Thank you. Hello everyone, and welcome to Sea’s 2023 third quarter earnings conference call. I am Minju Song, from Sea’s Group Chief Corporate Officer’s Office. Before we continue, I would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties and may not be realized in the future for various reasons as stated in our press release. Also, this call includes the discussion of certain non-GAAP financial measures such as adjusted EBITDA. We believe these measures can enhance our investors’ understanding of the actual cash flows of our major businesses when used as a complement to our GAAP disclosures. For a discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP measures, please refer to the section on non-GAAP Financial Measures in our press release. I have with me Sea’s Chairman and Group Chief Executive Officer, Forrest Li, Group President, Chris Feng, Group Chief Financial Officer, Tony Hou, and Group Chief Corporate Officer, Yanjun Wang. Our management will share strategy and business updates, operating highlights, and financial performance for the third quarter of 2023. This will be followed by a Q&A session in which we welcome any questions you have. With that, let me turn the call over to Forrest.

Hello everyone and thank you for joining today’s call. At our last earnings call, we shared that we would accelerate investment in e-commerce. In the past, our e-commerce business has made some significant shifts in operational focus to adapt to major business environment changes. Before diving into the details of the third quarter results, I would like to first share how the thinking behind each shift has been underpinned by our long-term view of the business. Our strategy for e-commerce is driven by the principle that maximizing the long-term profitability of the business will generate the greatest returns to our shareholders in the long run. And, maximizing long-term profitability requires scale and strong market leadership. To achieve this long-term objective, we look at three key operational factors: growth, current profitability, and market share gain. While all are important and positively correlated in the long run, near-term focus on one can create trade-offs for another. As business conditions change, sometimes rapidly, we need to decide which factor to prioritize for that period. During the pandemic, we focused on growth first, ramping up rapidly to meet surging demand for e-commerce despite the great operational difficulties created by lockdowns. This allowed us to achieve significant scale and strong market leadership when growth was very efficient. Subsequently, capital became very expensive and less available. So we made a rapid turn to achieve immediate profitability for Shopee as a first priority, while sustaining the platform’s scale and market leadership. In both cases, we believe we made the right decisions in response to the shifting business environment. As we focus on long-term profitability and adapt to changes in the business environment, some short-term fluctuations in our results are inevitable. However, our demonstrated ability to adapt quickly and execute major transitions effectively is a core strength for the long-term success of our business. We are now deploying this strength to realize the next shift in our operational focus in e-commerce. In this period, we will prioritize investing in the business to increase our market share and further strengthen our market leadership. We made this decision in view of three recent developments. First, our move to self-sufficiency and profitability has significantly improved both our cash reserves and operational efficiency. Our group cash position has increased by around $600 million from a year ago to more than $7.9 billion at the end of the third quarter. This puts us in a strong position to pursue more competitive and growth-focused strategies while maintaining financial discipline and a strong balance sheet over the long run. Second, the entrance of new players has intensified competition in our markets. Competition may accelerate market share consolidation, and when markets stabilize, each remaining player will have sustainable profitability. Investing in market share gain now will position us better with even stronger market leadership when that happens. We thrive in a competitive environment. We competed aggressively and effectively in our markets for years to emerge as the clear market leader from an underdog position. We now have scale, a deep understanding of our markets, and strong localized execution across diverse geographies. This gives us a wide competitive moat, and we intend to grow it further. Third, live streaming has become increasingly popular among sellers, buyers, and creators in our markets. These tailwinds give us a very good opportunity to build our e-commerce content ecosystem efficiently. We believe live streaming e-commerce will become a sizable and profitable part of our platform and extend our long-term growth potential. I want to emphasize that in making investment decisions, we are committed to maintaining a strong cash position, not relying on external funding, and investing within our means at a time and pace of our choosing. At the same time, given that e-commerce penetration remains low in most of our markets, we as the market leader have a responsibility to help grow the whole e-commerce ecosystem. Shopee will remain committed to doing so in a healthy and sustainable way and driving value creation for all stakeholders. I hope that this brief sharing on the thinking behind our decisions has been helpful. Being nimble and therefore able to do the right thing at the right time remains a core strength and competitive advantage for our business. With that, I will invite Yanjun to discuss each business segment in more detail.

Thank you, Forrest. Let me now share more details on the recent performance of each business segment, beginning with e-commerce. Just now, Forrest discussed the long-term objectives of our investment in e-commerce. For the immediate period, we assessed the effectiveness of our investment by looking at how our market leadership, as well as the scale and strength of our e-commerce content has been trending. On both fronts, we made strong progress in the past quarter. In the third quarter, growth in Shopee's users, growth orders, and GMV accelerated sequentially. We saw average monthly active buyers growing 11% quarter-on-quarter with increased order frequency and improved buyer retention. As a result, our growth orders and GMV achieved 24% and 11% sequential growth respectively, further increasing our market share. We also saw a material improvement in MTS scores broadly across the markets quarter-on-quarter and year-on-year. We believe this to be a good early indication of the effectiveness of our investment. Another key driver of our solid growth during the third quarter was the ramp-up of Shopee Live. During this period, we have made a strong push into e-commerce live streaming and increased collaborations with a growing ecosystem of content creators and live streaming sellers. We have also successfully acquired many new buyers and deepened our engagement with existing buyers. For example, in Indonesia, one out of five daily active users watched live streaming in October on average. With our efforts to help our sellers and creators, we saw a significant increase in their participation in Shopee Live. Our number of average daily unique streamers, total daily hour streams, and the number of daily stream sessions for October all grew by more than three times compared to June. Our streamers are also becoming more engaged, with the average stream duration per streamer increasing by more than a third during the same period. In Southeast Asia, our average daily orders on live streaming already reached more than 10% of the total order volume for October. For our investments in live streaming, we have a targeted focus on key categories such as fashion and health and beauty. These categories tend to benefit more from this format of user engagement and tend to enjoy higher margins. This further strengthens our overall market leadership in these key marketplace categories. Moreover, we have been focused on investment efficiency and driven fast improvement in unit economics. This aligns with our long-term view that live streaming e-commerce can be both a meaningful part of our platform and our business. As shared before, we are consistently focused on reducing costs to serve for our e-commerce ecosystem. We made strong progress in continuing to drive down logistics costs while improving user experience. Our platform logistics costs per order for our Asia market decreased by 17% year-on-year in the third quarter. Decreases in logistics costs also contributed to the year-on-year decline in our value-added services revenue. We believe this to be an example of scale economics where we drive down logistics costs with scale and pass the benefits of reduced shipping costs to our sellers and buyers. This business model also serves to strengthen the competitive mode of our platform. As we scale the Shopee platform, we also continue to expand the coverage of our logistics network across our markets to reach more sellers and buyers. This will be done through better routing for more efficient and faster delivery, further expanding our network of sorting centers, and improving our large-scale coverage. In the third quarter, Brazil continues to enjoy strong growth. At the same time, our user economics in Brazil improves. We will continue to invest in category expansion and user acquisition in this market. And we will take a balanced approach of investing in growth while driving improvements in operational efficiency, especially in logistics. Our results in Brazil for the quarter speak to our success on both fronts. While we believe we already achieved sufficient scale and cost efficiency to be profitable in Brazil, our focus remains on capturing the growth opportunity there. Looking into the fourth quarter, we will continue to invest in the holiday shopping season, which we believe is a good time to acquire users, gain market share, and strengthen our content ecosystem.

Thank you, Yanjun, and thanks to everyone for joining the call. We have included detailed financial schedules together with a corresponding management analysis in today's press release, so I will focus my comments on the key metrics. For Sea overall, total GAAP revenue increased 5% year-on-year to $3.3 billion. This was primarily driven by the improved monetization in our e-commerce and digital financial services businesses. Our group total adjusted EBITDA was $35 million compared to an adjusted EBITDA loss of $358 million in the third quarter of 2022. On e-commerce, our third quarter GAAP revenue of $2.2 billion included GAAP marketplace revenue of $1.9 million, up 18% year-on-year, and GAAP product revenue of $0.3 billion. Within GAAP marketplace revenue, core marketplace revenue, mainly consisting of transaction-based fees and advertising revenue, was $1.3 billion, up 32% year-on-year, as a result of both increases in advertisement uptakes by sellers on our platforms and commission rates. Value-added services revenue, mainly consisting of revenues related to logistic services, was $0.6 billion, down 4% year-on-year. E-commerce adjusted EBITDA loss was $346 million in the third quarter of 2023, compared to an adjusted EBITDA loss of $496 million in the third quarter of 2022. For our Asia market, we had an adjusted EBITDA loss of $306 million during the quarter, compared to an adjusted EBITDA loss of $217 million in the third quarter of 2022. In our other markets, the adjusted EBITDA loss was $40 million, narrowing meaningfully from last year when losses were $279 million. Contribution margin loss per order in Brazil improved by 91% year-on-year, to reach $0.10 reflecting better monetization and higher efficiency in our ecosystem. Digital entertainment bookings were $448 million, and GAAP revenue was $592 million. Adjusted EBITDA was $234 million, compared to $239 million in the second quarter of 2023. Digital financial services GAAP revenue was up by 37% year-on-year, to $446 million. Adjusted EBITDA was $166 million in the third quarter of 2023, compared to an adjusted EBITDA loss of $68 million in the third quarter of 2022. We recognized a net non-operating income of $46 million in the third quarter of 2023, compared to a net non-operating loss of $9 million in 2022. The year-on-year improvement was mainly due to higher interest income in the third quarter of 2023. We had a net income tax expense of $62 million in the third quarter of 2023, compared to a net income tax expense of $65 million in the third quarter of 2022. As a result, net loss was $144 million in the third quarter of 2023, as compared to a net loss of $569 million in the third quarter of 2022.

Thank you, Forrest, Yanjun, and Tony. We are now ready to open the call to questions.

Hi, good evening, management team, and thanks for the opportunity. Three questions. Firstly, in e-commerce, can you discuss how long we may continue to be loss-making for Shopee, and what is the specific market share level or what other KPIs Shopee may be aiming to achieve before spending starts to normalize? In the digital entertainment segment, what led to quarter-on-quarter softness in pay users despite the new game launch, and any insights on the outlook for the pay user base? And lastly, in the DFS segment, can you talk about the outlook for the lending growth? Is there scope for increasing lending user penetration, or will it grow in line with Shopee GDP?

Thank you. I will take the e-commerce question first. Regarding the probability of e-commerce, as we have demonstrated in the past few quarters, we have the capability to turn to break even quickly anytime if we want to. However, as far as shares, to maximize our long-term profitability, we will keep our organization nimble and flexible and adjust our operations based on the dynamic market conditions. For example, we look at both the growth of the market, we look at the profitability for the current quarter. We also look at market share dynamics in the market. In terms of investment plan, we look at both the general investment efficiency and also the specific growth opportunities in each of the markets. For example, if we look at the general investment efficiency, we look at will we put some investment in the market, will we see the return if we want it, do we see market share gain, for example, with the better economic compared to our competitive market. For the specific opportunity in our market, one of the examples we mentioned earlier in the call was the content acquisition building, the live stream opportunity in particular, where we see a very good time for us to invest to grow this part of the business at this particular time. We target to invest within our means, just to emphasize on that again. We would like to maintain a strong cash position at all times and not rely on the external funding. It's also important to note that while looking at our investment efficiency in the past few months, I think we have the positive numbers as we shared by Yanjun and Tony earlier, but if you look at month to month, we do see the efficiency improving month to month. If we look at the trend, we see a clear trend for Shopee to break even while achieving our market share and content acquisition building goals. There are many KPIs to look at. Market share is one of the KPIs, of course, but there are many other things, for example, how is our growth of our user base, how is the growth of our time spent on our apps, our MAUs, EAUs, and also, of course, how much profitability that we achieve during the month. All these are important KPIs to look at rather than looking at market share only. Thank you.

Regarding the question on game quarter-on-quarter subnet users, I think this is actually to us some early indication of seasonality we start to see in the game performance. When we start to see seasonality, it’s also a good indication of stability in the game performance. That's why we do not see it as a negative sign. We also mentioned on the call that in Q3, we saw a lot of school reopening and there are also fewer holidays. So that does affect user engagement. But overall, we are very happy to see the improvement in user retention and also in the re-engagement of churned users, as I mentioned earlier.

On the last question on the credit for DFS. In general, we do see both possibilities of lending growth on the GMB of Shopee and the penetration of credit in Shopee. Of course, that depends on quarter-on-quarter growth, depends on the risk profile we want to achieve and the growth that we want to control. In general, we grow on both Shopee's GMB and penetration. On top of that, I just want to emphasize that our credit is not only for the Shopee ecosystem. We do have a good growth on the credit portfolio outside of the Shopee ecosystem. For example, the Shopee Pay channel offline, we do see a good penetration for credit on the offline for Shopee Pay channel as well. We do also have other scenarios we are developing over time.

Thank you.

Hi, good evening management team and thank you very much for the opportunity. Three questions from me. Number one for e-commerce. Can you discuss where Shopee investment went into in the third quarter and whether you achieved the outcome you wanted? What are your considerations on spending and GMB growth target for the fourth quarter, especially considering some of the reasons of regulatory changes we see in Indonesia? That's question number one. Question number two regarding Gaming. Can you discuss the latest development regarding the right of first refusal agreement with Tencent that supposedly expired this month? Can it automatically renew and how would that impact the user pipeline? That's two. And number three for the fintech segment. Can you discuss the credit quality of your loan book? We continue to see credit loss provisioning trending better every quarter. Will this be your new runway or how should we think of this margin of this business in the long term?

For the first question of the Q3 investment, there are two main areas that we are investing in. Number one, to grow our market share, especially in the core categories like fashion and health and beauty. The second area we are investing in is to capture the market opportunity to grow the content type system, especially with live streaming first. As Forrest shared earlier, we always balance between growth, profitability, and market share. We believe that this is the right time to invest in terms of looking at market share growth. We do see great traction in our investment, reflected from the market share gain, even with a better economic compared to our original competitors. On the content side, we believe this can be a profitable and also a very vital business for us over time. If you look at the timing as shared in the previous answers, we do see this is a good opportunity in terms of the window of opportunity for us to capture the market. We have been a lot more educated by having investments from various parties in the past year. For example, the viewers who understand the concept, the sellers who have the capability to offer the content and also the ecosystem players like the MCN, etc. In the past few months, since we started investing more into the area, we have seen very good growth in terms of the adoption of our live stream services, both on the demand side and the supply side, not only from the creators but also from the sellers. We also see on top of that, which is also important to highlight, we see a significant improvement on the new economics of our live stream. Of course, when we first started building the ecosystem, it takes a bit of cost to build up, but we quickly see the economics improve month-to-month, actually much better than we thought it would before we started the program. Overall, I guess to answer your question, we are very happy with what we have achieved. Essentially, we achieved the market share gain that we wanted with much better economics than we thought. We also have seen good traction in live stream. The tick rate has been faster than we thought for the live stream services. To your question on the Q4 outlook, we will continue to invest in the shopping season. It's a holiday season shopping season as we all know. Q4 in our market generally is the best time of the year to acquire new users, gain market share, and strengthen our content ecosystem. If you look at the past one and a half months, we have seen very good traction. For example, I think we shared today that – yesterday actually for our W11, we have achieved more than 1 billion GMVs, which is a very good result, better than our anticipated, especially over the weekend as well. I think that's the question on the e-commerce side.

Regarding the question concerning the right-of-first-refusal with Tencent, the agreement has been also renewed under existing terms. As shared before, we'll continue to work on strengthening our game pipeline, both with our self-developed games and published games. And at the same time, we saw the strong trends in Free Fire, and we will continue to focus on making it a strong evergreen franchise.

I believe that the credit quality is showing signs of improvement over the year. Nevertheless, we remain cautious about how the market may change. Generally, we adopt a conservative approach in managing our credit operations to ensure that we effectively handle non-performing loans while expanding our portfolio. Looking ahead, we do not expect major fluctuations in credit quality in the short term. However, in the long term, various macroeconomic factors could influence credit quality and non-performing loans. Overall, we are confident that our current credit levels are sustainable and that our credit businesses will continue to grow without compromising quality.

In terms of long-term margins for the credit business, this is still an early stage for us. We continue to expand our credit portfolio across products and markets, and we are also expanding our funding sources to reduce the risk exposure to our own book cash. Overall, we will strive to maintain a very healthy profit level while ensuring consistent growth in the portfolio, as well as diversification of our products and funding sources.

Thank you.

Hi, thank you, good evening, management. Thanks for taking my questions. I have two questions. First, on e-commerce. I was hoping management could provide your view as we look beyond Q4 and further out. What is the long-term GMV growth we could achieve? And I think management had previously shared a potential steady state of the long-term EBITDA to the GMV margin guidance. Would that change given the live streaming now being an increasing part of Shopee's GMV? Second question is on your sales and marketing spend. Just wondering about the timeline or the inflection point that we are looking for. Or is there any sensitivity scenario that we will be assessed, the stickiness of the user engagement and purchasing behavior as related to the subsidy spend? So any color you could provide on the sales and marketing spend outlook would be helpful. Thank you.

Yes, for long-term gross merchandise value growth, we believe we can surpass the market due to our competitive advantage. In Q3, we noted a significant number of new users being acquired, as well as existing users becoming more active and increasing their engagement on our platform. Many users are transitioning from other platforms and offline behaviors. As mentioned earlier, e-commerce penetration in our market is still low, indicating that we are far from market saturation. There remains considerable potential for long-term GMV growth. Compared to more developed e-commerce markets, South Asia is still in an early stage, and in Brazil, for instance, the e-commerce orders are even less penetrated than in South Asia. Regarding long-term profitability, our strategic goals remain unchanged. As for live streaming, we see it as a promising area for growth. Our economic performance in this space has improved significantly in recent months. While the costs of content creation can be high, there are benefits as well. First, the product categories that perform well in live streaming are often high-margin, allowing for better monetization. Second, live streaming fosters engagement between sellers and buyers, which can boost conversions and sales for specific products or help test new offerings. Overall, we believe the e-commerce EBITDA potential we discussed previously remains intact. In terms of sales and marketing expenses, we analyze various factors including retention, order growth, and new user acquisition. We evaluate user contributions and consider long-term investments, focusing on overall growth, profitability, and market share rather than just individual aspects.

Yes. I also want to add to what Tony mentioned is that, as we shared on the call earlier, when we look at the current cohort of new buyers, we actually see very encouraging signs, the inequality of the buyers. And overall, we see better buyer retention and higher order frequency on our platform during this period. We have demonstrated a very strong track record previously during the past few years. As we scale the Shopee platform, when we do try to achieve profitability, we were able to have a very healthy profit level for our platform, while maintaining the size of the platform and maintaining the user base. That shows that we have built a very clear and strong competitive edge and capability in managing user growth and spending efficiency.

Yes. To provide some additional details, we evaluate each user based on their order profitability and their overall profitability. We consider not just their current activity but also their past behavior, and we have a model to forecast future actions. At both the order and user level, we can estimate the potential margins we might achieve, helping us determine which users to keep and which to let go. This analysis is crucial for monetizing our platform. As Yanjun mentioned, last year we were able to drive platform profitability quickly because we knew precisely which levers to pull. This understanding aids us in growing the platform by identifying the types of users we want to attract, from initial acquisition to early adoption and eventually to mature use. We have put significant effort into managing our subsidies, user acquisition, and costs to maximize our spending efficiency.

Thank you.

Hi, thank you for the opportunity. Actually, I had three questions. The first one is a bit more long-term. I guess looking at all the new entrants across several of your markets, how would you describe Shopee's competitive advantage against them? And why do you think that advantage is sustainable in the long term? The second question I had was with regards to the comments that you made about investments in logistics. How should we think about the quantum of those investments, I guess, both as it goes into your CapEx, but presumably also, I guess, as your lease payments, so I guess, cash outflow below EBITDA? And the last very quick question, the right of first refusal with Tencent, the new renewal, how long does this stay before the next renewal comes in?

Let me address the first question you raised. In our industry, competition is always present. It's quite challenging to be the sole provider of e-commerce solutions. Nonetheless, we notice that competitive intensity can vary by market and over time. As we noted in Q3, despite operating in highly competitive markets, we have managed to increase our market share. The secret lies in investment efficiency, which enables us to grow our market share while maintaining better unit economics compared to our competitors. This competitive edge has been developed over many years. Firstly, scale plays a crucial role. As the market leader, our scale leads to enhanced monetization abilities and cost efficiencies. Secondly, our local leadership and operations teams possess a deep understanding of our markets, fostering strong localized execution across diverse regions. Our core team consists of mostly homegrown talents who have been with us for years, in contrast to our regional competitors, who often rely on expatriate leadership. This familiarity yields significant advantages when making nuanced market decisions. For instance, we make detailed choices regarding specific investments, which users to prioritize or deprioritize, and which types of orders to emphasize. These local operational decisions significantly impact our investment efficiency over time. Thirdly, we have developed robust e-commerce infrastructure over many years. Notably, our logistics have improved meaningfully, reducing cost per order and lowering service costs for our users, which allows us to pass on these savings to both buyers and sellers. Additionally, our payment solution, ShopeePay, has minimized payment friction across all markets. ShopeePay Later, an innovative offering for our buyers, has greatly improved purchase conversion rates. I recently spoke with buyers who previously struggled with cash shortages for cash-on-delivery payments. With Pay Later, they can secure purchases on time, significantly enhancing their purchasing capability. All these components contribute to building a sustainable competitive advantage. Each element takes considerable time to develop; it is the result of nearly a decade of work for Shopee and the entire Sea Group, allowing us to achieve better investment efficiencies than our competitors. Our logistics investments are long-term commitments; we've made these investments steadily over the years. The extent of our investments might not be as substantial as often perceived. Much of it involves the networks we've established over time. A portion of our capital expenditure involves establishing hubs, which typically entails renting land rather than purchasing it, requiring investment in converting these spaces into operational hubs. This constitutes a relatively modest capital investment. We have also invested in sorting centers and automated sorting machines to streamline operations. Most of our investment in trucks involves renting, which also reduces the impact on our capital expenditure.

Also to clarify, the model of logistics that we have is not, at this point, a CapEx-heavy model. We're not looking to build mega warehouses or mega machinery type of logistics in that model. Our model is more about building a large network of small sorting centers, small hubs in many neighborhoods, and also building a team capability to expand our last-mile coverage across a wider network of areas covered by us. So it's more OpEx. And for the past few years, we have already been consistently investing in logistics, which is one of the key reasons that has got us to the current position of continued to reduce the logistic shipping fees and also a key competitive advantage that we have.

Just want to add on this a little bit. Actually, compared to many other logistic providers, if you look at the three regions, our CapEx has been a lot lower. And there's a reason for that, actually, because we are able to predict our volume in a lot more accurate ways. Imagine if you're a third-party logistics, you have to forecast what your volume will be in the next year or next two to three years in order to invest in CapEx. It's extremely hard, especially in our market. For our own logistics, we have a good way, let's say, to predict what's the demand in our market, not only for next month, not for next quarter, but in the next two to three years most likely. As a consequence of that, we can manage our CapEx, actually. Take on the designing of our networks, as Yanjun mentioned, to design our network in a very flexible way, to design our network in a very optimized way. After designing the network in a good way, we can manage our CapEx in a much more efficient way. Every CapEx can be put to use right after you capitalize on it. Rather than sometimes you have to rush for it or you have to capitalize on things, you build something, but you win to be used. I think in this aspect, we have a good advantage compared to the other offerings in the market. That's also why we can manage our cost down compared to the other offerings.

Regarding the question on ROFR agreement with Tencent, it is automatically renewed every year unless terminated by either party. The agreement is also publicly available.

Thank you for addressing my questions. I have two questions and one follow-up. First, since you shifted focus to growth a few months ago, it’s encouraging to see the year-over-year growth in GMV. Could you explain the progression throughout the quarter? I suspect the momentum increased as the quarter went on. Also, could you share how GMV growth has been performing in Q4 so far? Any insights on the impact of foreign exchange would be appreciated. For my second question, I understand the importance of live streaming for growth and you mentioned a 10% GMV figure. Is that specific to Indonesia or does it apply to the entire region? I'm interested in your long-term projections. In countries like China, live streaming comprises 20% to 25% of total GMV. What do you anticipate that number could reach for Southeast Asia in a few years, and where do you currently stand in the region? Lastly, regarding my follow-up, you have mentioned several times your commitment to invest within your means and not seek additional financing. In Q3, you effectively grew GMV and revenue while generating some profits. Does this breakeven or small profit represent the guardrail you referred to in terms of investing within your means? Thank you.

Let me start by discussing the growth over the quarter. While we don't have detailed month-to-month break down, the year-over-year growth looks promising as we see an improvement in growth levels from Q3 to Q4. Currently, the trend appears to be consistent from Q3 into Q4. Regarding foreign exchange impacts, our numbers are reported in U.S. terms, but when considering constant currencies, our growth performance is actually stronger. Many of our markets have depreciated against the U.S. dollar, but operationally, constant currency figures show better growth than what is indicated by a dollar basis. As for penetration rates, the earlier percentage I mentioned pertains to the region as a whole. Looking ahead, penetration rates may vary from country to country. For our largest market, Indonesia, we believe a penetration range of 20% to 30% seems reasonable, although this may be slightly lower than what we observe in China. Other markets may be just below this range but not by much. It’s still early in the market development phase, and so far, we remain generally optimistic about the potential for these businesses. In Indonesia, with TikTok exiting the market, all players experienced a rise in their market share. We are seeing good engagement from sellers and creators on our platform while they also explore growth opportunities on other platforms. Overall, we have observed these behaviors. Regarding breakeven, we are pleased that we reached breakeven at the group level. However, as Forrest mentioned earlier, we aim to strike a balance between gross market share and profitability, and our decisions will depend on evolving market conditions.

Thank you all for joining today's call. We look forward to speaking to all of you again next quarter. Thank you.