PDD Holdings Inc.

Ladies and gentlemen, thank you for standing by and welcome to PDD Holdings Inc second quarter 2024 earnings conference. At this time, all participants are in a listen only mode. That will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today. Sir, please go ahead.

Thank you, Operator. Hello, everyone, and thank you for joining us today. PDD Holdings earnings release was distributed earlier and is available on our website at investor.pddholdings.com, as well as through the Globe Newswire services. Before we begin, I would like to refer you to our safe harbor statement in earnings press release, which applies to this call, as we will make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures. Joining us today on the call are Mr. Chen Lei, our Chairman and Co-Chief Executive Officer, Mr. Zhao Jiazhen, our Executive Director and Co-Chief Executive Officer, as well as Ms. Liu Jing, our VP of Finance. Lei and Jiajun will make some general remarks on our performance for the past quarter and our strategic focus. Jun will then walk us through our financial results for the second quarter and June 30, 2024. During the Q&A session, Lei and Jiajun will answer questions in Chinese that we will help translate. Please kindly note that the English translation is for reference only, and in case of any discrepancy, statements in the original language should prevail. Now it's my pleasure to introduce our Chairman and Co-Chief Executive Officer, Mr. Chen Lei. Lei, please go ahead.

Thank you. Hello, everyone. Thank you all for joining our earnest call for the second quarter of 2024. In the first half of 2024, we will remain committed to our high-quality development strategy and consistently invested in our platform ecosystem. We received positive feedback for these efforts. Consumer experience and our services have continued to improve. A number of new merchants and products have grown significantly. This further meets the diverse needs of our consumers. This quarter, we benefited from the improving macro environment and achieved robust financial results. Our total revenues reached RMB 97 billion, which represents a year-on-year increase of 86%. However, we are seeing many new challenges ahead, from changing consumer demand, intensifying competition, and uncertainties in global environment. As a result, we will enter a new phase of high-quality development that calls for increased investments, and our profitability will affect it as a result. Since the beginning of this year, we are seeing that consumer preferences have become more diverse. On one hand, consumers are increasingly choosing experience-based consumption over material purchases. On the other hand, there's a growing emphasis on rational consumption. Consumers are making more thoughtful decisions to balance quality and value. In response, we have collaborated with high-quality brands and manufacturers to create customized products that cater to these diverse demands. This approach has not only propelled many new brands to success, but also revived the popularity of many established brands. And this is just one example of how digital technology and manufacturing can come together to create new opportunities. At this moment, the competition among e-commerce platforms is quickly escalating. And therefore, it's even more important that we go back to the basics of supply chain improvement and invest firmly in supply chain efficiencies. This will be the key focus for our high-quality development going forward. For example, in the second quarter, our teams continue to bring our agricultural crop initiative to major production regions, helping local growers to bring seasonal foods directly to people's hearts. And in this process, promoting local agricultural brands. In addition, to further improve agricultural supply chain, nurture research talents, and promote technology inclusion, we continue to support the Smart Agriculture Competition and the Pinduoduo Academy Growing Competition. The Agricultural Research Fund we established in cooperation with China Agricultural University has also started to bear fruit. On the manufacturing side, we are pleased to find that many small and medium-sized businesses have been using the digital capabilities from our platform to support product iteration and innovation. Through this process, they have not only emerged stronger from the competition, but also led the local industries towards high-quality development. These results have strengthened our commitment to further investing in high-quality development. We have communicated on a number of occasions that the profit goals in the past few quarters should not be used as a long-term guidance, and it is a result of mismatch between the business investment and the financial reporting cycles. As we enter a new investment phase, I would like to make it clear to our investors that our profits will gradually trend down starting in Q3, and there will be fluctuations or rebounds in the short term. In the long run, the decline in profitability is inevitable. Suddenly, our preference has reached a considerable scale, and we will remain committed to high-quality development and focus on creating a healthy and sustainable platform ecosystem. And to this end, we adopt the veterinary policies to vigorously support high-quality merchants and tackle low-quality ones. On the supply side, we will invest substantial resources to support high-quality merchants who are willing to innovate and improve quality. and we will offer a significant transaction fee reduction to these merchants, with an initial target of $10 billion in the first year. By doing so, our goals provide clear initial incentives for the merchants to join high-quality development. On the other hand, we will further deepen our trust and safety capabilities to improve our merchant ecosystem and strengthen our supply chain. We are actually identifying and removing a lot of bad actors from our platforms, and we will continue to strengthen these efforts. At the moment, we have already started a new round of investments in operations and R&D to streamline the merchant onboarding and product listing process. Leveraging technology will gradually improve the quality of the products sold on our platforms and create a fair and transparent business environment for our merchants. In this process, we believe that sacrificing short-term profits is necessary. A clear downward trend in profits is expected, but we are prepared to invest firmly and patiently in the platform's long-term health. This is a decision that has received unanimous support from all our management team. And now, moving on to the global business. In the past few quarters, we have noticed the rapid shifts in external environments, which brought significantly greater uncertainty. Our operations have also become increasingly affected by non-business factors. And meanwhile, the competition we face is growing stronger. Competition is here to stay and is expected to intensify in our industry. Our global business is facing significant uncertainties from intense competition and evolving external environments. These factors combined will inevitably cause fluctuations to our business, as shown in this quarter's results. High revenue growth is not sustainable and a downward trend in profitability is inevitable. And finally, as the environment evolves and our company continues growth, the island management team and I often discuss how we can better fulfill our corporate social responsibilities. We believe there is still many things that can be done, for example, Through enhancing our governance structure and adjusting resources, we can better adapt to the changing times. We can also do more to give back to society, to support agriculture and other industry sectors, and offer greater support to the people who need it most. We fully recognize that simply measuring our company's performance by short-term capital returns no longer aligns with where we are today. As a global company in this era, we are committed to driving innovation, adapting to change, and taking on greater social responsibilities in the region across the globe. Now, I will hand it over to our co-CEO, Sal Gazzan, to talk more about our operations in the second quarter.

Thank you. Hello, everyone. Thank you all for joining our earnings call for the second quarter of 2024.

In the first half of this year, online retail in China continues to perform well, bringing fresh energy to the overall consumption market. Over the past quarter, we continue to advance our high-quality development strategy, making steady long-term investments. to support both supply and demand sides of our platforms. Looking ahead to the second quarter of this year and beyond, we are very confident in the future of the China's consumer market.

In this quarter, we continue to meet the consumer needs. We continue to increase the number of affordable and good services, and continuously improve the consumer service system, so that consumers can enjoy more affordable and good services. During the year 2018, we followed the simple and affordable general principles, This quarter, we continued to focus on consumer demand, further enhanced our more savings and better services capabilities, and upgraded our after-sales services to provide consumers with more value

and more enjoyable shopping experiences. During the June agent's promotion, we continued to provide consumers with straightforward savings and introduced new promotions to meet the increasingly diverse consumer preferences. We also brought product categories like fresh produce, daily necessities, and high-end appliances into third- and fourth-tier TVs and made our contribution to consumption upgrades across the regions.

On the supply side,

We set up our support for quality merchants and brands, directing more traffic to high-quality products through the 10 billion program and fresh sales. We have also focused on enhancing the quality and efficiency of the supply chain, bringing more value to the agricultural areas and industry regions, and benefiting more producers of quality agricultural and domestic goods.

In order to encourage the downfall of home appliances, we changed our mind. We invested $1 billion in the first week of June 2018. Many domestic goods brands, including digital, home appliances, kitchen appliances, and home appliances, have achieved a good growth. For example, a 36-year-old domestic product brand, based on Pinduoduo's digital technology, has accurately met the new market needs. Only through a single product, we made a breakthrough. The store's rental platform sold 100 million yuan in two months.

To support a countryside home appliance program and a consumer group treat-in, we invested 1 billion RMB during the first week of the June 18th. This boost led to remarkable growth for many local brands in categories such as electronics, home appliances, kitchenware, and household products. For example, utilizing our digital technology, We helped a local brand with 36 years of history to understand the latest market demands and return to growth with a blockbuster product. It achieved 100 million RMB in sales after joining the platform for just two months.

In addition, the number of new businesses and new products in the market has also increased significantly. In the first week of June 28, the number of businesses and new products in the market increased by more than 90%.

In addition, the number of new merchants and new product supplies on our platforms saw meaningful growth. In the first week of June 18, the number of merchants participating in the $10 billion program grew by over 90% year on year, and the number of agricultural merchants increased by 83% year-on-year. Our platform also attracted a great number of new merchants in categories such as electronics, home appliances, and cosmetics. To create a better business environment for high-quality merchants, we have started a new round of investments in operations and R&D. Our goal is to build industry-leading compliance capabilities and foster a healthy platform ecosystem. For example, we continue to streamline our merchant onboarding and product listing processes to better control product quality and offer consumers a safe and reliable shopping experience.

We integrate automatic technology for product screening with thorough manual reviews

by our trust and safety team. This approach ensures rigorous oversight on product compliance while avoiding unintended penalties for quality products and merchants.

At the same time, we invest a lot of resources to make a rich, solid, and easy-to-understand 3D training materials and videos, to enhance the overall regulatory capabilities of 3D, to help 3D reduce the regulatory cost, and to assist 3D in broadening the market for 3D products,

At the same time, we have invested heavily in developing comprehensive user-friendly training materials for merchants to boost their compliance capabilities. This effort aims to enhance our supply chain quality while helping merchants lower compliance costs and expand their market reach.

Of course, we have also built a perfect platform for high-speed development, which is not easy. We also deeply recognize that building a healthy platform ecosystem and achieving high-quality development is a gradual process, especially given the cultural scale of our platforms. So we are committed to a dual approach,

One side, providing strong support to high-quality merchants while addressing issues with low-quality ones. This way, we aim to create a healthy and sustainable ecosystem.

In this process, we must pay a short-term price. As Chen Lei said, the management has reached a consensus. We are willing to pay a huge price for long-term health. The profits of the next few seasons may fluctuate and rebound, but the trend of long-term profits decreasing is inevitable.

In this process, we will inevitably face short-term costs. As Lei has mentioned, our ManYi team is fully committed to investing heavily for the long-term health of our platforms. While profits might vary or even rebound in the next few quarters, it's unavoidable that profitability will trend lower over the long term.

As the largest farm-based platform in China, we will continue to upgrade our agricultural strategy this quarter. As the largest platform for agricultural products in China, this quarter we further advance our agricultural strategy.

We launched the Science and Technology Courtyard project in Yunnan, Dali, and Shanxi, Fuping, and also kicked off the fourth Smart Agriculture Competition in collaboration with top research teams from around the world. We will continue to increase investments in agricultural research to promote the commercial application of research funding and accelerate the market adoption of high-quality agricultural products.

Meanwhile, we also leverage our strength as a platform working with ecosystem partners to proactively take on more social responsibilities.

We invested tens of millions in reading sounds and subsidies to launch the SEMTODO reading mouse. This initiative provides direct discounts on thousands of blue products, making knowledge more accessible to more people.

2024 is an important year for us to implement high-quality development. We will focus on the long-term development of SEMTODO, continue to invest, and provide more resources and technical support for SEMTODO.

2024 is a critical year on our path towards high-quality development. We will focus on creating healthy and sustainable platform ecosystems and empowering our ecosystem partners with more platform resources and technical support. Together, we will lay a solid foundation towards the high-quality development of our platforms. Next, I will hand it over to Jun. She will provide an update on our financial performance for the second quarter.

Thank you, Jiajun. Hello, everyone. Let me walk you through our financial performance for the second quarter ended June 30, 2024. In terms of income statements in the second quarter, Our total revenues increased 86% year-over-year to RMB 97.1 billion. This was mainly driven by an increase in revenues from online marketing services and transaction services. Revenues from online marketing services and others were RMB 49.1 billion this quarter, up 29% from the same quarter of 2023. Revenues from transaction services for RMB 47.9 billion, up 234% from the same quarter last year. In Q2, our top line growth slowed down significantly versus the last few quarters. Further slowdown is inevitable as a result of competition and global uncertainties. We want to cost 10 expenses. Our total cost of revenues increased 80% from RMB 18.7 billion in Q2 2023 to RMB 33.7 billion this quarter, meaning due to increasing fulfillment fees and payment processing fees. On a gap basis, total operating expenses this quarter increased 48%, to RMB 30.8 billion, from RMB 20.9 billion in the same quarter of 2023. On a non-GAAP basis, total operating expenses increased to RMB 28.4 billion this quarter, from RMB 19 billion in Q2 2023 In Q2, one continued to invest internally to support the high quality development of our platforms. Our total known gap operating expenses as a percentage of total revenues this quarter was 29% compared to 36% in some quarter last year. Looking to specific expense items Our non-GAAP sales and marketing expenses this quarter were RMB 25.4 billion, up 54% versus the same quarter last year. Throughout Q2, we stepped up our promotional efforts to give back to consumers and invest in marketing to promote our platforms. On a non-GAAP basis, Our sales and marketing expenses as a percentage of our revenues this quarter was 26%, versus 32% for the same quarter last year. Our loan gap general and administrative expenses were RMB 594 million, versus RMB 370 million in the same quarter of 2023. Our research and development expenses were RMB 2.4 billion a quarter on a known gap basis, up 15% year-on-year, and RMB 2.9 billion on a gap basis. It's critical that we maintain our long-term focus and continue to invest in R&D to drive supply chain efficiency and customer experience. On a gap basis, Operating profit for the quarter was RMB 32.6 billion versus RMB 12.7 billion in the same quarter last year. Loan gap operating profit was RMB 35 billion versus RMB 14.6 billion in the same quarter last year. Loan gap operating profit margin was 36% this quarter, compared with 28% for same quarter last year. nothing comparable to ordinary shareholders with RMB 32 billion for the quarter, compared to RMB 13.1 billion in the same quarter last year. Based earnings per ADS was RMB 23.14, and diluted earnings per ADS was RMB 21.61, versus basic earnings per ADS of RMB 9.64 and dilute earnings per ADS of RMB 9 in the same quarter of 2023. Loan gap net income attributable to ordinary shareholders was RMB 34.4 billion versus RMB 15.3 billion in the same quarter last year. Loan gap dilute earnings per ADS was RMB 23.24 versus RMB 10.47 in the same quarter of 2023. As noted last quarter, our business does not follow a linear path, and profitability in the last few quarters does not represent the future. Looking ahead, we will invest firmly to support a healthy ecosystem that encourages high-quality merchants. Our profitability may fluctuate in the short term, but we are gradually trying to lower and long run. This is inevitable as we focus on the long-term high-quality development of our platforms. That completes the income statements. Now let me move on to cash flow. Our net cash generated from operating activities was RMB 43.8 billion. compared with RMB 23.4 billion in the same quarter last year. As of June 30, 2024, we have RMB 284.9 billion in cash, cash equivalents, and short-term investments. Thank you. This concludes my prepared remarks.

Thank you, Jean. Next, we will move on to the Q&A session. In today's Q&A session, Lei, Jiazhen and Jun will take questions from analysts on the line. We will take a maximum of two questions from each analyst. Lei and Jiazhen will answer questions in Chinese and will help translate for convenience purpose. Operator, we are open for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. Participants are requested to restrict the number of questions to two at each time. Your first question comes from Joyce Ju from Bank of America. Please go ahead.

Good evening. Thank you for accepting my question. First of all, I would like to ask the management to share about the positive background of the growth of our system. Just now, Manager Teng mentioned that in the future, due to some big investment and market competition factors, the company's profit level will fluctuate. Can you share with us with this profit trend, how to understand the impact of short-term and medium-term equities? In addition, in terms of shareholder returns, can you trouble Manager Teng to share the factors to consider? Is there a possibility of repurchase and auction in the future? I will translate for myself. I have two questions. My first question is, we have seen Dodo's profit growth remain robust this quarter, but in the prepared remark management mentioned, there will be increased investment and profitability fluctuations caused by the competition. Could management share how you assess the profit trend in the future? In addition, in terms of shareholder returns, does management have any plan for share buyback or dividend payouts? My second question is, in the prepared remark, we noted that management emphasized a lot on the merchant ecosystem and the merchant supporting policies. Could you please elaborate a bit on your understanding on the healthy merchant ecosystem, how to review it, how to understand it, and why this will become the focus of the platform in the next stage? Thanks a lot.

Hi, this is Chen Lei. Let me take your first question. We have communicated on a number of occasions that a public vote in the past few quarters should not be used as long-term guidance.

and it was the result of the mismatch between the business investment and financial reporting cycles.

In addition, our business is facing a fierce competition and some external environmental factors. These will inevitably lead to the development of our business, and the growth of our revenue will be better.

In addition, our business is currently facing intense competition and shifting external factors, which will inevitably bring fluctuations to our business and also slow down our top-line growth.

At the moment, we are in a new phase of solid transformation and high-quality development. We need to patiently invest in the long-term health development of our brand. We are now entering a new phase of a steady transformation towards high quality development.

and we need to invest patiently in the platform's long-term health. And to support a sustainable development of our platform ecosystem, we will invest substantial resources over the next 12 months to support high-quality merchants. And looking ahead, our profitability may fluctuate in the short run, but directionally, it will gradually enter a downward trend.

And

Empowering and supporting merchants is crucial to building our high-quality supply chain and also creating a robust platform ecosystem. Over the long run, this will start off a virtuous cycle for the platform. And therefore, we will remain committed to patient investments, even though short-term profits will be affected.

Then for the stock return, we feel that the company is still in the investment stage, and the company's business is facing intense competition and uncertainty from the external environment in many areas. Therefore, I and other management centers, we all agree that it is not appropriate to carry out capital-level repurchasing or financing at the moment. In the next few years that our management centers can expect, we also feel that this is not necessary. Thank you.

In terms of shareholder returns, the company is still in the investment phase, and we are facing intense competition on different fronts, and also uncertainties from external factors. And therefore, our management team and I unanimously believe that it is not an appropriate time for share repurchases or dividends. And in the foreseeable years ahead, we also do not see such a need. Thank you.

Hi, this is Zhao Jiazhen.

Let me take your question on merchant ecosystem.

Our platform is a mutually dependent community of merchants, consumers, and our operation team.

Merchants are our key partners in our joint efforts to serve consumers.

Currently, the competition in this industry has also raised new demands for our community. In this process, as a platform, we ourselves feel very responsible. On the one hand, we must strictly observe the quality of our products. We must be aware of the needs of consumers and ensure their rights. On the other hand, we must be fair and just. High-quality participants who are serious about doing business

The increased competition in our industry brings new demands on our community. In this process, we feel a strong sense of responsibility as a platform. On one side, we must ensure strict oversight of product quality to prevent substandard goods and protect consumer rights. On the other side, we must ensure fairness so that dedicated high-quality merchants can earn meaningful rewards, which is essential for the healthy development of the platform ecosystem.

In order to find the balance of the ecosystem, we have no other choice but to firmly transform high-quality development. Therefore, strong support and firm governance will be our next strategic strategy. In the supply side, we will invest one hundred billion resources To achieve balance in the ecosystem, we have no choice but to firmly transition towards high-quality development.

we will adopt the necessary policies to provide strong support to high-quality merchants while tackling low-quality ones. On the supply side, we will strongly support merchants with product and technology innovation capabilities. We will significantly reduce transaction fees for these high-quality merchants with an expected amount of 10 billion RMB in the following year. We will continue to enhance incentives for the merchants to drive our high-quality development of ecosystem.

On the other hand, we will also be determined to carry out the environmental governance of the platform and the products, to fight against illegal trading, to promote the removal of raw materials from the industrial belt, and to further optimize and upgrade the supply chain. Currently, we have conducted a new round of investment in operation and development, to optimize the process of entry and sale of products, and to strictly protect the quality of products through technical means.

On the other side, we will further enforce strong governance of our platform and merchants. This includes identifying and removing unlawful merchants from our platform to strengthen our supply chain. As of now, we have already started a new round investment in operations and technology to optimize the merchant onboarding and product listing processes. use advanced technology to ensure strict product quality control, and create a better environment for our high-quality merchants.

We grow together with our high-quality partners, and provide high-quality products and services to consumers on the platform. Satisfying consumers can also create a sustainable environment. This is a positive cycle, and is the key to long-term health development in our community.

We grow together with our high-quality merchant partners, working together to offer consumers high-quality products and services. The consumers can in turn bring new world opportunities to the ecosystem, creating a virtual cycle, which is the key to the long-term healthy development of our community. To achieve the goal of high quality development of the merchant ecosystem, our management has reached the consensus to firmly commit to long-term investments and create a healthy, sustainable platform ecosystem. Thank you all.

Operator, let's move on to the next panelist on the line.

Thank you. The next question is from Yang Bai from CICC. Please go ahead.

Thank you, Mr. Guan. I have two questions. The first one is about international business. We have seen that the overall expansion of the company's international business has been very rapid recently. However, from some external data, the increase and decline in individual markets seems to have slowed down. From Mr. Guan's research, we have also noticed that the current company's development of full-scale business in the future also has a lot of relatively cautious considerations. So, is the company deliberately controlling some risks? Can I ask Mr. Guan Thank you, management. I have two questions. The first one we have observed that the growth of your global business remains strong. Some external data suggests that the growth rates and the investments in certain markets are slowing down. In your prepared remark, we also noticed that the company takes a relatively cautious approach towards the future development of your global business. Is the company trying to manage some risks proactively? Could the management please elaborate on your thinking in this regard. The second one is we saw that the overall competitive environment is quite intense. Has this caused any impact on the company's growth? In such a competitive environment, how will the company adjust your investment priorities and how does the management think about your position? Thank you.

Hi, this is Lei. Let me take your question on global business. Our global business is still evolving.

and we are actively exploring new opportunities. Currently, our global business has entered over 70 markets, and during this growth, we have always prioritized compliance and see it as the foundation for our development. And over the past few quarters, we have invested significant resources in building a safe shopping environment.

So with the development of business, we feel that As our business develops,

we have noticed that changes in the external environment are accelerating, and our operations are increasingly affected by some non-business factors, and we are seeing a significant increase in uncertainty. And meanwhile, competition is a constant theme in the e-commerce industry, and is expected to intensify.

So the current intense industry growth At this moment, such intense competition combined with the impact of external factors

will inevitably lead to disruptions on our global business. But nevertheless, we remain committed to our vision of allowing more consumers worldwide to enjoy the benefits of the digital economy. And this has not changed.

In the face of a complex environment, we will still focus on ourselves, and continue to invest and optimize our supply chain capabilities, service capabilities, and regulatory capabilities.

In response to the complex environment, we will focus on our core strength and continue to improve our capabilities in supply chain, customer services, and compliance to better meet the expectations of consumers around the world. and also achieve high-quality development in our global business. Thank you.

Hi, this is Zhao Jiazhen. Let me take your question on competition. Over the past few quarters, the competition has been intensifying, which is natural to the e-commerce sector. In such a competitive environment, our revenue growth may slow down. For instance, in the second quarter,

Our revenue growth has declined, indicating that high revenue growth is not sustainable.

Currently, the demand for consumers is also diversifying. Each e-commerce platform is actively adjusting its own strategy to adapt to the consumer's consumer needs. Each platform has its own resources and capabilities. In order to meet the consumer's needs, a large amount of resources have been invested. At this time, we should further train our basic skills.

Currently, consumer demand is becoming more diversified, and e-commerce platforms are actively adjusting their strategies to meet this evolving need. Each platform has its own strengths and competitive edge and commits substantial resources to cater to consumer demands. At this moment, we need to focus on our core strengths and continue on our path to high-quality environments.

For e-commerce platforms,

A robust supply chain is essential to providing good services to consumers. To meet the diversified needs of consumers, we remain focused on the fundamentals and strive for innovation in the supply chain. In the second quarter, our teams continue to bring agricultural core initiatives to major production regions, helping local agricultural products build their brand, and empowering small and medium-sized agricultural merchants through collective marketing efforts.

Apart from agricultural products, we have expanded our support to the manufacturer through digitalization.

By collaborating with high quality national brands and manufacturers, we have successfully launched tailored products for niche categories. This brand and merchant have achieved higher quality development through continuous technological updates and product innovation.

We will strongly encourage and support high-quality merchants who are dedicated to their business and innovation. In addition to the significant reduction in transaction fees that we plan to offer,

We will continue to leverage our platform's supply chain capabilities to help merchants improve quality and efficiency and guide manufacturers towards innovative and high-quality developments.

We are deeply aware that only by optimizing the supply chain to meet the standards set by the consumer's life-saving needs can we achieve long-term health development of the platform ecosystem. On the other hand,

我们会做长期耐心的投入,谢谢。 We fully understand that only by optimizing and upgrading the supply chain is essential to meeting deeper consumer needs and ensuring the long-term healthy growth of our platform ecosystem. We're committed to making long-term and patient investments. Thank you all.

And thank you, Jiajun. And thank you all for joining us today. We look forward to speaking with you again next quarter. And thank you. Have a nice day.

Thank you, ladies and gentlemen. That does conclude our conference for today. Thank you for participating. You may all now disconnect.