getting more and more tighter, is that what is happening for those data center engines? Thank you.

It has to be, I mean, separate the operation because for the Yutai brand high horse power engine, the most of the components applied, they are generally come from the China. So that the, I mean, on the on the surprise side, and then we didn't have much problem there. And And then because they had providing the most of component and to for for engine assembly. But the cost wise and then they had increasing the price this year, mainly because of the raw material increasing recently, and so that that cost and then our cost mark up. But for the joint venture side, and the we do have the bottleneck and then regarding on the supply because of the supply chain from our partners and from Germany, and then they do have some constraint and causing the supply of the component and then will be limited and then for the operation in the Chinese joint venture. Right.

Thanks. But I guess I didn't get it clear. So I'm trying to ask about your backlog, I mean, the order that you receive from your customer. So, is the size of that getting larger during the past few months?

No. I mean, we are still working very hard to fulfill those requirements, yeah. And I mean, the delivery and then so far still about between three to four months anyway, All right.

And my second question is about exports. So, do you see any, like, increase on your European business, and what is the, like, the detail segment about that? Is that about, like, diesel engines or gas engines, or, I mean, what is the outlook of your European business?

Are you referring to high horsepower engine or referring to the truck engine?

Mostly about the large horsepower engine.

Okay. Yeah, for the export market, if we referring to the Utah brand, I mean the Utah brand operation, our export markets only count for a small percentage, about 10%, and maybe in Asia. But for the M2 joint venture side, there will be, I mean, because we sell food, we sold food by our OEM, and those and then we'll have about over 20% or 25% of the export opportunity. And it's also on growing as well.

All right.

I see. Thank you very much.

Thank you for the question. At this time, there are no further questions from the phone line. We have now reached the end of our Q&A session. I would like to turn the call back over to Mr. Holmes.

Well, thank you all for participating in our conference call. We wish each of you good health, and we look forward to speaking with you again. Thank you.

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