Full Truck Alliance Co. Ltd.

Ladies and gentlemen, good day and welcome to Full Truck Alliance's fourth quarter and fiscal year 2025 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mao Mao, head of investor relations. Please go ahead.

Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the company's future performance. which are intended to qualify for the safe harbor form of liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion. A general discussion of the risk factors that could affect FTA's business and financial results is included in certain filings of the company with the SEC. The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from STA's senior management are Mr. Hui Zhang, our founder, chairman, and CEO, and Mr. Simon Tai, our chief financing and investment officer. We will open the call to questions following brief opening remarks from Mr. Zhang. As a reminder, this conference is being recorded. In addition, a webcast replay of this call will be available on FTA's investor relations website at ir.foodtrackalliance.com. I will now turn the call over to our founder, chairman, and CEO, Ms. Zhang. Please go ahead, sir.

大家好,欢迎各位参加满邦2025年第四季度以及全年业绩的电话会。 2025年第四季度,在复杂的市场环境中,我们持续深化生态体验建设,加强私货交易保障。 Hello everyone, thank you for joining us today for our fourth quarter and fiscal year 2025 earnings conference call.

In the fourth quarter of 2025, amid a complex market environment, we continue to energize our ecosystem by elevating user experience and strengthening protection mechanisms for both shippers and truckers, driving solid business growth across the board. Total fulfilled orders reached 63.9 million for the quarter, representing a year-over-year increase of 12.3%, and full-year total fulfilled orders reached 236 million. up 19.8% year-over-year. Notably, four-year orders for field for cold-chain logistics grew by nearly 30% year-over-year.

业务方面第四季度各项业务指标稳健向好 货属端精准拉近策略以及会员体系升级成效显速 本季度发货货属平均月活达到了328万人 同比增长11.6% The annual average of 3.14 million people is increased by 18.6%. The size of the cargo is the same as the annual implementation. The driver's end continues to be perfect. The driver is not divided. It is a full-fledged insurance system, rolling for 12 months, and the driver's size is relatively active. Maintain high position stability, respond to orders, and drive for four months. Maintain more than 85%. The stability and superiority of the transport network have been further enhanced. In the smart driving field, the smart card is already operating in the express delivery industry. At the same time, we have implemented the AI assistant function that points to the transaction part of the carrier, which reduces the cost of delivery and communication, and helps users on both sides to improve transaction efficiency. Next, we will accelerate the landing of AI in the logistics transaction and transaction part.

In terms of operational performance, key matrix across all business lines improved steadily in the fourth quarter. On the shipper side, our targeted use acquisition strategy and refined membership system gained momentum. Average monthly active shippers reached 3.28 million in the fourth quarter and 3.14 million for the full year 2025, marking year-over-year increases of 11.6% and 18.6% respectively. demonstrating parallel improvement in both shipper base and user thickness. For trucker users, we continue to optimize the trucker credit rating system and protection mechanisms, maintaining the 12-month rolling active trucker space at a high level and the next month's retention rate for truckers who responded to orders above 85%, further strengthening the overall reliability and quality of our truckers network. Our AI-powered heavy truck feed delivered by GigaAI is now operating commercially in the express delivery and fast freight sectors. We also piloted AI assistant capabilities for shippers to further enhance fulfillment efficiency during the quarter. Moving forward, we will continue to accelerate the integration of AI technologies and applications across our transactions and fulfillment processes.

In terms of wealth, the Group continues to optimize its operating efficiency and enhance its revenue capacity. In 2026, the total revenue of the whole year broke 124.9 billion yuan, and the annual net profit growth was 11.1 billion yuan. At the same time, the income structure has improved further, and the total annual trade service income has reached 53.2 billion yuan, and the annual net profit growth has reached 38.2%. In terms of profit, the total annual net profit has reached 44.6 billion yuan, Now turning to our financial performance, we remain focused on enhancing operating efficiency to strengthen profitability.

Net revenues reached RMB 12.49 billion for full year 2025, up 11.1% year-over-year. Furthermore, our revenue mix continued to improve with transaction service revenues of RMB 5.32 billion for the full year, growing by 38.2% year-over-year. On the bottom line, we achieved a net income of RMB 4.46 billion for the full year, up 42.8% year-over-year. On a non-GAAP basis, adjusted net income reached RMB 4.79 billion for the full year, up 19.3% year-over-year, underscoring our high-quality profitability and increasing economies of scale.

展望未来,满邦将持续提升持货双端的用户体验, 不断推进AI与物流全链路的深度融合, 为行业创造更大的价值,为股东和用户带来长期回报。

Looking ahead, Full Truck Alliance will consistently elevate user experience for both shippers and truckers and fully integrate AI across the logistics value chain, creating greater value for the industry while delivering long-term returns to shareholders and users. Thank you all once again. That concludes our opening remarks. We would now like to open the call to Q&A. Operator, please go ahead.

Thank you. If you would like to ask a question, please press star then 1 on your telephone keypad. If you would like to remove yourself from queue, please press star then 2. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Today's first question comes from Ronald Keung with Goldman Sachs. Please go ahead.

Thank you, Mr. Keung. Give me a chance to ask a question. Thank you management for taking my question. So looking back at 2025 and The company faced a number of external challenges and also made several strategic adjustments. So as we look into 2026, can you share your overall strategic priorities?

Thank you. Okay. The layout of new business areas such as real-estate value and overseas market is also stable. This year, we put more effort into user experience, returning to the original intention of the user, to build a platform that makes the client and the driver truly trust each other. These investments may not be able to accurately quantify its return in the short term, but in the long term, the ecosystem harmony of users is the foundation of our stable support. It is also the ecosystem value that AI cannot completely replace.

2025 was a year marked by both external challenges and proactive transformation for our business. During the year, we made significant progress in strengthening platform governance, improving operational efficiency, and further optimizing our user structure and monetization quality. At the same time, we steadily advanced our strategic initiatives in areas such as autonomous driving and overseas markets. Throughout the year, we focused on enhancing the user experience and returning to our core principle of being truly user-centric. Our goal is to build a platform that both shippers and truckers can trust. While some of these investments may not yield immediate measurable returns, we firmly believe that bolstering a healthy, balanced user ecosystem will serve as the foundation for our large and sustainable growth. That kind of ecosystem value is something I think we can't replace.

进入2026年,我们的各项工作将朝着高质量增长和智能化升级的目标来推动。 具体来说,主要包含三个方面。 第一,把增长重心从规模优先转向质量和规模并重。 规模依然重要,但是为了长远健康的发展,我们要构建用户和平台共生共同的关系。 We will also continue to improve the dual-end user credit and evaluation mechanism. As we move into 2026, we will focus on advancing high-quality growth and intelligent transformation across three areas.

First, we are shifting our focus from skill-driven growth to a model that balances both skill and quality. While skill remains important for long-term sustainable development, our priority is to foster a mutually beneficial relationship between users and the platform. We are raising ecosystem standards to ensure more compliant and standardized transactions, greater protection for freight payment, and higher user satisfaction. With the first phase of our ecosystem governance initiatives now largely complete, most fake accounts and low-quality orders have been cleared from the platform. As a result, the platform is operating on a much healthier footing, giving us the confidence to further strengthen fulfillment quality and support more sustainable growth going forward. Building on this foundation, we are also continuing to improve the credit rating mechanisms for both shippers and truckers. For example, through systems such as shipper rating scores and trucker behavior scores, we are gradually establishing a more robust two-sided evaluation framework. This helps regulate user behavior at the source, curb non-compliant connections, while also incentivizing high-quality users, ultimately creating a more virtuous cycle between shipper fulfillment efficiency and the trucker earnings.

to the AI-driven intelligent infrastructure platform. We have accumulated a large amount of real-time transaction data for many years, and we have high-end user access, which is a very important basis. Next, we want to fully transform this advantage into AI capabilities. In the key areas such as integration efficiency, credit system, dynamic pricing, and continuous deepening applications, the full range of values will not only be reflected on the information chain, but also on the entire intelligent upgrade of the transaction process.

Second, we are evolving from an information matching platform into an AI-driven intelligent infrastructure. Over the years, we have accumulated a large volume of authentic transaction data and built a highly active user base, which together provided a strong foundation for this transformation. Going forward, we will further leverage these strengths to advance and integrate our AI capabilities across key areas, including matching efficiency, credit assessment, and dynamic pricing. In doing so, we aim to extend our platform's value beyond simply connecting supply and demand and enabling a more intelligent and efficient transaction process.

第三,在主业稳健增长的基础上, 逐步布局新的增长局限。 我们对承受业务的盈利能力保持信心。 在此基础上,公司正在有节奏地推进海外 while maintaining steady growth in our core business, we are laying the groundwork for additional growth drivers.

We remain confident in the profitability of our mature business. Building on this foundation, we are advancing initiatives in areas such as overseas expansion and autonomous driving in a disciplined manner to support our growth over the next three to five years. Thank you.

Thank you. Thank you. And our next question today comes from Eddie Wong at Morgan Stanley.

Please go ahead. Hey, Chairman Zhang, Chairman Simon, Maomao, Emma. Thank you for accepting my question. I have two questions about AI. The first one is about the rapid development of AI technology. Thank you management for taking my question. I have two questions related to AI. The first one is that the AI technology is advancing rapidly, and the rise of the AI agent is gaining significant attention. How might this trend affect freight matching platforms such as FTA, and how do you plan to respond to the potential disruption that AI agents could bring to the traditional platform model? And the second question is, can management share how AI is being applied across the company and what's the key developments in the fourth quarter and what's your plans for the 2026? Thank you.

Thank you, Eddie. This is Simon here. I'll take over from now on. There has been a lot of discussion around the AI topic recently. We have been closely monitoring and evaluating its applications. Let me start with our core objectives. We see AI not as a threat to our business, but as a tool to enhance our capabilities. For the road freight industry in which FTA operates, the emergence of AI tools can significantly lower the barriers for shippers to find available carrier capacity, reduce manual costs in the matching process, and improve both matching accuracy and refueling rates. These changes will meaningfully improve efficiency across the entire industry. We believe this transformation will create significant opportunities for us to capture additional market shares as transactions migrate from highly fragmented offline markets, including ad hoc and relationship-based trucking networks onto our platform. In our view, AI presents more opportunities than challenges for our platform. For AI models to deliver meaningful results in the highly non-standardized freight matching market, they must rely on large volumes of authentic, high-frequency, closed-loop transaction data This includes data such as quotes, completed transactions, cancellations, fulfillment records, disputes resolutions, credit behaviors, and verified logistics address database. These data sets are the result of many years of operational experience and data accumulation on the platform. Let's take pricing as an example first. In the long haul freight market, competitive real-time freight rates are not publicly available. The effective transaction price for each route and time period is influenced by multiple factors, including capacity availability, backhaul demand, trucker preferences, and delivery time requirements. These dynamic pricing signals can only be formed and validated within the real transaction network. On our platform, truckers must complete real name registration and facial verification before logging into our app. and accessing shipment information. Negotiations between shippers and truckers are conducted through our in-app messaging tools and protected communication channels, while actual AI tools, if there's any, lack the basic data set to perform accurate pricing. Second, in the long haul freight matching business, where fulfillment standards are high and operational processes are complex, transactions involving far more than simply matching information. The capability to execute is critical. While external AI tools may help a shipper quickly obtain a price quote or even contact several truckers automatically, moving a shipment from posting to final delivery requires much more than pricing. Effective for few men depends on robust platform services and dispatch capabilities, including understanding which truckers are reliable on specific routes, their likelihood of cancellation, how trucking capacity fluctuates during different time periods, and maintaining a complete operational system from order placement to settlement to protect the interests of both shippers and truckers. In addition, long-haul freight operations frequently involve exceptions and non-standard situations These may include specific vehicle requirements, trucks equipped with gates or refrigeration units, last-minute delivery address changes, adjustments to cargo volume, highway closure, and damage disputes after delivery. Handling these situations requires well-established platform rules to determine responsibilities extensive historical data to assess reliability and a responsive dispatch network capable of quickly arranging alternatives when disruptions occur. These are not capabilities that a standalone generative AI model can deliver on its own. They are built on years of operational experience and data accumulation and are precisely where our core competitive advantage lies. In addition, Our platform connects a large number of shippers and truckers, and through years of operation has formed a stable transaction network and credit system. Truckers and shippers not only rely on the platform to obtain orders and capacity, but also depend on the platform for credit evaluation, fulfillment, protection, and dispute resolution mechanisms. This long-term accumulation of trust and ecosystem relationships is something that a standalone AI agent application would find difficult to replicate. Given these structural characteristics, we believe that as AI technology continues to mature, our competitive advantages will become even more pronounced. The reason is very straightforward. The more capable AI becomes, the more it depends on real transaction data and the stronger the resulting network effects. We're actively integrating AI capabilities across multiple aspects of our platform, including matching, dispatching, pricing, risk management, and customer service. As matching becomes more efficient, fulfillment becomes more reliable, and exceptional handling becomes faster and more effective. Both truckers and shippers will naturally prefer to transact on our platform. This in turn leads to continued data accumulation and ongoing model improvement, which further strengthens our network effects and the mode around our platform. Overall, we are very optimistic about the industry transformation and the opportunities brought by the AI era, and we are fully prepared to embrace the opportunities and challenges that come with this technological shift. For us, AI represents a capability upgrade rather than a disruption to our business model. We will leverage AI capabilities to capture the broader industry opportunities it creates, making our platform more efficient and improving the user experience for both shippers and truckers. At the same time, these capabilities will further strengthen our network effects, thereby reinforcing our long-term competitive advantage in the road freight market. To address your Second question on our plan for AI for 2026. As I discussed earlier on our view on AI, let me walk through the progress we made over the past quarter and our plan onwards. During the fourth quarter, our AI initiatives progressed from the experimental phase to broader deployment. We're currently building an AI agent framework that covers key scenarios across our platform, including shippers, dispatch, operations, and customer service, gradually embedding AI capabilities throughout the entire transaction workflow. Starting with the user side, our focus for shippers is simplified shipment posting and automated dispatch. In the fourth quarter, we launched an AI-empowered assistant that enables shippers to submit shipping requests through a simple voice input via a floating entry point in the app. The AI can then handle the entire workflow, including freight listing, trucker screening, price negotiation, and order matching, significantly streamlining what previously required multiple manual steps. This capability is particularly beneficial for direct shippers as it lowers the barriers to posting shipments and improves shipping efficiency, helping the platform better attract and retain SME shippers. This solution also supports WECOM-based shipment posting as well as API integration, delivering meaningful efficiency improvements for enterprise customers that require system integration. Our pilot results so far demonstrate the effectiveness of our AI-powered dispatch system. First, AI-driven dispatch has attracted a large number of valid trucker bids, reflecting that more accurate matching is increasing truckers' willingness to accept orders. And second, the vast majority of completed transactions are now processed entirely through automated workflows, and the need for manual intervention continues to decline. Compared to traditional freight listing, AI-driven dispatch is delivering superior outcomes in both transaction efficiency and fulfillment rates. In short, the AI assistant is helping shippers reduce the time required to find truckers and helping truckers improve order pickup efficiency and enhancing overall matching quality across the platform. Internally, AI has been integrated into our customer service operations, significantly improving response times and processing efficiency while also enhancing overall service stability. Looking ahead to 2026, AI will continue to serve as a core technology foundation for improving efficiency and enhancing user experience across FTA platform. As our models continue to evolve and data advantages deepen, we expect AI to unlock additional value in areas such as matching efficiency and operational cost optimization. becoming an increasingly important driver of our median to long-term growth. Thank you.

Thank you.

Thank you. And our next question comes from Brian Gong at Citi.

Please go ahead. Hi, Chairman Zhang, Chairman Sam, Chairman Mao, Chairman Emma, good evening. Thank you for accepting my question. I have a question about capital configuration. I will translate myself. Thanks management for taking my question. With respect to the capital allocation, how does management prioritize among investment in core business growth, new initiatives, and the shareholder returns? Thank you.

Thank you, Brian. Our approach to capital allocation is guided by a very clear principle, and that is to delivering sustainable returns to shareholders while maintaining healthy growth in our core business. We remain firmly committed to this objective and committed to creating long-term value for our shareholders. In 2025, we continue to deliver our commitment to returning value to shareholders through both dividends and share repurchases. Over the course of the year, we distributed approximately US dollar 200 million in cash dividend under our semi-annual dividend policy. In addition, we continue to implement our share repurchase program to further optimize our capital structure. Since the beginning of 2025, we have repurchased approximately US dollar 52.4 million worth of our shares, demonstrating management's confidence in the company's long-term value. In addition, in January 2026, we announced a median to long-term shareholder return plan. For 2026, we plan to return approximately US dollar 400 million to shareholders. And today, we also announced a dividend of approximately US dollar 87.5 million for the first quarter. To support these shareholder return commitments, we must continue to strengthen our core business while identifying new growth drivers to sustain strong cash generation. As you know, long-term freight matching remains our primary source of cash flow and profitability and forms the foundation for our long-term competitive advantage. Looking ahead, we will continue to invest in user acquisition, technology upgrades, product innovations, and ecosystem development to support the steady and sustainable growth of our core business. With respect to strategic investments in new initiatives, including overseas expansion and autonomous driving, we emphasize a disciplined approach characterized by controlled pacing, manageable cash outflows, and measurable milestones. We will not pursue high risk as a heavy extension. Instead, we will advance this initiative in a measured manner with evaluation of expected returns and progress at each stage. These investments are intended to build long-term growth capacity and further strengthen our competitive mode rather than pursuing short-term scale. Overall, we believe that the core business growth investment in new initiatives and shareholder returns are not mutually exclusive objectives. We will strive to maintain a dynamic balance between growth and shareholder returns while preserving strategic flexibility. Thank you.

Thank you. And our next question today comes from Thomas Chong at Jefferies. Please go ahead.

Good evening, thanks management for taking my question. We have seen the fulfilled orders grew by 12.3% year-on-year in Q4, and the growth rate is slowing down. Was this mainly driven by the ecosystem governance initiatives? How long do we expect this impact to last, and what is our outlook for order volume in 2026? Thank you.

Thank you, Thomas. That's a very good question. Let me first clarify the reasons behind the slowdown in order volume. growth during the fourth quarter. The slowdown was primarily driven by the ecosystem governance initiatives we proactively implemented on platform rather than any significant change in underlying freight demand. This round of ecosystem governance primarily focused on three areas. First, we addressed misclassified carpooling orders where full truckload shipments were posted as less than truckload orders. which can compromise transportation safety and fulfillment experience. And second, we strengthened real name verification requirements for both truckers and shippers, which resulted in the removal of a number of fake or non-compliant accounts. Thirdly, we implemented systematic measures to curb freight reselling and other irregular transaction activities. These issues had accumulated over time and were beginning to affect the platform . Therefore, we believe it was both necessary and timely to address them through a focused governance effort. These governance measures primarily affected low quality orders with limited monetization potential. During the initial phase of the governance initiatives, some of the misclassified carpooling orders have shifted back to the full truckload product, while others have temporarily moved to offline channels. We view this as a normal structural adjustment. From a revenue perspective, these orders historically contributed only a small portion of the platform's revenue. And in fact, transaction service revenue, as you can see, still grew by nearly 30% year over year in the fourth quarter, which clearly demonstrate that the ecosystem governance has not affected the platform's core monetization capability. Based on the results achieved so far, the governance initiatives have delivered meaningful improvements. For example, the resale and trading of trucker accounts on third-party platforms have been nearly eliminated. and the trucker vehicle verification rate is now close to 100%. In addition, freight reselling activities in January decreased significantly compared with the end of third quarter, and customer complaint rates have continued to decline. At the same time, trucker engagement has remained stable, with the rolling 12-month active trucker base maintaining at high level, and the next month's retention rate for truckers responding to orders exceeding 85%. The principle measures under this round of governance have been largely completed and the main impacts have been fully reflected. Real name verification has been fully implemented. Freight reselling is now managed under a normalized framework and misclassified carpooling orders have been structurally addressed through product rules. As we move to 2026, Our focus will shift from targeted governance campaigns to continuous optimization. We will leverage credit scoring and algorithm model to safeguard the long-term health of the ecosystem and placing greater emphasis on balancing growth pace and operational quality. In the near term, we do not expect to carry out another large-scale governance campaign. Based on Our operating data so far into the year in 2026, sequential order growth has already shown clear signs of recovery and looking ahead to the full year as the impact of governance initiatives continue to diminish, the share of direct shippers continue to increase and matching efficiency further improves. We remain cautiously optimistic about steady order growth on our platform in 2026. Thank you.

Thank you. And our next question comes from Richie Sun at HSBC. Please go ahead.

Good evening, Mr. Guan. Thank you for giving me the opportunity to ask a question. I have two questions. The first question is to ask about the situation of the four-segment calendar, and how to predict the change and trend of this indicator in the future. Thank you, management, for taking my questions. My first question is about the fulfillment rate. So how did the fulfillment rate perform in fourth quarter, and what is the outlook for this metric? And secondly, in terms of the commission revenue growth, it is nearly at 30% year-on-year growth in fourth quarter despite slower order growth. So what were the key drivers behind this, and what is the outlook for this metric going forward? Thank you.

Thank you, Richie, for your question on fulfillment rate. In the fourth quarter, the overall fulfillment rate reached 42.7%, representing a year-over-year increase of more than 5 percentage points, and it also set a new record. Notably, the average fulfillment rate for the mid- and low-frequency direct shippers approached 65%. This is a key metric we monitor closely as this segment represents a higher quality source of freight demand. Several factors drove the improvements in the fulfillment rate. First, we implemented systematic optimization to our cancellation policy. Historically, arbitrary cancellations by both truckers and shippers weighted heavily on fulfillment rate. In the fourth quarter, we introduced two key measures. We increased the cost of unjustified cancellations by imposing behavioral restrictions on users with frequent cancellations. And we also upgraded our credit scoring system. The evaluation framework shifted from a primary focus on transaction frequency to a more holistic assessment of behavior quality with greater emphasis on human rates, user ratings, and complaint rates. These adjustments are designed to encourage more consistent and responsible transaction behavior among both truckers and shippers. Secondly, the continued improvement in our user mix also contributed to the higher fulfillment rate. In the fourth quarter, fulfillment orders from direct shippers accounted for 55% of total fulfilled orders, up from the previous quarter. And direct shippers generally have higher expectations for fulfillment reliability and a stronger commitment to execute. So the increase in your share directly supported the improvement in the platform's overall fulfillment performance. Thirdly, ongoing product inconstants also contributed to the improvement. In the fourth quarter, we continue to iterate on the new freight zone and introduce a secondary confirmation step for shipment posting, which improved fulfillment rates for newly listed shipments. At the same time, upgrade to our matching algorithm and more refined operations significantly accelerated truckers' response times, supporting a steady increase in transaction conversion rates. Looking ahead, as our credit scoring system continues to improve, the base of direct shippers expand, and low-quality freight listings are further phased out. We expect fulfillment performance to maintain a steady upward trend. This will not only enhance the user experience, but also support further monetization of the platform. Regarding your second question on commission revenue growth, In the fourth quarter, transaction service revenue reached approximately RMB 1.49 billion. That's a year-over-year increase of around 28%. Despite the moderation in order volume growth, revenue maintained a relatively strong growth momentum, primarily driven by two factors. The first driver was the continued increase in commission penetration. In the fourth quarter, commission penetration rate reached 88.6%, up roughly six percentage points year over year. The number of cities covered by the commission model reached 273, effectively achieving nationwide coverage across major freight markets. This improvement reflect the platform's continued progress in identifying high-quality freight demand ensuring fulfillment, reliability, and enhancing matching efficiency, enabling the commission model to be applied to a broader range of orders. The second driver was the improvement in monetization per order. Q4 average monetization per order reached RMB 26.3. This reflects the effectiveness of our refined tiered operating strategy. By offering differentiated services tailored to different shipper segments, we improved monetization efficiency and overall profitability while safeguarding the interests of truckers. Looking ahead, we remain confident in the continued growth of our transaction service revenue. There's room to further optimize both commission penetration and the monetization for order. At the same time, continued enhancement of our trucker membership program will help ensure a stable supply of high-quality transportation capacity and further strengthening the foundation for transaction service revenue growth. Going forward, we will continue to refine our commission structure and operational strategies without compromising user experience to support more stable and sustainable long-term growth in this particular revenue stream. Thank you.

Thank you very much.

Thank you.

And our next question comes from Wenjie Zong with CICC. Please go ahead. Thank you, management, for taking my question. My question is about credit solution business within value-added services. I wonder what's the latest progress of this business?

Thank you. In the fourth quarter, amid an evolving regulatory environment, we continue to advance our credit solutions with a focus on compliance, risk management, and business model transformation, and maintain a steady pace of development. As of the end of the fourth quarter, we completed the transition to interest rates of 26% or below for both existing and newly issued loans. reflecting our proactive alignment with regulatory guidance and commitment to compliance. While this adjustment created some short-term pressure on revenue, we believe it will support a more robust and sustainable financial services framework over the long term and lay a stronger foundation for our future growth. In terms of asset quality, our overall risk exposure remains manageable. Since mid last year, regulatory changes across the credit industry have led to fluctuations in credit risk, and our credit business has also been affected. In the fourth quarter, the 90-day delinquency ratio reached 2.9%. In response, we proactively tightened our risk management measures by raising credit approval thresholds for both new and existing users. and implementing earlier interventions through model optimization and a more tiered risk control framework. As a result, our outstanding loan balance remains at a healthy level and the overall risk exposure is well contained. Looking ahead, while some volatility may persist in the coming months, we expect asset quality to gradually improve. improved with the overall MPL ratio stabilizing and beginning to decline in the second half of this year. In terms of our business model, we are proactively transitioning toward a more asset-light approach. We have established partnerships with multiple banks and financial institutions and are increasingly originating loans through guaranteed backed and facilitation models. This approach allows us to significantly reduce the use of our own capital while maintaining service coverage and improving capital efficiency and better managing risk exposure. As a result, we are building a more balanced and sustainable risk return profile for our credit business. And overall, we will continue to prioritize compliance, maintain disciplined risk management, and support our core business business through our credit operations. Going forward, we will balance growth and risk while further improving asset quality and expanding penetrations across operation scenarios. This will help ensure that our credit solutions business develops in a more sustainable manner as the regulatory environment continues to evolve.

Thank you. Thank you. And our next question comes from Yuan Liao with CITICS. Please go ahead.

感谢管理层接受我的提问。 那我的问题呢,其实是关于我们的海外业务。 管理层能否分享一下刚才我们海外业务的一个进展, 以及2026年的一个开成计划, 以及我们目前海外的一个战略重点有哪些, 针对于我们的海外业务的变现呢,还有没有一些计划? I'll translate myself. Thanks for answering, for taking my questions. Can management share us what progress have you made in your overseas business so far? And so what are the plans for your city expansion and your strategic priorities for 2026? Is there any timeline for your monetization of your overseas business? Thank you.

Thank you. Our overseas business is an important part of our mid- to long-term growth. We're building our international operations under the QMove brand, and we are currently in the model validation and capability replication stage. In terms of our market selection logic, the emerging markets we're targeting share key trails. Large road freight volumes, low level of digitalization, highly fragmented truckers and the shipper base, large information gaps, and high reliance on traditional broker models. This is very much like China over a decade ago, and much like China over a decade ago when we first started our business. This makes our domestic experience and capabilities highly transferable, allowing us to replicate our model in those markets with minimal learning curves. We are pursuing a as a light and localized approach, advancing investments gradually as we validate the business model and team capabilities, leveraging our technology and operational know-how to drive platform rollouts. QMove is already integrating a fragmented local trucking capacity in select markets and steadily building user network on both the trucker and shipper sides. The priority for 2026 remains deepening our presence in existing markets while expanding into new ones in a disciplined manner. We will first focus on boosting network density and user engagement in established countries while gradually advancing city expansions in markets that are operationally ready and steadily broadening the platform's reach. We maintain a pragmatic, flexible attitude toward Regarding the pace of the monetization, emerging market digital freight platforms typically progress through user acquisition, network formation, and efficiency improvement before reaching stable commercialization. With timing varying by market, our priority is to grow the platform network and expand our user base sustainably rather than simply pursue early monetization at the expense of long-term growth. And in summary, we remain confident the long-term growth potential of these emerging markets whose digital transformation is expected to follow a path very similar to China's road logistic industry. We'll continue expanding overseas in a disciplined, steady manner and gradually move toward commercialization as the operating model matures. Thank you.

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 FDA directly or reach out to TPG. Our contact information for IR in both China and the U.S. can be found in today's press release. Have a great day.