NTES (09999) Q2 2026 Earnings Call Transcript

Good day, and welcome to the NetEase Second Quarter 2026 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brandi Piacente. Please go ahead.

Thank you, Operator. Please note that today's discussion will contain forward-looking statements relating to the future performance of the company and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release in this discussion. A general discussion of the risk factors that could affect Nettys' business and financial results is included in certain filings of the company with the Securities and Exchange Commission, including its annual report on Form 20F and in announcements and filings on the Hong Kong Stock Exchange's website. The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures which should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For our definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial results, please see the second quarter, 2026, earnings news release issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the NetEase corporate website at ir.netes.com. Joining us today on the call from NetEase Senior Management are Mr. William Ding, Chief Executive Officer, Mr. Hu Zhipong, Executive Vice President, Ms. Eileen Muo, Vice President of Finance, and Mr. Bill Pang, Vice President of Corporate Development. I will now turn the call over to Bill, who will read the prepared remarks on William's behalf.

Thank you, Brandy, and welcome everyone to today's call. Before we begin, I would like to remind everyone that all percentages are based on RMB. In the first half of 2026, we delivered healthy growth across business segments. Total revenue reached RMB's $30.1 billion in the second quarter, driven by the solid performance of our games business. Our games and related value-add services generated net revenues of RMB's $25 billion, reflecting the broader appeal of our portfolio in both domestic and overseas markets. The strength of our portfolio stems from our sustained focus on innovation across the full life cycle of our games, from original concept and development to long-term life operations. By combining our engineering capabilities, creative design expertise, and disciplined and execution, we bring new ideas to life and deliver fresh experiences across genres, platforms, and markets. One recent example is Sea of Relements. Released in China in July, it showcases our ongoing emphasis on original IP and genre innovation. Built on our in-house game engine, Sea of Relements combines a distinctive visual style with an open-world ocean fantasy setting. Players step into a vivid world to embark on dynamic voyages, explore diverse islands, and discover richly layered stories. By combining naval combat, extraction gameplay, and roguelike progression, the game creates varied adventures that unfold differently each time. Across themed islands, players encounter a wide cast of NPCs that bring each island to life through meaningful interactions and evolving storylines. A variety of brand and content collaborations have also expanded the game's reach, extending its content ecosystem beyond the core gameplay experience. We are also preparing for the game's global rollout and look forward to introducing serial elements to players worldwide. Our innovation efforts are not only limited to new launches. They extend across our established titles, where we keep evolving gameplay systems, introducing new content, and strengthening live operations to sustain player enthusiasm over time. Sword of Justice launched its major anniversary update, New World, in June. The comprehensive upgrade to the open world experience improved visual quality, streamlined cultivation system and refined the in-game economy, creating a more enjoyable experience for both returning and new players. It also introduced the Dali, a highly immersive new region to expand exploration and add greater storytelling depth. The community response was strong, with active players existing 10 million on launch day and concurrent users reaching a two-year high demonstrating the title's ongoing appeal players continue to gravitate to identity 5 with the steady cadence of live service updates including anniversary content crossover events and new gameplay experiences in june the game introduced cryptic nodes a new pve mode that offers a lighter experience beyond its core pvp gameplay opening up new ways for the community to play. This excitement carried into July with the launch of Season 44, introducing new themed costumes and events alongside the latest Paper Bride crossover. This update sparked active discussions across live streaming and social media platforms, helping keep the community engaged and reinforcing the game's long-term appeal. During the second quarter, the Naraka Playpoint franchise unified its PC and mobile ecosystems. Players can now enjoy the game's signature melee combat seamlessly across devices while strengthening connections across its broader player community. Building on the increased connectivity, Naraka Playpoint kicked off its fifth anniversary celebration in July with a major content update that introduced all new land and underwater battlefields as well as a new underwater combat system this additions refresh the game's core experience and drove strong player engagement across platforms anti-party further solidified its position as China's leading party game destination they reach a new milestone 700 million registered users users, and monthly active users remained steadily above 100 million. In June, the game celebrated its fourth anniversary, bringing another wave of player activity, supported by diverse gameplay, a vibrant UGC ecosystem, and a rich slate of live operations. This strong momentum continued into the summer, with Aggie Party remaining among the top-ranked titles on both China's iOS top download and watching chart, and peaking at number three on the top watching chart. Peak daily active users also reached a multi-year high for the summer period. UGC remains one of the agri-party's defining strengths. Over the past year, the ecosystem has continued to thrive, supported by more powerful creation tools and the growing base of engaged creators. Total creator rewards reach a new milestone of all RMB 200 million to date, reflecting both the vitality of this creator community and strong player demands for diverse user-generated content. Recent upgrades to the editor, including integration with multiple AI models, have also made it easier for creators to learn, create, and program. Together, these efforts expand what players can create and support Aggie Party's evolution from a standalone party game into a broader content platform. Our flagship MMORPG, Fantasy Westworld Journey Online, continues to evolve across both its classic and unlimited servers. During the summer, its new expansion pack and Jun Huang Xin's content further engage players, underscoring its timeless popularity and its healthy community. Meanwhile, Fantasy Buzzword Journey Mobile carried its record-setting momentum into the second quarter, supported by refinements to the in-game economy and ongoing gameplay iterations. During the quarter, the game introduced a new equipment progression system and an extraction gameplay mode. Its additions created a fresh progression path and greater strategic depth, gaining real traction with players. In July, the Summer Treasure Pavilion offered a wider selection of costumes and items tailored to players' preferences, driving robust commercial performance. The launch of the Origin Server helped the Westward Journey Returns build strong momentum in the second quarter. By preserving the iconic appeal of the Westward Journey franchise while introducing a portrait mode interface and more relaxed gameplay, the Origin Server delivers a more accessible experience that players can enjoy anytime and anywhere, contributing to the title's strong performance in Q2. IfeBorders further reinforced its leading position in the SLG genre through new innovative gameplay and initiative designed to address community needs. New features such as IfeBorder Q, a social deduction game mode, were well received by players while its collaboration with minecraft china helped the game reach a broader and younger audience the launch of the highly anticipated special servers together with a series of pre-anniversary events ahead of its 11th anniversary generated renewed excitement across the community demonstrating the titles enduring appeal and continued relevance in the strategy game market alongside our success in the domestic market we made additional steady progress thus, in broadening our global reach. Will Wingsmith has demonstrated a health growth trajectory since its successful global launch last year. Its player base continued to grow in the second quarter, with positive reviews on Steam staying about 87%. In June, we brought this immersive open-world action RPG to even more players worldwide with its successful launch on Xbox. The game also repeatedly ranked among the top three titles on Steam's global top seller chart following major content updates. This underscores the long-term potential of content-driven games and highlights our proven capabilities in delivering high-quality content and live operations. In the domestic market, WorldWings Meets also expanded its player community during the quarter with major new region additions, including Qingzhou and Hangzhou. The Hangzhou extension proved particularly popular and pushed the game to the number three spot on China's LS Top Crossing chart. This update brought distinctive local culture, fresh narrative, and immersive exploration, driving year-over-year growth in quarterly revenue and achieving record-high monthly active users. Marvel Rivals continued to build on its global success through a steady stream of seasonal content, live service updates, and community initiatives. In June, the game introduced a refreshed 18 versus 18 mode set in Kunlun Shenlong Arena, alongside new heroes, maps, and events that broadened gameplay variety. The Rivals Summer Festival added further momentum with a wide selection of themed costumes for fan favorite characters helped pushing the game to number two on steam's global top seller chart and number one in multiple regions including the united states most recently the franchise extended its reach beyond the screen through real world touch points across major fan events at san diego comic con in late july more rivals generated even more excitement among players with new announcement and interactive fun activities. The mid-season finals was later held in Los Angeles, attracting top players and fans while reinforcing the title's competitive ecosystem and long-term live service foundation. As we continue to grow our existing portfolio, we're also advancing the development of new titles and exploring fresh ideas across diverse genres, gameplay experiences, and markets. Lentai is progressing steadily towards launch as a free-spirited urban open-world RPG. The game invites players to experience a vibrant modern city through a variety of characters, lifestyles, and activities, providing a high degree of freedom in exploration and interaction. With strong anticipation from the player community, we will continue to share more updates as development progresses. Blunt Message made a strong impression at the Summer Game Fest, where overseas audience responded positively to the latest gameplay footage. The trailer has since generated around 40 million views globally, with players praising its visual fidelity, distinctive storytelling, and cinematic combat. Our commitment to innovation and long-term operating capabilities also created value for our partner titles. Blizzard titles performed well in China during the quarter, supported by localized operations and a steady stream of updates. World of Warcraft and Hearthstone continued to engage their longstanding communities in China, backed by consistent updates and initiatives tailored to the local markets. Overwatch celebrated its 10th anniversary during the quarter with special content, rewards, and activities that revitalized players and drove a significant increase in active users. Diablo 4 further expanded its presence in China through exclusive localized content, localized events, and newly introduced Chinese mythology-themed skins, driving solid growth in both active users and player retention during the second quarter. Together, these achievements reflect the breadth and strength of our portfolio. from new releases to exceptional titles across China and global markets through both our own IP and partner collaborations. We aim to keep our games relevant and engaging through new ideas, ongoing content updates, and disciplined live operations while responding to evolving player expectations. This innovative mindset will continue to guide us as we build stronger communities and create even more compelling experiences for players worldwide. Turning to our other businesses, Yudang further advanced its AI-native strategy and deepened AI-driven innovation across its ecosystem. In the second quarter, Yudang launched its latest large language model, Confucius IV, with substantially enhanced capabilities. The new model delivers stronger performance in visual math and physics reasoning, particularly on complex diagrams at lower inference cost. Utah also upgraded its translation model with an efficient acceleration mechanism, increasing inference speed by approximately 80%. Beyond large language models, it further advanced its AI agent capabilities towards autonomous execution of complex real-world tasks, demonstrating stronger capabilities beyond simple Q&A interactions. The learning services segment continued its healthy development, driven by the strong performance of your . Popular features, including AI-powered English SE grading, AI quiz recommendations, and AI-based college admissions advisors, continue to enhance user satisfaction and drive higher user attention. Within the segment, AI-driven substitutions also maintain strong momentum. The advertising efficiency in UDAL's online marketing services also continued to improve. It recently launched a second-generation AI app placement optimizer, further enhancing the user experience and advertising efficiency with more streamlined and automated features. While capturing emerging opportunities in areas such as AI applications and short-form dramas, UDAL also made steady progress in client acquisition and retention. The Smart Devices segment sustained its focus on product innovation, with the UDOT Dictionary Pen maintaining a strong market position. In June, we launched the UDOT Dictionary Pen X8, featuring an expanded library of 80 million words and photo-based tooting across a broad range of subjects. During the 6-18 shopping festival, UDOT Dictionary Pen ranked number one in sales on JD.com and and Tmall within this category for the seventh consecutive year. Looking ahead, UDAL will continue to execute its AI-native strategy across learning and advertising scenarios. For native cloud music, we further developed its music-centric ecosystem in the first half of 2026, prioritizing exceptional user experiences, distinctive content, and a vibrant music community to support healthy and steady growth. Enhancement to user experience and strong brand perception continued to drive higher user engagement and expanded the daily active user base. Our DAU versus MAU ratio remained above 30 percent in the first half of 2026, increasing both year-over-year and sequentially. The average daily mobile music listening time also rose steadily, with penetration rates of community content consumption and interactions improving notably. In particular, retention and renewal rates across our expanded membership base increased both year-over-year and sequentially, reflecting stronger user loyalty and deeper connection to the platform. We also enriched our comprehensive and distinctive content library by expanding copyrighted music and promoting original music. Earlier this year, we renewed the partnerships with major labels, such as Universal Music Group, as well as added new content and Chinese labels, OSTs, and variety show music, while enhancing our signature genres. At the same time, we continue to promote original Chinese music, with our recent in-house releases, such as December 31st, gaining widespread acclaim. From the products perspective, we remain focused on user needs, advancing innovation across music discovery and consumption experiences while equalizing our community by making music exploration more intuitive and engaging on the platform. We also launched innovative functions, such as AI-inspired playlists, to address users' diverse music discovery preferences. Substitution-based membership grew as well, improving our music-oriented monetization. We further refined membership benefits built around content, features, personalization privileges, and artist-related offerings, all of which enhance the performance overall value proposition and support ongoing membership growth. Turning to Yanxuan, Yanxuan once again secured leading positions on e-commerce platforms across its key categories in the second quarter. New products in pet food, home sense, and home good categories perform well, generating healthy growth. Notably, the freshly steamed pet food series, which we launched last year with our differentiated steaming technology and fresh meat recipes, continue to deliver solid sales while earning recognition from leading industry organizations. In closing, across the NetEase family of businesses, we remain committed to innovation and staying at the forefront of technology. By integrating leading technologies into every stage of product development and operations, we create compelling user experiences that help shape industry trends. This approach continues to support sustainable growth across our business. In our games portfolio in particular, it enhances the appeal of both established titles and new releases, exciting our success in China to broader global growth. Throughout the year, we will continue to foster an environment that empowers our developers to push creative boundaries. As we advance our products with cutting-edge technology, we believe we are well positioned to create even more engaging experiences and enduring value for players, communities, and shareholders alike. That concludes William's comment, and I will turn the call over to Eileen for more detailed discussion of our financial results.

Thank you, Bill. I will now provide a brief review of our 2026 Injun financial results with a focus on the second quarter. Given the limited time on today's call, I will present some abbreviated financial highlights. We encourage you to read through our press release issued earlier today for further details. As a reminder, all amounts are in RMB unless otherwise stated. Our total net revenue for the first half of 2026 were RMD $60.7 billion, or USD $8.9 billion, representing a 7% increase year over year. For the second quarter, total revenue were RMD $30.1 billion, or USD $4.4 billion. During the first half, total net revenue from our games and the related VAS were RMB 15.7 billion, up 8% year-over-year. In the second quarter, net revenue grew 10% to reach RMB 25 billion. Specifically, net revenue from our online games were RMB 49.5 billion for the first half up nine percent year-over-year in the second quarter online games net revenue for R&B 24.5 decreasing 2% quarter-over-quarter and increasing 10 percent year-over-year the quarter-over-quarter decrease were mainly due to a slight decline in net revenue from certain self-development game and licensed games the year-over-year increase was attributable to higher net revenue from self-development games such as Fenton's retro journey franchise and their wins meet your does net revenue increased 4% to R&B 2.8 billion for the first half of 2026 in the second quarter net revenue were R&B 1.5 billion up 9% quarter over quarter and three percent year-over-year. The quarter over quarter and the year-over-year increases were mainly attributable to higher net revenue from its lending services segment. NetEase cloud net revenue increased three percent year-over-year to RMB 4.0 billion for the first half of 2026 in the second quarter net revenues were R&B 2 billion remaining broadly stable quarter over quarter and year-over-year net revenues from the innovative business and others totaled R&B 3.2 billion for the first half of 2026 in the second quarter net revenue were R&B 1.6 billion up six percent quarter over quarter and down four percent year-over-year the quarter over quarter increase was mainly attributable to higher net revenue from the e-commerce business and several other business within this segment the year-over-year decrease was mainly due to modest decline in net revenue from the e-commerce business for the first half our gross profit margin was sixty nine point nine percent in the second quarter our gross profit margin increased year-over-year to seventy point five percent from sixty four point seven percent in the prior year period looking at our second quarter margin in more detail gross profit margin was seventeen six point one percent from our games and related VAS compared with seventy point two percent in the same period of last year the improvements was primarily driven by lower revenue sharing costs related to platforms our gross profit margin for your Dow was 48 point nine percent compared with a forty three point zero percent in the same period of last year the increase was mainly driven by improved gross profit margin from its lending services segment gross profit margin for next was 37.4% compared with the 36.1% in the same period last year. The increase was primarily driven by lower channel fee rates along with the continued cost structure optimization. For our innovative business and others, gross cost margin was 43.4% compared with 42.3% percent in the second quarter of 2025. The improvement was primarily driven by the higher contribution from higher margin business within this segment. Total operating expenses for the second quarter were R&B 9.1 billion, representing 30 percent of our total net revenue. Taking Taking a closer look at our expense composition, our selling and marketing expenses accounted for 12.2% of total net revenue in the second quarter, compared with 12.8% in the same period of last year, remaining generally stable year-over-year. For the first half, the ratio was 11.7%, remaining broadly in line with the same period last Our G&A expenses accounted for 2.7% of total net revenues in the second quarter, compared with 3.8% in the same period of last year. For the first half, the ratio was 2.4% compared with 3.5% in the same period of last year. our R&D expenses remain stable at 15.4 percent of total net revenues in the second quarter compared with 15.6 percent in the same period of last year reflecting our consistent investment in innovation and content development for the first half the ratio was 15.0 percent remaining broadly in line is the same period of last year the effective tax rate was 21.7 percent for the first half and the 25.5 percent for the second quarter as a reminder the effective tax rate is presented on an accrual basis and the tax credit vary across each of our entities at different times period depending on applicable policies and our operations. Our non-GAAP net income attributable to shareholders for the second quarter totaled RMB 7.7 billion or USD 1.1 billion with the year-over-year decline primary attributable to investment losses. Non-GAAP basics earning per ADS for the quarter was USD 1.7A or USD 0.36 per share for the first half non-gap net income attributable to shareholders were down 8% year-over-year to R&B 19 billion or USD 2.8 billion which is USD 4.38 per ADS or USD 088 per share additionally our cash position remains strong as of June 30, 2026. Our total net cash position was RMB 167.5 billion compared with RMB 163.5 billion at the end of 2025. In accordance with our dividend policy, we are pleased to report that our board of director has approved a dividend of USD 9.6 per share or USD 0.48 per ADS for the second quarter lastly under our current USD 5 billion share repurchase program we had the repurchase approximately 24.8 million ADS as of June 30, 2026 for a total cost of approximately USD $2.3 billion. Thank you for your attention. We would now like to open the call to your questions.

Thank you. If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you are on a speakerphone, please pick up a handset to ask your question. The first question comes from Alicia Yap with Citigroup. Please go ahead. Ms. Yap, please go ahead with your question. Your line is open. Is your phone needed accidentally?

Hi, did you hear me? Okay, thank you. Hello, can you hear me now? 管理层晚上好 谢谢接受我的提问 我想问一下游戏一望之海 想请管理层分享一下 一望之海目前的最新表现 以及对未来一个季度游戏流水表现的预期 目前有哪些方面是做得比较好 然后未来计划进行哪些调整 以及有什么进一步的改善游戏的一些表现 So can management share the latest performance of EA of Remnants and also the expected growth for the next quarter? What aspects are currently doing well? And then what adjustments are planned in the future to further improve the game's performance? 啊我们回顾了玩家用户提出的意见啊我们啊在强烈他这这个产品的就强烈的这个探索性质的视觉风格以及肉鸽大世界的较为创新的玩法设计的时候呢啊没有能够充分降低玩家在初期体验中的一些理解成本啊影响了玩家的初期体验和啊

那么目前针对这个问题 我们团队已经储备了大量优质的内容 为这个产品的长期运营和持续拓展 提供了立足点 在经历了上线磨合以后 高频次的产品的内容迭代和体验优化 我们已经看到 用户逐渐认可目前产品的核心玩法和内容品质 已经回归到对游戏内容和运营的探讨 目前整个用户群体的口碑和满意度都在持续改善 那在未来我们会继续持续的服务好核心的用户 对用户提出的体验问题会进行持续不停的优化 另外也会进一步的梳理过去游戏前期的一些内容 let the new玩法 and content be able to accept the users. We are very confident about this product. Thank you.

Okay, I will do the translation. So when Jim Renneman's ability in China market, we did receive a lot of user feedback, and among which are a certain amount of our critics. to review all the feedback we received. We realized that while we were trying to explore a very bold visual style and the roguelike gameplay, which is the kind of novel, open-world experience, we did not sufficiently lower the learning curve for players in the early stages, features, which to some extent affected the initial player experience. So that's feedback we have heard and been taken. So in the meantime, our team has prepared a substantial amount of large, high quality amount of content, and which provides the foundation of the long-term operation and sustainable player community operation. After this initial feedback round, along with the high cadence of content update and experience We believe we have seen growing recognition from the players group of the game's core gameplay and content quality, which with discussions shift back to the game's content and ongoing operations the overall sentiment and satisfaction is continued to improve looking ahead will continue to serve our core players of this game well and keep optimization keep optimizing the experience problems we heard from players In the meantime, we will, you know, streamline the early stage game content, make sure that innovative gameplay could be better and wider accepted and experienced by the players. We are confident in the long-term potential of this game. Thank you for your question.

Thank you. The next question comes from Sui Xing Cheng with CICC. Please go ahead.

Please plan to differentiate the game and stand out from the competition. Thank you.

Okay, I will help to do the translation. Ananta is well on track with its development as the team is now keep polishing the game experience. We'll unveil the game's latest progress at the Gamescom next week, so please stay tuned. In terms of competition, we believe Ananta has its own distinctive strengths as an urban open world experience. The strengths come from the product's unique identity, its theme, and its gameplay design as well, which can offer players a fresh experience that stand apart from other open world urban games in the market. Ultimately, we believe that the high quality content, the distinctive narrative identity, the innovative gameplay, and the thoughtful monetization design will be the key part behind the successful products. Thank you for your question. Operator, next question, please.

Your next question comes from Lincoln Kong with Goldman Sachs.

Please go ahead. 其实过去两年我们也看到这公司主动的开始减少一些这个新游戏的一个发布的数量 把这个资源进一步聚焦到这个重点产品上 那当然就像烟云啊漫威啊其实也取得了非常强的表现 那整体的这个公司咱们这个游戏的业务的这个技术其实也是逐渐的逐渐扩大嘛 那往未来去看就是在我们的这个新品储备相对可能比以前要精减一些 and in the current and current and current and current and current and current and current and current and current and current and current. Thank you for taking my question. So congrats on the very solid second quarter. So over the past one or two years, actually a company proactively reduced the number of new launches to focus the resources on the key titles. And meanwhile, you know, like a new release like where we meet, Marvel Arrival, they have a very strong performance. So looking ahead with a relatively lean pipeline of new games and the higher baseline for our existing portfolio, how does company plan to drive further business growth? So what would be the primary growth driver and operating strategy moving forward?

Thank you. 第一个我们对精品游戏内容的投入还是会持续不断的加强 这个方向一定要把握清楚 内容质量一定要高 第二个我们会充分利用AI这个能力的放大器 加速产品开发的进度和用户在游戏世界中的体验

我们很有信心相信在AI的工具的加持下 我们会比其他公司同行做出更多优质的内容的体验 我们很有信心 这是我们的观点 Okay, I will help do the transition Well, first of all, regarding the really high quality products we're not hesitated to keep investment in and we're actually going to keep investment investing to keep building really high quality elite quality level of premium products put premium quality of of craft products of course when doing new product we need to make sure that we have a clear vision as well as the making sure the quality is definitely top-notch. And secondly, now as of today, with the help of AI capabilities, which we believe is an amplifier, that we believe we can exceed the development speed, and as well as leveraging AI capabilities to improve the user experience when users are playing our game. We have confidence that with the help of AI tools, we can build more high-quality products than most of our peers in the industry, providing high-quality experience to our players. That's something we have confidence in, and that's our view. And thank you for your question. Operator, next question, please.

Yes, your next question comes from Richie Sun with HSBC. Please go ahead.

Thank you management for taking my questions. So recently there are two games undergoing testings, Beneath the MIS and also Tamas Shadow View. So how does management view the monetization potential of these two games? And when can these games be launched? Thank you.

Okay, I will do the translation. So, thank you for the question. Both of the products you mentioned are still ongoing intensive refinement. And one is when the refinement approaches stage that we believe will satisfy the user's demand. and we will release them. As the game developer, we believe player experience is the key of everything. We believe delivering an excellent experience is a foundation of achieving commercial success. Thank you for your question.

And that concludes the question and answer session. I would like to turn the conference back over to Brandy Piacente for any additional or closing comments. Brandy, please go ahead with your closing comments.

Thank you. Sorry for that. Thank you once again for joining us today. And if you have any further questions, please feel free to contact us. Thank you again.

This concludes the conference. You may disconnect your line. Thank you.