SUPER HI INTERNATIONAL HOLDING LTD.

Good evening. Thank you for attending today's Super High International 2025 Q4 and Full-Year Earning Conference. The company leaders present to the conference are Ms. Yang Yuzhe, Executive Director and CEO, and Ms. Chui-Sung Xiefo, and the Secretary of the Board. The content of today's meeting may contain forward-looking statements, including but not limited to the company's statements on its strategies and business plans, as well as the outlook for its performance. The content released by this conference, at this earnings conference, as well as the comments and responses to your questions only represent the views of the management as of today. Please refer to the latest Safe Harbor statement in the earnings press release, which applies to all the conference calls. The meeting is conducted in Chinese with an external institution, providing simultaneous English translation. In case of any discrepancies, the Chinese content shall prevail. The meeting presentation materials have been uploaded to the company's investor relations page for your reference. Now, we invite Ms. Yang Lijun, Executive Director and CEO of Superhigh International to review the company's performance in fourth quarter 2025. Thank you, host. Dear investors and analysts, good evening. I am Yang Lijun, Executive Director and CEO of Superhigh International. Super High International. I'm here to brief you on the company's performance in the fourth quarter and the full year of 2095. In 2095, under the strategy of focusing on both employees and customers, the company took the initiative to offer benefits to these core groups. We have witnessed the sustained growth in revenue in customer traffic with the quality of the growth improving In the fourth quarter of 2025, the company's overall operation continued. The recovery trend of the first three quarters, the customer traffic of Haidilao restaurants reached 8.31 million persons times in this quarter, driving the overall average table turnover rate of Haidilao restaurants to four times, four times per day, an increase of 0.1 times per day year on year. At the same time, companies' delivery business and other businesses continue to contribute to revenue in this quarter. Companies' total revenue reached U.S. dollars $230 million, an increase of 10.2% compared with U.S. dollars $208.8 million in the same period last year, and a month-to-month increase of about 7.5% from the third quarter last year. indicating that our investment in optimizing product cost-to-performance ratio and reaching consumption scenarios and improving service experience have gradually been recognized by customers. Looking back at the full year of 2025, Heidi Lau Restaurants, operated by the company, received a total of 32 million diners. The overall average table turnover rate of the restaurants reached 3.9 tons per day. In the same store, average table turnover rate reached four turns per day, both an increase of 0.01 turns per day compared with the same period last year. Total revenue 2025 was U.S. dollars $841 million, an increase of 8% year-on-year. Now, I share with you some of our continuous efforts in business improvement. First, adhere to offering benefits to customers and employees, and consolidated the foundation of store management in 2025 on the basis of focusing on both employees and the customers. We further clarified and implemented the proactive strategy of offering benefits to customers and employees throughout the year. In terms of employee development, we have continuously optimized from multiple dimensions, such as salary and welfare, daily care, and training and development, enhancing the sense of belonging of the diversified team. Up to now, we have about 90 reserve backbones, and nearly half of whom are foreign key staff laying a talented foundation for diversified management. In the frontline management, on the basis of formulating core red line principles, we have turned the focus of the worker to frontline stores in the regional divisions, allowing them to focus more on the market, customers, and employees themselves. This transformation has released very obviously front line vitality in the second half of the year in many excellent service cases in management practices that have been spontaneously created by regional divisions in stores. At the same time, we also encourage management team in various regions to conduct cross departmental and cross city store inspections that conduct the comparison learning and reflection in onsite work In conjunction with the dual store management and multi-store management policies, we expand excellence management capabilities to more stores and further expand the talent training ashram. Second, create a unique idea and continue to invest in customer experience. This year in our work of focusing on customers, we have formulated and differentiated the service plans for different customers. such as birthdays, parent-child activities, dinners, and late-night snacks, and implemented scenario-based services in the audience, such as dishes, peripheral products, and decorations with more substantial investments. In terms of products, we have continued to promote localized new product launches in various countries with a total of more than 1,000 optimized new launches throughout the year. This year, we focused on the implementation of a fresh-cut food scenario. Fresh-cut meat is quite novel for overseas consumers. We have something equipped with the decoration of the open kitchen fresh-cut workshop, which can bring a better consumption upgrade experience. At present, there are a total of 57 SKUs of fresh-cut beef and pork series. Covering 13 countries, as of December 31st, the average click-through rate of the fresh-cut meat series products in overseas countries reached 12.21%. This year, we have continued to innovate in the take-out scenario, launching faster food categories such as spicy boiled food cups, fried snacks, and rice and noodles. At the same time, We launched and promoted on multiple platforms and expanded delivery coverage. The annual takeout revenue increased by 68.1% year-on-year, effectively reaching customer groups beyond dining meals. In terms of space and service, we selected some pilot stores to carry out the transformation of nightclub style scenarios, upgrading lighting, sound effects, and interactive experiences. The improvement of table turnover rate during late-night snack hours in pilot stores is more obvious than that of similar stores around us. In addition, we have actively explored innovative marketing models in many countries and driven a certain degree of talk-of-town popularity and customer traffic support locally through the dual-track strategies of celebrity co-branding and IT authorization. In terms of cost-performance ratio, We have authorized the teams in various countries to make reasonable adjustments in pricing, portion size, and plating, allowing customers to better feel the cost-to-performance ratio. This is also one of the important reasons why our table turnover rate remained stable in the traditional off-season in the first half of the year. Thirdly, enhance the capability of the headquarters and promote the upgrading of organizational efficiency and digitalization practices. We have made several important progress in the capacity building of the headquarter this year. In terms of supply chain, we have continuously increased the production capacity of our own central kitchens, strengthened the hierarchical management and bargaining power of global suppliers. The continuous efficiency improvement of the supply chain since this year has increased offset the growth profit pressure brought by the customer benefit strategy to a certain extent. Proportion of the employee cost has also gradually approached the level of the same period last year. In terms of digitalization and organizational efficiency, we have actively explored the application of AI technology in management to improve the operational efficiency of the headquarters and stores. We have also further integrated the coordination mechanisms of products and marketing, guided menu optimization, and data evaluation, and formed a normalized product management cycle of new launch evaluation and iteration. Up to now, the scale of our overseas members has continued to expand, and the application of digital tools in the members' activation and scenarios reach has gradually deepened. As of the end of 2025, the number of overseas members of HIDL has exceeded 8.5 million. Fourthly, the expansion of store network and the woodpecker plan are promoted in parallel. In terms of expansion, we still adhere to the bottom-up strategy where country managers are responsible for site selection and implementation. The headquarters controls the quality and pace. In 2025, we opened a total of 13 Hy-Vee Law stores throughout the year, covering nine countries, including Malaysia, South Korea, Indonesia, Japan, United States, Australia, Canada, UAE, and the Philippines. In the meantime, we continue to optimize the store network layout and make adjustments at the right time. In 2025, we closed a total of nine stores in Singapore, Thailand, Malaysia, and Japan. Some due to lease expiration, others due to active adjustment. Among them, three locations that have completed the format transformation from Haidilao to the second brand and then incorporated into the pomegranate native plant As of the end of 2025, we operated a total of 126 Haridwar stores overseas. In terms of store opening quality, the number of stores we have signed contracts for and to be opened still remains in double digits. With a steady overall expansion pace, we have not relaxed the requirements for profitability and implementation of the quality of new stores. In terms of the pomegranate plant, we have implemented it at a steady pace of advancing gradually and verifying, whilst polishing the plant as we go along this year. We continue to incubate prototype stores and second-brand projects in different countries around multiple catering trucks, such as the hot pot, barbecue, and spicy cups. And in terms of the implementation mechanism, We adhere to a bottom-up approach in terms of the teams in various countries identify, trust, and promote site selections and implantation based on the local market, whilst the headquarters focuses on the construction of the middle office capabilities, such as product R&D, brand marketing, information and business analysis, forming front-end and back-end coordination. We can also show you some of the results this year in terms of progress. We have some specific achievements that we report to you this year. Projects such as Spokoro BBQ, Canadian Haibo Malatang, and Japanese Izakaya are progressing as planned, some of which have achieved a single-store probability, proving that our exploration of new formats overseas is feasible. In addition, three original Haidilao locations were transformed into second-bred operations throughout 2025, and the pomegranate plant has begun to link with the optimization of the existing store network rather than being an isolated new thing. From the perspective of operating data, the revenue contribution of related business has also continued to increase. Other business revenue increased by 61.4% year on year, and the substantive contributions have begun to be seen in reaching the revenue structure and expanding the customer base. Next, we'll still adhere to a prudent pace of advancements and continue to polish the proven projects, build up information digitalization and the mid-office support capabilities, and on this basis gradually improve replication efficiencies and enrich the company's format, layout, and growth sources. Looking forward into the future, we take becoming a leading global comprehensive catering group as our long-term development goals continue to improve in five aspects, the customer experience, the restaurant network, operational improvement, new business, and headquarter capabilities. The above is my introduction to the business development situation. So now please welcome Ms. Xu Cong to introduce the financial situation to you all. Thank you, Ms. Xu. And next, I will report to you on the financials of the company. Our total revenue for the full year 2025 was U.S. dollars $840.8 million, an increase of 8% compared with the same period last year. Operating revenue of the high-dollar restaurants with the U.S. dollar 790 million accounting for about 94% of the company's total revenue, an increase of 5.7% compared with last year. Takeout revenue, U.S. dollar 19 million, increase of 68.1% year-on-year. Other business revenue was the U.S. dollar's 31.8-minute increase of 61.4% year-on-year, mainly due to the continuous expansion of the revenue contribution from restaurants incubated under the pomegranate plant and the continuous penetration of peripheral products, such as the hot pot condiments among local consumers and in retail channels. The four-year table turnover rate of a Haidilao restaurant was 3.9 tons per day, and the same store Turnover rate was four turns per day, both an increase of 0.1 turns as compared with 2021, and achieving steady improvement in operating quantities against the background of a continuous expansion of the store network. From the perspective of the annual rhythm, the year-on-year revenue growth rate of each quarter was 5.4, 8.5, 7.8, and 10.2, respectively, with the growth momentum strengthening quarter by quarter and reaching the annual high in the Fourth quarter reflecting that our continuous investment in optimizing product cost performance ratio enriching consumption scenarios and improving service experience. In terms of the raw material cost accounted for 33.6% of revenue increase of 0.5% over last year due to our active optimization restaurant dish quality and increase in the proportion of fresh products, which brought certain fluctuations in raw material cost in the short term. Employee costs accounted for 33.9%, increase of 0.6% over last year in 2025. We systematically raised the salary and the welfare for the frontline employees and increased investment in employees' daily care. Rental accounted for 2.9% of revenue, increase of 0.3% compared with the same period last year. Water and electricity expenses is 3.4% for revenue, a decrease of 0.2 percentage points compared with last year. Depreciation in amortization accounted for 9.8% of the revenue, a decrease of 0.6 percentage points compared with last year. Above changes are many due to dilution of a promotion proportion of relevant expenses by the increase in revenue. Other operation-related expenses accounted for 11.3% of revenue increase of 1.4 percentage points over last year, mainly due to the increase in our outsourcing services fees for restaurants as well as the company's increased investment in continuous promotion of the pomegranate plant and the brand building regional expansion. In 2025, our full-year operating profit was $37.4 million. The operating profit margin 4.4% decreased compared with 2024. From the perspective of quarterly trends, against the background of an actively increased investment in the first half of the year, operating profit margin had a low of 1.9% in the second quarter. recovered significantly from the third quarter and rebounded to 5.9% and 5.7% in the third and fourth quarters, respectively, with a clear recovery trend in the second half of this year. This resulted in line with our forecast at the beginning of the year, and this has laid a solid foundation for the company's long-term healthy development under the comprehensive influence of above factors. After that, the net profit in 2025 was the U.S. dollar 36.3 million, substantial increase compared with 2024. Significant improvement in net profit and is mainly due to the favorable impact of 2025 global exchange trend on the company's multi-currency asset and liabilities. So now looking at Q4, achieved a total revenue of US$230 million and increase of 10.2% compared with same period last year, month-on-month, 7.5% from third quarter. mainly due to expansion of the store network compared with last year, continuous improvement of the table turnover rate, peak season effect, driving double growth over customer traffic and average customer spending. Among them, operating revenue of Heidi Law Restaurants was $211.9 million, accounting for 92.1% of company's total revenue, increase of 6% compared with the same period last year, Takeout revenue was the U.S. dollar 6.8 million, substantial increase of 94.3% compared with the same period last year, continued high-speed growth. And other business revenue was the U.S. dollar's 11.3 million, increase of 109.3 compared with the same year last year. We can continue to see that the success of the pomegranate plant was further evident in fourth quarter. Fourth quarter of 2025, the raw material cost is 76 million U.S. dollars. The gross margin, 66.6%. It decreased about one percentage point compared with same period of last year, mainly due to the short-term cost increase brought by optimization of food material structure. Employee cost was U.S. dollars 74 million, accounting for 32.2% of revenue. Basically, same period of last year. Improvement compared with the third quarter. meaning benefiting from the increase in revenue scale in fourth quarter rent expenses. The U.S. dollar is at 6 million, accounting for 2.8% of the revenue, basically the same as the same period of last year. Ordering electricity expenses, 7 million U.S. dollars, accounting for 3.1% of the revenue. Decrease of 0.3% to the point compared with the same period of last year. Depreciation in amortization with U.S. dollars at 21.5 million, accounting for... 9.4% of the revenue, a decrease of about 0.9% each point compared with the same period last year. Total revenue and other operating expenses, the U.S. dollar is $29 million, accounting for 11.7% of revenue, increased about 1.1% each point, mainly due to the promotion of pomegranate plants, plant building and store expansion. to four companies operating profits. It was 12.98 million operating profit margin, 5.7% decrease, about 2.7 percentage points, and basically the same as third quarter, and the decline in the profit margin is mainly due to active investment on the cost side, which is in line with our overall rhythm of continuously offering benefits to customers and employees. Net exchange losses in the fourth quarter was U.S. dollars 3.8 million, mainly due to revaluation impact of exchange rate fluctuation. Under this impact, taking Q4, our after-tax next profit was U.S. dollars 4.47 million, achieving profitability by end of 2025. And our capital reserve is U.S. dollars 270 million compared with U.S. dollars 250 million at the end of 2024, mainly due to net cash inflow generated from annual operating activities. In terms of performance of the restaurants in Q4, we have served a total of 8.31 million customers, an increase of 3.89% compared with the same period in 2024. Companies averaged a table turnover rate with four turns per day, increase of 0.1 turns compared with the same period of last year, where average customer spending was the U.S. dollars at 25.4 U.S. dollars, the increase of the U.S. dollars at 0.4 compared with the same period last year, mainly because we continue to optimize the dish structure and the marketing measures providing consumers with more differentiated choices. Average daily revenue per restaurant was the U.S. dollars at $18. from the same period last year, and we can see that East Asia performance is the most outstanding. It has increased about 0.3 turns compared to the same period of last year, reaching 5.1 turns, and this is mainly thanks to the operating efficiency in Japan and South Korea markets, as well as the incremental Contribution of uni opened the stores. The average customer spending remaining at U.S. dollar is a 28-point decline for North America, roughly the same as last year at 4.1 tons per day. In terms of average daily revenue for restaurants, the U.S. dollar is $24,100, the same period, roughly the same as last year. Same period of last year, the average customer spending in North American market was the U.S. dollar's 41.4. It rebounded from 41 in the same period. Net increase of two high-deal restaurants in North America in this quarter supported revenue growth. Other regions, the table turnover rate in the fourth quarter was 3.9 turns per day, affected by ramping up period of newly opened restaurants during the same period. Average daily revenue per restaurant is 24%. 1,300 U.S. dollars, a slight adjustment from U.S. dollars, 26,100. Average customer spending, 40 U.S. dollars. Southeast Asia, total of 5.3 million customers. And in terms of the average customer spending, 19.3 U.S. dollars, slightly the same as last year, maintaining stable operation overall. In the fourth quarter, same period revenue was 195.4 million dollars. an increase of 2.3% for the same store growth, achieving positive growth for Southeast Asia. We can see 12.8% year-on-year growth, and for other regions, They are at 1%, 0.2%, 0.5% year-on-year for North America, Southeast Asia, and for regional performance is pretty much consistent with the overall trend, and I'm not going to go into further details. So this concludes our presentation. We're now going to the Q&A session.

Let's wait for the first question to come through.

So, first question comes from from security. This is from security. I have two questions. The first one is on store opening. May I please ask for the next three years, what's your store opening plan? And looking at the different regions, what's the approximate quantity? Given that there are certain global geopolitical changes, will this affect your current store opening plans? My second question is on the brand equity. What indicators do you use to judge the spend of your brand equity? In terms of hiding our brand in various countries, and what is the strength for the countries that you're not doing so well in, and how would you further strengthen your brand equity in those countries? Thank you, Ms. Zhong. I will answer your first question in terms of store opening. For store opening, we continue to focus on bottom to up, hence we're not going to have a specific target, and in terms of Our selection of the stores and in terms of the business district and maturity preparation for the local team, those are more important. At present, most of these plans, they will be opened up in 2026. In terms of regions, East Asia is where we have the most confidence. We can see that single-store model in Japan and South Korea have been verified. We have also noticed that North America achieved a net increase in the fourth quarter. And for Southeast Asia, we have a large base, and the focus is on optimizing the existing stock and improving quality of single stores. Middle East, Europe, Australia will be following and watching the market closely. You also talked about the geopolitical frictions and the war going on at the moment. So for our Middle East deployment, of course, for the short term, that will come as a headwind. But in terms of geopolitics, and our approach is that we will not be making unified decisions on contractions or accelerations, but it is really the country managers to make their judgment call because they're the ones who know the best about the local situation. And again, it is still bottom to upper hand, so we will maintain very prudent. In terms of your second question, how do we evaluate our brand power? And I'll have Ms. Yang to answer this question. So you can see that these would be reflected in our internal indicators, and we mainly look at the following areas. For instance, number one is the quality of natural growth of members of customer registered voluntarily and repurchase without relying on promotions or discounts. Second, steady growth of table turnover rate in peak season, which reflects the customer's willingness to visit. Thirdly, continuous increase in the proportion of local customers. If a market mainly relies on the Chinese customers, then the brand barrier is fragile. Number four is the spread of word of mouth. We continue to follow the natural discussions volume and the emotional tendency on local social media in each market. By market, in the mature markets such as South Korea and Southeast Asia, the brand awareness is high, and the local customer base is solid. Japan is growing rapidly with remarkable progress in the past year. In addition, in some markets where we have entered a short term, short time, and the brand awareness is still in the early stage, and Asian customers are still the main support. For markets with a relatively weaker brand power, our strategy has several levels. First, localized products and services to make local consumers feel that heavy-duty dishes are made for them. Second, scenario-based marketing strategies such as star co-branding and IP authorization have a higher leverage effect in the market with a weak brand awareness. And number three. We will not easily abandon a market because of the poor short-term data, but we will carefully evaluate which stores need adjustments based on performance. Thank you. Thank you, Ms. Yang, and thank you, Ms. Chu. Thank you for your question. So the next question comes up from Citic Securities.

Weijia Baobis, go ahead. Thank you.

I have two questions for the management team, and the number one is with respect to the pomegranate plant. Ms. Younghan mentioned this in detail. Could you please share with us about some of the single-store models and the profit levels of the representative brands in this area, and what are the subsequent development plans? And my second question is about 2026 to 2027. How do you look at this in terms of customer experience and the employee benefits? How do you look at this, and how will this be reflected in operating indicators such as expense ratio?

Okay, thank you, Mr. Wei, for your question.

The first question will have Ms. Young to answer your question. Thank you, Mr. Wei. The pomegranate plant has achieved some specific results this year. Sparkro BBQ, the Canada Hypo Spicy Hot Pot, and the Japanese Izakaya are all progressing as the plant, and some of them have already achieved a single-store probability. This is a very important signal for us, proving that it is feasible to build a second brand overseas. For single-store models, there are great differences among different brands and markets. At the moment, it's difficult to give a unified figure because we're now basically are literally crossing the river by touching the stones. And it is not yet the time for large-scale replication. And we consider there are mainly three factors whether a brand is worth promoting. First, whether a single store can make a profit without headquarter subsidies. Second, whether the model can be replicated to open a second store in the same market. Thirdly, whether the local team has the ability to operate independently. Only when all three conditions are met will we consider accelerating the expansion. The other business revenues increased by 61.4% year-on-year in 2025, with the substantive contributions starting to emerge behind this growth in this area. we will adhere to a prudent pace of first polishing the successful projects and build the middle platform to support capacity and gradually improve the replication efficiency. At this stage, we still focus on independent research hands in incubation and selection, no clear acquisition plans at the moment. Thank you, Ms. Yeung. Thank you for your question, and let's wait for the next question. I'll take your second question. 2025, this is a year of our active investments concentrated in the first half of the year, operating profit margin hit a bottom of 1.9% in the second quarter, but rebounded to 5.9% and 5.7% in third and fourth quarters of the second half of the year, showing a clear recovery trend entering into our investment strategy has shifted from increasing to optimizing. The established employee benefits standards and customer service quality will not be reduced. We'll continue to pay attention to any unreasonable aspects in addition to pricing. However, the strategy running in period has advanced. The corporate correction has been greatly improved. The investment direction will be more precise and more efficient. Attention will be paid to the input-output ratio reflected in the expense ratio. The ratio of the employee cost of revenues is expected to gradually thin out with the revenue growth. The continuous efficiency improvement of supply chain will support the proportion of raw materials. The fear of food delivery platforms will rise with business growth. but the investment in brand building and consulting will be more focused. Overall speaking, the expense ratio structure in 2024 will be optimized to a certain extent compared with 2025, but we will not set a specific profit margin target and then reverse deduce business behavior. We will not shrink investment in customers and employees for the sake of short-term good profit margins, but they will be more precise. Thank you. Thank you, management team. And we're now going to the next question. It's Mr. Lai Shengwei coming from CRCC.

Can I please ask about raw material cost?

And we can see that the price of the beef and mutton have risen sharply recently, and there are external environmental disturbances. How do you look at the future growth of profit margin funds? How would the company hedge against the pressure of rising raw material cost? My second question is about the different store-level operating profit margin across different regions. which regions may perform relatively poorly in 2026, and what further improvement measures that the management might take. Thank you, Mr. Lai, for your question. So, first a question on raw material. This is our key focus. 2025 raw material accounted for 33.6% of revenue for the whole year, an increase of 0.5 percentage points compared with 2024, mainly due to the increase in food material costs driven by business expansion. For instance, we have introduced fresh food cutting. Our response measures are mainly in threefold. First, centralized procurement and hierarchical procurement. Supplier management continue to strengthen the bargaining power with global suppliers, and none of the scale effect has already been partially reflected in 2025, but secondly, continuously to improve the production capacity of our central kitchens, reduce the dependence on external processing, Number three, menu structure optimization. We have established an evaluation system of click rate, coverage rate, gross profit margin, and continuously iterate to the items with a low gross profit contribution to avoid inefficient SKUs occupying procurement resources. Overall, we expect the ratio of raw materials to revenue will remain basically stable in 2026. Your second question, in terms store-level profit margin by region separately. We do not disclose those, but we can give you some directional judgment. East Asia is the region with the healthiest single store model at present, with a table turnover rate of 5.1 times In Q4, average revenue of $20,800 per single store. Profit contribution at the restaurant level has improved significantly. North America remains above $24,000 with a high absolute value, but the rent and labor costs are correspondingly higher. Southeast Asia has a large base of stores with great individual differences. Some mature stores perform very well. and a few individual stores are still in the adjustment stage. If we look at the future improvement potential, the table turnover rate of some stores in Southeast Asia has not reached the expected level in 2026. We'll focus on promoting the operational improvement of these stores, including deepening of product localization and upgrading of the service scenarios. The newly-opened stores in North America need time to ramp up their performance, and we have expectations and patience for this. The improvement in direction of each region in 2026 is clear and will not change our long-term judgment call on any of the regions due to short-term fluctuation. Thank you. That's very clear. Next question. We have from . Thank you for this opportunity. I have three questions here to ask the management team. The first one is short-term. We can see that right now Sino-Japanese relations are being affected, and so I don't know whether this would affect your table turnover rate performance. Second, about average customer spending. We can see that 2025 average commerce stem theme trending downward has helped with the increase in the customer traffic. And 2026, what about your pricing? Would you continue to reduce your price? In terms of the mid- and long-term, how do you balance this short-term profit concessions as well as profit margin balance? How do you strike a balance between those two? And my next question is on the stores, because in 2025, you have closed certain stores, underperforming stores. Right now, what is the proportion of the current store network that are still in loss or have a low operating profit margin? Going forward, how would the company evaluate those companies when you consider whether those stores should be closed or not? What are the key indicators? Thank you. Thank you, Ms. Lee, for your question. So your first question, the performance of the Japanese region in terms of what we can see right now, our operation has not been affected, and our turnover, table turnover rate is maintaining stable in terms of Proportions of local customers continue to rise. The consumption scenarios are also relatively rich. Impact of short-term external fluctuations on the overall operation is limited. This is the result of our persistent localization operation and in-depth cultivation of local customers. We have not yet been impacted, but we will continue to follow up on the external environment closely. In terms of the adjustments, or reduction in average customer spending in 2025. And this is not simply about a price reduction. This is about making customers feel better in terms of cost of performance, such as pricing, rationality, portion size, plating, and the service experience. So, some of those were active adjustments, and some of these are superimposed with structural changes, on the other hand, such as the number of stores in different countries, the increase in local customers, the changes in average number of people per table, and so on. Our direction in 2026 remains to ensure Hy-Vee Law's position as a mid- to high-end restaurant, while subordinating to the improvement of customer perceived value, healthier and fresher customers, better new product, larger experience, and more dimensional consumption choices in the mid and long-term. Profit concession and profit margins are not an opposing relationship. The customer growth and customer stickiness brought by profit concessions are the foundation for the long-term improvement of profit margins for every 0.1 increase in the table turnover rating and the positive impact on the store performance. level profit margin is quite considerable, and the profit concessions and probabilities form a positive cycle with a time lag. In 2025, we have closed down nine shops, and three of those have actually changed a second brand. And for us, it's not giving up on those companies. And out of these 126 companies that we are running, overall speaking, and overall quality is improving. We're not really able to disclose to you about the specific number of the ones that are not doing so well or underperforming stores, but I can give you some guidance. And when we look at a store, whether any adjustment needs to be made, mainly three aspects, number one, One is to see the operating, number one is to see whether there is any visible improvement pathways. Second, the trend of the table turnover rate, and not only just at a single time point, but also in the past six to 12 months, rather, for instance, a store with a continuously declining table turn rate, and even if it's not, In loss at the current stage, we will also intervene in terms of the ones that were seeing a positive turnaround and will encourage the local managers and the division head to further improve. Number three, we look at whether the problems are management-related, which we will change and update the management, and if it is about the market-related, and that will review our overall market strategy and make adjustments accordingly. That's my answer. Thank you. We also hope that the company can achieve better results in the future. Thank you for your answers.

Thank you.

My first question is about your strategy, focusing on both customers and employees. And we can see that in Q4, the table turnover rate has improved. So if I look at this strategy itself, in terms of the strategy itself and how will this drive the table turnover rate, and secondly, how do you look at the customer And because in 2026, in terms of this strategy, how would you continue on with the customer satisfaction strategy? And my next question is still asking about the Middle East impact on your business. For the Middle East, of course, that market will be affected. And for Europe, how do you look at the European market expansion and deployment? Those are my two questions. Thank you, Hilde, for your question. The first one, with respect to focusing on both customers and employees and giving profit concessions to customers and our employees, we not only look at the numbers but also customer behaviors. Last year, our overseas members has exceeded 8.5 million with continuous natural growth. The second overall overseas table turnover rate has been rising continuously. Customers' willingness to visit activity is increasing. whether it is repeat purchase or new customers, they're both increasing. And the number three, same-store sales growth rate has maintained positive growth throughout the year, reaching 2.2% in the fourth quarter. Among them, the same-store growth in East Asia was 12.8%, indicating that our store has closer connections with the surrounding customers and our overall breadth of the business district customer group is improving. In terms of local customers, we have seen that – There is an increase in the number and proportion of customers who place orders in local languages. For instance, in South Korea market, the proportion of bills placed in Korea exceeds 90%, which is the most direct signal of brand localization and the performance of the repurchase rate varies greatly. across the regions in the regions with a strong growth momentum of both customer acquisition and the repurchase performance and are improving simultaneously in relatively mature regions. The contribution of our regular customers is more prominent. We have not disclosed the specific figures of the repeat purchase, but the repeated behavior of members is a core indicator that our system continuously to track. For 2026, is that customer-based construction brought by profit concession strategy will continue to take effect. This, we have believed last year, this is a long-term investment and not simply a short-term move. For your next question, Middle East and Europe, yes, indeed, your politics is indeed an unavoidable external variable for our overseas restaurant operations. We have a business and deployment in Middle East and Europe. We have two stores in the Middle East at the moment for the short term in terms of some of the projects that we are working on. It has been affected negatively, but we also have authorized to the country manager. They're the ones who know the market very well and to ask them to determine the pace and the timing. In Europe, we also focus on different stores, and we are constantly visiting those stores, but whether we would sign the contract or not, depending on the location, such as customer footfalls, and looking at the country's macro economy, as well as the number of population, et cetera. So there are quite a lot that we need to consider. So it's all about the bottom two up, and we are very prudent, but we're very positive as well for the market. Thank you, Ms. Chee, for your answer. Thank you, Ms. Chee. We also hope that next year we'll see better results from your strategies. Next question comes from Zeng Jing from Huatai Securities.

So how do you look at the customer's satisfaction?

And at the moment, do you think that the table turnover rate is already quite satisfied? And can you please also share with us, in terms of the same store improvement for the future, how to consider the price dimension? Thank you, Ms. Zeng. Stability of table turnover rate is a result of our continued investment in the past two years. There are several directions we can continue to tap into the potential. Number one is optimization of the time period structure. At the present, our potential for improving table turnover is mainly in off-peak hours, especially the late-night snack scenarios. We have carried out nightclub-style transformation in some pilot stores. And going forward, we'll be looking at some other different investment methods and different types of sales to help us better promote the transformation. And the second is the customer stickiness. And we already have done quite well, but we do believe that there is a lot of improvement, for instance, using digital tools to We activated the members and to be able to reach them precisely, and we will want to make the customers change from knowing Heidi Lau to being used to coming to Heidi Lau. And number three is the enrichment of the scenarios. Not only is the birthdays, the parent-child activities, the dinners, the late-night snacks, and each have an independent customer group. This is the most direct way to improve the table turnover rate, hence, based on different customers at different time periods. In terms of the pricing, we are not going to actively raise the average customer spending, nor are we going to offer disorderly profit concessions in pursuit of customer flow. And I think that the headquarters does not have a one-size-fits-all approach, hence, we'll continue to monitor the markets, which is more sustainable than simply a price adjustment. Thank you, Ms. Still. Thank you, Ms. Chu. That's all very clear, and I also wish the company a bright future going forward. Thank you, Ms. Song. Thank you, analysts and investors online. We will see you next time. That concludes our conference result announcement today, and thank you, everyone, for joining us on the call. Thank you. Goodbye.