Earnings Call Transcript - FUTU Q3 2022

Operator, Operator

Hello, ladies and gentlemen. Welcome to Futu Holdings Third Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Daniel Yuan, Chief of Staff and Head of IR at Futu. Please go ahead, sir.

Daniel Yuan, Chief of Staff and Head of IR

Thanks, operator, and thank you for joining us today to discuss our third quarter 2022 earnings results. Joining me on the call today are Mr. Leaf Li, Chairman and Chief Executive Officer; Arthur Chen, Chief Financial Officer; and Robin Xu, Senior Vice President. As a reminder, today's call may include forward-looking statements, which represent the Company's belief regarding future events, which by their nature are not certain and are outside of the Company's control. Forward-looking statements involve inherent risk and uncertainty. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. For more information about the potential risks and uncertainties, please refer to the Company's filings with the SEC, including its registration statement. So, with that, I will now turn the call over to Leaf. Leaf will make his comments in Chinese and I will translate.

Leaf Li, Chairman and CEO

Leaf will make his comments in Chinese and I will translate.

Daniel Yuan, Chief of Staff and Head of IR

Thank you all for joining us today. As of quarter end, we had 1.44 million paying clients, representing a 24% year-over-year growth. In the third quarter, we added 58,000 paying clients, a 5% sequential decline due to stock market tumbles. Despite the market downturn, we achieved over a 98% quarterly paying client retention rate for each of the five countries and regions for the first time. Our industry-leading retention metric speaks to the stickiness of our product and the resilience of our premier client base.

Leaf Li, Chairman and CEO

Joining us today. As of quarter end, we had 1.44 million paying clients, representing a 24% year-over-year growth. In the third quarter, we added 58,000 paying clients, a 5% sequential decline due to stock market tumbles. Despite the market downturn, we achieved over a 98% quarterly paying client retention rate for each of the five countries and regions for the first time. Our industry-leading retention metric speaks to the stickiness of our product and the resilience of our premier client base.

Daniel Yuan, Chief of Staff and Head of IR

In Singapore, new paying client growth accelerated by over one-third sequentially as we successfully launched targeted online and offline marketing campaigns around mutual funds and expanded client acquisition channels. We were able to attract many allocation-driven clients who gravitated towards lower risk mutual funds amid market volatility. In the U.S. market, client growth remained robust as we iterated on online marketing and deepened our collaboration with key opinion leaders. The deceleration of client acquisition in Hong Kong was mainly due to sluggish equity market performance and, to a lesser extent, limited traction of our promotions around silver bonds. Residents between the ages of 35 and 55 will remain our priority in Hong Kong, as our current penetration is around 10%, offering significant room for further growth.

Leaf Li, Chairman and CEO

In the U.S. market, client growth remained strong as we improved our online marketing and strengthened our partnerships with key opinion leaders. The slowdown in client acquisition in Hong Kong was primarily due to weak equity market performance, along with limited success of our promotions for silver bonds. We will continue to focus on residents aged 35 to 55 in Hong Kong, as our current market penetration is approximately 10%, indicating considerable potential for further growth.

Daniel Yuan, Chief of Staff and Head of IR

Total client assets declined 13% year-over-year and 15% quarter-over-quarter to HK$370 billion. While the challenging equity market weighed on client portfolio valuations, net asset inflow remained strong. In Singapore, total client assets grew by 11% quarter-over-quarter due to higher-quality new clients and strong asset inflows.

Leaf Li, Chairman and CEO

Our current penetration is around 10%, offering significant room for further growth. Total client assets declined 13% year-over-year and 15% quarter-over-quarter to HK$370 billion. While the challenging equity market weighed on client portfolio valuations, net asset inflow remained strong. In Singapore, total client assets grew by 11% quarter-over-quarter due to higher-quality new clients and strong asset inflows.

Daniel Yuan, Chief of Staff and Head of IR

Total trading volume declined 19% sequentially to HK$1.1 trillion, of which U.S. stock trading constituted 69%. Lower turnover of technology names led to a 16% sequential decline in the U.S. stock trading volume, partially offset by strong trading interests in leveraged and inverse ETFs. Hong Kong stock trading volume was HK$304 billion, down 28% sequentially amid deteriorating market sentiments across all sectors. Margin financing and securities lending balance increased by 2% sequentially, driven by clients’ bottom fishing of Chinese new economy names.

Leaf Li, Chairman and CEO

U.S. stock trading constituted 69% of a total of llion. There was a 16% sequential decline in U.S. stock trading volume due to lower turnover of technology names, although this was partially offset by strong trading interests in leveraged and inverse ETFs. Hong Kong stock trading volume reached HK$304 billion, reflecting a 28% sequential decrease amid deteriorating market sentiments across all sectors. Margin financing and securities lending balance increased by 2% sequentially, as clients engaged in bottom fishing for Chinese new economy names.

Daniel Yuan, Chief of Staff and Head of IR

Client assets in wealth management grew 47% year-over-year and 19% quarter-over-quarter to HK$26 billion. In Singapore, we became the exclusive distributor of a newly launched USD-denominated money market fund with zero settlement, the first of its kind in Singapore. We also introduced SmartSave in Singapore, which gives our clients the option to automatically subscribe for and redeem money market funds based on the cash positions in their trading accounts. We were intentional about adding money market products and enhancing their functionality amid a rate hike environment, thereby growing our wealth management assets in Singapore five-fold quarter-over-quarter. Client assets in private funds increased by 67% sequentially, mainly attributable to a new cash management product that offers a 4.2% expected annualized return for professional investors with a one-month lock-up. As of quarter end, wealth management penetration among paying clients increased from 15% in the second quarter to 17% as we continue to expand fund offerings and upgrade product features.

Leaf Li, Chairman and CEO

Our wealth management assets in Singapore grew five-fold quarter-over-quarter. Client assets in private funds rose by 67% sequentially, primarily due to a new cash management product that provides a 4.2% expected annualized return for professional investors with a one-month lock-up. By the end of the quarter, wealth management penetration among paying clients increased from 15% in the second quarter to 17% as we continue to expand fund offerings and enhance product features.

Daniel Yuan, Chief of Staff and Head of IR

Our enterprise business had 301 IPO and IR clients as well as 572 ESOP clients as of quarter end, up 40% and 76% year-over-year, respectively. Over 50 companies adopted our ESOP services during the quarter, including Ganfeng Lithium and MicroPort. In the first three quarters of this year, we underwrote 23 Hong Kong IPOs and ranked second among all brokers.

Leaf Li, Chairman and CEO

Daniel Yuan, Chief of Staff and Head of IR

Next, I'd like to invite our CFO, Arthur Chen, to discuss our financial performance.

Arthur Chen, CFO

Thanks, Leaf and Daniel. Please allow me to walk you through our financial performance in the third quarter. All the numbers are in Hong Kong dollars unless otherwise noted. Our total revenue was HK$1.9 billion, up 12% from HK$1.7 billion in the third quarter of 2021. Brokerage commission and handling charge income was HK$958 million, an increase of 3% year-over-year and a decrease of 7% quarter-over-quarter. The year-over-year increase was mainly driven by a higher blended commission rate of 8.8 basis points, up from 6.9 basis points in the year-ago quarter. The quarter-over-quarter decrease was due to a close to 20% sequential decline in trading volume, partially offset by the higher blended commission rate. Interest income was HK$881 million, an increase of 39% year-over-year and 42% quarter-over-quarter. The year-over-year increase was mainly due to higher income from cash deposits, which more than offset lower margin financing income and IPO financing interest income. The quarter-over-quarter increase was mostly attributable to higher interest income from cash deposits and higher margin financing income. Other income was HK$107 million, down 36% year-over-year and up 16% quarter-over-quarter. The year-over-year decrease was mainly due to lower IPO financing service charge income, enterprise public relationship service charge income and currency exchange service income. The quarter-over-quarter increase was mainly due to some one-off income items. Our total costs were HK$218 million, a decrease of 18% from HK$267 million in the third quarter of 2021. Brokerage commission and handling charge expenses were at HK$83 million, down 34% year-over-year and 5% quarter-over-quarter. The commission expenses didn't move in line with brokerage commission income due to the cost-saving from our U.S. sales clearing migration and upgrade service package with our U.S. clearinghouse. The quarter-over-quarter decrease was mainly due to lower trading volume. Interest expenses were HK$41 million, down 40% year-over-year and up 6% to 8% quarter-over-quarter. The year-over-year decrease was mostly due to lower expenses from margin financing and the securities lending. The sequential uptick was driven by higher daily average margin financing balance and higher blended funding costs amid rising rates. Processing and servicing costs were HK$91 million, up 35% year-over-year and down 3% quarter-over-quarter. The year-over-year increase was primarily driven by higher cloud service fees to support our overseas market expansion. As a result, total gross profit was HK$1.7 billion, an increase of 18% from HK$1.5 million in the third quarter of 2021. Gross margin was 89%, expanded from 85% in the third quarter of 2021. Operating expenses were HK$761 million, down 0.3% year-over-year, up 5% quarter-over-quarter. R&D expenses were HK$313 million, up 40% year-over-year and 7% quarter-over-quarter. The increase was mainly due to increasing R&D headcount as we continue to support new product offerings, invest in U.S. sale clearing capabilities and the customized product experience for different new markets. Selling and marketing expenses were HK$235 million, down 42% year-over-year, up 7% quarter-over-quarter. The year-over-year decrease was mainly due to slowing paying client growth. Expenses increased quarter-over-quarter as client acquisition costs hiked due to weak market sentiment. G&A expenses were HK$212 million, up 55% year-over-year and 1% quarter-over-quarter. The increase was primarily due to an increase in headcount for general and administrative personnel. As a result, our net income increased by 23% year-over-year and 18% quarter-over-quarter to HK$755 million. Net income margin expanded to 39% in the third quarter as compared to 36% in the same quarter last year. Our effective tax rate for the quarter increased to 12.2% as the tax credit from our U.S. clearing has been fully utilized. That concludes our prepared remarks. We now like to open the call to questions. Operator, please go ahead.

Operator, Operator

Thank you. We'll now take our first question. Please stand by. This is from Cindy Wang from China Renaissance. Please go ahead.

Cindy Wang, Analyst

My first question is about the interest income in the third quarter, which showed very strong growth. Could you provide a breakdown by margin financing income, bank deposits, and IPO financing interest income for the third quarter? Considering the Fed's rate hike of another 75 basis points in November and the possibility of a further 50 basis points increase in December, how do you expect bank deposits to contribute in the fourth quarter? My second question pertains to the commission rate, which rose to 8.8 basis points in the third quarter. Could you explain the reasoning behind this increase and its sustainability for the fourth quarter? Thank you.

Arthur Chen, CFO

Thank you, Cindy. This is Arthur. I'll take two of your questions. First of all, the interest income. I think the contribution from IPO margin financing is relatively small. So, most of our interest income now comes from the clients' idle cash and also our margin business, which I think you're right, we are one of the beneficiaries from the rate hike cycle. Especially in the first quarter, we see that the contribution from the client's deposits becomes more meaningful. And down the line, I think on a like-for-like basis, it may contribute even more interest income in the fourth quarter. But having said that, you can understand that our interest income actually comes from two parameters: one is the interest rate i.e. the deposit rate we get from the banks. The other is the clients’ idle cash average balance, which may be related to market volatilities. For instance, in the third quarter, the market became very challenging, and we can see the average cash balance among our clients become much higher; they lowered down their stock position. So, I'm not sure whether such allocations, both in client's stocks and client's cash, will remain in the fourth quarter or not. But if we assume such ratio remained the same versus the third quarter, I think we will get more interest income in the fourth quarter. For your second question about the blended commission rate, that comes from several factors. Number one, as Leaf mentioned, in the third quarter our U.S. trading contributions roughly account for close to 17%; which has positively impacted our blended commission rate. It is very difficult to forecast whether such positives will continue or not, given it is more driven by market conditions. Secondly, the trading volatility in the third quarter comes from more clients trading derivatives such as options and futures. In third order, our trading commission—among our trading commission, roughly 30% came from client activities in the derivatives. So, it will enhance our blended commission rate as well. Thank you.

Cindy Wang, Analyst

Thank you. Very clear.

Operator, Operator

Thank you. We'll now take our next question. Please stand by. This is from the line of Zoey Zong from Jefferies. Please go ahead.

Zoey Zong, Analyst

Thank you, management, for answering my questions. This is Zoey Zong from Jefferies. Congratulations on the solid results. I have two questions. First, we've already met our annual goal of acquiring 200,000 new paying clients, so could you provide some insight into our user acquisition in Q4 and next year given the current market conditions? My second question is about our Singapore business. We've seen strong growth in new paying clients and client assets, so I'd like to know how many total paying clients we have in Singapore as of Q3, as well as the average assets for those clients. How do we evaluate the penetration rate and potential growth? Thank you.

Arthur Chen, CFO

Thank you, Zoey. I will take your first question, and I will leave your second question to my colleagues regarding the situation in Singapore. For your first question, you are right. We are already approaching our full-year guidance for 200,000 new paying clients acquired this year. Quarter-to-date, I think you can understand and everybody can imagine the market condition was quite challenging across the U.S. and also the Asian markets as well. So, based on the current quarter-to-date run rate, we think the new clients acquired in the fourth quarter may be smaller or slower than the third quarter. But we are very confident we will continue to acquire clients across the different markets. And also, quarter to date, we still record decent net asset inflows across the different markets. It is too early to give you some sense or the guidance for our next year's new paying clients guidance. We will keep you posted in our fourth-quarter earnings call. Thank you.

Leaf Li, Chairman and CEO

We believe that the new clients acquired in the fourth quarter may be smaller or slower than those acquired in the third quarter. However, we are very confident that we will continue to attract clients across various markets. Additionally, we are still seeing decent net asset inflows across different markets this quarter. It is too early to provide guidance for the number of new paying clients we anticipate next year. We will update you in our fourth-quarter earnings call. Thank you.

Daniel Yuan, Chief of Staff and Head of IR

In Singapore, we have over 200,000 paying clients now, which we think is about 15% of market share, and we think there's a lot of room for further growth. And in the third quarter, we recorded decent growth. It's mainly because we introduced lower-risk wealth management products, such as money market funds, to capture the conservative investment appetite of Singapore clients. In the rate hike environment, the yields of the money market funds kept rising and became rather attractive to Singapore clients. And that's driving the growth of local new paying clients. And we also continue to optimize the account opening and the deposit process, thereby driving conversion from users to clients and also to paying clients. And meanwhile, we also saw improving client quality. So, for the clients that we acquired in the third quarter, the average net asset inflow in the first month exceeded 9,000 Singapore dollars, while the average net asset inflow of clients acquired in January this year took about three months to reach this level. As of the end of Q3, the average assets of our Singapore clients were over 10,000 Singapore dollars, recording a modest quarter-over-quarter growth, and the increase in net asset inflow was able to more than offset the negative impact of the weak equity market. Thank you.

Operator, Operator

We’ll now take our next question. Please stand by. This is from the line of Zeyu Yao from CICC. Please go ahead.

Unidentified Analyst, Analyst

Okay. I will translate my question. Thanks, management, for taking my question. This is Zeyu Yao from CICC. First, congratulations on the exciting results achieved this quarter, despite the volatile market environment. I have two questions here. The first one is about the client region breakdown. Could you provide more details on the regional breakdown of both the newly added and existing paying clients? My second question is about the client assets breakdown. We noticed that total client assets decreased by 15% quarter-over-quarter. Could you provide a breakdown of the asset inflow and the market demand?

Arthur Chen, CFO

Thank you. My colleague, Robin, will answer two of your questions. Thank you.

Robin Xu, Senior Vice President

Thank you. My colleague, Robin, will address your two questions.

Daniel Yuan, Chief of Staff and Head of IR

First of all, to your question on the breakdown of our paying clients. So among the new additions in the third quarter, Asia contributed about half of that, among which Singapore was the main contributor, followed by Hong Kong, and the U.S. contributed roughly the other half. And as of the end of the third quarter, overseas paying clients are around 30%, in which Singapore outnumbered the U.S. by a small margin. And then, in total, Hong Kong contributed close to 40%. Overall, Singapore and the U.S. each contributed less than 20% of our overall paying client base. And to your question on client assets, market fluctuations and clients’ net asset inflows were the most important factors affecting our total client assets. In the third quarter, the net asset inflow from clients in all markets was quite robust, and the total amount remained flat compared with the second quarter. However, the decline in Hong Kong and U.S. stock markets dragged down the total client assets. Thank you.

Operator, Operator

We'll now take the next question. Please stand by. This is from Leon Qi from Daiwa.

Leon Qi, Analyst

This is Leon Qi from Daiwa Securities. Thank you for the opportunity to ask my questions. I have two questions today, one regarding Singapore and the other about Hong Kong. For Singapore, I would like to know what management's thoughts are on the future product pipeline. I understand there have been recent launches in money market funds and wealth management products to enhance your ecosystem, particularly with regards to equity-related offerings. Are there any new asset classes or subclasses being considered, such as cryptocurrency? I am curious about management's perspective on these emerging asset classes. For my second question on Hong Kong, I recognize there is still significant potential for growth in per-customer assets under management. Could management provide some insight on the user growth potential in Hong Kong? Do you believe that the market is already fairly saturated with our current presence? How do we envision future growth in Hong Kong—will it come from attracting new users or increasing assets per user? Thank you.

Arthur Chen, CFO

Thanks a lot, Leon. My colleague, Robin, will answer your first question about Singapore; and our founder, Mr. Leaf Li, will answer your second question about Hong Kong. Thank you.

Robin Xu, Senior Vice President

Thank you, Leon. My colleague, Robin, will respond to your first question regarding Singapore, and our founder, Mr. Leaf Li, will address your second question about Hong Kong. Thank you.

Daniel Yuan, Chief of Staff and Head of IR

So, since last year, we have continued to enhance our product functionality in Singapore. And going forward, we have a couple of new products that we want to roll out to the retail clients, including Hong Kong options trading and select U.S. options trading as well. We also plan to launch leveraged Forex trading in Singapore, and also bond trading. Additionally, we acquired a self-clearing license in Singapore. So, going forward, we'll build our self-clearing capability and allow our clients to transfer their assets to CDP accounts. Lastly, we're also investing in our enterprise services, mostly geared towards family offices in Singapore. Thank you.

Leaf Li, Chairman and CEO

We will be rolling out services to retail clients, which includes options trading in Hong Kong and select options trading in the U.S. We also plan to introduce leveraged Forex trading and bond trading in Singapore. Furthermore, we have obtained a self-clearing license in Singapore, which will enable us to enhance our self-clearing capabilities and allow clients to transfer their assets to CDP accounts. Lastly, we are investing in our enterprise services, primarily targeting family offices in Singapore. Thank you.

Daniel Yuan, Chief of Staff and Head of IR

So, lately, Futu's penetration rate among our Hong Kong retail investors is around 20 per client. We think nearly 10% of the middle-aged, especially residents between 35 to 55 years old. Our penetration among our population is around 10%. I will continue to focus on further penetrating these client cohorts. In the long run, we'll also pay more attention to asset-related metrics, such as clients’ net asset inflows. We intend to continue to increase the wallet share of our clients through the expansion of our product offerings and also increase in client engagement. Thank you.

Operator, Operator

We'll now take our next question. Please stand by. This is from the line of Frank Zheng from Credit Suisse. Please go ahead.

Frank Zheng, Analyst

The first question is about our progress in entering new markets and any concrete plans for 2023. The second question pertains to our current acquisition costs. We observed that in the third quarter, the customer acquisition cost is approximately HK$4,000. How should we view customer acquisition costs moving forward? Additionally, the company indicated an expense ratio of 1% to 1.5% based on net asset inflow. Are we on track with this metric?

Arthur Chen, CFO

I will take your second question first, and our founder, Mr. Leaf Li, will answer your first question about new market expansion. For the CAC, I can understand everybody may be slightly disappointed about our third quarter results. I think there are some reasons behind that. Number one is definitely the market conditions in the third quarter were quite challenging. Secondly, we actually continued to make some brand equity efforts in Hong Kong and in Singapore, despite some of our peers start to backtrack on their marketing campaigns, as we do think brand equity building is a very long-term process, and we need patience in volatile market conditions. And thirdly, as Leaf mentioned in opening remarks, we tried to initiate some new initiatives, such as silver bond promotions in Hong Kong, which unfortunately didn't pay off very well, increasing our CAC in the third quarter. Going forward, I think in the fourth quarter, the market conditions may remain very challenging. So, our CAC levels in the fourth quarter may continue to be on relatively high levels. For the asset acquisition costs, I think you're right, we are still well on track in the range of 1% to 1.5% year-to-date. Thank you very much.

Leaf Li, Chairman and CEO

We attempted to launch new initiatives, including promotions for silver bonds in Hong Kong, but these efforts did not yield favorable results, leading to an increase in our customer acquisition costs during the third quarter. Looking ahead to the fourth quarter, I anticipate that market conditions will still be quite difficult, which may result in our customer acquisition costs remaining relatively high. Regarding asset acquisition costs, we are indeed on target within the range of 1% to 1.5% year-to-date. Thank you.

Daniel Yuan, Chief of Staff and Head of IR

We expect to enter into new overseas markets in the first half of next year. We're also dynamically exploring opportunities in some overseas markets. We also consider launching certain select product features in a new market first for validation purposes and collecting feedback from the market, so as to constantly optimize and upgrade the products to meet the needs of the local clients. Thank you.

Operator, Operator

Thank you. We’ll now take our next question. Please stand by. This is from the line of Emma Xu from Bank of America. Please go ahead.

Emma Xu, Analyst

My question is about your U.S. market. Management mentioned that the U.S. market contributed around 30% of new clients in the third quarter. This is an important new market for your company. Can you share your plans for this market in the medium to long term? Additionally, what are the characteristics of your clients in this market, such as average client assets, client acquisition costs for U.S. clients, and the payback period?

Arthur Chen, CFO

Okay. Our founder, Leaf, will answer this question. Thank you.

Leaf Li, Chairman and CEO

Our founder, Leaf, will answer this question. Thank you.

Daniel Yuan, Chief of Staff and Head of IR

We continue to iterate on client incentives and across various channels in the U.S., and our continued marketing and cooperation with key opinion leaders helped improve our brand awareness in the U.S. market. Despite the acceleration of client acquisition, average assets per paying client have decreased as market downturn offset strong net asset inflows of our clients. Looking into the fourth quarter and as a result of the upcoming holiday season, we expect the sentiment to affect some U.S. clients’ willingness to open accounts and transfer funds, causing client acquisition to slow down in the U.S. In the meantime, we will continue to focus on improving client quality and the efficiency of client acquisition. In terms of client acquisition costs, right now, the CAC in the U.S. is lower than the overall group's client acquisition cost. However, the payback period will be much longer. We are still patient on our monetization in the U.S. as we plan to roll out a number of new product features in the coming quarters that we believe can meaningfully improve monetization. Thank you.

Operator, Operator

Thank you. We’ll now take our next question. Please stand by. This is from the line of Peter Zhang from JP Morgan. Please go ahead.

Peter Zhang, Analyst

Okay. Let me translate. This is Peter Zhang from JP Morgan. Congratulations on the strong results. My first question is about the market share in Hong Kong. We noticed that Futu’s trading volume in Hong Kong declined by 28% quarter-over-quarter while the total trading volume in the Hong Kong market declined by 18%. We would like to understand the reason behind this. My second question is regarding IT spending. Management indicated a 20% headcount increase in 2022. I would like to check on the progress of this initiative and what the trend for R&D expenses will be moving forward.

Arthur Chen, CFO

Thank you. I will take both of the questions. I think number one, the comparison is our trading volumes change patterns versus the overall markets. The reason behind this, in my humble view, is that the overall markets, including retail investors and institutional investors, when the market becomes extremely volatile and extremely challenging normally, institutional investors trade more tactically and responsively versus retail investors. Given certain revamps, few retail investors may continue to hold their positions, whereas institutional investors become nimbler and react to market volatility. This answers your first question. For question number two, I think year-to-date we are on track in terms of the next new headcount increase this year, and in particular, in terms of delta, the overall headcount increase has already peaked in terms of speed versus the past two years. So, down the line, I think we are still conducting internal evaluations about next year's budget, in terms of headcount, but I do think the increase of headcount, especially in the R&D side next year will be quite stable, or the speed may be even smaller than this year. Thank you.

Operator, Operator

Thank you. And this concludes the question-and-answer session. I would now like to hand back to Daniel for closing remarks.

Daniel Yuan, Chief of Staff and Head of IR

That concludes our call today. On behalf of the Futu management team, I would like to thank you for joining us tonight. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you and goodbye.

Operator, Operator

Thank you. This does conclude the conference for today. Thank you for participating. You may now disconnect.