ATRenew Inc.

good morning and good evening ladies and gentlemen thank you for standing by and welcome to at renews incorporated second quarter 2024 earnings conference call at this time all participants are in a listen-only mode we will be hosting a question and answer session after management's prepared remarks please note today's event is being recorded i would now like to turn the call over to our first speaker today mr jeremy g Director of Corporate Development and Investor Relations of the company. Please go ahead, sir.

Thank you, Chuck. Hello, everyone, and welcome to AG Renew's second quarter 2024 earnings conference call. Speaking first today is Kerry Chen, our founder, chairman, and CEO. And he will be followed by Rex Chen, our CFO. After that, we'll open the call to questions from analysts. The second quarter 2024 financial results were released earlier today. The earnings release and the investor slides accompanying this call are available at our IR website, ir.atrenew.com. There will also be a transcript following this call for your convenience. For today's agenda, Kerry will share his thoughts of our quarterly performance and business strategy, followed by Rex, who will address the financial highlights. Both Kerry and Rex will join the Q&A session. Let me cover the six Harvard statements. Some of the information you'll hear during this conversation today will consist of forward-looking statements, and I refer you to our safe harbor statements in the earnings press release. Any forward-looking statements that management makes on this call today are based on assumptions as of today, and that AT&U does not take any obligations to upgrade our assumptions on these statements. Also, this call includes discussions of certain non-GAAP financial measures, please refer to our earnings press release, which contains a reconciliation of un-GAP measures to GAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB, and all comparisons are on a year-over-year basis. I'd now like to turn the call over to Kerry for business and strategy updates.

Hello everyone and welcome to AT&T Renew's second quarter 2024 earnings conference call. We are pleased to share our achievements this quarter and the strategies we have implemented in the evolving landscape.

where the social economy has been driving consumer behavior.

In the second quarter, we achieved solid growth, especially at the recycling end and invaluable money retail business.

even though consumers are more prudent with spending. To boost domestic consumption, the government has taken actions to encourage large-scale trading of consumer goods. As a result, more products have entered the pre-owned market through e-commerce platforms and physical retailers. In the near term, we have already witnessed a significant increase in recycling volumes in cities like Shenzhen. More importantly, we believe such policies and support will have a long-lasting impact by raising awareness of sustainable consumption and the resulting of second-hand goods. Such support provides greater certainty to our sustained growth outlook.

The revenue of one product reached 3.4 billion RMB, which increased by 29% and contributed to the main growth. It is worth mentioning that the recovery of mobile phone 3C digital products increased by 27.8% including the order volume of some low-end products, which increased by 38.9% for the second-hand industry.

Looking specifically at our business performance in the second quarter, our total revenue reached 3.78 billion RMB, up 27.4% year-over-year, exceeding the high end of our guidance. Product revenue was 3.4 billion, up 29% year-over-year, serving as the main growth driver. Order volume related to our core self-operated consumer electronics recycling business grew 27.8%, while other volume of the overall self-operated business that included low ASP business grew 38.9% year-over-year, leading in the second-hand industry. 核心業務場景中,宇宙換新成為越來越主流的購買方式。

Among primary recycling scenarios, trading has become an increasingly mainstream way to shop.

we collaborated with JD.com on their old Apple product for new Apple product initiative, which received widespread praise from users. In May, the recycling value of used products traded in through JD.com grew 97.6% year-over-year. During the June 18th shopping festival, the trading volume of used consumer electronic products from JD.com increased by 100% year-over-year.

In terms of platform business, the revenue has increased by 14.6% to RMB3.7 billion. Among them, the return rate of PaiPiTang and PaiPai continues to be healthy. The entry-level inspection and sales model have been accepted by more third-party merchants. In addition, the education scale of platform model multi-level recovery business has increased by nearly 4 times, contributing to more power of platform growth. In our platform business, revenue grew 14.6% year-over-year to 370 million RMB. PJT and PiPi marketplaces maintained healthy take rates, with an increasing number of third-party merchants leveraging our inspection capabilities and adopting our consignment model.

the GMV of our multi-category recycling service business increased by nearly 400% year-over-year, serving as the main driver of platform business growth, and reflecting that in the current micro-environment, an increasing number of users are willing to explore recycling services beyond consumer electronics categories.

On the profit side, at Algidoo, we effectively turned the profit rate of Apple's official new business into profit. promoted the overall return of product revenue to 12.1%, and increased by 1.2% compared to the first quarter. Compared to the same period in 2023, due to the increase in product revenue by 1.1%, the overall revenue of the group increased by 20.8% compared to the small share. In terms of business profits, a larger scale of business has contributed to the optimization of cost efficiency. On the growth margin front, we successfully turned the growth margin of the Apple trading business positive in the second quarter, raising the overall product revenue growth margin to 12.1%.

an increase of 1.2 percentage points from the first quarter of 2024. Growth margin at the group level slightly dropped to 20.8% as the proportion of product revenue increased by 1.1 percentage points compared with the second quarter of 2023. Even though the economies of scale have also led to improved cost efficiency, the net gap fulfillment expense as a percentage of total revenues decreased by 0.3 percentage points year-over-year, while the non-GAAP selling and marketing expense as a percentage of revenue fell by 1.1 percentage points year-over-year. This overall resulted in a 0.7 percentage points improvement year-over-year in the non-GAAP operating profit margin, bringing it to 2.5% in the second quarter of 2024. 以上業績得益於我們扎實的場景 The achievements we've discussed so far are rooted in our core strengths in recycling scenarios and supply chain capabilities. Going forward, we will continue to build on these strengths to drive further growth and success.

On the one hand, we completed the strategic cooperation agreement with Jindong in June this year for the basic disk and mobile phone 3C recovery and transaction business. We deepened the cooperation on core business such as mobile phone 3C recovery and replacement of mobile phone 3C recovery and replacement of mobile phone 3C recovery and replacement of mobile phone 3C recovery. On one hand, we have strengthened our service capabilities in our core business of consumer electronics recycling and transaction services.

In June, we renewed our strategic agreement to deepen our business collaboration with JD.com in areas such as consumer electronics recycling, trading, and the retail of value for money secondhand products. This renewal also introduced new trading methods for Apple products. We continue to meet the high standards and specific needs of JD users through our industry-leading fulfillment and supply chain capabilities.

The penetration and development of the ecosystem change service in the Jindong channel has maintained a rapid growth. In the first half of the year, the recovery rate of Jindong users in the Jindong channel has increased by more than 50%. And the recovery rate of the ecosystem change in the Jindong channel surpassed the normal recovery rate of the channel for the first time in June this year. The ecosystem change provides a better user experience, locks in the user's core needs, and fully reflects the user's desire

Our trading business through JD has experienced rapid growth. In the first half of the year, the recycling value of products traded in by JD users increased by over 50% year-over-year. Notably, in June, the recycling value of products fulfilled by trading program surpassed that of regular recycling for the first time. establishing it as the leading recycling method through JD. Trillions provide a better user experience than regular recycling, effectively capturing users' demand for upgraded devices, and receiving growing acceptance and adoption by our users.

At Apple's official change-in service, we have consistently improved our performance in the second quarter. The second quarter is the beginning of Apple's official business. For our Apple's official trading business, we successfully turned the growth margin positive

as anticipated in the second quarter. During this typically off-peak period, we achieved 160 million RMB in revenue. Specifically, we ensured a positive operating margin for this segment in the second quarter, while aiming at a long-term operating profit margin of 3% to 4%. Expenses at the operating level are simple, and we expect Apple's official trading business to bring more positive operating profit.

We have continued to build on the ability of offline booking to improve the household registration business. As of the end of the second quarter, we have operated 1,516 second-hand registration stores in 260 cities across the country. In the quarter, 19 second-hand registration branch stores and 69 second-hand registration joint branch stores have been added, and we have adapted the needs of users for multi-spec registration. to more than 50 second-hand recycling self-serve stores to update the store image or location. In addition, since the end of the second quarter, we have operated more than 600 up-and-coming service teams nationwide, mainly to meet the diversification needs of users' delivery and booking methods. The up-and-coming team of second-hand recycling maintains a unified brand image and service standards, We continue to build our offline fulfillment capabilities to strengthen our business mode.

As of the end of the second quarter, we operated 1,516 AHS offline stores in 260 cities nationwide, with a net increase of 19 self-operated stores and 69 jointly operated stores in the quarter. To meet users' demand for multi-category recycling, we upgraded the store image for a location of over 50 self-operated stores. Additionally, we have a nationwide doorstep service team of over 600 staff to address users' diverse fulfillment needs. Our service team maintains a consistent brand image and service standard, offering face-to-face device inspections and on-the-spot payments, which provide several advantages over traditional mail-in recycling. In the second quarter, the doorstep recycling business sustained the same year-over-year growth rate as the overall C2B business. Our in-store and doorstep fulfillment options offer users flexible and convenient recycling choices.

On the other hand, we are further enhancing our core capabilities in client shopping scenarios

and supply chain management. These improvements aim to provide users with a wider selection of premium products while strengthening the brand recognition of AHS selections.

The clear trend is that in a time of slowdown, consumers' selection and purchase needs for high-quality second-hand products will not decrease. At AirBus, we are offering high-quality second-hand products. Let the consumer see the quality guaranteed accuracy machine 95-star and 90-star products. Inspire the user's desire to try and purchase. Through the online door store memory storage and the online nationwide storage open sales method. Provide consumers with cost-effective second-hand purchase choices. At the same time, the user's trust and recognition for the love of recycling selection brand. The sales revenue of second-hand stores and official websites has broken 2.1 billion RMB. The net profit has increased by 31% and the net profit has increased by 8 times. The sales revenue of second-hand stores, official websites and stores with multiple channels such as Tiktok has increased by 9.6 billion RMB. The net profit has increased by 125%.

We are witnessing a clear trend that consumers are increasingly looking for value-for-money, high-quality pre-owned products. We offer a curated selection of premium second-hand products in our offline stores, allowing consumers to directly access the quality of certified pre-owned items that are 95% and 90% new, stimulating their interest in trying and purchasing these products. By linking in-store inventory with our nationwide online inventory, we provide consumers with cost-effective options for buying secondhand items. This capability has successfully gained the trust and recognition of our AHS selection brand. In the second quarter, product revenue from AHS selection in our offline stores and on our official website surpassed 210 million RMB, marking an increase of 31% year-over-year, excuse me, marking a 31% increase from the previous quarter and an eight-fold increase year-over-year. Product revenue brought by our 1P2C retail business increased by 125% year-over-year to 960 million RMB. Retail channels included PiPi selection, AHS recycled websites, and physical stores, Douyin, et cetera.

Based on the mature supply chain capability of supply chain storage and sales, in addition to PaiPai online sales, second-hand sales, self-sales sales, joint-stock sales, and live sales, we also join the retail channel partners to explore the output capability of supply chain. In June this year, our B2B trading platform, Paiji Tang, joined Douyin e-commerce with Paiji Tang's industry-leading second-hand consumer electronic products supply chain, to help more small and medium-sized businesses in the industry to make Aosong a new business. The main focus is on two aspects. One, support for the sale of products by Wanwu New生. Two, Paiqi Tang provides Aosong mobile phone 3C products to TikTok e-commerce. At the same time, Paiqi Tang forms a strategic cooperation with the leading enterprise Huidongda in the lower market. building on our robust end-to-end supply chain capabilities from sourcing to processing to sales.

We are exploring synergies with retail partners in addition to the established retail channels of HiPi, AHS Store, and live streaming platforms. In June, our B2B transaction platform, PJT Marketplace, partnered with Douyin e-commerce to empower more small and medium-sized businesses to thrive in the new retail landscape by leveraging PJT's leading second-hand consumer electronics supply chain. Key elements of our collaboration include our operations center, which supports product quality inspections, and PJT supplying second-hand consumer electronics to Douyin e-commerce. Additionally, TJP has established a strategic partnership with Hui Tong Da, a leading retailer in mass market cities. Together, we are exploring opportunities for secondhand products through Hui Tong Da's extensive offline store network. Initial sales pilot programs have already been launched recently.

In closing,

We would like to share our perspective on establishing our brand as the top of mind choice for consumers nationwide when it comes to recycling.

such as Xiaohongshu, Shipinghao, and other platforms to publish the contents of the recovery and resumption of new products, and to post certain brand adverts. Erhuizhou has also joined more consumer brands to launch anti-slip promotion activities. In the second quarter, we and Jindong, Jinzhao, Mengniu, Bilibili, Naixue Tea, Aoleqi Supermarket, and more than 20 brands jointly launched activities to resumption of new products, and to promote the cycle of green consumption.

Starting last year, we have increased our marketing efforts to promote our upgraded services in recycling to raise the awareness of our brand and to improve public understanding of recycling, trade-ins, and circular consumption. We have distributed educational content about recycling and trade-ins on popular social media platforms, including Douyin, Xiaohongshu, Weixin video platform, while partnering with key influencers to advertise our brand name. Moreover, we have collaborated with leading consumer brands to launch the Revive Fanhang Xinxiong initiative. In the second quarter, we rolled out trading programs in partnership with 20 brand owners, championing the concept of sustainable circular consumption. To name a few, Jingdong Jingzao, Mengniu, Bilibili, Naixue, and Audi. We jointly encouraged more consumers to pick up a quest, return more used goods, and claim the rewards.

Given the clear shift in consumer behaviors,

We believe it is crucial to proactively seize the opportunities presented by the circular economy. We will continue to invest in our brand. We aim to acquire greater mindshare for our brand and services among consumers through strategic brand marketing, cross-brand partnerships, and revamping our stores.

In the third quarter, we are actively preparing for the new sales release in September.

As we enter the third quarter, we are preparing for the upcoming launch season for new cell phone models in September and October. We look forward to serving even more users by facilitating the recycling and transactions of their second-hand products through our enhanced service offerings.

下面請公司的CFO Rex介紹一下財務情況。

Now, I'd like to turn the call over to our CFO Rex for financial updates.

Okay. Hello, everyone. We are pleased to report another profitable quarter under the gap measures on revenues that once again exceed the top end of our guidance. Before taking a detailed look at the financials, please note that all figures are in R&D and all comparisons are year-over-year basis unless otherwise stated. In the second quarter, total revenues increased by 27.4% to 3,776.7 million, primarily driven by the strong growth in net product revenues. Net product revenues increased by 29% to 3,401.8 million, while net service revenues increased by 14.6% to 374.9 million. Growth in net product revenues was primarily driven by an increase in the sales of pre-owned consumer electronics, both throughout the company's online and offline channels. The increase in service revenues was primarily due to an increase in the service revenue generated from the PJT marketplace and the multi-category recycling business. The overall gross transaction value of marketplaces increased consistently with service revenues and the takeaway of our marketplaces was 5.28% in the second quarter of 2024. About $30 million was directly attributable to our multi-category recycling business with an average service take rate of 3%. Multi-category recycling business accounted for 8% of total service revenues in the second quarter of 2024, while the figure was 1% in the same period of 2023. Now let's discuss our operating expenses to provide greater clarity on the trends in our actual operating-based expenses. We will also discuss our NGAP operating expenses, which better affect how management views our results of operations. So, the considerations of NGAP and NGAP results are available in our earnings studies and is a corresponding form 6K, furnished with the SEC. Merchandise costs increased by 28.6% to 2,998.6 million, in line with the growth in product revenues. Growth margin as a group level was 28.8% in the second quarter. Product revenues growth margin, which we also refer to as 1P billion growth margin, was 12.1%. Fulfillment expenses increased by 22.1% to 328.3 million, excluding share-based compensation expenses, which we will refer to as SPC from PL. And then gap fulfillment expenses increased by 22.9% to 321.7 million. And then the gap measures increased was primarily due to first an increase in personnel costs as the company conducted more recycling and transaction activities compared with the same period of time on the street. And second, an increase in operation center-related expenses as the company expanded its store and operation station networks. And gap fulfillment expenses as a percentage of total revenues decreased to 8.5% from 8.8%. Selling and marketing expenses increased by 5.6% to $354 million, excluding SPC expenses and amortization of intended assets and deferred costs resulting from assets and business acquisitions. Then gap selling and marketing expenses increased by 11.7% to 283.3 million, primarily due to an increase in advertising expenses and promotional campaign related expenses. Then gap selling and marketing expenses as a percentage of total revenues decreased to 7.5% from 8.6%. General and administrative Expenses increased by 26.1% to $72.5 million. Excluding SPC expenses, Nangap J&A expenses increased by 41.9% to $56.2 million, primarily due to an increase in personnel costs. Nangap J&A expenses as a percentage of total revenues was 1.5% compared with 1.3% in the same period of 2023. Technology and content expenses increased by 10.6% to $49.8 million, excluding SPC expenses and amortization of intangible assets and deferred costs resulting from assets and business acquisitions. And debt technology and content expenses increased by 12.6% to $43.7 million. The increase was primary due to an increase in personal costs in connection with the ongoing upgrade of the company's operation center and the system. MnGAP technology content expenses as a percentage of total revenues decreased to 1.2% from 1.3%. As a result, our MnGAP operating income was $984.1 million in the second quarter of 2024, representing a significant increase of 81% year-on-year. MnGAP operating profit margin was 2.5%, compared to 1.8% in the second quarter of 2023. And our ongoing share repurchase program, which a board of directors approved us uplifting the limit to purchase $15 million through June 27th, 2025. We have returned approximately $8 million to our shareholders for a total number of 3.3 million ADSS as of June 30th, 2024. June 30, 2024, cash and cash equivalents, restricted cash, short-term investments, and funds receivable from third-party payment service providers totaled 2.8 billion. Our strong cash position safeguards are sustainable growth outlook. Now turning to the business outlook for the third quarter of 2024, we anticipate total revenues to be between 3,970 million RMB and 4,000 and 70 million RMB, representing an increase of 21.9% to 25% year over year. Please note that this forecast already reflects our current and preliminary views on the market and operation conditions, which are subject to change. This concludes our prepared remarks. Operator, we are now ready to take questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're 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. When asking the question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone in the call. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Joyce Zhu with Bank of America. Please go ahead.

I'll translate myself. This is Joanne on behalf of Joyce from Bank of America. Thank you for taking my question and congrats on a solid result this quarter. We see there are recent domestic policies that have increased support for large-scale consumer goods trading, such as the subsidies announced by the National Development and Reform Commission in July. How do these policies impact your business? Thank you.

Thank you for the question. Let me answer it. In March this year, when the State Council released a new action plan for large-scale consumer goods exchange, we saw that in addition to the support of central policies, the policies of the local governments mainly revolved around the development of computers, cars, home appliances and home appliances. In July this year, the Ministry of Finance and the Ministry of Finance released a new measure document for large-scale consumer goods exchange. We saw that Thank you for the question. Since the State Council released its action plan for large-scale consumer goods trading in March,

observed both central and local policy support, mainly focusing on computers, cars, and home appliances. In July, the NDRC and Ministry of Finance issued measures to further support these trade-ins. We've seen more cities implementing specific subsidies for electronic products, including home appliances and computers. ATRenew and JD.com have collaborated to meet users' trade-in needs, securing more high-quality first-hand recycling products.

Sorry. Currently, phone specific subsidies are being implemented at the local level. For instance,

In Shenzhen's July trading subsidy program, we processed used consumer electronics products from JD's trading orders. The number of successful recycling transactions increased 2.5 times compared with the number in June, even though June was the peak month considering the grand promotion season, reflecting the popularity of such an initiative. In the second half of the year, we expect more cities to introduce similar subsidies further promoting the effective recycling of idle electronic products within the circular economy.

Then we more importantly understand policy subsidies as a catalyst for user recovery. Some studies believe that this round of government subsidies may be longer than the period for home appliances. Therefore, we need to seize the opportunity to strengthen the construction of recovery systems and improve the recognition of love recovery brands. However, we primarily view these policy subsidies as catalysts for enhancing users' recycling awareness.

Some studies suggest this round of subsidy may last longer than previous programs, like home appliances going to the countryside. Therefore, we aim to seize these opportunities to strengthen the recycling system, enhance AHS recycle brand recognition, and guide users towards trade-in. We anticipate that as national and local subsidy policies are introduced, user acceptance increases, and our fulfillment capabilities strengthen. These factors will collectively promote further penetration of this unique service model into the circular economy. Thank you for the question.

The next question will come from Jiao Wan with CICC. Please go ahead.

Congratulations on the solid results and I have two questions. The first one is about the top one. What are the contributions of the compliance refurbishment business and your Apple trading business? And the second one, could you please elaborate on how you improve the net gap operating margin? Thank you.

Okay, thank you. I will take your question. In terms of the compliance refurbishment, we saw a 50% year-over-year increase in the second quarter, reaching R&P 300 million in product revenue. In the first half of this year, we continued to enhance our selection of self-recycled goods, swiftly identifying suitable forms for refurbishment and improving efficiency across our value chain. Currently, we have achieved 95% comparison coverage in the mobile phone category, laying a solid foundation for future replication to other categories. At the same time, we have enhanced our repair coverage capabilities and processing capabilities for different phone conditions. Additionally, we have boosted our sales capabilities for 1P goods, opening up channels for both retail and business buyers, better connecting the end-to-end industry chain. Regarding Apple's official trading service, we have successfully optimized our gross margin as planned, achieving a positive gross margin in the second quarter Although the overall gross margin for our Apple business in the second quarter was only low single digits, we observed significant improvements in the gross margin for goods received during the second quarter. We will continue to refine this business in the second half of this year, aiming to provide an excellent trading experience for Apple's official users while maintaining steady profitability. In the first half of this year, in addition to our consumer and trading service, we also enhanced our service to Apple's corporate offerings. Based on Apple's orders from a number of Fortune 500 corporates, we expect to recover used devices from these corporate clients in the next one to three years. Through such a program, we can access the corporate service market while addressing the needs of leading international and domestic corporates when disposing of used workplaces, iPhones, and MacBooks of their employees. In terms of profitability, we reported an eighth consecutive quarter with positive operating profit In the second quarter, NetGap operating profit was 94 million RMB. NetGap operating margin was 2.5% during the promotional season of e-commerce platforms, compared with 7.8% in the second quarter of 2023. Such improved operating efficiency was a testament to the economy of scale-back by our end-to-end supply chain. As I mentioned earlier, in the second quarter of 2024, Nangap fulfillment expenses increased by 22.9% and Nangap sales and marketing expenses increased by 11.7%. Both grow slower than our top line. Labor costs in relation to fulfillment as a percentage of total revenues decreased by 0.2% compared with the second quarter of 2023. Although promotion fees related to the brand promotion of AHS cycle increased, but the commission fees and the promotion fees of PJT marketplace and the PiPi in relation to sales and marketing as a percentage of total revenues dropped. So, both are the main reasons behind the improved margin. Thanks.

Thank you.

The next question will come from Michael Kim with Zach's Research. Please go ahead.

Great. Good morning or good evening, everyone. Thanks for taking my questions. First, just curious how the gross margins for the recycling of luxury goods compare to consumer electronics, and then assuming the mix continues to shift in favor of luxury items, just wondering how that might impact overall gross margins, and then I do have a second question.

Okay. So for your first question, currently approximately 90% of our total revenues comes from the product sales related to recycling, quality inspection, refurbishment, and the resale of products. So remaining 10% of our total revenues come from service revenues generated by our platform. Revenue is equivalent to the gross profit for this segment in our finance statements. Of this service revenues, 80% is attributable to our multi-category recycling business operated under the platform model. But in terms of the operating profit margin, so luxury goods, products will be similar to our electronic products. So when we examine the recycling business of high-value goods, including luxury items, we categorized some as a part of our multi-category business alongside other consumer electronic categories. This indicates that the multi-category recycling business currently has a limited impact on our our overall gross margin. However, we believe that by expanding the scope and accessibility of our multi-category recycling services, we can positively influence our overall gross profit mix and margins, as well as operating profit margin. Thanks.

Got it. Makes sense. Appreciate that. And then second, just given the strength of your balance sheet and your asset-light business model, Just curious to hear your updated thinking on the capital management front. I know you talked about the board recently upsizing and extending the share repurchase authorization, but just wondering how you might be thinking about potentially instituting a dividend down the road and or capitalizing on potential M&A opportunities.

Thanks.

Okay.

Thank you. In terms of our shareholder returns, we will maintain regular and open communication with the board and the market to explore the feasibility of share buyback and dividend plans. And our current plan to use most of our current year profit for share repurchase in current year. So considering the current capital market environment and the company's stage of development, we will adopt a prudent approach to capital utilization, and we do not have any M&A plan now. Thank you.

Great. Thanks for taking my questions.

This will conclude our question and answer session. I would like to hand the conference back over to management for any closing remarks. Please go ahead.

Thank you. Thank you all again for joining us. A replay of today's call will be available on our website shortly, followed by a transcript when ready. If you have any additional questions, please feel free to email us at ir.atunew.com. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.