Chagee Holdings Limited

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Chargy's first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. We will be hosting a question and answer session after management prepared remarks. Please note that today's event is being recorded. With that, I'll now turn the call over to the first speaker today, Ms. Alicia Guo, Investor Relations Director of the company. Please go ahead, ma'am.

Thank you. Hello, everyone, and welcome to Chaddy's first quarter 2026 earnings call. With us today are Mr. Jun Jie Zhang, our CEO, Mr. Aiden Yin, our COO, and Mr. Aaron Huang, our CFO. The company's financial and operating results were released by the newswear earlier today and are currently available online. Before we continue, I refer you to our safe harbor statement in the earnings release, which applies to this call. Any forward-looking statements that we make on this call are based on assumptions as of today, and Chargy does not undertake any obligations to update these statements. Also, this call includes discussions on non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measure to a GAAP measure. With that, I will turn the call to our CEO, Mr. Junjie Zhang. Please go ahead, sir.

Hello, everyone.

Welcome to China's first quarter 2026 earnings call. As we enter 2026, our strategic direction is clearer than ever, and our execution is more focused. The reflections and adjustments of the past several months have allowed us to develop a way of working that is closer to our consumers and more committed to long-term value creation.

First of all, regarding the overall strategic focus, First, on our strategic priorities.

In 2026, we're dedicating all our efforts to operations, focusing on executing every detail that truly matters to our consumers' wealth. We believe that the ability of a company to navigate cycles ultimately depends on genuine consumer recognition. Therefore, our goal this year is very clear, to perfect every single consumer touchpoint.

其次呢,组织调选。 The overall efficiency has been significantly improved. In the past few seasons, we have actively optimized the organization. Currently, it can be clearly stated that these adjustments have brought us a lot of real-time changes. The configuration of resources has become more precise, and the implementation of strategies has become more efficient. The cohesion and combat power of the team surrounding the main business has also been significantly enhanced. This has laid the foundation of a firm internal foundation for our continued growth in high-quality.

Second, our organizational adjustments are delivering results, and overall efficiency has improved significantly. Over the past few quarters, we have proactively optimized our organization. These changes have delivered tangible results. Resource allocation is more precise. Decision-making and execution are more efficient, and our team's cohesions and effectiveness around our core mission have strengthened significantly.

This has laid a solid foundation for us to continue achieving high-quality growth. Third, our products and marketing plans are now clearly defined, and our execution priorities are highly focused.

we have completed a comprehensive and actionable roadmap for both products and marketing. Our starting point has always been consumer needs rather than external trends. Going forward, all of our work will center on five dimensions, product, service, environment, experience, and value proposition, making every tea house, every cup of tea, and every interaction consistently well-executed is our only true priority.

With the return of business in the first quarter and the growth of documents, the efficiency of operations continues to increase. From the perspective of the capital market, we believe that the current stock price of the company is seriously underestimated and will not be able to reasonably reflect its long-term development prospects. Therefore, I would like to make a clear commitment on behalf of the company and the management level As our business returned to steady growth and operational efficiency continued to improve in the first quarter,

From a capital market perspective, we believe our current share price is significantly undervalued and fails to properly reflect our long-term development prospects. At this point, on behalf of the company and the management team, I would like to make a clear commitment. Our board has approved a share repurchase program authorizing us to repurchase up to A $150 million U.S. dollar ADS during a 12-month period as a concrete way to demonstrate our confidence and reward shareholders' trust.

最后我想再次强调三前公司的战略方向还是非常清晰的 团队也开始进行高效的运转了 海外布局有序的推进 茶几正在迈入一个成熟的 稳定的 可持续的高质量发展的分展阶段

我们对未来的每一步都是充满庆幸的。 Finally, I want to reiterate, our strategic direction is clear, and our team is operating with high efficiency. Chagi is entering a mature, stable, and sustainable phase of high-quality growth. We're confident in every step we take forward toward the future.

以上是我们整体的战略方向。 That concludes our strategic direction.

Next, I will hand the call over to our COO, Aiden, who will walk you through the specific operational progress in the first quarter. Thank you.

谢谢,静姐。 也感谢大家参加我们的业绩发布会。

Thank you, Junjie. And thank you all for joining our earnings call today.

首先我来分享一季度的整体的表现。 总收入人民币35.46亿元。 同比增长4.5%。 环比增长16.2%。 毛利率达到了55.6%。 NGF净利润人民币5.07亿元。 环比增长超过4倍。 NGF净利率 The recovery is 14.3%. The total GMV has reached RMB 79.18 billion, which is 8.1% compared to the growth. In China, the GMV is 7.8% compared to the growth. The overseas GMV is 14.6% compared to the growth, which is 139% compared to the growth. From the above data, it can be seen that the overseas market is becoming more and more important growth.

Let me begin by sharing our overall performance for the first quarter. Total revenue reached the RMD $3,546 million, representing a 4.5% increase year over year and a 19.2% increase quarter over quarter. Gross margin came in at 55.6%. Non-GAAP net income was RMD $506.7 million, increasing more than four-fold sequentially. Non-GAAP net margin improved to 14.3%. Total GMV reached the R&D 7,917.8 million, up 8.1% quarter over quarter. Greater China GMV grew 7.8% sequentially, while overseas GMV grew 14.6% sequentially and 139% year over year. It is clear that overseas markets are becoming an increasingly important growth engine.

正值得关注的是, 我们的经营质量在持续改善。 中国区重建增速环比改善了9.4%, 整体重建增速也环比改善了9.5%。 这些数据保证, 我们聚焦用户价值的策略, 为了这一策略, 本基度,

More importantly, our operating quality continues to improve. Same-store GMV growth in Greater China improved by 9.4 percentage points sequentially. And overall, same-store GMV growth improved by 9.5 percentage points sequentially. These results show that our strategy of focusing on consumer value is working in practice. This quarter, we concentrated our efforts on four key areas to drive performance recovery.

第一,组织效率的兑现。 经过第一季度的持续优化, 我们的组织效率实现了质的飞跃。 在整体费用率下降的同时, 推动了执行端变得更快、更准、更协同。 一方面,组织调整显著提升了执行效率。 另一方面呢, 目標更加明确和坚定,从总部到门店,团队对执行重点形成了高度共识,将有限资源集中投放到最能创造用户价值的事情上。从数据上看,Nuncap的管理费用率环比下降了8.1%至11.6%,Nuncap的销售和营销费用率环比下降了3.6%至8.6%,

First, our improved organizational efficiency. Through continued optimization in the first quarter, our organizational efficiency achieved a qualitative leap, making execution faster, more precise, and more coordinated, while overall expense ratio declined. On one hand, organizational adjustments improved execution efficiency. On the other hand, our goals became clearer and more resolute. with teams from headquarters to tea houses forming a strong consensus on executing priorities, channeling limited resources into activities that best create consumer value. In the first quarter, our non-GAAP G&A expense ratio declined by 8.1 percentage points, sequentially to 11.6%, and our non-GAAP sales and marketing expense ratio declined by 3.6 percentage points sequentially to 8.6%.

第二,产品的扩展。 第一季度我们共推出了12款新品。 更重要的是,我们的品牌边界正在扩宽, 逐步覆盖了茶拉铁、茶色调整系列。 产品创新率与消费者认可度持续提升。 二月上新的大红袍系列销售表现优秀。 The GMV of Shouzhou and the contribution ratio of Beidan, Shouzhou recovery rate, and Zijian Laxin Renci and other indicators are all higher than the historical new products and products. During the visit activities, the performance of Baiwu Hongsheng in this series is better than that of Shoushuzhu, which has become a strong wave. In addition, Yunjiao Kamenro creates a distinct memory point and difference-based advantage with its unique field style and sweetness DIY. Second, our product expansion.

In the first quarter, we launched a total of 12 new products. More importantly, our categories are broadening, gradually expanding into tea lattes, special deals, and others. Our product innovation and consumer recognition continues to improve. The Da Hong Pao series launched in February 2021 delivered strong performance with first-week GMV contribution, cup contribution, repeat purchase rate, and direct-to-new-customer acquisition, all exceeding historical averages for new product launches. During the Tianwen campaign, the products of Da Hongpao Qiwaipei from this series saw especially strong sequential growth and became an important growth driver. Caramel Pour Latte, with its distinctive caramel flavor and interactive sweetness customization, created a strong impression among consumers and was a clear point of differentiation. The product was well-received by our consumers and showed strong potential to become a long-term bestseller.

第三,以您下的信息落地。 In terms of sales, we have expanded the early and late series of activities and successfully surpassed the early and late series of consumer venues. Since the start of the early series of activities, there has been a three-fold growth in the volume ratio. At the same time, we have continued to consolidate the supply and demand during the purchase and sale activities. During the activity, the small program channel order ratio and new customer ratio have increased. This shows that our supply and demand capabilities are constantly improving.

Third, clearer and more effective marketing execution. On the marketing side, we introduced a morning buy one, get one free campaign and launched a low caffeine beverage section for the evening, successfully extending consumption scenarios in both the early morning and late evening. Since the campaign began, the share of cups sold in the morning has doubled. At the same time, we continue to strengthen our private domain traffic, through in-store promotions. As a result, the share of orders from our mini-program channel and the share of new customers both improved during the campaign period. This demonstrates steady progress in both private domain traffic conversion and new customer acquisition.

第四点,门店网络以资料优先, 我们高度重视顾客体验和品牌标准, 主动放缓了拓电节奏, focusing on single-point operating quality, and fully promoting door-to-door upgrade. At the same time, the new business model is fully operational. The company is more consistent with the business value. We believe that only every door-to-door store can deliver the same brand value, and only by playing cards can we truly win the long-term trust of users. From the data, in the first quarter, there are 7,531 global door-to-door stores. Of which, 7,157 in China and 374 overseas.

Fourth, growing our tea house network with quality remains our top priority. We place great importance on customer experience and brand standards. So we have deliberately slowed our pace of tea house expansion and focused on improving operating quality while comprehensively upgrading our tea houses. At the same time, our new business model has been fully implemented, further aligning the interests of the company and our franchisees. We believe that only when every key house delivers a consistent brand value can Chachi truly earn consumer long-term trust. At the end of the first quarter, our global key house network totaled 7,531 locations, including 7,157 in Greater China and 374 overseas.

Our overseas markets continue to expand steadily.

Currently, our key health presence includes 36 in Singapore, 221 in Malaysia, 32 in Thailand, 41 in Indonesia, 13 in Philippines, 22 in Vietnam, and 9 in the United States. Our overseas key health network maintains a steady growth pace with operating performance in line with our expectations.

Thank you. 我想回到俊杰刚才提到的战略方向上 我们的战略核心 是把用户关心的每一件小事做到极致 而用户是否真正认可 不看我们说了什么 而看我们做了什么 离极多么 我们的会员总数已经达到了2.48亿 活跃会员接近5000万人 环比四季度增长了超过11% 更让我们感到踏实的是 活跃会员的 The resale rate remains at 42.3%. More than twice the number of members who purchased the product contributed more than 76% of the order volume. Every repurchase is a true recognition of Cha You's products and experiences. 2.48 billion Cha You used a repurchase to tell us that they trust this brand and are willing to come back to our store again and again. This is our most precious asset. It is also the most valuable asset Finally, let me return to the strategic direction that Jingjie laid out earlier.

Our strategic core is to perfect every small detail that consumers truly care about. Whether consumers genuinely recognize this is not measured by what we say, but by what they do. At the end of the first quarter, the number of our total registered members reached 248 million, with nearly 50 million active members, an increase of over 11% quarter over quarter. What gives us even greater confidence is that the repurchase rate among active members remains stable at 42.3%, and members who made two or more purchases contribute over 76% of total orders. Every repeat purchase is generally recognition from our strategy friends. 248 million strategy friends are telling us through their repeated purchases that they trust this brand and are willing to return to our tea house again and again. This is our most valuable asset and our strongest foundation for navigating market cycles. Our strategy is clear. Our execution is deliverable.

And consumer trust is our best answer. Looking ahead, our direction remains unwavering.

On product, we will maintain a steady launch cadence while continuing to expand into new categories such as special deals. On service, we will continue to optimize our membership system, and consumer experience. On environment, we will continue to upgrade the tea house differentiation through design. On experience, we will make the third place a place where consumers genuinely want to spend time. On brand value proposition, we will continue to embrace the spirit of connecting through tea, creating emotional resonance with our customers. On tea house operations, we will continue to prioritize quality in our greater China markets while steadily expanding overseas.

That concludes my remarks.

Now let me turn the call over to our CFO, Aaron, who will walk you through the detailed financials. Thank you.

Thank you, Aiden. And hello, everyone. Excuse me for my voice. Thank you for joining our earnings forum. Before we begin, please note that all amount in RMB and all comparisons are on year-over-year basis, unless otherwise stated. As Junjie and Aiden just outlined, 2026 was about disciplined execution, a sharper operating focus, and a visible progress in restoring growth quality. I'm delighted to say that this strategy is already translating into improved financial performance. For the first quarter of 2026, our total GMV was 7,917.8 million and 8.1% sequential increase from 7,322.9 million in the fourth quarter of 2025. As of March 31st, 2026, our tea house network totals 7531 locations across greater China and overseas, up 12.7% from 6681 a year ago. Of these, 6741 were franchisee tea houses and 790 were company-owned tea houses. reflecting the continued conversion of selected location into company-owned store as a part of a networking optimization strategy. In Greater China, average monthly GMV per tier house was 356,080 RMB in the first quarter, representing a quarter-over-quarter increase of 5.5%, from 337,358 yuan in the fourth quarter of 2025. At the same time, overseas total GMV for the first quarter grew 139% year-over-year and 14.6% quarter-over-quarter to 426.4 million. On the revenue line, Our net revenues for the first quarter of 2026 were 3,546 million, compared to 3,392.7 million in the same quarter of 2025, and up 19.2% sequentially. Net revenue from franchisee tea houses were 2,743.9 million, representing 77.4% of total revenue compared to $3,149.9 million a year ago and up 12.7% sequentially. Net revenue from company-owned tea houses were $802.1 million, up 230.4% from $242.8 million a year ago. mainly as a result of our continued development of company-owned tea houses network across greater China and overseas markets. Turning to margin, our gross profit, calculated by excluding cost of materials, storage, and logistics from net revenue, reached $1,970.5 million this quarter, resulting in a gross margin of 55.6%. This marks an improvement from 53.1% a year ago. This improvement was primarily supported by increased revenue contribution from company-owned tea houses, which generated a higher gross margin. Operating expenses remained well-controlled relative to the scale of business. Share-based compensation expenses this quarter were $59 million, reflecting our commitment to long-term employee engagement and aligning their goal with shareholders. To provide greater clarity on underlying operational performance, we will continue to reference non-GAAP operating results with full reconciliation available in our earning release and the Form 6-K. Operating income was $547.2 million, representing an operating income margin of 15.4%, marking a sequential turnaround from an operating loss in the previous quarter. Excluding share-based compensation expenses, non-GAAP operating income was $606.2 million, representing a 17.1% margin compared to a 1% margin in the previous quarter. This sequential improvement reflects both a stronger operating leverage and the benefit of organization adjustment and a strategic investment we have made to support future growth. Operating costs for company-owned tier houses were $497.2 million. up 216.6% from $115 million a year ago. As of March 31, 2026, we operated 790 company-owned tea houses, up from 615 in the fourth quarter of 2025 and 191 in the first quarter of 2025. Other operating costs decreased by 7.8% to $159 million, largely due to lower payroll expenses and by organizational restructuring and the continued headcount optimization. On a non-GAAP basis, other operating costs account for 4.3% of revenue, compared to 5.1% a year ago. Sales and marketing expenses. quarter were $306.2 million, up 2.3% from $299.3 million a year ago, mainly due to our investment in strategic brand activities, new product launches, and marketing campaigns. On a non-GAAP basis, sales and marketing expenses representing 8.6% of revenue compared to 8.8% a year ago and 12.2% in the previous quarter. General and administrative expenses reached $462 million, up 30.9% year-over-year from $352.8 million. The increase in G&A primarily reflecting our continued investment in global corporates infrastructure as we've further expanded our international business for free. On a non-GAAP basis, G&A expenses represented 11.6% of revenue compared to 10.4% a year ago and 19.7% in the previous quarter. Income tax expenses represented 21.2% of income before income tax, slightly higher than 19% a year ago. This was primarily driven by the impact of share-based compensation expenses recognized during the quarter. Notably, we continued to deliver profitability on both GAAP and non-GAAP basis, extending our track record of 13 consecutive quarters of positive net income. GAAP net income was $447.7 million. Non-GAAP net income, excluding $59 million of share-based compensation expenses, was $506.7 million, with a non-GAAP net margin of 14.3% compared to 20% a year ago and 3.4% in the fourth quarter of 2035. For the first quarter, basic and the diluted net income per ordinary share was RMB 2.36 yuan and RMB 2.34 yuan respectively. On a non-GAAP basis, basic net income per ordinary share was RMB 2.67 and the diluted net income per ordinary share was RMB 2.65 yuan. Turning to liquidity, we ended the quarter with $7,146.3 million in cash and the cash equivalent, restricted cash and the time deposit. Compared to $7,892.4 million as of December 31st, 2025, we maintained a robust balance sheet, which provides us with the flexibility to fund expansion plan and continue to return value to our shareholders. As we move through 2026, we remain focused on executing our established strategy, strengthening our brand value, and maintaining disciplined investment to support sustainable growth. We are always committed to creating long-term value for our shareholders. With that, I will turn the call back to the operator to begin Q&A. Operator, please go ahead.

Thank you. We will now begin the question and answer session. To ask a question, please press star 11 and wait for a name to be announced. When asking a question in Chinese, please translate your question in English for the convenience of everyone on the call. Our first question comes from the line of Leland Lowe of Morgan Stanley. Please go ahead.

Thank you for the opportunity to ask this question. I am Lillian, an analyst at Morgan Stanley. Thank you, Mr. Junjie, for the introduction of Aden and Agen. I am also very happy to see that the company has achieved a very stable recovery in the first quarter and accurate landing of all measures. Just now, you guys also explained in more detail some of the mistakes we made in our strategy. So, maybe I want to ask some details about the recovery of the GMV in the first quarter. I want to understand what kind of factors driven the improvement of the GMV in the first quarter, especially in the industry, in fact, in the whole industry. Let me translate my question. So thanks to everyone's management of the detailed explanation of FirstQ performance. I just want to follow up on the more detailed factors that has driven the good equipment improvement on the improvement in China and overall trying to understand what factors have been putting in place in terms of the new products, the traffic, pricing, et cetera, and what can be sustained. Thank you very much.

Okay, thank you. Thank you, Linlin. Let me answer this question. It's a very good question. In the first quarter, the total number of data we recharged was 16%, but compared to last year's quarter, it was about 10 points. Overall, it also showed a clear recovery trend. We also made some recharges, and then calculated it as a number of sources.

Thank you, Lillian, for the question. In Q1, our overall theme store GMV growth was down 16%, but that was about 10 percentage points better than Q4 last year. So the trend has clearly improved, and the recovery was mainly driven by a few things.

. . . . . First, we got an incremental list from the Tianwen campaign.

During the peak period from February 6th to 10th, the Shenzhen Channel contributed about 3 million orders per day on average. Our ability to effectively capture this traffic and convert it into performance results was driven by two factors. First, a more agile response mechanism, and second, the continued improvement in executing efficiency following the earlier adjustments.

The second and more important is our new products. Then, just like what A-Lin just said, we have 12 new products in a season. There is a clear lead in the growth of the whole G&V and GMV. Second, our new product launch helped as well, as Aiden mentioned.

We launched 12 new products in the first quarter, which helped to drive sequential growth in both carb volume and GMB. In addition, recently we continue to expand morning and evening consumption scenarios, taking caramel-poored tea latte and longjing tea latte as examples. Their combined carb contribution during morning hours reached 45% during the campaign period, representing a relatively significant incremental contribution.

最后呢,就是在海外市场方面的话, 我们也很先行的看到, 重电下滑幅度也在比较有意义的收窄, 尤其是在马来西亚市场。 Then, in fact, Zeng Ji is on the market level, it is doubtful that it has launched its own limited product. For example, Singapore's Shanta Oolong, and then during the activity, the stock accounted for 18%, and then in March, in Malaya and other markets, Samsung's hometown tea, including Singapore, Lastly, in the overseas markets, the decline in theme store GMV growth has also narrowed significantly.

We launched locally tailored products in different markets. For example, the caramel oolong tea latte in Singapore captured an 18% cup share during the campaign period. The houjicha jianmai launched in multiple markets in March generated an average of 440 daily cups per teahouse in Singapore during its first week of launch. These initiatives all played a positive role in improving overall same-store performance. Thank you. Next question, please.

Next question. The next question comes from the line of C.J. Lin from CICC. Please go ahead.

Thank you, Mr. C.J. Lin and Mr. Alex. I am C.J. Lin from CICC. Congratulations on your good performance as the main consultant. So thank you, management. Congrats on stabilizing earnings results again. My question is, will the new business model, which is the tech rate based on GMB, affect profitability and how to evaluate the impact? Thank you.

Thank you for your question. Just like what we just announced in the last year's report, At the beginning of the year, we officially adopted the new business model to switch to the income division model based on GNV. Then our brand company will raise the fee rate, but the added interest rate of the material will be greatly reduced. At the same time, there is also a discount guarantee for Jiameng Store. Under the new model, our income structure has also changed. Our product sales, that is, raw material product sales, including raw material, food raw materials, packaging raw materials, including door-to-door equipment and other consumables, this part of the income must be a slight drop. Then the increase in the income of the service fee. Thank you, Si Jie, for the question. As previously disclosed in our annual report,

Since the beginning of the year, we officially switched to a GMV-based revenue sharing model for our franchise, T-House, in Greater China. Under the new model, the brand takes a higher fee rate based on the franchise, the T-House GMV, but the markup on materials has come down significantly and also locked up or secured the discount rate for our franchisees. As a result... Our revenue mix has changed accordingly. The proportion of revenue from product sales, including raw materials and packaging, key house equipment, and other supplies has declined, while the proportion of revenue from franchising services has increased. However, this change in revenue mix does not affect the company's profitability. Based on our Q1 results, Our gross margin remained at 55.6% with a slight sequential increase.

我想做一些说明, 就是这个的环比率有提升, 最小的贡献还更多的在于我们直营门店的比重的上涨, 因为直营门店的毛利率是比较高的, 因为不涉及到收取分层之类的一些处理。 It does not come from the more income charge between customers. So I think it is better to understand that we are in the business model of the customer. Basically, it is the same as the first quarter. It can have a part of the interest. Because in the discount, we let our customers.

Let me further explain the reason of the gross margin increase, which is a result from the increase of the self-owned T-house GP margin increase. If we exclude the self-owned T-house GP margin, the franchisee T-house GP margin is flat sequentially versus Q4, or a little bit slightly decreased from the previous GP margin.

我们认为新模式下面公司和加盟商真正实现的是利益共同体。 For Jiamusha, the cost of raw materials and equipment purchases has dropped significantly, and the risk of group supply and supply has contributed to the improvement of the business capability and anti-discrimination capability of the main store. For the company, the income and main store performance are deeply tied. When the sales of the main store are improved, it is also conducive to the improvement of the company's income and net profit, and thus achieve a win-win effect. Lastly, we believe that under the new model, the company and its franchisees truly become a community of shared interests.

For franchisees, lower raw material and equipment procurement costs along with shared risk with the brand, should help improve tea house profitability and resilience. So for the company, revenue is now more closely tied to tea house performance. So when tea house sales improve, both our revenue and gross margin can benefit, creating a winning outcome. Our goal is to build a long-term sustainable profit model through closer collaborations. I hope this answers your question. Next question, please. Next question, please.

One moment, please, for the next questions. Our next question comes from Jesse Xu from J.P. Morgan. Please ask your question.

Thank you. Thank you, Mr. President. Good morning, everyone. Thank you for listening to my question. I'm Jessi Xu from Morgan. Congratulations to the company for achieving a good start in the first quarter. Since this year, we have been able to feel that the company has done a lot of work in product innovation and operation. The activity and volume have been significantly improved compared to last year. We can see that the efficiency of our operation has improved after the change of the organization. Thanks for taking my question. This is Jessie Xu from JP Morgan. Very happy to see visible improvement in product launches, consumer engagement, and also market impact in the first quarter. The $150 million U.S. dollar repurchase program is indeed a positive surprise. What's your thoughts behind this decision? Would you prefer repurchase or cash dividend in the future? Anything you can share on shareholder return would be great. Thank you.

好的,谢谢Jesse. 麻烦这个问题的话,我们请俊杰回答一下。

Thank you. Thank you for your question. Actually, this is what we have just shared. The first is that the board has approved the return plan of this stock. It is authorized that we can buy back up to $1.5 billion of APS in December. The company is now in the market situation and valuation level. First of all, it must be dynamic to adjust the rhythm of the return during the authorization period. We will see the situation.

Thank you for the question. As we just shared, the board has approved a share repurchase program authorizing the company to purchase up to $150 million of the ADS over the next 12 months. We will adjust the pace of repurchases depending on market conditions and valuation during the authorization period.

第二个是公司目前的资产和负债的结构情况是非常健康的。 Second, our balance sheet structure remains healthy and our liquidity position is strong.

At the end of March, we had about RMB 7.15 billion in cash, restricted cash and time deposits, or roughly 1.04 billion US dollars.

第三呢,我们认为公司单钱的股价, 绝对是没有充分反映我们公司的业务的基本面和持续修复的这个趋势, 以及长期增长的空间呢, Thirdly, we believe the current share price does not fully reflect the continued recovery in our business fundamentals.

or our long-term growth potential. Through this buyback, we want to show the board and management strong confidence in the company's future growth prospects, as well as our commitment to create value and delivering better long-term results for shareholders.

展望未来,我们将在保障核心业务健康发展的前提下, Looking ahead, we will continue to optimize our capital allocation strategy while ensuring the health development of our core business.

We aim to deliver a tangible improvement in shareholder returns and ensure that the market fully understands our value.

那么我就先说这么多,再次感谢诸位股东以及现场所有的听众,谢谢你们。 That's my answer, and thank you all the shareholders and investors to join our call today.

Thank you. As there are no further questions, I would like to hand the conference back to management for closing remarks.

Thank you. As there are no further questions, I'd like to hand the conference back to the management, and thank you for the call today. We look forward to speaking with everyone again on our next call. Have a great day. Thank you.

Thank you all. Have a great day.

This concludes today's event. Thank you for participating. You may now disconnect.