This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk05: Good day and welcome to the ZTO Express first quarter financial results conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Hu Bingyan, Chief Financial Officer. Please go ahead.
spk02: Thank you, Operator. Hello, everyone. Thank you for joining us today. The company's results in an investor relations presentation were released earlier today and are available on the company's website at ir.zto.com. On the call today from ZTO are Mr. Mason Lai, Chairman and Chief Executive Officer and I, Wei-Ping Yan, Chief Financial Officer. Mr. Lai will go through his prepared remarks, highlighting business operations, and I will then go through the financials and guidance. We will both be available to answer your question during the Q&A session that follows. As a reminder, this call may contain forward-looking statements made under the safe harbor provisions of the Private Security Litigation Reform Act of 1995. Such statements are based on management's current view and expectations of the market and operating conditions that relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control and may cause the company's actual results, performances, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, and factors are included in the company's filings with the U.S. Security and Exchange Commission. The company does not undertake any obligations to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under law. It is now my pleasure to introduce Mr. Mason Lai. Mr. Lai will go through his prepared remarks in its entirety in Chinese before I translate for him into English. Mr. Lai, please go ahead.
spk06: The market share increased by 1.2% in the same period last year, reaching 21.6%. The adjusted net profit of 10.5 billion yuan has increased by 34.9% in the same period. Since March, the epidemic has been spreading in some areas, and local express delivery has been slow. First, Highly value the legacy of the end-of-the-year and creditors. Make good use of the progress of the front-end payment. Fully transfer to the end-of-the-year and end-of-the-year. And through the collection of payment standards, standardization and coordination, the donation of the epidemic loan, the small talk of hundreds of millions of dollars, the support of policies such as love funds and financial assistance, the protection of the network base, the stability and resilience of the special period, and long-term sustainability. Second, enhanced network management. This is a comprehensive technology for end-of-the-line units, including the entry and exit thresholds between the center and the end-of-the-line, and the effective optimization of end-of-the-line and end-of-the-line. This kind of end-of-the-line, end-of-the-line management, will never form the best network model for end-of-the-line. In this In this comprehensive self-discipline process, we adopt a more harmonious network policy and control system to make the network more stable, healthier, and more sustainable. Thirdly, we accelerate the construction of speedy management capabilities to implement a system that integrates the whole network, the whole body, and the whole element to accurately track and track, and to achieve this effect. We fully utilize the resources and advantages of the technology service platform, to improve the platform and reduce the cost-effectiveness, and to ensure the safety and operation of the network to the maximum extent, especially to build a complete system with a complete perspective. The complete management system will become a comprehensive management system of the network from the previous professional tools. Fourth, record optimization, quality assessment indicators, and dispatch mechanisms, especially during the epidemic, to develop more human-oriented network tests and indicators to fully identify and increase confidence. Fifth, continue to develop multidirectional products and services. In the epidemic environment, our ability to operate in mainstream e-commerce channels has still been improved. We have deepened the exploration and implementation of real-time products and e-commerce platforms such as Zengxiang, BiaoKai, and so on. With the delivery of high-end service capabilities for the group, So the state-owned state-owned service capacity is also exploring and deploying. In fact, the spread of the epidemic across the country is gradually being controlled. The center of attention and the end point are gradually coming into effect. In April, the total business volume of the whole country increased by about 12% and began to recover gradually. The share price of May increased by 2.3%. The relevant government departments are directly involved in the management of the courier industry and the support of the industry. Dispatch the political connection, solve the difficult problems, and help the courier industry to safely travel to and from all over the world. The good news is still edible. In mid-May, the first Shanghai-based courier industry, Pocong Pochan, was listed as a white list. The center and the finish line are not in good condition, including the actual efficiency, which will not be able to reach the standard level. In order to achieve the goal of dynamic cleanliness, we expect that safety production will become a standard in anti-corruption. The country has proposed a clear demand for the epidemic to be restored, the economy to be stabilized, and the development to be safe in major meetings. China's fast-growing industry will continue to play an important role in the development of the stable economy. We are looking forward to the ongoing demand for consumers. We have confidence in China's leading scale and efficiency advantages. We are confident in the resilience of the entire network to face difficulties and challenges. In the coming days, we will deploy epidemic prevention and control to normalize, at the same time, firmly implement various work goals, digital management, precision testing, real-time adjustment, measure the effect, grasp the opportunity, restore the market, drive efficient management and stable and continuous growth, and continue to expand the market share and profit level. May 8th, The Chinese Communist Party has been through the heat of the 20th century. In the past 20 years, we have been chasing after, chasing after, surpassing, breaking through the waves, fighting against the disease. The past is the result of all the Chinese Communist Party members' unity and struggle. We can't live without the support and support of society and the times. We can't live without the support and support of society and the times. We can't live without the support and support of society and the times. We can't live without the support and support of society and the times. Thank you, Chairman. Hello, everyone, and thank you for joining us today.
spk02: In the first quarter of 2022, CTO delivered a partial volume of $5.2 billion, which increased 16.8%, expanding our market share by 1.2 points to 21.6%. The adjusted net income grew 34.9% to $1.1 billion. Starting in early March, Omicron infections that erupted and spread across the country disrupted the industry's growth momentum, causing delays in stoppage in express delivery industry. Quarterly parcel volume level was below expectations. During this extraordinary time, CTO Headquarters and our provincial operations coordinated action plans and effort, tightened prevention measures, and maintained continued operations wherever possible. We carried out stringent safety protocols while continued to focus on achieving goals and objectives that we set forth in the beginning of the year. First, we prioritized on protecting the rights and interests of the grassroots. and insisted on passing through the increase in delivery fee in its entirety into the hands of delivery outlets and couriers. Through supportive measures such as detailed standardized pickup and delivery fee schedule and equitable reallocation procedures, added lending for designated prevention use, renewal of couriers' accidental group insurance, and special care funds, we strengthened the network foundation in ensuring its resilience and vitality. Second, we raised bars for comprehensive outlet management on an outlet by outlet basis from establishing direct routes to and from sorting centers to improving timeliness of parcel bonds for urban and rural areas, to enhancement of managerial effectiveness, we are fine-tuning the matrix model of management for Tier 1 partner outlets. As a result, more appropriate policies and performance measures are put in place so that our network of outlets can become more stable, profitable, and sustainable. Third, we accelerated the digitization initiatives to streamline end-to-end process, allowing close monitoring and coordination of all critical stages of operations to drive effectiveness and efficiencies. Technology solutioning was there to provide more scientific approach to maximize resource utilization, productivity gain, and safe operations. Development of an operating system from all its perspectives has transformed previous toolkit applications into an integrated process-driven task management framework. Fourth, we improved the performance evaluation and associated reward and reprimand mechanisms. During the COVID disruption, more user-friendly scorecards were set up to ease burden and boost confidence for our network partners. Fifth, we designed diversified products and services to meet varying customer demands. Our presence among mainstream e-commerce volume continued to increase as we introduced more time-definite products, such as premium and standard, as part of the effort for product enrichment. The higher-end service that was nicknamed as and other expanded cross-border capabilities are all being developed and tested. Recently, sorting centers and service outlets in the affected areas have been gradually resuming operations while outbreaks across the nation become more and more under control. Contrast to a year-on-year decline of nearly 12% in April, Express parcel volume recorded a 2.3% increase during the May holiday break for the industry. Government agencies have been paying close attention to logistic industries and proactively working with companies on their day-to-day challenges by coordinating policies from different governing bodies, sorting through conflicts and blockages. BTO Shanghai was among the first few logistic companies to restart operation in early May. Volume and timeliness are gradually trending normal. Before the goal of dynamic zeroing is achieved, we expect prevention procedures will become part of the daily norm. The central government has established clear directives that the epidemic must be contained. the economy must be stabilized, and growth must be safe. Express delivery companies will continue to play an active role in ensuring smooth and safe logistic operations, which will support the economic growth. We anticipate that the consumer demand will remain strong. We believe in our competitive advantages with scale and efficiency and we are confident in our entire network's ability to endure hardship and overcome challenges. Looking ahead, routines need to be established for prevention. On one hand, while we firmly implement our strategic goals through data-driven management, precise policy design, and timely adjustments to enhance productivity and profitability, we aim to seize rebound opportunities and reestablish momentum so as to accelerate our market share gain in earnings growth. May 8th marked ZTO's 20th anniversary. In the 20 years, yesteryears, against all odds, we went from keeping up to catching up to taking the lead, achieving all records we set for ourselves in both quality and quantity. All of our past success came not only from the hard work of our people, but also from the support of the time and history and the entire society. We do not take for granted of what we have, and we will journey forward with gratitude. Today, riding the rising tide, we are determined to buckle details and enforce execution. Tomorrow, We will hang tight to our aspiration and belief, secure our core competencies, and enhance quality, develop comprehensive might that extends to equal advantages, which will enable us to bring happiness to more people through our services. Now allow me to take us through the financial results. As I go through financials, please know that unless specifically mentioned, all numbers quoted are in RMB, and percentage changes refer to year-over-year comparisons. Detailed analysis of a financial performance, unit economics, and cash flows are posted on our website, and I'll only go through some of the highlights here. In the first quarter, ZTO maintained the momentum of profitable growth. Our parcel volume grew 16.8% to $5.2 billion, expanding the quarterly market share by 1.2 points to a record 21.6%. With steady execution of our strategy, the income from operation robustly increased 76.4% to $1.4 billion, and associated margin grew 4.3 points to 14.1%. Total revenue increased 22.1% to $7.9 billion. ASP for the core express delivery business increased 8.5% or 11 cents, thanks to a healthier competitive dynamics. There is an average of 15 to 20 cents per package delivery fee increase since fourth quarter last year. Total cost of revenue was $6.3 billion, which increased 16.9%. Overall unit cost of revenue for the Core Express delivery business increased 3.6% or $0.04. More specifically, line haul transportation costs per parcel decreased 0.2% to $0.57 as a combined result of surging fuel costs offset by cost efficiency gains from increased use of high-capacity trailer trucks, improved load rate, and better route planning. Unit sorting costs increased 6.5% to $0.36, driven by increased labor rates and higher depreciation and amortization charges not entirely absorbed by increased level of automation. Lower than expected volume dampened our scale advantage for the quarter, and as we look forward to volume returning to normal, our cost advantage and scale efficiencies will continue to demonstrate. Gross profit increased 47.7% to $1.6 billion as a result of increased volume in ASP. Gross margin rate increased 3.6 points to 20.5%. SG&A expense, excluding share-based compensation as a percentage of revenue, dropped 0.2 points to 5.6%, demonstrating a stable and sound corporate cost structure. Adjusted net income increased 34.9% to 1.1 billion, and associated margin grew 1.2 points to 13.3%. Operating cash flow grew 131.8% to 1.1 billion. Capital expenditure totaled 1.8 billion, which is at a lower level as planned. Now let's talk about the guidance. The spread of Omicron caused the derail of the entire industry's growth momentum starting in March. and we are slowly but surely coming out of it. The industry declined 11.9% year-over-year for the month of April, but the good news is that in May, we saw daily volume reached over 300 million, especially during and after the three- to four-day May holiday break. Volume growth has come back to positive. Given our visibility into the month of May, we estimated the cumulative volume increase for the first half of the year to be around 4.5% to 5% for the industry and around 9% to 11% for ZTO. There is a fair chance that an orderly recovery will take place and the economy would resume growth. Accordingly, the express delivery industry could also continue its current trajectory and get back to a healthy click of around 10 to 13% of growth for the second half, which means, excuse me, I'm going to take a sip of water, which means the industry for the whole year could grow between 7.5% to 10%. Now, taking into these considerations, as well as the current market condition, plus the COVID uncertainties that still remain, the company revised its annual parcel volume projection to be in the range of $24.96 billion to $25.86 billion, representing a 12% to 16% increase year over year. Relative to the entire industry performance, the company is confident to achieve one percentage point or more increase in its market share gain for the entire year. These estimates represent management's current and preliminary view, which are subject to change. Now this concludes our prepared remarks. Operator, please open the call for questions. Thank you.
spk05: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one 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. In the interest of time, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question will come from Thomas Chong with Jefferies. Please go ahead.
spk03: How is it? And then we can share our expectations for June. Because it's also June 18th. In addition, we just talked about the first half. It's about 4.5% year-on-year. I don't want to confirm if this number is right. offense management for taking my questions. I have a question regarding the situation of the pandemic and the monthly positive volume trend. Given we have seen positive partial volume growth in the first few days of May, how should we think about for the full month, as well as our thoughts about the June performance? And a follow-up on that, that is relating to, double confirm, the first half, the growth is around 4.5%. And how should we think about the growth momentum in Q3 and Q4? Thank you.
spk02: Thank you, Mr. Chang, for your question. Let me answer this. I'll give you a little bit more breakdown. Yes, indeed, in the month of May, we saw a recovery, especially during the May holiday. And on a cumulative basis, including the first five months of the year, we are looking at around 3%, 3.5% at most of cumulative growth, because the really first two months of the growth is fairly strong for the industry. The industry specifically for the month of May, we think it's probably just coming out of the negative and into the positive territory. And then for the month of June, with the consideration of the shopping gala of 6-18, we think it could have a good possibility of reaching the high single digit of growth year over year. Now, with these together, it gives us a rough estimate of the first half of the year for the industry to be around 4.5%. Now, going into the third and the fourth quarter, we referenced to what happened in the first outbreak of COVID-19 in late 2019 into 2020. rebound, it was healthy. And with that into consideration and also referencing to the projection that was given by the State Post Bureau in the beginning of the year, which says the industry is capable of growing at least 13%, we estimated the third quarter and the fourth quarter for the second half of the year to grow around 10% to 13%. So specifically perhaps 12% to 14% or 10% to 12% respectively for the third and the fourth quarter. That gives us for the entire year around 7.5% to 10% growth for the industry. I hope that is detailed enough. However, I want to ensure that you understand there are still lots of uncertainties in the outcome of the recovery, what might take place in terms of the pace. For sure, it's going to recover. It's the matter of how long it will take. And as we go into deeper into the second half of the year, then we will have a better view. Thank you.
spk03: Thank you.
spk05: Again, if you have a question, please press star then 1. Our next question will come from Tian Hao with CH Capital. Please go ahead.
spk01: This question is for President Lai. President Huiping, this is for President Lai. These are two questions. One is, I think, in the Middle East, he also gave a report. When he reported it, he also mentioned some benefits of their self-sufficiency, that is, the benefits of logistics self-sufficiency. In fact, in the lock-down in Shanghai, I also saw some benefits of self-sufficiency. For example, he is in the field of warehousing, Then the staff, etc. Then I was thinking in today's environment, how do you look at self-sufficiency and this kind of alliance model we are now in? So for the general public, how do we develop our advantages more? This is the first question. The second question is This is about China's economy. China's economy is indeed weak. Everyone can see it. So it can be seen that now everyone's demand for logistics delivery has been shortened from long-term to short-term, from e-commerce to restaurant, food delivery, food delivery. The first one is the difference between the 1P business and the franchise model. What is Mr. Tsai's view on that? how ZTO is going to strengthen its own competitive advantage. The second is regarding the end user behavior change from a long haul to a short distance from e-commerce to food and grocery delivers. So in that front, you know, does ZTO have any plan? Thank you.
spk06: We feel that the advantage of this model is very obvious. First, it is not fast. Second, it can develop all the internal forces of our station. It can do it for itself. What I understand is that J&M is a company that is open to reformation. The issue of property rights is very clear. It is very clear that the production of grain comes from the water. So it doesn't mean that J&M's product quality is not good. In fact, over the years, the quality of our products is improving every year. So In the long run, I believe that the growth of the courier industry will be supported by the strong market in China. In the long run, we are confident in the growth. This year's growth is also confident. Although in April there was some downfall, in May, in my opinion, I should be in the middle of growth. In the second half of the year, This demand is still there. Then the key question is whether it has a business volume. In fact, it is its efficiency guidelines. In other words, whether you are from the beginning or from the long term to the short term, but it must be the efficiency guidelines that are brought to the user, that is, spend less money to buy more things. From our factory manufacturers or agriculture, it must cost less.
spk02: Thank you, Tian, for your question. I'll translate for Mr. Lai and also a supplement where needed. First of all, whether a directly operated vertically owned model or a franchise model is better is really a discussion we had for years. It's not about one better versus the other, but each has its own advantages or disadvantages. We look back in the history, the speed of expansion, the way that we are able to motivate thousands of entrepreneurs to be part of the tremendous growth supported with economic growth. All these shown that the express delivery in a franchised model is not necessarily in providing any quality of services inferior to the directly operated model. The important part is it is a crucial element in terms of how we are able to ensure the investment and the reward of our franchise network is fair and equitable. And our initiatives throughout our 20 years demonstrates that commitment and also result of success in allowing the express market share gain, efficiency gain, as well as servicing the customer needs. You specifically talked about during the pandemic or hard times what happened to some of the more vertically operated business. Our view is that the time as this are extremely unfortunate but rare. The entire growth of the industry hinged upon economic growth is have been intact and then also will be intact going forward. And a franchise model will continue to demonstrate its foundational design, which is to, again, motivate with self-propelled intention to grow in quality as well as quantity. That leads to the second part of the question. The express delivery industry is a long journey. We do know that the first part of the year, the Omicron impact was quite devastating. However, despite such, we saw the rebound in the month of May, and we're expecting the demand remains intact. Volume or not, distance, short or long, we think the critical consideration is whether efficiency is there. For example, as we grow into more of the rural area, going into the farm, going to the factories, the goal is to spend less but achieve more, either for manufacturers, for merchants, or for consumers. The efficiency and the scale achieved by the express delivery industry has been an enabler for the past growth and also we expect it to continue to be the case in the future. The example Mr. Lai gave us is that when we have products in the eastern part of the country or north part of the country, as it being shipped, the produces or goods or daily the cost of going into all these directions across the nation are very much similar with very little differences. And that is because the efficiencies of the entire network, the high efficient operations and the people, and of course, the network partners that made it all possible. So going into the future, Certainly, we will expand our capabilities into diversified products and services serving different needs, different distances or different type of goods and different consumer groups. But that doesn't change our overall goal to continue to seize the opportunity that is presented to us in the Chinese economic growth and the industry growth. I hope that answered your question.
spk01: Thank you, Hubei.
spk05: Our next question will come from Frank Du with Diawa Capital Markets. Please go ahead.
spk00: Good morning, Mr. Lai. I have two questions I would like to ask. The first one is about how we see the competitive status of our entire industry this year, especially in terms of price. So I got two questions, first related to the market competition landscape. And so how is the real for the industry ASP for this year? And do you see any changes for the market competition after the recent outbreak, pandemic outbreak? And the second question is, what is the financial impact for the Express Services VAT waiver?
spk06: Thank you. No matter how the outside changes, but there is one thing, that is, you have a scale, and then you have a cost advantage, your service quality is good, it will definitely increase the share. My own judgment is that China Express will definitely enter a market share, Yeah. Yeah. Yeah. Yeah. Yeah. Yeah.
spk02: Let me first translate for Chairman for the first question, and then I'll take your second question. It doesn't matter what the external changes are. There are a few critical internal considerations, especially our capacity, our efficiency gain, because the overall growth trajectory of the economy of China is still on an upper trend and express delivery industry has been a catalyst or as well as a beneficiary of that growth. I, we think that the industry dynamics will continue to shift towards a more concentrated players taking greater share of the market and the stronger ones will become even more strong. will become stronger. In terms of the pricing, we think the Omicron or the pandemic is going to become a thing of the past, even though it might continue to be part of our norm as prevention measures are becoming our day-to-day norm. Yet, the competition since the month of September last year has become has become more stabilized and sensible because everyone has realized and experienced the past pain. And market share gain could be a short stint, but it's not sustainable for the long run. Quality and efficiency is still what the consumers or our customers demand. So pricing going forward, we think, will continue to remain stable. Here and there in certain regions, depending on the capacity and the demand, there will be reasonable changes, but that is all part of the normal competition, and we think that's not going to become as unreasonable and out of economic basis. The second part of the question, yes, the government has given VAT waivers for services related to the prevention, related to goods that are for prevention. So what happens to our business is the impact might come with the rate differential. In other words, because we pay VAT for the entire receipt, which includes the delivery fee, and the delivery fee element is enjoying the VAT waiver as it goes into the hands of our network partners who deliver those packages. And of course, the deliver network will issue receipts to us. Some of those network partners are able to enjoy zero VAT rate And as we report the entire receipts with our 6%, because we don't differentiate in our receipts whether it's zero or 6% taxed, so there is a rate differential that we are required to take the burden off. Does that answer your question?
spk00: Okay, thank you. Thank you, Liza. Thank you, Yanzhu.
spk05: Our next question will come from Parash Jain with HC Hong Kong. Please go ahead.
spk04: Thank you. And if I may ask two questions. First of all, when I look at your slide nine, and for whatever it's worth, when we look at your next five years of e-commerce sales forecast versus the parcel volume growth, parcel volume growth is trailing by about 3.5%. Shall we think more as the differential is more of an inflation or are we seeing a trend where customers are again start to consolidate the volume before they place an order? And secondly, given the inflationary environment, I would really appreciate if you can talk about a bit of sensitivity to some of your key cost items, especially related to fuel and labor. and your operating leverage opportunity, i.e., I mean, you have done a tremendous job in the first quarter, but how shall we think about every additional 10% of volume that you handle? How shall we see the change in cost, i.e., what shall we think as more fixed versus variable? Thank you so much.
spk03: Hello.
spk02: Yes, thank you for your question. On the slide 9, we talked about... Hello? Yeah, on the slide 9, we talked about... The volume growth in China, I think the volume growth has starting to exhibit a... Hold on one second. On page nine for the market growth.
spk04: Yes.
spk02: The express delivery, let me just give you an overview. I'm looking at the page nine. It's a percentage of market share by various different players. Is that correct?
spk04: I was more referring to expectation is that the volume growth will be 8.5% driven by 12%. growth in online retail sales. So the volume growth is trailing the retail sales. Is it because the ticket size is increasing and is it largely inflation or you think that we will continue to see the volume growth will trail the online retail sales as consumers start to consolidate the volumes before they place an order?
spk02: I think the interpretation when you look at the online retail growth, the online physical goods growth, and the entire economic growth, we believe the e-commerce growth is at a faster pace, and it's still growing at a faster pace because more and more of the people are going online and become web shoppers. then the parcel in itself, we do believe they are becoming more scarce or more of a sporadic order placing versus concentrated as in before during the shopping gala of November 11th. So, day-to-day goods are being also placed order are also being placed online instead of going to the grocery stores. So that is the trend. And in that also another factor to consider is we are going into the other than consumer logistics, we are also going into the rural areas, going into the farm, going into the factories and bringing in service to those needs and those demands. The produce, which is of recent years development, more and more people are developing the habit of buying their perishables even online. And then the second part of the question relates to our cost element. Overall, I think the industry is in a way a brick and mortar, so we do have a facility cost. We have the depreciation and of our invested assets, hard assets. The machinery, the trailer trucks that we have mentioned, those are also all part of our cost. The labor cost is what we are, keeping our watchful eyes on because that's still a large portion of our total cost. The leverage is on gradually introducing a replacement of these labor costs with machinery, automation, and then also the digitization investment into our IT technologies is also part of our effort. to continue to address the cost increases in the labor. The network framework of how we are developing more direct routes will also reduce the number of sortations, hence reducing the sorting cost and transportation cost. And then that's also part of the structure of the cost that we are able to find opportunities to further enhance efficiencies.
spk04: Okay. Thank you so much. You're welcome.
spk05: This concludes our question and answer session. I would like to turn the conference back over to Ms. Yan for any closing remarks.
spk02: Thank you, everyone, for your interest and continued support of our business. The fact that Omicron disrupts the business process is I think largely behind us and we are optimistic about the growth prospect of the Chinese economy as well as the express delivery industry. With our advantages clearly distinguished from the rest in our capacity and efficiency gain that are still underway with the benefits of digitized approach, in proper and more detailed management in finding productivity as well as efficiency. So we are confident in the growth of our business in terms of volume, as well as our ability to deliver even faster growth in our profitability. So with that, again, thank you everyone for joining today's call. We look forward to speaking with you individually soon. Thank you.
spk05: The conference is now concluded. Thank you for attending today's presentation.
Disclaimer