SK Telecom Co., Ltd.

Good afternoon. I am Joong-seok Oh, Head of IR Planning at SK Telecom.

Today's conference call will consist of the presentation on the earnings results for Q2 of 2021 and the future management plans and strategic direction by Pung Young Yoon, CFO and Head of Corporate Center 1, and Hyung Il Ha, Head of Corporate Center 2, followed by a Q&A session. Today, achievements and strategic plans for M&O will be provided by Tong Young Yoon, Head of Corporate Center 1, and Hyung Yul Ha, Head of Corporate Center 2, will discuss that of the new ICT businesses. Today's conference call will provide consecutive interpretations, and we have with us executives from relevant business divisions to help deepen your understanding. Before we begin, we want to remind you that all forward-looking statements are subject to change depending on the macroeconomics and market situations. Let me now present our CFO. Good afternoon.

This is Hong Young Yoon, CFO of SK Telecom. First, let me update you on the spin-off process that many investors are interested in.

SK Telecom may be spin-off official with the board's approval on June 10th. The spin-off ratio between the surviving company and the new company is around 6 to 4. A 5-1 stock split was also decided to increase investment accessibility and expand the shareholder base.

All the necessary steps are being taken as scheduled, including the submission of the registration statement to the Financial Services Commission on July 16th.

We are also in the process of developing specific vision for the two companies.

SK Telecom, a medium-sized company based on 5G home media's core business, is going to explore new growth potential in subscription, Metaverse, and enterprise areas. As a tech-based investment company, Sinsol is investing in high-tech, big-tech, and deep-tech areas that promote semiconductor, platform, and high-growing future innovations.

SK Telecom as the surviving company plans to develop new growth drivers in the areas of subscription, metaverse, and enterprise based on its core business in 5G and home media. The new company will be an investment company specialized in technology sectors. It aims to increase the current net asset value of 26 trillion won to 75 trillion won by 2025 Through investments in high-tech, big-tech, and deep-tech, which encompass semiconductor, platform, and innovative new technology with high growth potential.

The division will be finally confirmed by the shareholders' meeting on October 12, and two companies will be formed from the day of the division on November 1 when it is confirmed. During the remaining period, we are making sure that the planned schedule is true,

The spin-off is awaiting a final approval at the General Shareholders Meeting to be held on October 12 by the shareholders as of July 16. When it is approved by the shareholders, the spin-off will result in two separate companies as of November 1, 2021. We're committed to completing the remaining process as scheduled and developing detailed strategic growth plans for the two companies.

Now, let me discuss the Consolidated Earnings Highlights for Q2 of 2021. In the current quarter, the business has continued to grow steadily, Consolidated revenue for Q2 2021 recorded $4,818.3 billion, up 4.7% year-on-year and 0.8% Q2. Amid governance restructuring underway, SK Telecom continues stable business growth, and all business divisions, including MNO, saw their earnings grow year-over-year and Q2. Consolidated operating income posted 396.6 billion won.

It increased by 10.8% year-on-year and 2.2% year-on-year mainly thanks to higher operating income of M&O business even though investments and costs related to new ICT businesses increased. Net income recorded 795.7 billion won, hosting an 84% growth year-on-year and a 39.1% growth Q12 thanks to equity method income growth on SK Hynix.

Let me now discuss major achievements and strategic directions for each business. SK Telecom 별도 기준 2분기 MNO 매출은 Non-consolidated MNO revenue for Q2 increased by 2.7% year-on-year and 1.4% Q12 to post 3 trillion 21.6 billion won.

As of the end of June, the number of 5G subscribers reached 7.7 million, representing more than 30% of the handset subscribers and contributing to the sustained revenue growth. M&O Operating Income posted 328.4 billion won, up 21.7% year-on-year, and 6.9% Q&Q on the back of M&O revenue growth and cost stabilization.

Last July, the company launched a new metaverse platform, E-FRIEND. E-FRIEND has the meaning of a space where numerous possibilities of E-FRIEND become reality. When you run the E-FRIEND app, In July, SK Telecom launched Eastland, a new metaverse platform that can make countless possibilities a reality. On the Eastland app, you can easily create a metaverse room using avatars. And in the metaverse room, you can have audio chat with up to 130 people,

and share files and documents with them. In the era of 5G and contactless communication, the platform is expected to be used for diverse purposes, including business meetings, events with many participants, knowledge sharing, and social networking. We plan to grow this as a popular metaverse platform, and we ask for your interest and support. Along with Metaverse business, subscription business is going to be another important growth pillar of M&O Division, and details for this new initiative are being finalized. We are currently designing subscription products that package various highly demanded services and couple them with media and commerce benefits. This will be revealed around the end of August. The membership service will be revamped based on customer input, and the new membership program will be introduced in Q4 that features a new earning point benefit in addition to the existing immediate discount benefits. We will do our best to prepare for the launch of the new subscription service and the membership restructuring so that they can mark a meaningful new beginning for SKA Telecom post-spin-off.

Next, the media business recorded 9,971 billion won in sales based on the connection between SK Broadband. As a result of the support from ITTV subscribers, it increased by 8.7% compared to the previous year and by 3.1% compared to the previous quarter. The sales profit was 6.42 billion won. According to the sales growth, it increased by 4.9% compared to the previous year and by 14.9% compared to the previous quarter due to the increase in wired infrastructure and content investment.

Moving on to the media, SK Broadband's consolidated revenue recorded $997.1 billion won. It rose by 8.7% year-on-year and 3.1% year-on-year with continued net ads of ITTV subscribers. The operating income posted 64.2 billion won. It grew by 4.9% year-on-year, driven by revenue growth, but it fell by 14.9% 2-on-2 due to higher investment in fixed-line infrastructure and content.

The SNCF project earned 36.98 billion won in revenue based on the agreement between ASIC-CAPS and HAICB. With the rapid growth of the CNS project, new business evaluation such as CAPSOM was carried out, 14.5% for the previous year and 5.5% for the previous quarter. The net profit was 28.6 billion won. The revenue growth was thanks to the solid growth of CMS business and accumulated results of new business such as Caps Home.

The operating income posted 28.6 billion won, which marks a 3.1% Q12 drop due to increased spending on new business, but a 2.9% year-on-year increase thanks to revenue growth and profitability improvement of the new business.

E-commerce market growth and delivery service discrimination efforts have continued to increase sales,

Commerce revenue posted $211 billion, up 9.6% year-on-year and 3.6% Q&Q. The growth of the e-commerce market and differentiated delivery services led to the growth of revenue, but operating income posted a slight loss due to intensifying market competition caused by market restructuring events.

Next, Hyung-Il Ha, Head of Corporate Center 2, will discuss the achievements and strategic direction for the new ICT businesses.

Good afternoon, I am Hyung-Il Ha, Head of Corporate Center 2. Allow me to discuss the achievements and plans for the new IPTV businesses.

First is the media business. SK Broadband achieved the first place in the first half of the second quarter and became one of the first IPTV subscribers. As a result, the number of subscribers reached 8.81 million as of the second quarter.

SK Broadband achieved the largest IPTV subscriber net ads in Q2 and the first half of 2021. As a result, the number of paid TV subscribers increased to 8.81 million as of the end of Q2.

SK Broadband's revenge channel business, MPP, MediaS, has been focusing on increasing channel competitiveness such as awareness and coverage, content investment enhancement, and so on since the start of the regular broadcast in April.

Established by SK Broadband as a multiple program provider or MPP, MediaX began regular broadcasting in April. It has focused on strengthening channel competitiveness by increasing channel awareness and coverage and making content investments. As a result, in just three months, it entered the top 40 among approximately 300 channels in terms of ratings at the end of June.

SK Broadband continues to strengthen media business competitiveness in terms of platform, channel, content, and all other areas. Waves continues to achieve subscriber growth based on the popularity of original content. It established Studio Waves in May and accelerated investments in original content including Tracer which will be released in December. We will continue to boost content competitiveness through various approaches as seen in the example of signing an exclusive content distribution agreement with HBO.

Next is FNC Business.

ADT Caps is leading the market with technology differentiation in new business areas such as cloud, home, unmanned solution, and converged security on top of the growth of the existing security business. ADT-CAPS is the first to win the first place in the Korean Service Quality Index in 2021, which was selected by the Korea Standard Association based on the security service with AI. This is the result of introducing AI throughout the security service, from video security to entrance security, unmanned stores, and smart home security.

With its AI-based security services, ADP-CAS ranks number one for managed security service for the first time in 2021 at Korea Standard Service Quality Index by the Korean Standards Association. This achievement is attributable to our efforts to apply AI in the overall security services ranging from security camera operations, access security, security for unmanned stores, and smart home security.

ATC TAPS signed an agreement on strategic business cooperation for cloud security with AWS in Q2 and received IFV partner of the year.

Based on the strengthened partnership with AWS, we are pursuing cloud security business opportunities in the financial and public sectors.

ADT Caps selected a main underwriter for IPO in Q2 and is currently preparing for the IPO in full swing. Next is Commerce. The competition in the e-commerce market has intensified in the process of some companies appearing and selling. In order to respond to this, Shiba Inu was launched to strengthen its competitiveness through external demand. Today's Order, Tomorrow's Arrival Service, which is linked to Ujung Business Administration, and SLS Delivery, which is linked to SLS Delivery, have been released.

The recent IPO and M&A in the market further intensified e-commerce market competition to which 11th Street responded by strengthening competitiveness through external partnerships. 11th Street started the next-day delivery service in collaboration with Korea Post and the same-day delivery service in partnership with SLX. In addition, we are working to make sure that Amazon Global Store can open around the end of August that will offer convenient and differentiated shopping experience in connection with SK Telecom subscription service.

SKStore was able to quickly respond to the movement of consumer change offline, increasing the number of high-quality products such as health products and beauty products, and increasing the number of mobile Jeju channels to minimize the side effects of TV viewing time reduction.

SK STOA increased high-margin product categories, such as health supplements and beauty, to respond to market signals that consumers are turning offline for shopping. And we increased the number of partner mobile channels to minimize the negative impact of reduced TV viewing. Thanks to these efforts, SK STOA maintained a high growth trend in Q2 as well.

TeamM Mobility is making the basis for growth strong through the expansion of our portfolio. Since the launch of Uber, a joint venture with Uber in April, the number of calls has increased by more than 20%.

T-Map Mobility is a mobile IT company that has entered the cargo transportation market by acquiring YLP, a logistics IT company. TeamMap Mobility expanded the scope of its business to mobility for goods by entering the goods delivery market with the acquisition of YLP, a logistics IT company. It also launched a designated driver service. to gain a share in the stable designated driver service market worth 3 trillion won.

Heman Mobility remains committed to growing the business by offering differentiated services to users and cooperating with various stakeholders. Lastly, I would like to talk about One Store, which is showing a new trend in the IPO, achieving an increase in transactions in the 12th quarter in a row. One Store is based on the expectation of rising corporate value along with the expectation of increasing the value of the company by investing from Microsoft and Deutsche Telekom Capital Partners in the second quarter.

Finally, let me report on OneStore, which has achieved GMV growth for 12 consecutive quarters, a positive sign for a successful IPO. OneStore attracted investments from Microsoft and Dolce Telecom Capital Partners, thereby raising expectations for corporate value enhancement and building a foundation to enter the global ad market.

Also, we acquired ROK Media, the largest content publisher in Korea,

In addition to the acquisition of Valk Media, Korea's largest drama fiction publisher, One Store will continue to make investments to secure IPs, which will be utilized for various types of content such as films and games.

I will now hand it back to the CFO. Thank you.

Finally, I would like to present our dividend policy. Since 2016, SK Telecom has maintained a total dividend size of more than 700 billion won with an annual DPS of 10,000 won. Starting from Q2 this year, we introduced quarterly dividend in accordance with the global standards. Yesterday, dividend of 2,500 won per share for Q2 was paid out.

The dividend will be paid out evenly by quarter, but when there is additional amount, it will be added to the year-end dividends.

As we communicated previously, we will make sure that this year's total dividend will be similar to last year's. Since we started dividend payment in Q2 this year, we are considering adding the Q1 portion to the year-end dividend. SK Telecom would like to increase transparency and predictability on the size of dividends by providing a guideline on dividend-linked-to-business performance.

SK Telecom would like to increase transparency and predictability on the size of dividend-linked-to-business performance.

First, the surviving company is expected to maintain a stable cash flow after the spin-off. We would like to use 30% to 40% of the amount, which is a deduction of KPAX from EBITDA, as a basis for dividend payment for the next three years, including this year. EBITDA is a cash flow generated from business operations, and KPAX is essential investment for business management. Equity investments such as M&A will be excluded. Our dividend formula is on a non-consolidated basis.

If M&O earnings continue to improve based on 5G competitiveness, the free cash flow of the surviving company is expected to increase.

which means that there is upside potential on dividend payout.

Second, the new company will continue to enhance shareholder value through rapid growth of net asset value and value harvest.

The spin-off will mark a new beginning for the two companies to achieve greater growth based on clear identity. We will do our best to complete the remaining process successfully and continue to improve the quality of our business.

We ask for your continued support and interest. Thank you.

Then we will now begin the Q&A session.

Now the Q&A session will begin. Please press 1 and 4 if you have any questions. Questions will be taken according to the order you have pressed, the number 1 and 4. Please press 1 and 5 if you want to cancel your questions.

The first question will be provided by Jaehyuk Yoo from Merrill Lynch. Please go ahead.

Hello, I'm Yoo Jae-hyuk of V-O-V. I have two questions. The first is, you have announced the dividend, but as Chef just said, you talked about the minimum 10,000 won DPS this year. Based on what you announced, if you calculate it roughly, the dividend is 7 to 8 billion won. I think it will fall for a long time, but I wonder if there will be additional DPS upsides this year. I wonder why. Other companies have been There seems to be a DPS growth, so I would like you to answer in that respect. Also, you said that you would pay based on EBITDA and CAPEX. First of all, in the case of CAPEX, I would like you to clearly distinguish whether it is a performance data standard or a data model standard. I'm curious about the future prospects of these two metrics in terms of visibility. The second question is about our new investment company T2's NAB growth target. You gave us a target of 26 to 75 trillion won. Thank you for this opportunity. I would like to ask two questions. The first question is, as FT Telecom made a disclosure

and as was mentioned by CFO, SK Telecom is expected to provide the DPS level of 10,001 as a minimum level of DPS. So if I do some simple calculation, this would mean that there will be about 700 to 800 billion won of basis for dividend payouts. So I wonder if there's any upside potential for your DPS level because other companies in the market are expected to increase their DPS level and there's more visibility on that side. So I would like to get some more understanding on this part. And you mentioned that in your dividend formula there will be EBITDA and CAPEX. So as for the CAPEX, is it based on your earnings presentation or is it based on the financial statement? And I would also like to get some more visibility on the overall outlook for EBITDA and CAPEX going forward because these will be linked to the dividend side. And you are paying out on a quarterly basis, so I'd like to get some more information on this. And the second question is related to the new company. You mentioned that you are planning to increase the net asset value to 75 trillion won, and that is your target. And there are many questions raised by investors saying that this target seems to be quite aggressive. So I wonder how you are going to deliver and try to meet this target. In addition to what the CFO mentioned in the seminar in June, is there any other plan that you have devised to achieve this target?

Mr. Yoo, thank you very much for your question. Let me first address your question regarding our dividend policy.

As for our dividend formula, EBITDA, you can refer to our financial accounting EBITDA number. And for KPEX, you can refer to the KPEX number announced in our earnings presentation.

As you said, it is expected to be between 70 billion and 80 billion won. Accordingly, I expect that this year's balance will remain at least 10,000 won more than the current DPS standard.

Of course, there is some uncertainty as to the projection for the end of this year, but when you think about 30 to 40 percent of the amount, which is a deduction of KPEX from EBITDA, as you already mentioned, it will be in the range of 700 to 800 billion won. So based on this, I expect that our DPS is going to be near or more than 10,000 won.

EBITDA is operating cash flow generated from our business operation. Continuing on from 2020, in the first half of this year, we saw EBITDA to continue to grow in a stable manner

and we expect that Ibiza will continue to grow going forward as well. CapEx is essential and necessary investment in order to maintain our telecom business. We will continue to do our best to expand the 5G coverage and improve the quality of the network and at the same time we will do our best to increase efficiency in CapEx execution by utilizing the joint network of 5G.

Based on this overall projection, we believe that the difference between CAPEX and EBITDA will continue to grow in 2022 and 2023.

As a result, we expect upside potential on the dividend payout. Let me now comment on your question regarding the net asset value target for the new company. As of the current net asset value, based on the closure of the first quarter this year, it's 19 trillion won for semiconductor and 7 trillion won for other business areas including platform.

In 2025, we are aiming to raise about 40 trillion won from Hynix to 25 trillion won from local asset areas such as Hynix and other platforms, and create about 10 trillion won of NAV through new investment.

It is our plan to increase the value of Hynix to 40 trillion won and increase the value of other businesses including platforms to 25 trillion won by 2025. And we also are aiming to attract about 10 trillion won of new investments which will lead to additional net value growth.

In the case of Hynix, which occupies the largest share, since SK Telecom acquired it, IRL has achieved a performance of about 20 degrees, and it is expected that there will be a great progress in the land business if we consider the possibility of industry consolidation after the successful completion of the Intel land business.

And as for Hynix, which takes up the largest portion of this net asset value, ever since SK Telecom acquired SK Hynix, for the past 10 years, IRR has been more than 20%. And we will be able to further solidify the DRAM top two structure in the industry. And after a successful completion of the acquisition of Intel NAND business, we believe that there will be further industry consolidation, which means that there will be more competitiveness in the NAND business as well.

Through these growth strategies, we believe that the equity value of Hynix can reach about 200 trillion won by 2025. So based on our ownership state, it's going to be equivalent to 40 trillion won. In addition to Hynix, our security, commerce, mobility, and OTT assets are all high-growth business areas, and we believe that the value of these platform areas has not yet been fully realized. Our goal is to raise net asset value to the level of 25 won in this field.

In addition to Hynix, we have other assets, including security, commerce, mobility, and OTT, and we believe that these assets have a lot of growth potential to realize going forward. So, in these other areas, we believe that we can increase the net asset value to 25 trillion won.

In addition to these two areas, we will carry out preemptive investments in the key technology areas where we expect high growth with global partners,

In addition to these two areas that I just mentioned, we will continue to collaborate with various global partners so that we can make preemptive investments in future core technology, which will lead to additional 10 trillion won of new asset value. Thank you.

Next question is from Kim Jun-seop of KB Securities. Please go ahead.

The next question will be provided by Junseo Kim from KB Securities. Please go ahead.

Yes, thank you for the question. I am Junseo Kim from KB Securities. I would like to ask a question about the OTT Wave strategy and the subscription business. First, I would like to ask about the OTT Wave. Recently, not only Netflix but also Coupang and Naver are entering the OTT market, and the competition is getting more and more fierce. I am curious about the change in the strategy of the Wave in the same environment. The second is a question about the subscription business. After the last explanation, our SK Telecom's subscription business model has increased expectations. I think it will help you understand if you share specific strategies and business plans related to the subscription business. Thank you.

Thank you for this opportunity. I would like to ask two questions. The first question is related to your OTT business strategy. Currently, not only Netflix but also Coupang and Naver are jumping into the OTT market. As a result, the market competition has been intensifying. So has there been any change to the wave strategy in order to respond to this intensifying competition in the market? The second question is related to your subscription business. Ever since your last conference call, there has been increased expectation on your subscription business. So what are the specific subscription business plans and strategies? Thank you. Mr. Kim, thank you very much for your questions. I'm going to address your question on our subscription business, and Mr. Ha will address a question on OTT.

SK Telecom's subscription service is based on media and commerce benefits, and we are preparing a package of various services that are highly usable for customers in a shocking price and providing them in the form of basic, premium, etc.

As for our subscription service, as I mentioned previously, it's going to be based on the media and commerce benefits. We're going to bundle various useful and popular services for the benefit of customers, and we will offer them at very attractive prices. There will be the basic plans and premium plans for the subscription packages.

Currently, various domestic partners and partners who want to participate in our subscription service are proceeding smoothly, The goal of the company is to evolve into a digital marketing platform based on AI to ultimately connect various subscription products and optimal customers.

Currently, work is underway smoothly as collaboration with various domestic and overseas partners are going on because they want to be part of our subscription service business. And ultimately, it is our goal to develop this as an AI-based digital marketing platform where various subscription products and customers will be matched in an optimal manner.

Not only SK Telecom's communication customers, but also all citizens,

We will not only offer these products to our SK Telecom subscribers, but also address the entire Korean population. And by expanding the scope of the subscription services, we are targeting 35 million subscribers by 2025 with a GMV size of 8 trillion won.

The basic business model for subscription is revenue share. And as for more details and strategies for our subscription service, we are going to arrange a separate press conference within August.

Corporate Center 2 Head, and I'm going to address your question regarding the intensifying OTT market competition and differentiation strategies of WAVE. Wave has been enjoying sustained subscriber growth trend thanks to the popularity of original content and territorial broadcasting content such as Taxi Driver and Penthouse Season 3. In May, we plan to strengthen the platform competitiveness through the expansion of original content investment production through the establishment of Studio Wave, which is the representative position of the top content responsible for Lee Chan-ho.

In May this year, Studio Wave was established with producer Lee Chan-ho as chief content officer and the head of Studio Wave. And by using the studio, we're going to expand original content investment and production. This will lead to competitiveness of our platform.

Studio Wave is currently in active cooperation with various creators and producers, and will be releasing Tracer by Im Si-hwan and Son Hyun-joo in December.

Currently, Studio Wave is collaborating actively with various creators and producers, and in December this year, we're going to release Tracer with Im Shi-hwan and Son Hyun-joo as lead actors.

Also, recently, HBO has signed a large-scale content supply contract with HBO alone, and in the next year, HBO's main drama, documentary, including The King's Game, will be released in order.

Also, recently, WAVE signed a very large-sized content distribution agreement with HBO in an exclusive manner so that we can offer Game of Thrones and other HBO dramas and documentaries for one year. And this is part of our efforts to increase our content competitiveness.

In the 2nd quarter, while Netflix was sluggish, Wave was ahead of K-content competition. At the end of June, Netflix's MAU decreased by 4% in March with 7,920,000, while Wave's MAU increased by 6% in March with 3,900,000, the highest in history.

Thank you. Thank you.

The next question will be provided by Hwae Jae Kim from Dae Shin Securities.

Please go ahead. Hello, I'm Hwae Jae Kim from Dae Shin Securities.

First of all, I would like to ask about the dividend. The policy you proposed this time is that the dividend can be improved through the dividend policy that is linked to the performance as you propose the minimum dividend. I'm making a positive judgment. If you calculate last year's dividend, EBITDA's tax rate was about 39%. You proposed a range of 30% to 40%, but if you set it to 40%, I think you'll get a better response from investors. I'm wondering if there is no dividend plan for SKT investment companies. Last time, you announced that you would deposit 5 trillion won in the next three years, including 1 trillion won for asset transfer and 1 trillion won for natural resources in the new year's meeting. I'm wondering if you're using this information investment or not. Secondly, our investment company has a large share of value. In order for the investment company to properly recognize its value, I think that value-added performance is important. I'd like to ask you to update Amazon and J.U. in the future. If possible, I'd like to ask you to answer when you can see the IPO. Thank you.

Thank you for this opportunity. I would like to ask two questions. The first question is related to the dividend. You mentioned in your guideline the minimum dividend level, and you mentioned that the dividend size will be linked to business performance, which means that, as you indicated, there is upside potential. When I applied the dividend formula to last year's dividend, I would say that there is 39% of the difference between CAPEX and EBITDA used for dividend payouts. And you mentioned that the range is going to be between 30% and 40%, and if the percentage is closer to 40%, it will be very well received by investors. So as for your moving on to the new company's dividend plan, you mentioned at the CEO seminar that there will be additional $5 trillion of financial raising, which is mainly going to be used for investment only, or is it going to be also used for dividends in the future? And as for the second question, it is about the 11th Street. In the new company, 11th Street takes up a sizable share in the new company. So I believe that the earnings of the 11th Street will be quite important going forward. So what is your earnings outlook for the 11th Street? Any updates on your collaboration with Amazon? And any visibility on the timing of the IPO?

Thank you for the question. Mr. Kim, thank you very much for your question.

Let me first address your question regarding our dividend.

I will discuss with the board of directors what you said so that the shareholder's part and stable investment can be well harmonized.

And regarding the dividend policy for the surviving company, as you mentioned, there will be a link between the business performance and dividend size. So as EBITDA continues to increase and KPEX becomes more efficient, as you pointed out, yes, there is a steady potential for dividend payout going forward. And as for your suggestion, we will do our best to maintain a balance between shareholder return and stable investment, and this will be discussed at the board as well. Thank you.

I would like to ask for your understanding that the T2 dividend has not been completed yet and there is a specific discussion with the BOD members of the T2 board. What I can tell you now is that T2 is basically an investment company and currently does not consider a fixed form of dividend,

As for the new company's dividend policy, the spin-off has not been completed yet, and there will be further discussions with the members of the new board of the new company, so I'd like to ask for your understanding on this part. And as was communicated previously, the new company will be an investment company, so we do not consider any regular dividend payment. However, if there is any good occasion such as an exit or value harvest, then we may consider other options such as special dividend.

The third question is related to 11 and IPO. Currently, due to the nature of e-commerce, I think there should be a balance between profit and growth. As I said before, we are planning to make a large-scale promotion and investment in order to differentiate between overseas and domestic companies with Amazon soon. We will make a differentiated value through this part and prepare a shortcut to succeed in IPO.

And moving on to your question regarding the IPO timing of 11th Street, as you may understand, given the nature of e-commerce business, it is very crucial to maintain a balance between earnings performance and growth. As for 11th Street, we will continue to find ways to differentiate our services in collaboration with Amazon for cross-border purchase experience, and there will be major promotions and large-scale investments planned. These will lead to more differentiation and this will once again provide a good basis for a successful IPO. As for our collaboration with Amazon, as I mentioned previously, there will be a separate press conference on this topic. This is going to be an opportunity for us to communicate more details with the market. Thank you.

If you have any additional questions, please contact our IR team. This concludes the conference call for the 2nd quarter of 2021. Thank you for attending.