DSC Holdings Ltd.

Junhong Yao, Gongwei Zhang, Bofei Kong After the meeting is over, the recording and relevant text records will soon be posted on the website of the company's investor relations. Next, I would like to invite Ms. Wang Jianan, the director of the investment director of Dazao. Ms. Wang, please start.

Hello, everyone. Thank you for participating in today's press conference. We will discuss the financial performance of the company in the second quarter of 2026. Our press conference has already been published on the company's website. Before we start, I would like to remind you that today's discussion will include the preliminary statement made by the U.S. Securities Regulatory Reform Act Security Act in 1995. Qin Zou, Junhong Yao, Bofei Kong In addition to the legal requirements, the company does not carry the obligation to update any preemptive statements. In addition, please note that unless there is a description, all the money mentioned today will be counted in RMB. In this press conference, we may also mention non-US credit card standard financial indicators. Related to non-US credit card standard financial indicators and the most comparable US credit card standard financial indicators, please refer to the relevant materials released on the Investor Relations website. The management of today's press conference includes the founder of the company, the chairman and chief executive officer, Mr. Junhong Yao, and the chairman and chief financial officer, Ms. Zou Qing. Now, I will hand over the meeting to our chief executive officer, Mr. Junhong Yao. Mr. Junhong Yao, please start.

Hello, everyone. Thank you very much for attending the first press conference since the launch of DaShouChi. In June, DaShouChi completed its IPO in Nasdaq. This is an important milestone in the company's development process. It also made us officially enter the stage of the international capital market. We clearly realized that we must use the perfect disclosure, solid execution, and long-term business results to repay the trust of shareholders. In the second quarter of this year, China's car market was completely suppressed, and the operating environment was not good. However, the company's various business indicators are still stable and have achieved a significant reduction in losses. Revenue increased by 3.7% in the same ratio, and the net loss was adjusted by 61.5% in the same ratio. This reflects our progress in operating efficiency, profit improvement, and other aspects. There are two other business trends in this quarter that are worth introducing later. The first is that AI products create value in real business scenarios. Second, China's export of second-hand goods is growing rapidly. We begin to carefully explore international opportunities. Next, let's take a look at the changes in the industry environment. In the first half of this year, Chinese car market competition has escalated, and the price drop has become the main theme of this industry. This has directly led to the rapid decline in the storage of second-hand car dealers. The data from Dafeng shows that the main car type of medium-sized second-hand car dealers has dropped by 10% to 15% in a short period of two months, which has brought huge challenges to the second-hand car dealers. According to industry experts, more than 70% of Chinese second-hand car manufacturers suffered losses in the first half of 2026. With the change of the industry, the second-hand car with experience and feeling, the old business model, under new challenges and impacts, car manufacturers have made some changes. Car manufacturers also feel that they must pay great attention to operation efficiency in order to stand firm in a turbulent environment and make profits in a high-pressure market environment. Some of the top car manufacturers that woke up earlier are more and more important. Based on real-time market data for purchase decisions, for pricing decisions, and for monitoring of some storage risks, they also got some benefits from it. Data drive is no longer a concept, but directly determines whether the car is profitable or not, and even some of the business priorities of survival. Car manufacturers are suppressing and quickly improving their digitalized operating system provided by large companies. and AI services. Although the overall environment is not good, despite this, China's second-hand car trading volume is still growing. According to data from the China Transport Association, in the first half of this year, the second-hand car trading volume increased by 1.5%, reaching 9.72 million units. This is also a historical milestone. A brighter thing happened in June. In June this year, the second-hand car trade volume exceeded the first-hand sales volume of new cars. It became a historical milestone. We believe that the industry is in turmoil. It will take a while for a new, stable pattern to form. I often use the term of the second-hand car industry. No matter how the industry changes, Liyu Zhang, Junhong Yao, Gongwei Zhang, Bofei Kong We provide smart operating systems for Chinese second-hand car manufacturers, and based on the system, provide second-hand car manufacturers with the necessary trading services and AI services. According to the report of Zou's Group, the market share of Dafeng cars has remained at more than 90% for a long time. This allows us to have a sky-high data dynamic in the Chinese second-hand car industry. This data is huge, precise, and real. At the same time, it is also our exclusive. In addition to data, Dafeng also allows us and second-hand car manufacturers to establish a long-term stable and deep online connection. Based on our dynamic in the industry and the online connection with car manufacturers, we have continuously launched a number of car manufacturers' just-needed transactions. There are B2B mixed services among them. We are ranked second in China in sales services between mixed services. There is a second-hand car inspection certification service. Our inspection certification service has linked more than 4,000 inspectors in 250 cities. The coverage rate is the lowest in the country. There are car dealerships and car dealerships. We have established more than 100 motorhomes in all provinces across the country. We have connected more than 40,000 large and small motorhomes and delivered more than 2,600 lines. It is the largest single-car delivery service in China. We also have some vehicle channel business. We build high-efficiency transparent connections between vehicle and financial institutions, vehicle and traffic platforms, and improve dual-side transaction efficiency. The mission of LHC is to promote the digital civilization of the automotive industry. By digitizing, networking, and digitizing, it will be able to supply and upgrade the second-hand car industry. This will be the pursuit of LHC all its life. We always believe that the value of a company's foundation lies in how much value it can create for society. LHC will also receive sufficient rewards in creating positive values for the industry. The third aspect I want to communicate with you today is the two business trends that occurred in this quarter. The first is AI. The second-hand car industry has been digitalizing this road for more than 10 years. Now this AI makes us have the opportunity to promote the industry into intelligent. We have stated many times in our interviews that the big car is a basic facility for AI applications in the second-hand car industry in China. This is indeed a great opportunity for us. Any AI application in any industry is inseparable from large-scale models, high-quality industry data, and digitized application scenarios. In China, we have two of these three elements in particular, data and application scenarios. Liyu Zhang, Junhong Yao, Gongwei Zhang There are three main categories of AI applications provided to car dealerships. One is the tool category, the second is the digital employee category, and the third is the platform-level smart body construction. Next, let me introduce some of the tools we have launched so far. 1. Business Assistant 2. Business Assistant Each car that is purchased by the car dealer is provided with new market data every hour to help the car dealer determine whether it is worth buying and what price to buy. For example, the retail market that we provide to the car dealer, we will tell him about every car he has launched, whether it is more than the total or more than the total in this city. The same car that was sold in the same market an hour ago is really more than 20 cars. The same car was on sale an hour ago. What is the price? If this car was purchased for wholesale, then we will provide it with wholesale sales. For example, which city sells the most, which city sells the most of this car. All these information can be obtained from the sales assistant. In our recruitment book, we included a Yunnan car dealer. His name is Yang Hang. He shared with us a case of his own using a sales assistant. There is a car dealer who wants to sell his Dazhong Polo. The price is not less than 50,000 yuan. The five buyers in the store all think that the maximum is 40,000 yuan. If the price is too high, it will definitely not be sold or it will lose money. . . . . . So he asked his employees that you can no longer judge based on feeling and experience. You still have to follow the data to make a decision. Of course, the bank is one of the barriers between us and our environmental assistant. Now this tool is also used by many car manufacturers. The second reason is the temperature assistant. The temperature assistant can help car manufacturers save the cost of building cameras and fields. You can take a photo of the car and put it in the digital exhibition hall on the high-end. The third application is the chemical assistant. There are a lot of second-hand cars, and sales often can't remember all the characteristics and sales points of all types of cars. The chemical assistant can help him quickly obtain the characteristics and sales points of each car to facilitate communication with customers. This application can also help sales analyze communication records and lock in the real needs of customers. The application of the tools is video assistant. Video assistant can be based on the car pictures and video and car information in the Dafeng system. Help the car manufacturer to generate one thing to generate various styles of short videos for marketing and promotion on the Internet. The application of the tools was released relatively late. It was released in March this year. It basically covers our QR system. We also see from some data that it was quickly recognized by the car manufacturer. . . . . . . . . . . . . . . . There are already two types of employees on the line. One of them is a self-media operator. His main job is to actively interact with customers in the comments section of live broadcasts and short videos, form sales clues, and push large-scale CIMs to distribute to the consumer to follow up. By the end of June, the self-media operator have already deployed 3215 employees in Dafeng. The second reason is that we call it management assistance. The right to access the business data of the store is granted to Dafeng's OpenClock. Management assistance can provide real-time business analysis and management advice for the boss. Until the end of June, the paid management assistant has deployed 295 of them. There are many entrepreneurs in the second-hand car industry in China. The number is about 80 to 1 million. We will thoroughly scan different positions. The feasibility of being replaced by IIT gradually promotes the training and promotion of digital employees in the industry. The two most likely positions are sales and procurement. There are a lot of these two positions and the cost is very high. According to our field survey, The sales and procurement of these two employees will probably consume 35% to 50% of the total profit of the car dealership, so this cost is very high. If we can make a replacement, I believe that the space for the future transformation of these two digital employees will be relatively large. Currently, we are training sales digital employees, and there has been some progress. I believe that in the near future, it will be open for car dealers to use. Our third AI application is called platform-based intelligence. This is also a key direction for our next exploration. Due to our huge, detailed, real-time exclusive data collection, we have the opportunity to create an application that can cover the entire industry. The application of platform-based intelligence contributes to reducing the friction between business participants and the industry. I hope that in the near future, I can also share with you the progress in this regard. In addition to AI business trends, the second trend I would like to share with you is internationalization opportunities. According to the data published by the China Transportation Association, in the first half of 2026, our second-hand cars had a total of 32.5 million exports and 61% growth. Of course, there are also industry experts who analyzed that most of the second-hand car exports last year were zero-power second-hand cars, that is, fake second-hand cars. Therefore, the country introduced a new rule at the end of last year. This new rule has already been implemented on January 1st of this year. The main content of the new rule is to register cars that are not full for 180 days. Only after the confirmation and permission of the manufacturer can it be exported. This new rule blocked the loophole of fake second-hand car exports. At the same time, it also promoted the real second-hand car export trade in the industry. As a result, we can infer from the previous phenomenon and data. This first half of the year, the real second-hand car export volume achieved a double growth compared to last year. China's second-hand car exports really broke out under the influence of two factors. The first factor is that China's new second-hand car prices are too fast and too much, which makes the price of Chinese second-hand cars have global competitiveness. The second factor is that the new rules block the export of fake second-hand cars, and foreign trade car manufacturers have turned to make true second-hand car exports. We will continue to observe and explore Of course, we think we have two advantages when it comes to large car internationalization. The first advantage is that large cars have China's largest second-hand car real-time real-time car storage. Second-hand car dealers use large windmills to manage the real-time storage. The total amount of real-time storage is basically maintained at more than 1.7 million units. As far as I know, the storage information of other platforms is about 300,000 units. At the same time, we have the service of detecting logistics, storage, and other services. This makes us serve the foreign trade type When the car has a unique competitiveness The second advantage is that according to our company's research, most countries and regions in the world The number of second-hand car dealers is very low Our Dafeng car system has the feasibility of global reproduction Of course, in addition to We have the advantage that we can do the basics. How to do it, what stage to do what, we will decide the subsequent investment and development rhythm based on actual progress. Please rest assured, shareholders. Dazhou has been established for 14 years. These years, we have experienced many black swan events that concern life and death, and we have also experienced large-scale division and reorganization. Most of today's business is rebuilt in extreme challenges. Bai Ze Bu Nao is our base company. We have just started our new journey. Thank you very much for your attention. I hope that we will have more opportunities to communicate and interact more in the future. That's all for my sharing. Next time, I will leave it to the CFO, Zhou Qing, to introduce the financial performance of the company's second quarter.

Hello, thank you, Mr. Yao. Thank you for taking the time to attend our press conference. As Mr. Yao said, in the second quarter, the car market was under pressure, but our main business indicators still showed good resilience. First of all, the company's revenue has increased by 3.7%, and the return has increased by 14%. This is basically in line with the environment of the industry and the seasonality of the industry. Usually, the first quarter is the youngest season of the industry, and then the second quarter is a little better, and then the third quarter and the fourth quarter will be better and better. In the end, the fourth quarter is actually the most forgotten season of our industry. Junhong Yao, Junhong Yao, Junhong Yao, Junhong Yao, Junhong Yao, Junhong Yao Before we take a closer look at our profit chart, I would like to first introduce the core operating indicators that the company has announced since this quarter. The operating indicators we have previously announced include the two groups of new car managers and second-hand car dealers. From this quarter, the operating indicators we have announced are focused on the second-hand car industry and only cover second-hand car dealers. This adjustment is mainly due to the feedback of many investors during the process of listing Luye. We hope that this new indicator can help investors to observe and evaluate our company's bottom-level business. There are two main indicators for this business model. The first one is the user participation data of Dafeng. The core is the number of active business and active users. The purpose of these two active data is to assist investors in understanding the health of our digitized base. At the same time, through these data, we can also understand the state of the entire second-hand car industry. The second module is the commercialization data of our second-hand vehicles. It is divided into two levels, the commercialization and the trading. The commercialization is the main unit of our commercialization, so the number of commercialized vehicles or the number of commercialized merchants is a very important observation indicator. This reflects the concept of our commercialization process. However, our income is actually from each transaction service. The size of the car is different and the depth of our cooperation is different. There may be a very big difference in the number of orders produced by a car. For example, car A produces 10 test orders a month, car B produces 50 test orders a month, and 10 B2B-matched orders. We need to really understand the business driving of large-scale vehicles. We need to look down and enter the transaction volume, the transaction unit volume of the transaction service. So we need to disclose this set of numbers. In this regard, we will also disclose the average income of a single business owner and the average income of a single transaction service. The average income of a single business owner can reflect the depth of commercialization on the business side of the car industry. That is, the same business owner has contributed 500 yuan or 5000 yuan to us per month. This is a dimension. The average income of a single transaction service can reflect the size of our smallest income unit. So these two are starting from a micro perspective, and are more convenient for everyone to carry out long-term observation and comparison. We hope that investors will be able to see the stability of DaFeng's users and the speed of DaFeng's performance growth. Next, let's take a closer look at the business data of the second quarter. In the second quarter, our average number of Yuehuo business owners is 65,334. The average number of Yuehuo users is 199,933, which is close to 200,000. If we compare the number of Yuehuo business owners with Q1, it actually has a very slight decline, but the number of Yuehuo users has a slight increase. This basically reflects what Mr. Yao just mentioned, In the first half of the year, the business pressure in the car industry has increased. The number of entrepreneurs in the industry may not have decreased, but the number of businessmen has decreased. This shows that some businessmen may not be able to survive independently in this intense competition. They have switched to another family to work. In the second quarter, the number of commercialized businesses reached 9,146. The average income of a single business is 6,672 yuan. The total number of commercialized trading services is 214,451. The average income of a single trading service is 259 yuan. These data are relatively small and easy to digest. We believe that it will be more convenient for everyone to pay attention and compare in the future. The services we create are mainly related to transactions, such as B2B integration, second-hand car testing, delivery, and other B2B collaborative services. Our operating system, Dafeng, and some other digital solutions, have never been our main source of income. They were not like this before, and they will not be like this in the future. And as the revenue of our trading services continues to increase, we predict that the revenue ratio of this digital solution will continue to drop. Finally, I would like to remind you that the two key factors of the business and trading levels are to observe the revenue driving factors of the company from two different dimensions. These two indicators are not simple to add up, right? We can't simply multiply them and get the total income of a large car. Our total income is still hoped that everyone can go to see our disclosure. Okay, after introducing the financial indicators, I will now introduce some of the major changes in our financial performance in the second quarter. First of all, in terms of loss, our total income has increased slightly. The total of the second-hand car version is basically flat, so the contribution of the income increase in this quarter is mainly from software services provided to the main airport. At the same time, we are no longer providing some marketing services for the host market this year, so the revenue of the marketing service has disappeared, which has reduced some of our increases. When evaluating our revenue performance this quarter, we hope that investors can see two points. The first is that our business overall is relatively stable. The second is that we are actually actively adjusting the company's business structure to improve our overall revenue quality. The increase in revenue this quarter is lower than the overall net profit level of the company. Therefore, the current cost increase is higher than our revenue increase. However, through strict cost management and efficiency improvement measures, we have still achieved a significant reduction in net loss after the adjustment. So let's talk about the net loss. In the second quarter, if we look at the US general accounting standard, which is GAAP, the net loss is up to RMB2.405 billion. But it includes about RMB2.278 billion in equity incentives and IPO-related expenses. The net loss of Gap Coaching last year was RMB 25 million, but at that time we did not have any capital incentive fees. Because we had a clause that we had to confirm at the time of IPO. If we deduct the capital incentive and the IPO-related fees, and look at the net loss of gold adjustment, the second quarter was RMB 7.4 million, and the same period last year was RMB 19.2 million. and so on. The core reason is that our management costs, sales and marketing costs, as well as research and development costs, all have the same significant decline. The decline is 14%, 14% and 29%. These three costs have dropped a lot. In the meantime, income documents can also reduce costs. On the one hand, it benefits from our discipline in resource configuration. We are constantly improving the structure of business and simplifying our organization. Another very important factor is that we are promoting AI applications to a large extent within the company this year to improve the efficiency of all business conditions. I want to spend two minutes to introduce this promotion. Because I even feel that among the many companies that I know, we all have a lot of experience and are relatively ahead. As for AI, as Mr. Yao mentioned, from the outside, AI has increased the competitiveness of a very strong digitized infrastructure company, and provided us with some new opportunities for transformation. From the inside, we think AI is a very strong incentive for corporate capital growth. This year, we have launched an AI-era life-and-death promotion project. In addition to some of our frontline employees, We have to participate in all our business conditions and professional conditions. We use AI application results to answer questions and PK to evaluate and select the AI application capabilities of employees. and others. The award includes the issuance of rights, and the issuance includes the forced replacement of employees. So in the next few months, AI applications in our company will no longer be a management expectation. It has become our employees' working habits. During this process, we have also produced a lot of very excellent AI promotion tools. Naturally, many of our processes have also been improved, which gives our management a lot of opportunities to reduce costs. This is a very important reason why our three fees have dropped significantly. We will continue to promote AI in enterprise applications to further improve our operating efficiency. Last but not least, let me introduce our asset tax table. The IPO financing has obviously enhanced the company's financial flexibility and provided a more stable financial foundation for the development of our core business. However, this will not change the probability of our resource configuration. So whether it's AI, overseas markets, or other potential areas of growth, we will invest very carefully in different stages. On this basis, we believe that the key to performance is in the following aspects. First of all, we will continue to increase the revenue of trading services. In the process of IPO, we also have a lot of communication with many investors. That is to say, the revenue growth of our large-scale car will still come from trading-related services, right? We are a wheel of growth made up of the stability of the operating system and the growth of the revenue growth of trading services. So, our next performance focus is to continuously expand our trading service revenue. Not only do we want to increase the type of trading service, but we also hope to deepen the commercialization and cooperation degree with individual car manufacturers to further improve the average income ratio of our individual merchants. We also have a lot of investment in AI. AI will provide us with new business opportunities outside of the existing service system. We will be very active in verifying the needs of our clients, the wishes of our clients, and the benefits of our investment. We will gradually seek to commercialize AI applications. Finally, we will continue to improve the efficiency of the elite, maintain strict costs and control of expenses, and achieve profits as soon as possible. Of course, when facing this huge opportunity with value, we will still make necessary investments. Okay, that's all for my speech. Host, we can start the Q&A session. Now we enter the Q&A session. You can ask questions in the following ways.

One is to use the hand raise function on the screen. We will invite the participants to ask questions according to the order. At that time, your audio will be connected. You can ask questions directly. If you broadcast through the phone, please press the signal button 9 to raise your hand. Press the signal button 6 to cancel the audio. Before asking questions, please introduce your name and organization. Another way is to enter your questions in the question box. We will check the questions received and convey them to the management floor. Now we have a few minutes to wait for the questions to line up. Our first question is from Liyu Zhang. Please start the question.

Good afternoon, Manager Chen. I'm Liyu Zhang, an analyst at Deutsche Bank. Thank you for accepting my question. I also congratulate the company for successful IPO and continuing to achieve strong business progress. I have two questions. My first question is to ask Manager Chen to share the key strategic focus of the company in the second half of 2026. I'll follow up my second question later. Thank you.

OK, let me answer. In our company, when it comes to strategic issues, there is a framework called the first step. In the second half of this year, we will focus on two things. We will focus on two things at the beginning. First, we will continue to dig deeper, so that the depth and width of our wind turbines will continue to expand. What is the depth? For example, I have 10 workers. Today, I use 3 meters or 5 meters. 5 meters is deeper, right? This is the depth part. In Guangdong, although the market strategy is very high, more than 90%, but in fact, our coverage may still be about 60%. Some car dealers don't use it because it's small or because of some other reasons. We have to continue to let more car dealers use it. So this is our first strategic policy. In the second hand, we want to increase our revenue level. I cover so many car dealers, how many car dealers pay me? How many car dealers use my transaction service? Of course, these are two dimensions. More and more car dealers use my transaction dimension, and then the part of the payment is getting bigger and bigger, then my revenue is getting better and better. So this is the two aspects of our handover in the second half of 2026. The two aspects of the initial two aspects, in fact, I mentioned it when I introduced the business trend earlier. The first is to accelerate the development and commercialization of applications in the AI sector. The second is to actively explore opportunities for internationalization. Thank you, Leo. Thank you. Very clear.

My second question is, which businesses will make the most money in the future? Thank you.

Liyu, let me answer this question. Just like what we just introduced, the company's business is divided into two levels, the digitalization and the trading service level. More than 90% of our income and growth will come from the trading service level. As you can see, we have also disclosed that the work chain of the car dealers is very long. From start to finish, they have a lot of stages where they have to cooperate with third parties. We have a lot of low-hanging fruits here. We will continue to promote this part. Whether it's the efficient combination of B2B, and other third-party institutions. I would like to remind you that the company has a long history. We have many other businesses in the history. As we mentioned in the introduction, we are actively adjusting our business. In the short term, in a certain period, there may be a line of business that gradually shrinks, and its income will drop. But this is actually a healthier way for us, so there will be no such off-set situation. Finally, if you look at it a little longer, I think in a few more seasons, you may see some more physical, AI-related commercialized income. Thank you, Mr. Yao and Mr. Qin. Thank you, Liyu.

Our next question is from Cathy Zhu. Please ask a question. Good afternoon.

Thank you for giving me the opportunity to ask a question. I am Cathy, an analyst at Morgan Stanley. I would like to ask a question about the change in the industry structure and the problem of company business response. We have also observed that the percentage of new energy vehicles selling in new vehicles is increasing. Thank you.

Okay, let me talk about the impact on the industry. All new products need time to digest and adapt to the new industry. We have been paying attention to the fact that car manufacturers used to run oil cars. How can they slowly transform into electric cars? Because from the data of new car sales, it is now more than half, right? Of course, we have been tracking this figure. The data I have recently seen is that in the past month, there are about 36% to 37% of car dealers in our big car data. In the past month, less than 20%, about 18-19% of the inventory in our system is new members. So there is a general concept, that is, the infiltration of new members and second-hand cars in this industry, one is about 36%, the other is about 18-19%. We are getting more and more used to it, especially during the US-U.S. war. We also saw a lot of activity, especially in May and June. Although most of the cars were lost, most of them had cars. So I think the impact on the industry is that the sales of new cars The higher the price, the easier it is to get used to it. Because there is a habit in second-hand cars. The more new cars are sold, the more valuable the second-hand car is. The less new cars are sold, the less valuable the second-hand car is. Its price will be very low. At present, it is generally seen that the remaining value of the entire new engine is lower than that of the oil car. It is because its total sales are not big enough. The same is not enough to get used to it. For example, I am very confident that 100,000 yuan will be sold out. Then I can say 95,000 yuan. I was not confident that I could sell it for 100,000 yuan, so I sold it for 80,000 yuan, right? I sold it for 90,000 yuan. Therefore, I believe that the impact of this process on the industry will continue in the next three to five years. Of course, we also judge that if there is a car that cannot adapt to it, there is a probability that it will be eliminated. The second one is for us, the car dealers. In fact, our car dealers are a negative energy structure. It doesn't matter if you sell electric cars or oil cars. In fact, your electric car also needs to be cut. Electric cars also need logistics. Electric cars also need to be connected to financial institutions. Electric cars also need to be integrated. So it doesn't have much impact on all our digital services, as well as trading services and AI services. On the other hand, we may have acquired some new opportunities. Liyu Zhang, Junhong Yao, Gongwei Zhang, Bofei Kong and so on. In the process of second-hand trading, do we need to maintain the battery? Do we need to change the battery? I think for large companies, it has increased some opportunities. Especially, for example, There is a lot of experience in oil cars, right? It can be judged by experience whether it should be charged or not. How much money to charge? Electric cars have no experience. So we also found that we are in the aviation department. The proportion of surveyed electric cars is actually higher than oil cars. That is, some digital applications will also be strengthened. That's probably the case.

I would like to add two points, Mr. Yao. Because this is a question that many investors have asked during our recording. I would like to add two points. The first one is what Mr. Yao mentioned just now. Electric vehicles, its new brand, new model, new configuration, and many more. So what does this mean? This means that there are more SKUs in the car industry. Right? Because second-hand cars are originally a car and a product. You might have 10 main brands, right? Now there are 30 of them. And then under each main brand, it has N types of configuration. This configuration affects the value of this car. So for the car industry, it actually has increased the difficulty of managing its own SKU. So how do you manage it? Right? You must have a good operating system to manage it. So I think this is actually for us is The second is, I would like to once again use this opportunity to emphasize that for a large car, our income mainly comes from the services related to transactions. It is essentially a market driven by the amount of transactions. So no matter if this car is electric or oil-fired, as long as it is a second-hand car, a second-hand item, and it has a residual value, it needs to flow between one main body and another main body, then we will have a great deal of this income opportunity, especially in such a very wide-scale market in China, right? Thank you, Cathy. Thank you, President Yao.

Our next question is from Ke Wang. May I ask you a question? Mr. Wang, right?

Yes. You didn't turn on the microphone, right? I did, but there was no sound.

Okay, it should be okay.

Can you hear me now?

Yes, you can. Thank you.

I'm sorry. Hello, everyone.

I'm Wang Ke, an analyst at Zhongjing.

I want to quickly ask two questions that I'm curious about. The first question is about tracking indicators. I'm curious if for investors, the MAU for individual users The second question is about the industry. We have observed some trends in the industry. Many small businesses have been acquired or eliminated, and more and more shares are concentrated in large businesses. Does this mean that the future of our platform will have a downward trend in the number of active business accounts? These are the main questions I would like to ask.

OK, let me answer this question. First of all, I would like to reiterate what I said. I would like to emphasize that our users, the so-called individuals, are actually employees in the car. We are not consumers. Of course, the problem you mentioned is that and so on. I think both are very important. The second and the first questions are related. Will there be fewer and fewer company accounts? Will there be more and more employee accounts? Let me explain a bit. In the past, more than one investor has asked me the same question. The question is, is there Carmex or Carvana in the U.S.? Will there be Carmex in China? My answer to him is, I don't think there will be Carmex in China. Besides the U.S., there is no Carmex in other countries in the world. I think there are two important reasons. The first reason is that the price of new cars in the U.S. is particularly stable. The numbers don't necessarily change. I'll give you an example. I used to go to the U.S. to look for these cars. For example, the Bentayga sells $20,000 a year. The price of this and that will not change. At the same time, when you go to buy a car, the store will never be the same. This is the front radar, that is the rear radar, this is this color, that is that color. If you want to fully meet your needs, I'm sorry to wait six months. What are all his mistakes doing? They are doing something to stabilize the price. What are the consequences of such instability? Kavanaugh once had a roller coaster. I think as an analyst and investor, you all know very well. The value of more than 8 billion dollars fell to tens of billions of dollars. It fell very low. What is its risk? It is because In the United States, there has been a rare fluctuation in the price of second-hand cars. The cause of this fluctuation is because of the nervousness of the chip. When the chip is nervous, I think I may have a chance. I will stock up on a lot of goods. But it may be that the fall cycle and time may be different from its original expectations. So it brings a lot of storage management risks. Kavanaugh only faced it once, but in China, he had to face it several times a month. Look at that, that Ya Ge, $199,800, next year $170,900, and the following year $150,900. The guidance price keeps going up, and it's still discounting, right? Newly listed, add price, add it up, then full price, full price, then nine fold, nine fold, eight fold, and then zero to six fold. It's very difficult to run a Chinese car business. Of course, this kind of bad environment will train those who are particularly awesome. I think Chinese car business is particularly awesome. But we can't ignore one problem, which is the premise of new car price stability is to scale up the chain of operations. If your price fluctuates, it will be very difficult to scale up the chain of operations. That kind of strong elite, that kind of individual household, is easy to survive. This is one of the reasons. What is the second reason? The second reason is the supply chain problem. There are about 5.5 million second-hand cars in the U.S. every year. They are from the leasing institutions that have been withdrawn from this institution. And these rental companies such as Ivers, Hertz, and Price have to withdraw about 5.5 million a year. and most of them have been auctioned. This provides a very good foundation for some joint businesses to collect goods. For example, when I went to CarMax, I saw that the same car, the same color, has five or ten cars. You can't collect goods anymore. Because in China, there are very few car dealers, very few. So it makes it very difficult to collect goods for each car. I don't know. So these two factors, I think they are two factors that greatly affect the development of globalization. If they are available, they can develop. If they are not available, they are very difficult to develop. So in China, I often say to the car dealers, I say, look, whoever goes to drive across the city to open a store, he is basically an alien. I think China's future will continue to be a country of small and medium-sized companies. and so on. I don't think so. I don't think so. I don't think so. I don't think so. The remaining 94% to 95% of the capacity is still for small and medium-sized cars. So I think this question is my conclusion. I think the number of car dealers and the number of car employees are all worth considering. Thank you.

Let me add one more thing. Some of the reasons that I mentioned earlier about the wide-ranging industry will make it difficult for big and small car manufacturers to change. I actually have another observation. Just like the picture we put in the recruitment book, the management of second-hand car manufacturers Thank you.

Thank you. Thank you, Feifei. Thank you, everyone, for attending today's press conference. As we mentioned before, the replay of this Chinese and English press conference and the relevant text records will soon be posted on the company's IR website.

If you have any other questions, please contact our investor relations team via e-mail. At the same time, we would like to welcome everyone to participate in the subsequent activities of the company. For more details, please visit the company's IELTS website.

Thank you everyone for your time today. Thank you.