J&T Global Express Ltd B

Thank you for standing by. Welcome to J&T Global Express Ltd 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star 11 on your telephone. You will then hear an auto message. Please be advised that today's conference is being recorded. I would now like to hand the call over to the first speaker today, Ms. Sylvia from the company.

Thank you, operator. Hello, everyone, and welcome to J&T Express 2023 earnings conference call. I'm Sylvia from the investment department. The company's results and the investor relations presentation were released earlier today and are now available on the company's IR website at ir.jtexpress.com. Before we start the call, we would like to remind you that The call may include forward-looking statements which are underlying by a number of risks and uncertainties and may not be realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of J&T. This presentation also contains some unaudited non-IFRS financial measures. that should be considered in addition to, but not only as a substitute for the company's financials prepared in accordance with IFRS. I have with me J&T's Executive President, Stephen Fan, Vice President, Charles Ho, and CFO, Dylan Tay. Our management will share strategies, operating highlights, and financial performance for the full year of 2023. This will be followed by a Q&A session. With that, let me turn the call over to Steven. Steven will read through his prepared remarks in Chinese before I translate for him in English. Steven.

Okay. Hello, everyone. Welcome to today's press conference. On behalf of JITUSUDY, it is an honor to share with you the company's annual performance in 2023. This is the company's In the past year, in the face of multiple challenges of the macroeconomic economy and intense market competition, our business has still gained rapid growth. In 2023, the company handled a total of 18.8 billion packages, which is 29% of the total growth. Next, I will introduce the development of each business in parts. First is China. In 2023, the express business in China made a major breakthrough. In the case of a 27.6% increase in business volume and a 0.7% increase in market share, EBITDA has been adjusted to profit and loss. After four years of accumulation, G2 has become one of the most competitive express service providers in the Chinese market. At the business end, we are deeply aware that the industry is experiencing a process from quantity change to quality change. Therefore, we are very concerned about the service quality, whether it is the quality of the service . . . . In the last two or three years, G2 has launched a high-end e-commerce product, 2UDA. This is the company's new service that was developed on the basis of standard express products, marking our product's diversification. Our network capability and strength are constantly improving. In the future, we will improve service quality, improve brand image, and improve customers' understanding of G2 brands to reach more users and accumulate more high-quality customers. Next is Southeast Asia. . . . . . . . . . . The third is to provide high-quality, high-performance services. Next, I will introduce our performance results and future development plans around these three driving factors. The first is the development of the e-commerce industry and the courier industry. In 2023, Southeast Asia e-commerce transactions amounted to $1,897 billion, which increased by 22.6%. Among them, social e-commerce transactions amounted to $819 billion. is one of the fastest-growing markets in the world, with a 36.2% growth rate. G2 has caught up with this growth, especially with the trend of social media rising rapidly in Southeast Asia. In addition, G2 has improved its network construction and operation capabilities. G2 has been growing in the Southeast Asian market for nine years, covering the widest network density in Southeast Asia, with the widest CUD service range, and the strongest express service provider with the widest processing capacity. The single-day processing value during the harvest period is up to 16 million units. This solid network has provided us with good security for our long-term growth. In 2023, we will also use the industry-advanced experience and measures accumulated in operation in China to operate in Southeast Asia, making our unit ticket costs in Southeast Asia drop by 11.8%. The efficiency of operation is significantly improved. In the future, we will continue to invest in network construction China China China The average investment time of the company in Southeast Asia has been reduced by 6.5%. The customer speed rate is also constantly decreasing. The quality of service is constantly increasing. We are concerned that the customer's demand for quality of service is increasing. In the future, we will continue to maintain close communication with customers and provide customized services to meet the needs of multiple customers. Finally, the new market. The customs data shows that In 2023, China's cross-border e-commerce import and export scale reached 2.4 trillion yuan, which increased by 15.6 percent. Among them, cross-border e-commerce exports of 1.8 trillion yuan increased by 17.6 percent. The development of cross-border e-commerce is as good as ever. More and more Chinese e-commerce platforms have participated in global competition, among which the Latin American market is called the last blue sea, becoming one of the potential markets where major cross-border e-commerce giants focus on. At the same time, as the political and economic relations between the Middle East and China entered a new historical period, it sought economic transformation by itself. The Middle East has also become a popular choice for e-commerce platforms to go out of the sea, and G2速D, after two years of deployment, has established the last public network in this market. Due to the surge in e-commerce out of the sea in China, in 2023, the company's new package volume in the new market will increase by 369%. In the future, we will continue to expand our production capacity, expand our network capacity and quality to better serve our customers and grow with our customers. In the future, we will pay close attention to the movements of other global markets. We may choose the right way to enter other markets at the right time and achieve sustainable growth at a global scale. We believe that through constant efforts and continuous innovation, we will be able to serve global customers better. Hello, everyone.

Welcome to today's earnings call. On behalf of J&T Express, I'm pleased to share with you the company's performance for the year 2023. This is the company's first financial report since its listing. In the past year, Despite facing multiple challenges from the macro economy and fierce market competition, we have still achieved rapid growth. In 2023, we handled a total of 18.8 billion puzzles, representing a year-on-year increase of 29%. Now, I will share with you the development of our business in different regions, starting with China. In 2023, We have achieved EBITDA breakeven in China, which is a major breakthrough for us. Our parcel volume increased by 27.6% year-on-year, and our market share increased by 0.7 percentage points, a double gain in market share and profit. After four years navigation, J&T Express has become one of the most competitive express delivery operators in China. On the business side, we have noticed that the industry is transforming from quantitative growth to qualitative enhancement, and therefore, service quality is our priority. Our service quality has been improving as demonstrated by a few of the service quality indicators, such as the statistics disclosed by the State Post Bureau and logistics industry platform. With the improvement of service quality, we are able to reach higher quality customers. Thus, the company's volume mix has been continuously optimized. The proportion of reverse look parcels and individual parcels has been continuously increased. We have set up a special program to develop branded customers. And at the end of 2023, we have seen a significant increase in the number of branded customers. reflecting substantial endorsements from our customers. In 2023, we also introduced 2Yoda, a new premium e-commerce express delivery service on top of standard express delivery products. This diversified our product portfolio and demonstrates our enhanced network capability and strength. Looking ahead, We aim to broaden our customer base and cultivate a roster of premium customers through continuous elevation of service quality, enhancements of our brand image, and a strengthening of customer engagement and recognition of the J&T brand. Now, moving on to Southeast Asia. In 2023, we handled a total of 3.2 billion parcels in Southeast Asia. representing a year-on-year increase of 28.9%, far beyond industry average. Our market share has expanded to 25.4%, a 2.9 percentage points increase from 2022, further consolidated our leadership position. Our growth in Southeast Asia was driven by three main factors. First, the growth of the e-commerce and express delivery industry in the region. Second, our solid network infrastructure and superior operational capability. And third, our high quality and cost-competitive services we provide. I will now present our business results and future development strategy around these three growth drivers. First is the growth of e-commerce and express delivery industry. In 2023, The transaction value of e-commerce in Southeast Asia reached US$189.7 billion, representing a year-on-year increase of 22.6%, of which the transaction value of social e-commerce reached US$81.9 billion, representing a year-on-year increase of 36.2%. This makes Southeast Asia one of the fastest growing markets across the globe, and we see this growth opportunity, especially the growth of social e-commerce in the region. Second is our solid network infrastructure and superior operational capability. J&T Express is deeply rooted in Southeast Asia and has been cultivating the market for nine years. We are the express delivery service provider with the broadest network coverage, the highest network density, and the broadest coverage of cash on delivery services and the largest handling capacity in Southeast Asia. For example, during Ramadan, our daily parcel volume peaked at 16 million. Our well-established infrastructure has laid a solid foundation and support for our long-term growth. In 2023, our operational efficiency has been greatly improved through applying the advanced industry know-how in China to Southeast Asia, with our course proposal in Southeast Asia decreased by 11.8% year-on-year. Going forward, we will continue to invest in our network infrastructure and enhance network capacity and efficiency. We will utilize the extensive know-how in China to empower our Southeast Asia business, further improving our operational and management capabilities. Last but not least, we are able to provide with high quality services with competitive pricing to our customers. As operational efficiency improves, the cost per parcel is expected to decline. which drives us to offer our customers more competitive prices, thereby making our customers more competitive in a dynamic market. At the same time, our service quality improved in 2023 with the average delivery time for parcels reduced by 6.5% year-on-year, while the complaint rate continued to decline as well. As the demand for high-quality services increases, we will continue to maintain close communication with customers to provide customized services and cater to their varied needs. Lastly, the new market. According to customs data, China's cross-border e-commerce imports and exports amounted to 2.4 trillion RMB in 2023, representing a year-on-year increase of 15.6%. among which cross-border e-commerce exports amounted to 1.8 trillion RMB representing a year-on-year increase of 19.6%. The development of cross-border e-commerce is advancing rapidly with the increasing number of Chinese e-commerce platforms engaging in the global market. The Latin market is seen as the last blue ocean and has emerged as a key area of focus for leading cross-border e-commerce platforms. Furthermore, as the political and economic ties between the Middle East and China enter a new chapter and the region undergoes an economic transformation, the Middle East has also emerged as a favorite destination for e-commerce platforms expanding internationally. After two years of strategic development, J&T has successfully established its last mile delivery network in these markets. Benefiting from the explosive growth of China's e-commerce platforms going overseas, our parcel volume in new markets grew by 369% year-on-year in 2023. Moving forward, we are committed to enhancing our productivity while elevating both the efficiency and the quality of our network. Our goal is to foster mutual growth by providing superior logistic services to our customers. Looking ahead, we will closely monitor the development of other markets globally and are likely to enter into selected markets at up to moments and in an appropriate way so that we can achieve sustainable expansion on a global scale. We firmly believe that our relentless dedication and ongoing innovation will enhance our ability to serve our global customers and attain our low-cost targets. I would like to take this opportunity to extend our gratitude for your support and trust. Together, let us look forward to more achievements by the company in the future. With that, I will invite CFO Dylan to discuss our financials.

Thank you everyone for joining the call today.

Now please allow me to take you through the financial highlights. Please note that unless specifically mentioned, all numbers I will be quoting are in US dollars and percentage changes refer to year-on-year comparisons. Detailed financials of our performance, unit economics, cash flow and capex are posted on our IR website and I will only go through some of the highlights here. For J&T Group overall, our total revenue increased 21.8% year-on-year from $7.3 billion in 2022 to $8.8 billion in 2023. This was mainly driven by the market share and parcel volume growth of our express delivery services in the 13 countries we operate. The total gross profit in 2023 was $473 million compared to a gross loss of $270 million in 2022. Our annual adjusted EBITDA turned profitable for the first time. amounting to $147 million in 2023, while we had an adjusted EBITDA loss of $894 million the previous year.

Next, I will present our segment results. Let me start with Southeast Asia segment.

Our revenue increased by 10.6% year-on-year growth from $2.4 billion in 2022 to $2.6 billion in 2023 as a result of partial volume growth and flexible pricing strategy. Our gross profit was $470 million in 2023 compared to $476 million the year before. We had an adjusted EBITDA of $376 million in 2023, representing a year-on-year increase of 13.3% compared to $332 million in 2022. Our adjusted EBITDA margins in these two years were 13.9% and 14.3%, respectively, which is relatively stable. As you can see, we maintain a healthy and sustainable level of EBITDA profitability in Southeast Asia. Our cost has been reduced continuously by expanding the existing economies of scale since we can integrate the volumes of all the e-commerce platforms being the independent e-commerce enabler.

We are also able to leverage our know-how in China into Southeast Asia to further drive down our costs. Our operating leverage has also assisted us to deliver this healthy unit economics. Next, let me move to the China segment.

As mentioned by Stephen, we are pleased to share that we have achieved our first positive adjusted EBITDA in 2023. which was a breakthrough and milestone for us For the year of 2023 revenue increased 27.7% year-on-year to $5.2 billion from the year before along with 27.6% year-on-year growth in parcel volume Revenue per parcel in China was $0.34 in 2023 which was relatively stable compared to the year before. This was primarily driven by the diversified customer base and the optimized volume mix, further supported by our improved service quality.

On the other hand, cost per parcel declined from $0.4 in 2022

to $0.34 in 2023, which was in line with our improved overall operational efficiency. In China, we have adopted many measures to improve our cost efficiency, such as investing in self-owned line haul vehicles, upgrading automated equipment in our soiling centers, Improving labor efficiency through standardization in operating procedures Optimization of performance metrics As a result, we had a gross profit of $59 million in 2023 compared to a gross loss of $665 million in 2022 The adjusted EBITDA was $31 million in 2023 while the adjusted EBITDA for China was a loss of $723 million in 2022.

Thirdly, let me share about our new markets segment.

As you recall, we entered Saudi Arabia, UAE, Mexico, Brazil and Egypt in 2022, which we define as our new markets. Our revenue for our new markets tripled from $82 million in 2022 to $332 million in 2023, driven by strong growth of parcel volume and market share. As we ramp up into economies of scale, we achieved our first positive gross profit of $1.7 million in 2023.

compared to a gross loss of $19.1 million in 2022.

Adjusted EBITDA of this new market recorded a loss of $74 million and $82 million in 2022 and 2023 respectively. And the corresponding negative margin were 90% and 25%. which representing a significant narrowing of losses.

We were still in the investment stage in 2023 for these new markets.

But going forward, we will further enhance our network capacity by increasing investment in equipment in soiling centres, increasing our line haul vehicles and adding new outlets to meet

the ever-growing service demand, as mentioned by Stephen. Lastly, for our cross-border.

Due to our strategic adjustments and focusing on our core, we closed down the cross-border small parcel business in the fourth quarter of 2023, which resulted in some one-off expenses, such as personal severance,

contract suspension penalties and lost deposits.

The revenue in 2023 was $660 million, down 6.8% year-on-year from $708 million in 2022. The adjusted EBITDA of this segment was a loss of $170 million in 2023 compared to a loss of $90 million in 2022.

Finally, let me return to our consolidated numbers.

As a result of all the factors mentioned above, we achieved our first consolidated positive annual adjusted EBITDA of $147 million, which is a turnaround from an adjusted EBITDA loss of $894 million. We had an adjusted net loss of $432 million in 2023, significantly narrowed from the loss of $1.5 billion in 2022. From the cash flow perspective, we had a net cash inflow from operating activities of $342 million in 2023 compared to a net cash outflow of $520 million in 2022, which is also a healthy turnaround.

As of the end of 2023,

Our total cash and cash equivalents and restricted cash were $15.3 billion. This concludes our prepared remarks. Operator, please open the line for questions. Thank you all. Thank you.

We will now begin the question and answer session. To ask questions on the phone, please press star 11 and wait for a name to be announced. Please stand by while we compile the Q&A roster.

One moment for the first question.

The first question comes from the line of Chi-Ping Feng from CICC. Please ask your question.

Hello, can you hear me?

Yes, we can. Hello, I am Chi-Ping Feng from CICC. In the case of CICC in 2020, many companies failed to make good results. I have two questions. The first question is about Southeast Asia. Because I looked at the overall average price and cost of Southeast Asia, the price has dropped and the cost has also dropped. The market share has increased by nearly 3%. And then, in fact, I think it has done a very good balance in terms of cost, price and scale. Of course, the second place has a 21% level of market share. So we are thinking about how to look at the future market rate of Southeast Asia and the relationship between price and cost. How to consider this matter? This is the first question. The second question is that the Chinese market performed very well. But the cost decline also performed very well. But the average price of China's domestic market for two or three years is not small. May I just quickly translate your questions in English?

and please confirm whether I understand correctly. So for Southeast Asia, your question is how the company is going to continue increase our market share. That's your first question. And the second question is, how is our, for China, how are we going to maintain our stable ASP as well as, and what help us to turn around in China?

Is that right? Yes.

Okay, let me reply to your first question. In Southeast Asia, we are an independent logistics service provider in Southeast Asia, and the e-commerce development in Southeast Asia is relatively rapid. This is very beneficial for us, because we do it on every platform. In addition, we have been in Southeast Asia for nine years because of the forwarding advantage. China China So let me translate for the first question. As everyone knows, we serve all the e-commerce platforms in Southeast Asia, and we were also the first mover in this region.

So building on these two, we have the largest network in terms of scale and also the deepest density as well as operational capabilities. All these combined will be able to help our partners to go through explosive growth in the region. On the other hand, we also have our portfolio in China that allow us to get access to the best practice from China and replicate that best practice to Southeast Asia. All this combined, we were able to provide the high quality and competitive pricing to the e-commerce partners that we work with. And we are confident that going forward, our market share will continue to increase as we execute this strategy.

Hello Steven, I want to ask a question.

Our price in Southeast Asia has dropped from 0.95 USD to 0.81 USD, down to 0.14 USD. I will answer your question. I think your question is for the benefit of the English speakers, I will just translate for you. The question is whether there is any room for us to reduce our cost in the future for our Southeast Asia segment.

I think the short answer is yes. We still have ample room for cost reduction. As Steven mentioned, we will continue to build on our scale. And as everybody knows, logistics is a unique cost game. So as we continue to build our scale and increase our market share, along with the growth in Southeast Asia, we'll be able to reduce our costs on a unique basis. On the other hand, We still have a lot of efficiencies to be gained as we replicate our know-how from China into the Southeast Asia market. Qibing.

Thank you, Qibing, for your question. And Charles will take your question about China.

Okay, thank you for the question. I'm Charles. Regarding the stability of the average price in China and the interest rate transfer, Actually, it is related to the management strategy of the company. Since March 1, 2020, Chinese business has been in progress. In the four years since then, the company has been focused on its own business development, management strategy and management goals. At different stages of development, we pay attention to and take measures. But no matter what method is taken, . . . . . . . . . . . The structure of the business volume is constantly being optimized. On the other hand, in terms of cost management, through the optimization of the rail line, the increase in the number of free rail cars, the investment of the transfer center and the homeowner's automated equipment, especially the improvement of the homeowner's ability, the efficiency of the entire network operation is constantly improving. I'll translate for Charles. As everybody know,

After we started China, the company has always been focusing on our own self-development and focusing on our strategy and our goals. We have adopted a phased approach in refining our operational capabilities in China. The overall objective is basically to make less mistakes or no mistakes in the process. On the operational front, we seek to continuously improve our service quality and from that build on our ability to obtain and get higher quality customers. For the last year of 2023, we have optimized, we continue to optimize our revenue mix, which help us to maintain the stable ASP.

On the cost front, we also continue to seek multiple measures to increase our operational efficiencies while lowering our costs, such as optimization of our line haul routing, increase our self-owned line haul vehicles percentages, increase training,

and very importantly as well, strengthening the operational efficiencies and service quality of our network partners. In the future, we hope our China market share will continue to be stable and we will continue to and we expect that all these measures that we implemented in 2023 to help us to achieve this gross profit turnaround to continue into the future.

Thank you, Chi-Bing.

Thank you for the questions. One moment for the next question.

Our next question comes from the line of Fan Su from Bank of America.

Please go ahead.

Thank you. Good evening. This is Sanchal from Bank of America. Thank you management for the presentation and congratulations for the first result. I have two questions, if I may. Number one is both are on the Southeast Asia. So number one, could you please give us an update on the TikTok Indonesia situation after its reentry? How's that impacting J&T? And from the Southeast Asia gross margin perspective, should we assume that the margin already bottomed in 2023? Second question is kind of related to the question asked by Chi-Bing. We saw that the logistic market share of e-commerce platform like Shopee and Lazada were growing quite meaningfully last year. How would that impact our strategy and growth outlook there? And do you expect more logistic insourcing by this platform? And if you and I'm also wondering if you are able to provide a quantitative target for our Southeast Asia volume growth for this year. So let me translate for myself. Hello, Mr. Guan. I'm from Maine. I have two questions. The first one is about the situation of TikTok. After it reentered the market, what is the current volume? And what is the overall price rate in Southeast Asia? Thank you, Director.

Thank you. Thank you, Fan. For your first question about TikTok back to Southeast Asia and how that impact the company's business. And Charles will take your question. And the second question is about the growth profit in Southeast Asia. And I think our CFO Dylan will take this. And the last question is about the guidance of the volume growth in Southeast Asia. And Dylan will take that as well. Charles, please.

Okay, thank you. The first question is about the change in Indonesia's TikTok last year. First of all, G2D is an independent logistics service provider. All e-commerce platforms are the company's main customers. All e-commerce platform growth will benefit the company, including Shopee. Second, the Tiktok business has been affected and has stopped for a while, but at the end of 2023, the business has recovered. This must be the first recovery for our company's business development, and it is expected to grow better. Third, The growth of e-commerce in Southeast Asia, according to the forecast data of Salewin, the industry consultant, is estimated to be around 18% in the next five years. It is far higher than the average growth rate of global e-commerce, which is expected to be 9%. It is one of the highest growth rates in the world. We believe that as e-commerce continues to grow, will also have a corresponding business performance.

Thank you. Let me translate for Charles. So everybody knows we are platform agnostic and we are the independent e-commerce enabler in Southeast Asia. TikTok and Shopee are both important customers of our company. and any growth of our partners will benefit our growth in this region. And secondly, as some of you might know, for a short period of time, TikTok's operations was affected in Southeast Asia. But at the end of 2023, the operations has resumed and has continued to experience growth in the last few months. And we expect the growth to continue into the future. According to the industry, Frost and Sullivan, over the next five years, the CAGR growth of e-commerce in Southeast Asia will be around 18%, which is significantly higher than the global e-commerce growth of 9%, which means that Southeast Asia is one of the fastest growing area for e-commerce globally. Being the largest and independent e-commerce enabler, e-commerce logistic company in Southeast Asia, we are poised to enjoy the growth of this e-commerce growth in this region.

And hopefully we answered your first question.

As for your second question about gross profit margin as well as the volume guidance for Southeast Asia, I will answer in two parts. So first for the gross profit, I think from our company perspective, we are looking at ensuring a stable EBITDA margin, which considered both the gross margin as well as operating leverage that we have. Being the first mover and the largest player in this region, we expect our EBITDA margin to be stable into the future. Your second question about the volume growth. We expect our growth for 2024 will continue to be higher than the industry growth. I hope we answered your questions.

Thank you for the questions. One moment for the next question. Our next question comes from Aaron from UBS. Please ask your question.

Thank you, Guan Licheng, for accepting my question. Congratulations on the company's first good performance. I have a question about the new market. We have noticed that the company has signed a contract with the largest online platform in recent years, so I would like to ask about the current customer structure of the company in the new market. Let me translate myself. Thank you management for taking my question and congrats for the first financial results. And my question is more about for the new markets. As we have noted, we have already signed a contract with the biggest e-commerce platform in Saudi Arabia. Just a bit curious, what's our current customer mix looks like and how soon we expect we can achieve a break-even there and what are those major drivers? Thank you, management.

Thank you, Aaron. For your questions about our business in the new markets, Charles will take this.

Okay, thank you, Aaron. The company's choice to enter the new market is one of the considerations. Whether this new market will have our already available customers. We all know that China's e-commerce platform has been in the overseas market for the past few years. The so-called overseas market has been expanding. So, in the process of choosing a new market, we will try our best to keep up with the steps of these e-commerce platforms. As the company establishes and improves its local network, it gradually gains the knowledge and competitive ability of the brand. In addition to China's e-commerce platform, We will also gradually expand our cooperation with local leading e-commerce platforms. The e-commerce platform of Shutter that you just mentioned is one of the examples. We have entered these new markets for about two years. The express industry requires a considerable investment cycle and an ability construction cycle. Let me translate for Charles.

Let me translate for Charles into English. So I think for, as everyone know, as we have developed this new market and maybe just as a refresher, the reason why we select one of the core consideration of how we select new market destination is whether we have anchor customer in this market. as everyone knows as well that in the last few years there are many Chinese e-commerce platforms seeking growth abroad so I think we will we have close relationship working with them in various geographies so we will pace our investment as well as our growth in this market along with their pace of growth in this market as well and secondly I think Even though we are relatively new in this market, we are continuously upgrading and improving our network strength and density. As we continue to build our reputation as well as our operational capabilities, we will also gradually collaborate with the local e-commerce players. Aaron, the one that you mentioned in Saudi is obviously a clear example. Lastly, I think for all these new markets, we have only started this market for two years now. In our business, we need to invest out front in building the infrastructure to allow for future growth.

We expect the losses to continue to narrow into the future and we achieve profitability in due course. Aaron.

Thank you, Mr. Charles and Mr. Dylan. I have a question about our domestic business, the business in China. We have noticed that at the beginning of the year, the company separated the Chinese region. There has been a change in the organizational structure. I would like to ask you, what are the main considerations? What is the overall development plan of our domestic business this year? How do we balance the growth of quantity and profit? Let me also translate myself. We also noted that since the beginning of this year, we have done some organizational structural change for the China operation. And just wondering what's our key reasons or our key thinking behind and what's our development goal for this year? How do we make a good balance between volume and profit growth? Thank you.

Thank you, Aaron. Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the best person to answer this question.

Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the best person to answer this question. Steven used to be our China CEO, so I guess Steven is the And then in 2023, we achieved 11.6% in China's actual war rate. In addition, our EBITDA industry has already achieved a female lead. We think this is also a milestone year. In addition, we also think that China needs independent development like other 12 countries. So we have this plan. And we want to Let me translate for Stephen.

As you know, for the last four years, our group and China, we were double-heading and you were run by the same team. And for the last four years, the group team has spent significant effort in building up our China business. With our China market share increasing to 11.6% and also achieving the first EBITDA positive as we described earlier, we will consider this as a milestone. And the second reason is I think China we believe being one of our 13 countries portfolio also deserves a chance to develop independently under a separate and computer management team. And then lastly, I think this separation will allow the group team, which is led by Stephen, to be able to spend more and even the full attention and all efforts into focusing our overseas market, which presents significant opportunity and growth opportunity for us.

Aaron, I hope we answered your question.

Thank you for the question.

Yes, I guess we are running out of time here. So that was the last question we took. So and once again, thank you everyone for joining today's call. And we look forward to have further discussions with you all. And thank you and have a good day and great evening.

Thank you.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect your line.