GreenTree Hospitality Group Ltd. American depositary shares, each representing one Class A ordinary share

Hello, ladies and gentlemen, and thank you for standing by for Green Tree's fourth quarter and full year 2020 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Mr. Rene van Goostein of Christensen Green Tree's investor relations firm. Please proceed, Rene.

Thank you. Hello, everyone. Thank you. Green Tree's earnings release was distributed earlier today and is available on our IR website at ir.998.com, as well as on PR Newswire services. As a reminder, we also posted a PowerPoint presentation that accompanies our comments to the same IR website. On the call from Green Tree are Mr. Alex Shug, Chairman and Chief Executive Officer, Ms. Celina Yang, Chief Financial Officer, and Mr. Nicky Jang, IR Manager. Ms. Megan Huang, Vice President of Sales and Marketing, is attending an industry-wide conference and is not able to join our call today. Mr. Xu will present the company's Q4 and full year 2020 performance overview, followed by Ms. Yang, who will discuss business operations, financials, and guidance. They will be available to answer your questions during the Q&A sessions, which will follow. Before we begin, I'd like to remind you that this conference call contains forward-looking statements. within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as may, will, expect, anticipate, aims, future, intents, plans, beliefs, estimates, continue, target, is or are likely to, going forward, confident, outlook, and similar statements. Any statements that are not historical facts, including statements about the company and its industry, are forward-looking statements. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known and unknown risk uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made during this conference call, are current as of today's date. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under applicable law. It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Alex Hsu. Mr. Hsu, please go ahead.

Thank you, René, and thanks, everyone, for joining our 2020 Fourth Quarter and the Four-Year Earnest Call today. In this report, we will highlight our Q4 and the Four-Year performance, followed by our strategic focus in 2021. Then we will go into the details of our operation and the financial performance in Q4 and the full year of 2020. Please turn to slide five. We were glad to see the robust recovery continue in the fourth quarter. Compared with the Q3 2020, raw power increased 4.1% to 124.4 RMB. Total revenues increased 8.6% to 289.8 million RMB. Income from operations increased 17.4% to 118.5 million RMB, with a margin of 40.9%. Non-GAAP adjusted EBITDA increased 17.8% to 130.6 million RMB, with a margin of 45.1%. And the non-GAAP core net income increased 18.3% to 109.3 million RMB with a margin of 37.7%. While raw power was slightly lower than in the fourth quarter of 2019, income from operations adjusted EBITDA and the core net income was substantially higher than in the Q4 2019. Let's take a look at slide six. Here, you can see the considerable progress we have made since the pandemic hit our business back in January 2020. Total revenues, income from operations, adjusted EBITDA, and the non-GAAP core net income all increased for three consecutive quarters from the lows in Q1 with consistently improving margins. Let's turn to slide seven. The fourth quarter saw a sustained recovery in occupancy rate, ADR, and RARPAR. We outperformed the industry by leveraging our strategic advantages, including our expansive footprint in Tier 3 and the lower cities, and our industry-leading member loyalty program, as well as the hard work of our franchisees and staff. Slide 8 shows our occupancy rate and the raw power over the past 15 months. Due to the resurgence of the COVID-19 in several provinces and cities, such as Hebei, Shanghai, and Beijing, our occupancy rate declined in Q4 2020 and in January 2021. As you can see, occupancy rate was at its lowest during the Chinese Spring Festival due to the government's stay local policy. However, it rebounded quickly, especially after March 16, when people could travel more freely in low-risk zones. With the rollout of the COVID-19 vaccines, most travel restrictions have been lifted. According to the official microblog of the Ministry of Culture and Tourism, the calm sweeping holiday on April 5th 2021 saw 102 million domestic tourists. That represents a year-over-year growth of 144.6% and 94.5% of the number of domestic tourists in 2019. By early April, our occupancy rate had recovered to 77.7%. and the VRAR PAR recovered to 92.7% of the 2019 levels. The key takeaway is that by the end of 2020, Green Tree proved to be more resilient and still performed better. Please turn to slide 10 to begin in the discussion of our strategic focus. In 2021, Our strategic planning focuses on two key components, hotel and expansion, and the franchisee support. Expansion targets strategic locations, tier three and smaller cities, and the mid to upscale market segment. And for our franchisees, in 2021, we are expanding our plan to renovate over 760 existing hotels in the following years, which should significantly increase our raw power. We'll also continue to improve our direct sales channels and members' support, and continue our investment in the IT and data infrastructure. Let's take a look at slide 11. In Q4 2020, we accelerated our expansion into the middle and higher end markets in Central China, Southeast China, and the Southwest China. During the first quarter of 2021, we opened several L&O hotels in tier one and two cities in these regions, including Chengdu and Wuhan, all well located around transportation hubs, central business districts, or government centers. By showcasing our brand and operating standards, we believe these hotels will help us to attract more high-quality franchisees, further accelerating our growth. Slide 12 highlights our strong presence in China's thriving tier 3 and lower cities. This not by chance, but by design. Over the past four years, the vast majority of our new hotel openings have been in Tier 3 and the lower cities. And 69.8% of all hotels in our current development pipelines are located in such cities. As a testament to the soundness of this strategy, during the pandemic, the pace of recovery at our hotels in Tier 3 and the lower cities was consistently faster than in other cities until the end of the Q4 when business recovery in the Tier 2 cities accelerated. The combination of our existing footprint and our strong performance in these cities gave us a real competitive advantage to capture future opportunities in China's forming hospitality industry. Now, please turn to slide 13. We have been consistently growing our high-end segment over the past few years. And at the end of 2020, hotels in this segment represented 21.2% of our total portfolio. compared to only 5.2% in 2017. This year, we plan to open more hotels in the mid to upscale and luxury segment. In 2021, we also expand our ongoing hotel upgrade program to renovate 760 hotels, which have been in operation for more than seven years. On slide 14, you get a summary of the marketing support which we provide to our franchisees. The same slide also shows the impressive growth in both of our individual and corporate membership programs, which contributed most of our 92.2% of all direct sales in 2020. In addition to the benefits which we provide, our members also receive benefits from our business alliances, which in turn help us to attract more members. In summary, despite the many unprecedented challenges brought upon us by COVID-19, the company delivered a robust Q4 with above average sequential improvement in operating and the financial matrix across the hospitality industry. I am extremely grateful for the achievements of our teams. I cannot thank enough of the smart government policies, strong local government and community support. I cannot thank enough all of our employees, franchisees and our guests and our investors for their support and dedication. Thanks to our resilient business model, we are able to weather an extremely difficult year in the travel industry and perform well above the industry benchmark. When considering our well-segmented and robust brand portfolio, the loyalty of our members, and our strong balance sheet, we are well positioned to capitalize on opportunities and create long-term, and sustainable growth for our shareholders in 2021 and beyond. I will now pass the call over to Selena, who will summarize our business operations and financial for the fourth quarter. Selena, please go ahead.

Thank you, Alex. Please turn to slide 16. The impact of COVID-19 on the company's operations and performance was inevitable The fourth quarter of 2020, blended ADR decreased 3.6% year-over-year to 162 RMB. Occupancy rate increased to 76.7%, and rest part decreased 3.2% to 124 RMB. Nevertheless, we continue to expand our market presence across China opening 203 new hotels in the fourth quarter. We ended the year with 1,186 hotels in our pipeline, up 25% over year-end 2019. Total revenues for the quarter were 29.8 million RMB, a 0.1% increase compared to the fourth quarter of 2019. Income from operations increased 19.9% to 118.5 million RMB. Non-GAAP core net income increased 22.3% to 109.3 million RMB. And core net income for ADS, basic and diluted, increased 21.3% to 1.06 RMB. Moving to slide 17, At the end of the fourth quarter, we had 4,340 hotels in operation, 9.7% more than a year before. 40 of these hotels were listed and operated, or RO hotels, and 4,300 were franchised and managed, or SM hotels. While the middle-scale segment remains the core of our business with 64.2% of all our hotels. Last year, we continued our expansion into both the high-end and economy segments. This expansion accelerated in the fourth quarter as the number of the Mediatab scale and luxury hotels increased to 8.8% of our total portfolio. while the economy segment at 27% remained stable. As Alex mentioned, we also solidified our already dominant position in Tier 3 and smaller cities. And at the end of the fourth quarter, 67.3% of our hotels were in these cities. These strategic advantages enhanced our cross-marketing efforts across all of the brands and the locations. On slide 18, you can see that in the fourth quarter, we opened 203 hotels, compared to 119 in the fourth quarter 2019. Three hotels were in the luxury segment, 29 in the mid-tab scale segment, 141 in the mid-scale segment, and 30 in the economy segment. 19 were in tier 1 cities, 42 in tier 2 cities, and the remaining 142 in tier 3 and smaller cities in China. 15.8% of newly opened hotels in the fourth quarter were in the mid-trap scale and luxury segments of the market. We closed the 58 hotels, eight due to brand upgrade, 35 due to non-compliance with our brand and operating standards, and 15 due to property-related issues. So net-to-net, we added 145 hotels to our portfolio during the quarter. Slide 19 shows the growth in our pipeline of new hotels. Despite COVID-19, our pipeline increased from 949 on December 31, 2019, to 1,186 on December 31, 2020. Around 41% of these new hotels are in the mid-scale segment, and about 34% in the economy sector, and around 25% in the mid-tab scale and luxury segments. Slide 20 shows the quarterly operating performance trend. Compared with third quarter, RAPR for our Aero hotels increased to 135 RMB. RAPR for our FM hotels increased to 124 RMB. ADR for our Aero hotels increased to 190 RMB. And ADR for our FM hotels increased to 162 RMB. Occupancy rate. And our LO hotels increased to 31%, and occupancy rate in our SM hotels decreased to 76.8%, where RAPPA continued to rebound. Total revenues increased 0.1% year-over-year to 289.8 million RMB. Total revenue for SM hotels decreased 4.6%, to 207.2 million RMB, while total revenue from ARO hotels increased 11% to 76.1 million RMB. The increase was primarily due to the sustained recovery in hotel operations from the impact of COVID-19, as well as the revenue contribution from our newly opened ARO hotels. This represents an 8.6% sequential increase over Q3 total revenues. Primary, it's rapid growing from 120 MB in the third quarter to 124 MB in the fourth quarter. Turning to slide 22, you will see that hotel operating costs were 99.8 million MB, a 7.8% year-over-year increase. that is mainly attributable to higher rents and increase of other costs with the expansion of our air or hotels. In the fourth quarter, we opened four new air or hotels, which accounted for most of the increase in hotel operating costs in this quarter. If we exclude air or hotel operating costs, costs related to FM hotels and others decreased 7%. Compared with third quarter, we observed a 7.6% sequential decrease. That's mainly due to higher newly opened expenses in the third quarter. Second, the marketing expenses were 24.2 million RMB, a year-over-year increase of 4.7%, which was mainly due to higher advertising costs. Compared with third quarter, selling and marketing expenses increased by 13.9%, attributable to higher advertising expenses. Q4 general administrative expenses were 50.9 million RMB, down 36.1% year-over-year. The decrease was primarily attributable to the effective control of business driver expenses, and the impact of one-time provision for bad debts during the same period of 2019. Excluding the impact of these bad debts in 2019, our G&A in the first quarter decreased by 14.3%. Compared with third quarter, G&A expenses increased by 13.6%, which was mainly attributable to the increase of consulting fees and higher staff costs. Overall, 2020 operating costs and expenses decreased 11.8% year-over-year to 175 million RMB. Excluding air or hotel operating costs, our total operating costs and expenses decreased 23.5% from 2019. Turn to slide 24, income from operations defined as ratio minus total operating costs and expenses for the fourth quarter of 2020 totaled to RMB 118.5 million, that's US dollars, 18.2 million, representing a year-over-year increase of 19.9%. The increase was mainly due to the sustained recovery of RAPA The increased number of hotels and better control of costs and expenses during this quarter. Operating margin defined as income from operations as percentage of total revenues was 40.9%, compared to 34.1% a year ago. Compared with third quarter, income from operations increased by 70.4%, And operating margin increased from 37.8% to 40.9%, mainly attributable to our revenue increase. On slide 25, adjusted EBITDA increased 17.2% year-over-year to 130.6 million RMB. And the EBITDA margin increased to 45.1%. our core net income increased 22.3% to 109.3 million RMB, and the core net margin was 37.7%. If we compare with Q3, adjusted EBITDA increased by 17.8%, adjusted EBITDA margin increased 3.5%. Core net income increased by 18.3%, and the margin increased 3.1%. Next, please turn to slide 26. Next income per ADS was RMB 83 cents, that is US dollars 13 cents, up from RMB 75 cents one year ago. Core net income per ADS basic diluted non-GAAP was RMB 1.06, that is US dollars 16 cents, up from RMB $0.87 in 2019, and up from only $0.90 at the end of the third quarter 2020. Let's now take a look at slide 27. As of December 31, 2020, the company had total cash and cash equivalents, restricted cash, short-term investments, investment equity securities, and time deposits of $1.9 billion only. compared to 1.82 billion RMB as of September 30, 2020. The increase from the third quarter was primarily attributable to increase the cash inflow from operating activities, offset by loans to franchisees, investment and upgrade costs at our air hotels. The cash and cash equivalents provide us with ample resources as we continue to evaluate potential investments and to support our franchisees. Lastly, on slide 28, you can see the significant impact which COVID-19 has had on our business. Assuming the pandemic remains under control in China, we expect total revenues for the full year of 2021 to grow 48% to 53%, over 2020 levels and 25% to 30% over 2019. This concludes our prepared remarks. Operator, now we are ready to begin our session.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. I will now give you a few moments to register your question. Your first question comes from Praveen Chowdhury from Morgan Stanley. Please go ahead.

Hi. Good morning. Can you hear me? Hi, Alex. Hi, Selena.

Hello. Hi, Parveen. We can hear you really clearly.

Great. Thank you so much. So, first of all, thank you very much for the presentation and great to see that out of COVID, the company did it remarkably well and it came out stronger. My question is related to two things. One, I just want to understand the competitive dynamics. I hear from some of your competitors that in the market where other companies were struggling, the incumbents and the bigger ones like you, like Raju, managed to add more hotels because you have the financial might and you are big enough and you have scale. But I look at your net openings for 2020. That's not as strong as we would have liked if you capitalized. So I just want to understand what's the dynamics there. And the second question is related to the first quarter. How are you trending right now? And what do you expect in terms of REF PAR? I know you have given the guidance on revenue, but in terms of REF PAR trend in first half versus second half, how are you incorporating that in your guidance? Thank you so much.

Okay. I will have Celine to answer the second question in terms of the first quarter rural power trend. Because the first quarter we saw some resurgence in certain cities and provinces. So the occupancy and rural power was lower than the same period of 2019. The we also have, we also given, you know, the franchisee support in terms of, you know, wavering of certain fees and franchise, franchise, I think franchisees. So in terms of in adding hotels in the 2020, we, the first six months and including the especially the first two quarters, we did see, you know, the slower movement in terms of goods and people and the construction companies and also the lack of the certain people concerned about continued investment in renovating the hotels for the opening. So we, if you can see the numbers for the total year of 2020, We did not add as many as we projected. I think we already predicted the 700 were short. But I think we plan to capture that in 2021. For instance, I think the first quarter, our pipeline, I think we should add about 200 hotels, comparing with 60 in 2020. And so I think that's mainly the impact of the COVID for the majority of the first half of the year of 2020. Okay. So, Selena.

Hi, Praveen. As for the second question, how is the rapid trend in the first quarter of this year? We observed that rapid in January decreased by around 20%. And in February, due to the Chinese Spring Festival, the occupancy rate and also the reptile dropped to the lowest. However, in March, we observed the reptile rebounded quickly and declined by less than 10%. And especially by the end of March and early April, our occupancy rate has recovered to 78.5%, nearly 80% recovery as the normal rate. for 2019, and our red part has recovered to nearly 97 percent as of 2019. So we especially during the first two weeks of April, we observed the red part has continued to recover as of 2019. So that is what we observed for the first quarter.

Thanks, Selena. And if I can follow up on the Rappaport trend, I know in 2019, second half, it was a low base. Things were a little bit difficult. So as we go to the second half of 2021, and barring any new flare-up of COVID, should we expect the Rappaport to be up compared to 2019, whether it's 5%, whether it's 10%, And the reason I'm asking is that what is embedded in your guidance of the revenue growth for full year in terms of second half REFPA versus 19?

Okay. Thank you, Pravin. As for our guidance, I think it's a composition of two factors. The first one is our FM expansion. The second one is our newly opened ARO hotels. So for the normal expansion of our SM hotels, our expansion for the second half of this year, since the third quarter, we expect the RAPR to be at the same level as 2019. And for the fourth quarter, we expect 2% to 3% above the level of 2019.

Okay, great. Super. Thank you so much. I mean, I had some strategic questions. I just don't want to take a lot of time for you. For Alex, one question is about acquisition. You have a lot of cash. You've been talking about it for some time. You did some acquisition in Argyle and Urban. What's the plan in future, considering there will be many opportunities at this time? And second was, any plans for listing in Hong Kong? Thank you. That's it for me.

Okay. We accelerated, I think, our growth in the first quarter of this year by providing, you know, by adding strategically in the certain, you know, our last growth area, such as Southeast China, Southwest China, and Central China, by growing both, providing some liquidity to our franchisees, you know, for good franchisee support. And in addition, if there are strategic locations, strategic hotels, we may add selectively L&L hotels in those regions. And so the third, and we are continually evaluating and the smaller regional, but with a robust operating team. But not as big as I think we were discussing before, but we'll consider that in the smaller scales, local, regional, but with a strong operating team, we may partner or make investment. So we are aggressively... evaluating those opportunities and that we also try to figure out the impact of this new dynamics to those cities. For instance, the city with the tourism, the more leisure tourism and the recovery period, and as well as the city with the stronger business travelers. and what was the impact of the cash flow to our investment in the hotels, and trying to make a little smarter decisions for our, you know, not only growth, but with profitable growth. So thank you so much for being here.

Thank you. Your next question comes from Colin Yao from Goldman Sachs. Please go ahead.

All right. Thanks. Thanks management for taking my question and, and congratulations on the robust recovery ring in Repa. So my first question is also about MAA. So since management mentioned that the company will be doing more of a kind of lease on hotels in strategic locations. So, so I would like to know like, What's the thoughts behind that? So why we would like to do L&O hotels? And also, how many are we going to be opening this year? And thirdly, will we consider forming a JV like some of our peers do, probably a JV with some property owners or developers? So that's my first question. And my second question is, It's also about REPA. So since Selena just mentioned the recovery has been robust in the first and second quarter. So I would like to know, so what are we factoring in for the full year REPA recovery? Are we seeing like perhaps the full year REPA will be about 110% versus the 2019 level? You already mentioned that the second quarter REPA was like to three above 19 already. And the third question will be also about secondary listings. I think management perhaps maybe missed that part, as was asked by just now. So those are my three questions. Thank you.

OK. So I will answer the first questions that the We're doing the L&O hotels because right now we find that we have the smallest, we have the lowest number of L&O hotels among our peers. The L&O hotels that in the past several years, in the past three years, we have not done many because as we recommended to our franchisees the last three years, we've been seeing a dramatic increase in rent, in various design and construction costs, in, you know, the cost across the board increased substantially. So that is the reason I think we advised our hotel owners, our franchisees, to make, you know, to be conservative But this year, we see the rent, along with many other costs in those different sectors, all, I think, come back to a reasonable level. In addition, in certain strategic locations, we feel that representative hotels will give us the brand standard will also give us a um a place to recruit train the best people to set the operating uh standard and uh um so those are crucial for those area where we we don't have a strong presence such as in southeast china and southwest china and south part of china and that the those will bring us more impact to accelerate our growth in F&M segment. So that is the reason why we plan to add more in that area because the financial return is also healthier with the reasonable control of all the costs such as rent, such as construction costs. And we're also able to identify some improved hotels where we can, where the hotel owner, previous hotel owners will have some need of financial, and we are able to either partner or buy those hotels. So that's the reason behind this. We can earn both the great return as well as setting up the stronger base being the model hotel, so setting up the operating standard and create a base to train our teams instead of training the team just in corporate office in Shanghai. Okay, so the second issue regarding the full year of RARPAR growth compared with 2019, I'll leave that to Selina. And in terms of the second listing, I think I'll leave that to Selina to comment.

Thank you, Alex. Thank you for your question. Actually, our forecast is made on a consecutive basis. We expect a decrease of 3% to an increase of 2% in terms of RAPA if we compare with the year of 2019. So in our forecast, there's an increase of 25% to 35%. may be composed of two parts, a 20% contribution from our normal expansion of FM hotels, and the balance comes from the contribution of newly opened hotel hotels. So for your question in terms of Hong Kong listing, we are considering the potential listing in Hong Kong, and we will provide information when necessary.

Thank you very much, Alex and Selena.

Thank you.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from Bruce Emmy from UBS.

Please go ahead. Okay. Thanks, Selena and Alex, for taking my question. So I have two small questions. The first one is also on the hotel. May I ask, so do you have a target for the contribution from the ILO hotels in total hotel accounts? So as I can see, it's only about 1% in 2020 and 2019. So as you are accelerating the opening of ILO hotels, what's your opening plan for 2021? And do you have the plan to increase this contribution? And my second question is more about the outlook for the upcoming Labor Day holiday. So could you give us some color on it and how is the booking data for this holiday?

Thank you. Hello, thank you for the question. As a first question, what's our plan to open air hotels in this year. Actually, in our forecast, we expect around 10% contribution from the newly opened air hotels, but it's really hard to give the exact number of the less-operated hotels opened. As you know, only when the location of the property and the condition of the property satisfy our requirements that we could make a decision to open and lease operated hotels. And for your second question, our forecast in May, especially on the May day, now from the advanced reservation, we could observe around 30% in terms of occupancy already. So I think that's a signal to us that we're The coming holiday, for the coming holiday, the occupancy rate will rebound continuously.

Okay. So I'm adding a little bit more to Selena's comments that we do not want to force a particular number in terms of opening of L&O hotels. It has many... First of all, the property has to be right and has to be... generating sound financial returns. Secondly, that has to be more representative hotels in certain key locations, strategic locations such as transportation hubs. But we see more opportunities this year, especially the second half of last year and the first quarter of this year. We see more opportunities, much more than before. And I want to elaborate a little bit about Celina's comments. We do not want to give unrealistic projections of real-par growth. We do believe that like-to-like kind of real-par growth, not by the change of the composition, such as adding more higher-end hotels or spending more in terms of... in terms of tier cities and also higher rented and higher impacted hotels. And excluding that, like we think the raw power will be anywhere between probably 3% down from 2019 to somewhere 2% up from 2019. So somewhere about neutral and flat if we're able to achieve the 2019's raw power. And again, the reason is we do believe there is a stress level on the personal consumption as well as in the corporate travel budget due to the worldwide pandemic crisis. So even though we may see the number of tourists increased or achieved the same levels, But in terms of ADR and consumption per capita will be, you know, I think will be constrained. And so that's our production assumptions in that end. But we will be less impacted because our position of the hotels in the tier three and also the position of hotels in terms of the industry zones and development zones. We are focusing on hotels for the business travelers versus leisure travelers. So I think this created a positive impact to conquer the negative impact from COVID.

Thanks. So may I ask a small follow-up question? So for our newly opened L.O. hotels this year, so will it be mainly in V2 upscale hotels? In where?

In upscale?

I'm sorry. So for the newly opened L.O. hotels, will they mainly be in the V2 upscale segment?

Correct. So mainly in those areas we have less presence. such as we've mentioned the south, southeast, southwest, and also in those brands, we have less presence, such as mid to upscale, primarily in those segments. So that is correct.

Okay. Thank you, Serena. Thank you, Alex.

Thank you. Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. I will now give you a few moments to register your question. There are no further questions at this time. This concludes our question and answer session. I would now like to turn the conference back over to Ms. Selina Yang for any closing remarks.

In closing, on behalf of the entire Brain Tree Management team, we thank you for your interest and participation in today's call. If you require further information or have plans to visit us, please contact us. Thank you all.

Thank you.

The conference is now concluded. Thank you for attending the conference today. You may now disconnect.