FinVolution Group

Ladies and gentlemen, thank you for participating in the third quarter 2021 earnings conference call for Thin Volution Group. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Jimmy Tan, head of investor relations for the company. Jimmy, please go ahead.

Thank you, Andrew. Hello, everyone, and welcome to our third quarter 2021 earnings conference call. The company results were issued via newswire services earlier today and are posted online. You can download the earnings release and sign up for the company's email alerts by visiting the IRR section of our website at irr.fimpigroup.com. Mr. Feng Zhang, our Chief Executive Officer, and Mr. Jiang Yuan Xu, our Chief Financial Officer, We'll start the call with their prepared remarks and conclude with a Q&A session. During this call, we will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in this video or as a substitute for financial information prepared and presented in accordance with US GAAP. For information about these non-GAAP measures and reconsideration to GAAP measures, please refer to our earnings press release. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Implication Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties are included in the company's filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Additionally, we post a slide presentation on our IR website providing details of our results for the quarter. I will now turn the call over to our CEO, Mr. Feng Zhang. Please go ahead, sir.

Thanks, Jimmy. Hello, everyone, and thank you for joining us today. I hope you and your families remain safe and healthy in the new non-COVID-19 environment. Thanks to our advanced technologies, industry-leading digital capabilities, and a strong corporate strategy execution, we continue to expand our business with robust momentum across each of our segments, both domestically and internationally. Given our stronger than expected results, greater confidence in business trends, and successful strategy execution, we have raised our total transaction volume outlook for 2021. We now expect transaction volume for the year to reach between 130 billion RMB and 135 billion RMB, representing a year-over-year increase of 103% to 111%, above our prior guidance of 100 billion RMB to 120 billion RMB. Let me now outline some of our third quarter highlights. Total transaction volume maintained its strong growth trajectory, reaching a new record high of 38.1 billion RMB, representing an increase of 120% year-over-year and 14% sequentially. Notably, our total outstanding loan balance expanded to 45 billion RMB in the quarter, representing an increase of 101% compared with the same period last year. This growth was primarily driven by a new, fast-growing, and higher-quality customer base. we gained over 1.18 million new individual customers in Q3, making the third consecutive quarter during which we've exceeded 1 million new borrowers globally. Our domestic business demonstrated progressive growth under clear regulatory guideline. Looking at our transaction volume composition, China accounted for 37.1 billion RMB, up 118% year-over-year and 14% sequentially. We are also pleased to share that in October, as we continue to acquire better quality borrowers, our percentage of loans facilitated at or below IRR 24 further increased to 80% compared with just 29% in Q2, while our average IRR borrowing cost further reduced to 24.3% compared with 26.2% in Q2. indicating a higher compliance level and reflects our commitment towards greater financial inclusion for the society. Our take rate for the third quarter remains stable at 4.2%, and we are confident that the cap rate's future impact on our financials will be minimal. Our high-quality borrower base is expanding rapidly with 827,000 new customers acquired during the quarter. Our diversified borrower acquisition strategy is working efficiently and we are well positioned to leverage this strategy for further business expansion. We have established partnerships with multiple leading traffic platforms and expect to further diversify our online acquisition channels. Our offline customer acquisition team also expanded to over 700 employees in 20 different cities, covering around 80% of China's provinces. We expect our offline team to reach around 1,000 employees by the end of this year. As we refine our risk management systems and enhance our asset quality, our 90-day-plus delinquency rate remains low at 1.04%, and the vintage delinquency rate for the third quarter is expected to decrease to below 2.3%. Moving to our operations for small business owners, During the quarter, transaction volume for small business owners grew rapidly to 7.9 billion RMB, accounting for 21% of total transaction volume for the period. The total number of small business owners we served grew to 488,000, an increase of 20% from the previous quarter. With huge market potential and a more supportive regulatory environment, we believe small business owners present a very promising opportunity for our long-term growth. Going forward, we expect transaction volume for small business owners alone will comprise approximately 20% of total transaction volume for the full year. With respect to our global expansion, we are thrilled to explore new product offerings and have made impressive strides in strengthening our international partnerships. For example, we entered into a strategic cooperation with PT Bank Jago in Indonesia. which increase our local loan facilitation capabilities and broaden our presence across different market segments in the country, including retail, mass market, and others, opening up new potential areas for cooperation. In addition to our facilitation business, we teamed up with local e-commerce and e-wallet partners, such as JD Indonesia and Dana, to launch operations in the buy now, pay later sector. Our customers and partners' initial feedback has been overwhelmingly positive, and we are confident we can achieve greater success in this area. Along with our venture into the BNPL sector, we are also shifting towards better quality customers as to achieve high-quality growth. With this objective in mind, we have also been increasing our investment in areas such as technologies, talent development, and customer acquisition for our global expansion. We have also taken the initiative to groom local talents for management duties, reflecting our long-term commitment and confidence in this business. Despite the recent resurgence of COVID-19 cases in Southeast Asia, we were still able to generate over 1.05 billion RMB in transaction volume, up 233% year-over-year and 12% sequentially. Concurrently, our outstanding low balance for the quarter was 480 million RMB, up 269% year-over-year and 17% sequentially. Going forward, we will continue to leverage our technological capabilities to strengthen our foothold in countries where we have established a presence while exploring potential cooperation with local financial institutions, e-commerce platforms, and other players. Using our multi-level approach, we believe we can acquire better quality customers and further diversify our business models, making financial services more accessible and inclusive for borrowers from around the world. The global financial technology industry is evolving rapidly, and over the past several years, we have successfully demonstrated our capabilities and achieved tremendous growth in this dynamic industry. We have advanced multiple strategic initiatives, grown our customer base while improving the quality of our customers. Looking ahead, we will continue to pursue premium quality growth in China while capturing massive growth opportunities in international markets. Last but not least, I would like to highlight some of our successful corporate social responsibility initiatives. Since 2016, we have performed our duty diligently as a responsible corporate citizen as we supported various social welfare organizations, donated school supplies to children and built kindergartens in rural mountain areas, and donated cumulatively over 80 million RMB to regions in need. Also, together with our founding partners, we have provided low-interest loans for small business owners, increasing access to quality financial services for the underserved segment of business society. To build on our effort to help small business owners as they recover from the pandemic, Simvolution will provide over 100 million RMB of interest-free loans for small business owners. We are proud to support the backbone of China's economy and do our part for society during this challenging time. With that, I will now turn the call over to Jia Yuanxu, who will discuss our financial results for the quarter.

Thank you, Paul, and hello, everyone. We are pleased that Fablution delivered respectable financial and operational results for the third quarter of 2021. As a result of our continued efforts to transform our business and technology to meet the needs of credit service industry, our net revenues rose to about RMB 2.5 billion, up 6% quarter over quarter. Our profitability also continues to improve during this quarter. Leverage ratio across our business is relatively low at 3.9 times, while our balance sheet remains solid with 5.1 billion RMB in unrestricted cash and short-term investments. In September, we successfully issued at least our first ABS on China's Shenzhen Stock Exchange. marking an important milestone in our transaction towards bad quality borrowers. Funding on our platform continues to be ample and stable. We have cumulatively cooperated with around 60 licensed financial institutions and will constantly maintain a strong and robust pipeline of potential partners. We expect future improvements in funding efficiency as we continue to diversify our funding sources. These results are a powerful testament to our effective business strategy and skillful execution. We are confident that we will gain momentum as we continue to accelerate our overseas expansion, strengthen our services for small business owners and increase investment in technology advances. We will also continue to invest in our core capabilities and infrastructure, big data insights, AI capabilities, and our people to better serve our customers, partners, and the communities around the world. Now, turning to the financial results for the third quarter, in the interest of time, I will not walk through each item line by line on this call. Please refer to our earnings release for more details. Net revenue increased by 41 percent to 2.5 billion RMB in the third quarter of 2021 from 1.8 billion RMB in the same period of 2020, primarily due to an increase in loan facilitation service fees and the post-loan facilitation service fees. Loan facilitation service fees increased by 121% to 1.1 billion RMB in the third quarter of 2021 from 486 million RMB in the same period of 2020, primarily due to the increase in the transaction volume. Post for citation service fees increased by 124% to $361 million in the third quarter of 2021 and $61 million in the same period of 2020, primarily due to the increase in outstanding loan service by the company and the low impact of deferred transaction fees. Guaranteed income was $645 million in the third quarter of 2021 compared to 747 million MB in the same period of 2020 as a result of improved asset quality. Net interest income increased by 28% to 333 million MB in the third quarter of 2021, from 216 million MB in the same period of 2020, mainly due to increasing transaction volume in the international market. The revenue decreased by 19% to $112 million in the third quarter of 2021 from $138 million in the same period of 2020, primarily due to the decrease in customer referral fees from third-party platforms. Non-GAAP-adjusted operating income, which includes share-based compensation expenses before tax, was $700 million and $51 million in the third quarter of 2021. representing an increase of 8% from 698 million B in the same period of 2020. Net profit was 632 million B in the third quarter of 2021, representing an increase of 6% compared to 597 million B in the same period of 2020. With the culminating recent resurgence in China and other regions around the world, The company will continue to closely monitor the pandemic situation and remain vigilant in its business operations. As such, the company holds a cautious view on its operations and anticipates its transaction volume guidance for full year 2021 to be between 130 billion RMB and 135 billion RMB, representing a year-over-year increase of 103 percent to 111 percent, above our prior guidance of 100 billion MB to 120 billion MB. Going forward, we are confident to maintain healthy growth in 2022 and resume robust growth for the year ahead. That concludes my prepared remarks. We will now open the call to questions. Operator, please continue.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, we ask that you please kindly repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question comes from Eric Wu with China Renaissance. Please go ahead.

Good evening, management. So thanks for giving me this opportunity to ask questions, and congrats on the solid results in the third quarter. So my question is about the outlook for 2022. So can you please give us some color about 2022 in terms of the loan pricing target? For example, the target IRR by the end of June 2022, also about the loan origination plan and development plan in the overseas market.

Thanks. Thank you, Erica. Let me answer this question. Regarding the specific plan for next year, we are still working on some specific relevant numbers. As for some numbers and guidance for next year, we will give them out later.

Specific numbers for 2022 are still early at this stage. We will provide the guidance for 2022 at a later time.

will be better than this year's situation. Next year, our policy should still have some fluctuations. At the same time, next year, with the clear and clear policies under control, we will actually spend more work on the platform to do these policies well. So we will be more cautious to look at the overall environment next year.

We will also take the opportunity to share our thoughts with the market. We think the macro environment this year has been very good and the macro environment for next year will have some volatility and is unlikely to exceed this year. Regulation directions have largely been clarified. However, we still need to wait and execute the order at ground level. Platform companies will have more workload when executing these orders at ground level. Overall, we will have a more cautious attitude for 2022. 然后从今年的我们前三季度的表现, 包括我们给的guidance,大家可以看到, 我们其实今年是取得了一个非常不错的增速, 相比去年而言其实差不多是有翻倍的增长。

In the context of this growth, in fact, our core indicators are constantly being optimized. Our expected rate of 90 plus from last year's 3Q's 3.4 to this year's 1.04 is actually down by 70%. And then the capital cost from last year's 3Q's 8.2 to this year's 7.6 is actually down by 7%. We have achieved strong results this year.

In 2020, we have successfully completed our P2P transition and shift towards better quality bonds, which results in our transaction volume growing more than 100% year-on-year. Our key operational metrics have also shown significant improvements. For example, our 90-day plus delinquency ratios improved by around 70% to 1.04% in this quarter from 3.4% in the same period last year. Also, our funding cost fell by 7% to 7.6% in this quarter from 8.2% in the same period last year. As a leading technology platform, we are confident to maintain our stellar operational metrics and achieve stronger growth than our peers. Our objective is to achieve long-term sustainable development.

Yes, and then back to the pricing, you can see that in the third quarter, our average pricing reached 25.3. And then in October, our average pricing reached 24.3, which is another drop. From the perspective of next year, we expect that in the second half of next year, our average pricing will drop to 23.0.

As you can see, our average pricing in the third quarter was 25.3%. And in October, our borrowing cost further reduced to 24.3%. And for next year, we expect our borrowing cost to be below 23%. 对,应该说我们在24的这个事情上,我们是在行业当中准备的是最为充分的。 In terms of reducing borrowing risk to 24%, our platform progress is ahead of our peers, and we are very well prepared. If we are talking about the 24%, we have basically achieved this goal. Thanks.

The next question comes from Han Yang Wong with 86 Research. Please go ahead.

Thank you for giving me the opportunity to ask this question. Congratulations to our third quarter for once again achieving the performance of the leading anchor. I mainly have two questions here. The first question is about funding source and cost. First of all, congratulations to us for successfully launching this ABS. Then I would like to understand the current situation of our ABS. Thank you, Benjamin, for taking my questions. Congratulations on our great third quarter results. I have two questions. The first is regarding on the funding source and cost. So what is the current situation of the ABS shelf registration? And how should we project the funding cost as a portion of the ABS funding to increase? Second is about the international business. So can you share us more updates on the final period of business? And what will the overall growth of the international business look like going forward? Thank you.

Thank you, Han Yang. That's okay.

Late September, we have issued our first ABS, which is at 200 million RMB, with a coupon interest rate at 5.5%. And this is actually a milestone for the company.

然后储价的事情,我们现在是在非常积极的一个推进当中。 这个也是我们明年非常重要的一个工作。 到目前为止,我觉得我们总体的进展还是 on track,是比较顺利的。 Our ABS shelf registration is an active process and this will be a very important priority for us in 2022. We believe we are on track and the process has been smooth. We believe in the future,

When the ABS shelf registration has been completed, ABS will become a very important composition in our funding sources.

Let's take a look at the international market in Southeast Asia. In fact, we think this space is very large. I can also share some data with you here. One is from the population. We are now in Indonesia, Philippines, Vietnam. The population is close to 500 million. Compared to China's 1.5 billion, the population of the United States is more than 300 million. Its population is very large. In addition, from the indicators of retail credit balance and GDP, uh, that Indonesia is 7.8, uh, the entire Southeast Asian three countries are almost 8.3. And this indicator is 15% in China, uh, in the United States is 20%. Uh, this reflects the local consumer market. There is a very huge space. Then look at the credit card penetration rate, uh, the credit card penetration rate of these three countries is now almost between three to four. Uh, Let me take the opportunity to share some market data with you. The countries which we have already established in present has massive market opportunities. For example,

Indonesia, Philippines and Vietnam have a combined population of around 500 million. It is higher than the US population and it is not small compared to China. And its loan to GDP ratio is about 8.3% with a low credit card penetration rate of between 3 to 4%. And when compared with China, these countries have huge opportunities. For example, China loan-to-GDP ratio is about 14.8%, and the credit card penetration rate is around 21%. And the U.S. loan-to-GDP ratio is about 20%, with a credit card penetration rate of 66%. We are pursuing a long-term development.

We believe that the future development of these new countries will be similar to that of China. It is a process that will gradually change from the high West to the low West. So we will be very actively and actively doing this crowdfunding. From this perspective, we will also solve the problems of local signage and local cooperation partners. On the business level, we will first move to Hunan to do this crowdfunding. In the end, we look forward to We are different from other smaller platforms.

Our objective is not in meeting a quick buck in the country. Instead, we are looking for long-term sustainable development. We believe developing countries will gradually lower the interest rate cap over time, and we have already begun shifting towards better quality borrowers. And before we begin operations in a new country, we will ensure compliance by having the appropriate license in place and source for the right partners. From the operations perspective, we will enter the market through an easier product and eventually shift towards higher quality products like, oh, higher quality borrowers like what we have been doing in China. 我们觉得我们也完全可以把国内我们这些业务上的成功经验能够带到这些东南亚的国家当中去。

As you all know, we have launched a product called Binal Pallet in Indonesia. As Mr. Zhang mentioned, we have established a collaboration with major local e-commerce companies such as JDID and Dyna. Of course, this collaboration is still in the early stages. After we have some specific data, we may have the opportunity to share with you. In the process of our promotion, we have received very positive feedback from our customers and local partners. In the future, we will explore more different business models with local banks and e-commerce platforms. In addition to cooperating with e-commerce platforms, we have also made very important breakthroughs with local banks. Our successful business model in China can also be replicated in these Southeast Asia countries.

For example, our CEO, Mr. Chang, has mentioned that we have started BNPL products in Indonesia and we are working with partners such as Dana and JD Indonesia. As for the results, we will be sharing more results with the market in the later quarters. And we also intend to explore business model with banks and other partners. For example, we have also begun the loan facilitation model with Bank Jago in Indonesia and we have secured an additional US dollars 30 million as funding sources for our loan facilitation business in Indonesia.

Finally, I would like to add that we have a commitment and determination in international business. So far, we have established a team of 900 people overseas. And we have reached 86% in terms of localization. And we will continue to invest in international business in the future.

We have great confidence in our international business and will increase our investment in this business segment. For example, we have established an international team with over 900 employees and the world scope of these employees ranges from R&D operations and marketing. And by the way, the localization of these international employees has reached 86% and going forward, we will continue to invest in our international business.

Okay, thank you, Han Yang. Let's see if there is any follow-up.

Thank you, President Jia Yuan. Very clear. Then I will ask a small question. I have seen that you have also announced a relatively clear dividend policy in the three-week financial report. Our company is also in the industry. You started doing dividends early. So what are our plans for the future of dividends? I will translate it again. So may I have a follow-up question on the shareholder return plan? So do we have a detailed plan or policy for the dividend payout in the future? I mean, it kind of will be helpful. Thank you.

Okay, Haiya. Yes, as you know, we have been doing this for a few years. And since the listing, we have collected 2.7 billion yuan in returns to shareholders. As you know, we have been distributing annual dividend over the last three years, and we are now actively exploring an annual dividend policy and will share it with the market during our next earnings quarter.

cumulatively distributed around 143 million in dividends. Okay, thank you, Han Yang.

Okay, thank you, Chairman Jia Yuan. Thank you, Jimmy. Very helpful. Thank you. Thank you, Han Yang.

The next question comes from Alex Ye with UBS. Please go ahead.

Hi, Benjamin. Thanks for taking my question. I have two. The first one is on tech rate. So you have mentioned that tech rate has remained stable in Q3. So I'm wondering how did you manage to achieve that, even though your APR has been decreasing over the quarter? And could you also share with us some color on how does the tech rate for your new loan price under 24% versus the typical portfolio? So that would give us some color on your forelooking trend. So, and given you're already, 80% of your new loans is already priced at under 24% as of November. So when should we expect your take away to like stabilize going forward? That's on first. And secondly, Some of your peers have been discussing their details about the discussion about working with the by-harm credit about the collaboration in terms of data transfer with the banks after the credit scoring regulation was rolled out. So also wondering if you could share with us some details of the current progress from your side. Thank you.

Thank you, Alex. Let me explain the price of TickRate. In Q3, our average price was 25.3, and our TickRate was about 4.2. In October, our average price dropped to 24.3. So basically, we can understand that we are very close to 24%. In this case, our TickRate is now 4%. ah, ah, The take rate is at 3.6%. Of course, I think there is still a lot of room here, because we have a lot of room for optimization in terms of capital cost and risk. Here, we also found that the risk performance of the 24-person group is much better than our average risk performance. The average risk performance of our large-scale group is 5.6%. The risk performance of the 24-person group Okay, let me translate Alex.

In the third quarter, our average pricing was around 25.3% with a take rate of 4.2% in October. Our average pricing was 24.3%. It is already very close to 24% and our take rate was around 4%. Going forward next year, our average pricing will be around 23%. and we believe our take rate will be around 3.6%. This is under the assumption that there is no improvement in funding costs or there is no improvement in our credit waste performance. However, we believe there is still room for improvement in these two segments. And from our observation, for borrowers priced at or below 24%, they have better credit performance. For example, the day one delinquency ratio for this segment was 4.6%, compared to 5.6% for the overall segment. We have been very proactive in our pricing reduction. However, please note that our total transaction volume has not been impacted at all. In fact, in October, our loan origination volume has reached 12.5 billion, which is another record high for us.

We also have a lot of communication with Baihang, Pudao, Baoguo, and Tongye. In general, we think the progress of this program is actually similar. At this stage, we think it should be more clear in the direction of supervision, but it is still very complicated in terms of the details of the specific landing. There may be details that need to be inferred, but fortunately, the supervision actually gives Okay, let me translate.

The breaking direct linkage between financial institutions is a top priority for us and we have been in constant communications with Bai Hang and many of our peers. At the moment, we believe the work progress for most of the platforms regarding breaking direct linkage between financial institutions and platforms is at about the same pace. The regulator has given a clear direction but some degree of complexity remains in the ground level execution which needs to be further discussed. The regulator has given us sufficient grace period until the end of June 2023 to implement the changes. And we believe the final proposal from the different platforms will largely be similar.

From our point of view, I think we will take two steps forward. First, we will actively promote cooperation with credit institutions to implement such a specific plan as soon as possible. Second, we will explore the way of using cards. Let me translate again. We have two different proposals.

A, we will proactively cooperate with credit rating agencies to determine the plan, and B, we will explore the possibilities of using a financial license to conduct our business. For example, you guys do know that we have a micro-lending company in Anhui, and we will also explore the possibilities of setting up a new nationwide micro-lending company.

Okay, Alex, let's see if you have any other questions.

That's all from me. Thank you. Thank you, Alex.

Again, if you have a question, please press star then 1. The next question comes from Thomas Chong with Jefferies. Please go ahead.

Thank you for taking my questions. I have two questions. First, how does macro headwinds and the property sector outlook affect our business trends? And my second question is that how does data security and privacy laws to affect our business? Thank you.

Hello. Actually, I just mentioned that in our future business, in the next year's exhibition, we are still maintaining a relatively cautious attitude. Now, we have found that the risk is fluctuating. In this case, we have adopted some measures to control the risk fluctuation by adjusting the rate. So, we are still investigating. But we will give some guidance later. But in general, we will stick to

As we have mentioned earlier, we will adopt a prudent attitude for the upcoming year. We have also mentioned that we have seen some volatility increase and we will have some control measures such as controlling the approval rate. We will provide some guidance in the later stage and overall we are still confident to have stronger operational metrics ahead of our peers.

And then about the data, I would like to introduce our company in two aspects. The first is in the information system. The second is in the data. In terms of the information system, we have done a few things. The first is that we have equipped the firewall, the network routing detection system, the loop scanning system, the host monitoring and audit system, and a series of security and confidentiality products. We are also actively working with third-party security manufacturers to build and support SRC, to introduce external white-collar companies to carry out security checks on the company's system throughout the day. If the company is notified by some third-party manufacturers, it will quickly carry out an inspection. Okay, let me share what the company has been doing to protect data privacy and security.

From the perspective of information system and data security, we need to prevent external hacking and also actively prevent internal information leakage. From an information system security perspective, information system and data control is a lifelong process. Our network is equipped with firewalls, network intrusion, detection system, vulnerability scanning system, auditing system, anti-computer virus software and other security products. to achieve in-depth defense. And together with our third party security vendors, we have built a joint venture SRC and with the introduction of external white hat hackers, we have established around the clock security inspection. The company has also self-developed a privacy self-check platform and is able to strengthen the whole inspection process for data privacy.

From the perspective of data, we have done several things. First, we pay great attention to user data privacy protection. We have set up a virtual cross-border partner group internally. It is led by our CTO. It will process, use, store and destroy user data from collection, transmission, processing, and use. It is a comprehensive security assessment and design process. Secondly, we have also developed a platform called Jingwei. Jingwei management platform. From the perspective of data,

The company attached great importance to the protection of user data privacy and has established a professional cross-departmental compliance team to evaluate and design the safety of the entire live process for user data. Example, collection, transmission, processing, storage, and destruction. Our in-house R&D team has developed a management platform to strengthen the control of database access. On manual, we have self-developed a system coaching way to check on authorized access, and it will prevent all unauthorized access. The company works with a number of security agencies, such as Tail Labs, Electronic Sport, et cetera, to implement the app's mandatory policy for each update and provide compliance protection data.

That's all. Thank you. Thank you.

Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks.

Thank you for joining our third quarter earnings conference call. If you guys have any further questions, please feel free to reach out to our IR team and have a nice day. Thank you.

This concludes this conference call. You may now disconnect your line. Thank you.