Full Truck Alliance Co. Ltd.

I will now turn the call over to our founder, chairman and CEO, Mr. Zhang. Please go ahead, sir.

大家好,欢迎各位参加满邦2024年第四季度业绩电话会。 在刚刚过去的四季度,我们继续推动公务货运行业的数字化和智能化, 助力全社会降低物流成本,面对宏观经济环境的挑战和机遇, Nambang continues to look forward to the traditional offline trading model based on strong network efficiency and extreme trading efficiency. Drive growth wheel high-speed operation, group orders increase by 24%, again exceeding the volume of the logistics market, and draw a perfect sign for 2024.

Hello everyone, and thank you for joining us today on today's fourth quarter and fiscal year 2024 earnings conference call. In the fourth quarter, we made significant strides in advancing the digital and intelligent transformation of the logistics industry, substantially contributing to the reduction of social logistics costs. Amid a dynamic macroeconomic landscape, we capitalized on our robust network effects and unparalleled transaction efficiency to further supplant traditional offline logistics transaction models, accelerating our growth fly well. As a result, our total fulfilled orders in the fourth quarter increased by 24% year-over-year, once again outpacing the overall industry's growth and concluding 2024 on a strong note.

This quarter, we continue to focus on user value, promote key operating indicators, and create new heights in user growth. In the face of 30 million small and medium-sized users, we have firmly invested in the brand for a long time. In the fourth quarter, the average number of issuers has surpassed 2.93 million people, which is more than 30% of the total growth. The user structure has also continued to optimize. At the same time, at the end of the fourth quarter, the number of platform members and issuers has exceeded 1 million for the first time. The number of active drivers in the past 12 months has risen to 414,000. The driver-to-driver process is maintained at more than 85%. At the same time, the number of wallets for driver-to-driver online transactions continues to grow. More orders, more cars, more money. The value of the price has been widely recognized by the driver's group. Through driver behavior, priority card number, or target level, the driver's environment and matching efficiency have significantly improved. The driver's degree of travel rate has increased to 37.5%, which has increased by 5.4%. And in terms of transmission quality, this quarter, we have further successfully released the platform's huge currency-based potential to promote high-speed income growth. The above results once again prove that Maipang platform has created unique value for both private and commercial goods.

Throughout the quarter, we remain dedicated to delivering user value, propelling key operational metrics to new heights. In terms of user growth, we made long-term investments in brand enhancement to attract new users, aiming to capitalize on the potential of the 30 million small and medium-sized direct shipper market. Our average monthly active shippers surpassed 2.93 million in the fourth quarter, reflecting a remarkable year-over-year increase of more than 30%. Our user structure also reached significant milestones, demonstrating our ability to drive rapid user growth while strengthening user engagement. For the first time in our history, our direct shippers accounted for 50% of total fulfilled orders, and the number of shipper members exceeded one million by the end of fourth quarter. In terms of tracker supply and fulfillment efficiency, the number of active trackers fulfilling orders through our platform over the past 12 months surged to 4.14 million, with the next month's retention rate of trackers who responded to orders exceeding 85%. Meanwhile, trackers' wallet share of online transactions has continued to grow. Our value proposition of more orders enhanced the pickup efficiency and higher earnings have gained widespread recognition within the trucker community. We have also notably improved the trucker ecosystem and matching efficiency by implementing trucker credit ratings, priority access, and our premium cargo bidding mechanism, enhancements that drove our fourth quarter fulfillment rate to 37.5%, up 5.4 percentage points year over year. Regarding monetization, we continue to smoothly tap into our platform's significant monetization potential this quarter, fueling robust revenue growth. These achievements reaffirmed the unique value we created for both shippers and trackers.

Based on the high-value business operations, the financial performance of this quarter is also very outstanding. The total income of the fourth quarter group has increased by 32%. to 31.7 billion yuan. Among them, the transaction service revenue is the largest increase. The same increase exceeded 70% and reached 11.6 billion yuan, while the total revenue of the group reached 36%. Under the general accounting standards of the United States, the profit after adjustment increased by 142% to 9.6 billion yuan. After adjustment, the net profit increased by 44%

supported by these operational accomplishments, we delivered a record-breaking financial performance for the quarter. Our total net revenues grew by 32% year-over-year, reaching RMB 3.17 billion. Notably, transaction service revenues remained the primary growth driver, surging over 70% year-over-year to RMB 1.16 billion, and contributing 36% of our total net revenue. Non-GAAP-adjusted operating income soared 142% year-over-year to RMB 963.3 million, and Non-GAAP-adjusted net income grew by 44% year-over-year to RMB 1.05 billion.

本邦作为物流新制生产力的代表, 积极拥抱人工智能的科技趋势, 基于独特的业务场景和高成长数据, Before I wrap up, I'd like to share some thoughts about the technology trends shaping our industry.

As a pioneer in advanced logistics productivity, we remain committed to embracing technology-driven innovations. Currently, we are leveraging our unique user scenarios and high-quality data to explore AI applications that will potentially enhance the efficiency of freight matching and trucker capacity scheduling. We aim to empower truckers to improve fulfillment efficiency and earnings while reducing logistics costs for shippers. ultimately creating enduring value for the entire industry. Thank you all once again. Now I'll pass the call over to our CFO, Simon, who will provide an update on our fourth quarter's business progress and financial results.

Thank you, Mr. Zhang, and thanks everyone for joining our earnings conference call today. I will now provide an overview of our operational highlights and financial performance for the fourth quarter of 2024. Let's start with our operational performance this past quarter, which was highlighted by significant breakthroughs in expanding our user base, enhancing efficiency, and improving monetization capabilities. We also achieved a remarkable 24.3% year-over-year increase in fulfilled orders to 56.9 million in the fourth quarter, This growth was primarily driven by our rapidly expanding shipper user base and the increased fulfillment efficiency stemming from shifts in our user structure, along with the earlier Chinese New Year and other seasonal factors. Building on our third quarter momentum, our fulfillment rate set another new record this quarter, increasing significantly to 37.5%. up over 5 percentage points year-over-year. Notably, the average fulfillment rate of low and medium frequency shippers exceeded 55%, continuing its upward trend quarter-over-quarter. The order contribution from our low and medium frequency shippers reached 50%, also marking a new milestone. Our increasingly optimized order and user structure Ongoing improvements to our matching algos and our refined operational strategies collectively drove this quarter's all-time high fulfillment rate. Our average shipper MAUs increased by 31.3% year-over-year to 2.93 million in the quarter, with our average shipper MAUs surpassing 3 million for the first time in December last year. This strong growth was driven largely by our low and medium frequency direct shippers. Our coordinated efforts, of course, multi-channel user acquisition, streamlined app interfaces and initiatives supporting new users have significantly improved the new user onboarding experience. Shipper activity remained robust as a result, with our shipper member 12-month rolling retention rate consistently exceeding 80% in the fourth quarter. Our trucker side operational performance was equally impressive in the fourth quarter. The number of active truckers fulfilling orders through our platform over the past 12 months increased to 4.14 million quarter over quarter. And our next month's retention of truckers who responded to orders remained above 85%. Boosted by tiered incentive strategies such as the premium cargo bidding initiative and the carefree package, The average number of monthly fulfilled orders per trucker continued to rise, further enhancing trucker retention and stickiness. Next, I'd like to highlight the progress we have made in our transaction service. Fueled by increased order volume and refined monetization strategies, revenues from transaction service soared by 71.1% year-over-year to RMB 1.16 billion in the fourth quarter. Specifically, our monetized order penetration ratio also increased to 82.9% for the quarter, a jump of over 11 percentage points from 71.7% in the same period last year. Additionally, our average monetization amount per order, which includes mostly transaction commission, increased to RMB 24.6 in the fourth quarter, up from RMB 20.6 a year ago. By dynamically fine-tuning commission metric granularity, we have effectively catered to different transaction types and user demands, driving parallel improvements in both matching efficiency and monetization quality. Heading into 2025, we'll continue refining our smart pricing model to further enhance the monetized order penetration ratio and overall monetization rate, unlocking even greater monetization potential. Before we dive into our financials, I'd like to discuss our newly initiated semi-annual dividend policy and provide an update on our extended share repurchase program. After a thorough review of our operational results, business development plans, capital requirements, and cash position, our board of directors has approved a semi-annual cash dividend policy set to begin in 2025. We expect the total cash dividend for 2025 to be approximately US$200 million. The initial dividend payout is projected to be around US$100 million, translating to US$0.0048 per ordinary share or US$0.096 per ADS. This dividend will be payable on or around April 18, 2025. to shareholders on record as of April 7, 2025. Regarding our share repurchase program starting from March 2024, we have repurchased an aggregate of 4.9 million ADS for approximately US dollar 40.3 million from the open market. Additionally, in March this year, our board has approved a further extension of the share repurchase program, allowing for up to US dollar 200 million in additional repurchase through March 12, 2026. These efforts reflect our robust cash position and strong confidence in our business and further developments as well as our commitment to delivering value to our shareholders. Now moving on to our 2024 fourth quarter and year-end financial results. In the interest of time, I'll be presenting abbreviated highlights only We encourage you to refer to our press release issued earlier today for complete details. Our total net revenues for the full year 2024 were RMB 11.2 billion, representing a 33.2% increase year over year. Net revenues for the fourth quarter were RMB 3.2 billion, representing a 31.8% increase year over year. Net revenues from freight matching services, including service fees from freight brokerage models, membership fees from listing models, and commission from online transaction services were RMB 9.5 billion for full year 2024, up 34% from 2023, primarily due to the rapid growth in our transaction service. Revenues from freight brokerage service reached RMB 4.7 billion for 2024, up 20.7% year over year. For the fourth quarter, the net revenue increased by 17% to RMB 1.3 billion, primarily driven by an increase in service fee rate, partially offset by a decrease in transaction volume. Revenues from freight listing service were RMB 879.5 million for the full year, up 6.2% year over year, and rose 7.5% year over year in the fourth quarter, to reach RMB 230.5 million, primarily due to the growing number of total paying members. Revenues from the transaction service amounted to RMB 3.8 billion in 2024, representing a 66.7% increase year over year. For the fourth quarter, net revenues amounted to RMB 1.2 billion, representing a 71.1% increase year-over-year, primarily driven by increasing order volume, commission penetration, and per-order transaction service fee. Revenues from value-added services for RMB $1.7 billion in 2024, representing a 29% increase year-over-year. For the fourth quarter, net revenues increased to $469.3 million, representing a 19.8% increase year-over-year. mainly attributable to growing demand from truckers and shippers for credit solutions. For the fourth quarter, our cost of revenues was RMB $1,391.7 million compared with $1,152.3 million in the prior year period. The increase was primarily due to an increase in VAT-related tax surcharges and other tax costs, and that of grants from government authorities. These tax-related cost net of refunds totaled RMB 1,278.5 million, representing an increase of 25.9% from RMB 1,015.3 million in the same period of 2023, primarily due to an increase in tax costs related to the company's freight brokerage service. Our sales marketing expenses in the fourth quarter were RMB 471.8 million compared with RMB 420 million in the prior year period. This increase was primarily due to an increase in advertising and marketing expenses for user acquisitions. General and administrative expenses in the fourth quarter of 2024 were RMB 202.3 million compared with RMB 266 million in the same period of 2023. The decrease was primarily due to lower salary and benefits expenses. R&D expenses in fourth quarter were RMB 205 million compared with RMB 255.3 million in the prior year period. The decrease was primarily due to lower salary and benefits expenses resulting from a decrease in headcount. Our income from operations in the fourth quarter of 2024 was RMB 835.4 million, an increase of 233.1% from RMB 250.8 million in the same period of 2023. Net income in the fourth quarter of 2024 was RMB 574.6 million, compared with RMB 588.3 million in the same period of 2023. Under non-GAAP measures, our adjusted operating income in the fourth quarter of 2024 was RMB 963.3 million, an increase of 141.6% from RMB 398.8 million in the same period of 2023. Our adjusted net income in the fourth quarter of 2024 was RMB 1,052 million, an increase of 43.5% from RMB 733 million in the same period of 2023. Basic net income per ADS was RMB 0.56 in the fourth quarter of 2024, compared with RMB 0.56 in the same period of 2023. Diluted net income per ADS was RMB 0.53 in the fourth quarter of 2024 compared with RMB 0.56 in the same period of 2023. Non-GAAP adjusted basic net income per ADS was RMB 1 in the fourth quarter of 2024 compared with RMB 0.70 in the same period of 2023. Non-GAAP adjusted diluted net income per ADS was RMB 0.99 in the fourth quarter of 2024, compared with RMB 0.69 in the same period of 2023. As of December 31st, 2024, our cash and cash equivalents, restricted cash, short-term investments, long-term time deposits, and wealth management products totaled RMB 29.2 billion compared with RMB 27.6 billion as of December 31, 2023. For our first quarter 2025 business outlook, we expect our total revenues to be between RMB 2.63 billion and RMB 2.68 billion, representing a year-over-year growth rate of approximately 15.9% to 18.1%. This Forecast reflects our current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof. And that concludes our prepared remarks. We'll now like to open the call to Q&A. Operator, please go ahead.

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 are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Please also note, for the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question today comes from Ronald Cheung with Goldman Sachs. Please go ahead.

Thank you, Chairman Zhang, Simon, Mama, and Emma. I would like to ask about the growth of our four-week contract. We can see that the growth is more than 24%. The increase is higher than three-week. And it is also far above the growth of the supply chain. Thank you, management. We've seen the number of fulfilled orders for the fourth quarter was very strong at 24%, plus even outpacing the third quarter growth rate and exceeded the overall freight rate market quite significantly. So I want to hear what are the drivers behind this acceleration in the fourth quarter, and based on the order trends so far, the quarter to date. How do you view order volume growth for the full year of 2025? Thank you.

Thank you, Ronald. Our platforms' order volume continued to grow very steadily in the first quarter. That's beyond seasonal tailwinds given the impact of the earlier Chinese New Year in 2025. There are three key elements which drove this momentum. And first, we continue to see robust growth in new user acquisitions against the backdrop of rising shipper demand for reduced logistic costs and improved efficiency. We have adopted a dual approach to optimize new user acquisition and combining precise online marketing with offline engagement. Online, we focus on boosting app store promotions and targeted ads to improve our conversion rate. Offline we expanded brand visibility and reached more target users with truck stickers and tarp ads. We also ramped up our brand marketing efforts in the fourth quarter by placing view boards in high traffic locations such as high speed rail stations, airports, and business districts to connect with direct shippers across multiple touch points. And thanks to these effective new user acquisition initiatives, our shipper MAU surpassed 3 million for the first time in December last year. And for full year 2024, our average shipper MAUs grew more than 30% year over year, accelerating meaningfully from the prior year, with direct shippers making up a big chunk of growing share. Given the relatively low online penetration rate in the long-haul market, we're confident we can continue to expand our shipper user base at a very healthy pace. Now, second, we continue to implement and execute highly effective operational strategies which help to accelerate underwater water growth. For new users, we focus on improving fulfillment rates for their first three trials. This is achieved by leveraging hands-on support from our operations team, offering new users incentives through various benefits and using WeCom or WeChat engagement to enhance both user retention and order fulfillment. For active truckers, we upgraded our premium cargo bidding function and introduced a dedicated service section with expanded coverage of all order types. In addition, we fine-tuned our order distribution mechanism based on truckers' credit ratings, further improving the fulfillment efficiency in matching mid- to low-value freight resources. And finally, rapid growth in our new business lines contributed to auto expansion. For example, our less-than-truckload business again exhibited very strong growth momentum as fueled by optimized pricing strategies and upgraded matching algos. And these improvements enhanced carpooling efficiency for truckers and leading to a notable increase in LTL orders. And looking ahead, we see even more potential for this business to scale up further. As we move into the current year, we remain optimistic in other volume growth of the platform regardless of macro challenges. For our full truckload business, we'll continue to deepen online penetration and extend our market share. Meanwhile, we also keep refining our product offerings and operational strategies to strengthen our lesson truckload and short haul services and laying a very solid foundation for long-term scalability. I hope that answers your question.

Yes, thank you, Simon.

The next question comes from Brian Gong with Citi. Please go ahead.

Good evening, Ms. Zhang, Ms. Simon, Ms. Mao, and Ms. Emma. First of all, congratulations on your very good performance. I have a very quick question. The four-week interest rate continued to increase to 37.5% on the basis of last quarter. I will translate myself. Thanks, Maxman, for taking my question. I have a quick question on fulfillment rate. In the first quarter, the fulfillment rate further improved to 37.5%, up 5.4% year-on-year and 3% sequentially. What were the key drivers behind this improvement? And what operational strategies were implemented to enhance the fulfillment rate? And what is your expectation for 2025? Thank you.

Thank you, Brian. Our fulfillment rate reached another record high in the past quarter. There are three main contributors to this. First, the continuous user mix improvement has laid the foundation for other quality improvement. In the fourth quarter, the other contribution from direct shippers was around, it actually hit 50% for the first time in fourth quarter. By nature, these direct shippers are mainly SMEs, which tend to have more stable demand and prioritize service quality over price. So as a result, they typically contribute to higher fulfillment rates than those professional shippers, such as CPLs and brokers. For example, the average fulfillment rate of our entrusted shipment transactions exceeded 60% in fourth quarter, The subscribers of this program are mainly direct shippers, especially those who newly joined the platform due to the high certainty of the fulfillment. As a result of strong shipper growth, the order volume of entrusted shipment transactions in the fourth quarter grew by over 100% year-over-year, contributing greatly to the overall improvement in our fulfillment rate. In addition, our precision operation strategies are delivering strong results. For instance, the expanding coverage of premium cargo billing functions further boosted truckers' willingness to respond to others. Our algo-driven precise recommendations more effectively aligned truckers' preferences with freight source labels. As a result, the median fulfillment time for truckers dropped to under 10 minutes in fourth quarter. We also implemented additional measures to address duplicate freight listing, including proactively suppressing orders from inefficient professional shippers to prioritize exposure for high-quality orders from direct shippers. And lastly, the ongoing improvement in supply-demand dynamic also positively impacted our fulfillment rate. Apart from seasonal tailwinds, as mentioned before, Our continuous improvement on freight quality led to a steady increase in both the number of truckers responding to and fulfilling orders in the first quarter. Meanwhile, truckers' wallet share also rose steadily, enhancing the overall sufficiency of trucker capacity and ensuring greater fulfillment stability. Moving forward, we expect our fulfillment rate to continue its steady upward trajectory driven by ongoing upgrades to our direct shipper strategy, our technological capabilities, as well as growing trucker ecosystem synergies. These factors will create a positive cycle between high-quality orders and sufficient trucker capacity and further boosting our fulfillment rate.

The next question comes from Charlie Chen with China Renaissance.

Please go ahead. Thanks, management, for taking my questions. I would like to ask some questions regarding the user membership. What was the growth trend for shipper membership in the fourth quarter, and what is the latest update on the 288 tier mini membership? Thank you.

Thank you, Charlie. We reached a milestone at the end of fourth quarter with the number of active shipper members on our platform basic surpassing 1 million. It's actually 1.05 million to be precise. The key growth drivers of Shipper's membership were the optimization of our membership tiering system and our targeted subsidy strategies. So look at our membership system. Our 288 tier mini membership, which was launched in early 2024, has unleashed incremental growth contributing most of our new shipper members this quarter. It is different from the existing 688 and 1688 tier members. The 288 tiers offer fewer shipping benefits but at a much lower price, effectively lowering the barriers to entry for new shippers and boosting paying member conversions. This mini membership program is particularly attractive to small and medium-sized direct shippers as it aligns very well with their early stage shipping needs as they transition to an online business model. Additionally, we introduced targeted subsidies for new user purchasing the mini membership as well as returning users who met certain criteria and further reducing the membership cost and allowing shippers to enjoy benefits such as shipment tracking and freight rate discounts. which in turn enhanced overall user engagement on the platform. Additionally, our operations team is developing a transition model to encourage many members to upgrade to the 688 tier, closely monitoring the renewal rates and upgrades to inform long-term member strategies that align with user behavior. On a related note, our gradual conversion strategy for non-paying users is also progressing steadily. For example, while maintaining the current benefit of five free orders per month for existing users, we introduced a 30-day unlimited shipping feature for certain newly registered shippers and will closely monitor the positive impact of this feature on membership conversion. And looking ahead, we are confident that by continually optimizing our membership products and fine-tuning our operational strategies, we can further expand our paying member base and enhance overall user engagement with us. Thank you.

Thank you, Simon.

The next question comes from Wenji Zhang with CICP. Please go ahead.

Good evening, everyone. I have a question about the cash flow economy. I would like to ask I'll do the translation for myself. The revenue of the freight brokerage service in the fourth quarter grew by 70% year over year, beating market expectations. What are the main reasons behind that? And what's going to be the outlook for the business this year?

Thank you, Wenjie. The better than expected revenue growth for freight brokerage business in the fourth quarter was primarily driven by the increase in service fee rates, and that's partially offset by a decrease in transaction volume. We have always maintained a cautious approach to freight brokerage. It is one of our traditional business. The value proposition for this business has been to improve user retention and engagement by meeting the invoicing needs of high-frequency shippers as they find it convenient and compliant. And since the publication of the Fair Competition Regulatory Review last August, we further toned down the scale of this business to adjust to the potential changes of national VAT requirements. As a result, the total transaction value of freight brokerage business declined both year-on-year and quarter-over-quarter in fourth quarter 2024. Meanwhile, anticipating potential reduction in regional tax rebate, we raised our service fee rate since October last year. By Q4, the overall service fee had increased to about 7%, from about 6% a year ago. This strategic adjustment helped to offset the decline in transaction value and then contributing to the year-over-year revenue increase. By the end of 2024, although we received notification from certain local governments on further tax rebate reductions, our proactive rate adjustments as mitigating measures helped to fully offset these negative impacts and margins. without major fluctuation compared to previous quarters. As we move to 2025, we will remain committed to prudent risk management for this business. We continue serving high-value shippers while keeping a close eye on potential changes in tech rebate policies. This way, we can ensure stability and sustainable growth for our business while creating value for our users in the long term. One important note is that while our total revenue growth is expected to moderate in 2025 due to a strategic adjustment in our freight brokerage business, we expect core transaction service business and its revenue to grow at a strong pace. And thanks to our expanding user base, steadily improvements in monetization efficiency and discipline, cost control, plus the operating leverage We're very confident in achieving over 60% year-on-year growth in adjusted operating profit for 2025. Thank you.

Thank you, Simon.

The next question comes from Richie Sun with HSBC. Please go ahead.

Hey, Zhang Huizhong, Simon, Maomao, Emma, 晚上好。谢谢你们给我提问机会。想请教一下管理层你们能分享一下灵弹业务在四季度有什么进展,还有如何区别灵弹停车还有专线的主要业务。 My question is about a less than truckload business. How did the LTL business progress in fourth quarter and what are the key differences between LTL carpooling and dedicated line services? Thank you.

Thank you, Ruchi. Our LTL business maintained its rapid growth trajectory in Q4. That's mainly due to our deeper penetration into offline markets and the ongoing optimization of our carpooling features. We have been very focused on solving the timeliness issues that often plagued the traditional LTL express and dedicated line logistics, like multiple loading and unloading, pickup and the delivery process, by developing a carpooling model that caters to diversified LTL needs, whether it's short to medium distance or large freight volumes. We have been able to streamline processes by offering a single loading and unloading and door-to-door delivery service. As a result, we're not only improving transportation efficiency, but also significantly reducing the risk of cargo damage and gaining market share of shippers. Looking at our user conversions, the order volume growth in the first quarter was mainly from small and medium-sized direct shippers. over 70% of which migrated from offline LTL dedicated lines and express models based on a survey. Our core advantage lies in our unique door-to-door delivery model and lowering pricing given the massive trucker supply, which is much more efficient than the traditional offline options. And during the quarter, our product functionality improvements have further contributed to user goals. For shippers, we introduced a feature that allowed them to compare prices between full truckload and less than truckload carpooling options, making it easier for shippers to see the cost advantage of carpooling. On the trucker side, we have successfully rolled out dedicated route operations along first 10 routes. where the number of truckers opting for carpooling was up by almost 10% compared to the broader market. And going forward, we plan to expand our route operation coverage to further enhance the matching efficiency, which will help us establish stronger operational barriers. We're also exploring opportunities in the LTL dedicated line sector. Right now, we are working closely with LTL dedicated lines to meet their diversified transportation needs and improve the overall shipping experience for our shippers. Looking ahead, we're confident that our well-established operational know-how in FTL will help us strengthen our advantageous position in the large-ticket LTL market. We're also committed to boosting industry's online penetration rate, which will help solidify our competitive edge in the long-haul market. Thank you.

Thank you.

The next question comes from Yuann Liao with CITIC. Please go ahead.

Thank you, Mr. Zhang, Ms. Simon, Mr. Mao, Ms. Emma, for accepting my question. I also congratulate you for achieving a relatively strong performance growth this quarter. My question is actually about, I did not see in the report, My question is, what are the main reasons behind the $300 billion $15 million on the impairment loss in the first quarter, and any guidance for further impairment in the new few quarters? Thank you.

Thank you. The impairment loss in the fourth quarter was mainly stemmed from our investment in an e-commerce platform that focuses on tire sales and aftermarket auto parts supply chain. And that company has been facing ongoing operating losses. The initial investment into that company was made by another team back in 2018 under a different leadership before Umama and Ho Chi Minh operations were fully integrated. Regarding our accounting treatment for the investment, we have always adhered to a prudent and standardized principles and regularly assess the most up-to-date situation of invested companies. And based on audit judgment, we believe that the financial conditions of this investment is beyond recovery. So as a result, we made a full impairment provision of 350 million RMB in the fourth quarter. The impairment was one-off. We're not aware of any other situations that would potentially lead to an impairment of investment in the foreseeable future. Looking ahead, we will continue to maintain a prudent approach to investing while strengthening our post-investment management. Our key goal through investments is to create synergies to our freight matching business and contribute to the achievement of our long-term vision. Thank you.

The next question comes from Thomas Chong with Jefferies. Please go ahead.

Good evening, thank you for accepting my question. My question is about how we can look at the overall development strategy from the perspective of the group this year. Thanks management for taking my question. My question is about our group strategy. How do we envision our overall development strategy for this year? Thank you.

Thank you, Thomas. We expect the company to maintain steady business growth in 2025 with a year-on-year order volume growth expectation of at least 15%. This growth will be driven by efficient user acquisition strategies and technology, which will deepen the platform's online penetration and further improve operational efficiency across the entire value chain, accelerating the digitalization transformation of the freight industry. From financial strategy perspective, our focus will be on optimizing the revenue structure. The proportion of freight brokerage business in the overall revenue mix will be further reduced to ensure that sustainable development while effectively managing risk. Meanwhile, leveraging the platform's network effects and technological capabilities, the transaction service business will continue to grow rapidly through economies of scale and enhanced alcohol recommendations. It will become the core engine of our company's revenue growth as a strategic pillar in the profit structure. This adjustment strategy reflects our proactive management of the business portfolio, ensuring a balance between optimizing the business mix and increasing the share of high-margin businesses. By improving operational efficiency, we aim to significantly enhance the overall profit margin. I would believe this flexible yet very robust strategic path will provide shareholders with higher certainty of long-term returns and strengthen our company's leadership position within the industry. Thank you.

And that concludes the question and answer session. I would like to turn the conference back over to management for any additional or closing comments.

Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Photoshop Alliance, Deluxy, or TPG Investor Relations. Our contact information for AI in both China and US can be found in today's press release. Have a good day.

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