Tongdao Liepin Group

Good day and welcome to the Tong Dao Liepin Group 2026 1H Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Liz Wong. Please go ahead, ma'am.

Thank you, operator. Hi, everyone. Thank you for joining us on today's earnings call to discuss our interim results. The company's financial and operating results were published and were posted on the company's IR website at ir.liepin.com. On today's call, Mr. Rick Tsai, company's chairman and CEO, will kick off with our business operations and highlights. After that, Mr. Tim Tian, our CFO, will continue with detailed financial review. After the prepared remarks, we will be available to answer your questions. All remarks will be in Chinese followed by English translation. Before we continue, I would like to remind you that this call may contain forward-looking statements made under the Safe Harbor provisions. Such statements are based on management's current expectations, current markets, operating conditions, and related 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, which may cause the company's actual results, performance, or achievements to differ from those in the forward-looking statements. Further information regarding these and other risks, incidences, and factors is included in the company's filings with the Hong Kong Stock Exchange. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise except as required under law. Please note that certain financial measures that we use on this call are expressed on a non-GAAP basis. Our gap results and the reconciliation of gap to non-gap measures can be found in our earnings press release. I will now turn the call over to our chairman and see you in a week. Please go ahead.

Okay, thank you. Hello, investors. Welcome to the mid-term performance release of Tao Liepin Group in 2026. Thank you for your continued attention and support for the company.

Dear investors, welcome to Tao Liepin Group's 2026 interim results call. Thank you for your continued attention and support for the company.

Since the beginning of the second half of last year, the company's cash return has achieved a direct rise compared to the previous year, and in the first half of this year, it has shown the beginning of rapid growth. At the same time, our income and interest rates have also gained a turning point in this performance. In the first half of the year, the group achieved a profit of 9.89 billion yuan, a growth of 5.6% compared to the previous year. The overall interest rate has increased to 79% for the past four years. As a result of the conflict between organizational structure optimization and AI technology, the group's profit has been realized. The operating profit of the adjustment has been adjusted to 1.36 billion yuan, which is 8.8% of the total growth. The amount of adjustment has been adjusted to 1.1 billion yuan, which is 13.5% of the total growth Against the backdrop of microeconomic structural adjustments and profound changes in the employment market, we are actively implementing our development strategies

of Deepen Value Win with AI. We are seizing opportunities amid transformation and continuously enhancing our capabilities as a small. Since the second half of last year, the company's cash dealings has turned from decline to growth, and this growth accelerated further in the first half of this year. At the same time, both revenue and profits have reached a clearly flashing point. In the first half of the year, the group generated revenue of RMB 989 million, representing a year-on-year increase of 5.6%. Consolidated gross margin increased to 79%, the highest level in recent four years. Benefiting from organizational optimization and the efficiency gains brought by AI technology, the group recorded non-GAAP operating profit of RMB 136 million at 8.8% year-on-year, and non-GAAP profits attributable to owners of the company of around RMB 110 million at 13.5% year-on-year. Looking at our core operating performance, excluding the impact of other income, such as interest income and government subsidies, non-GAAP operating profit increased by a substantial 42.6% year-on-year. demonstrating that our operational improvement continues to accelerate.

in high-end manufacturing, communication semiconductors, IT, Internet and other industries. The company is holding on to the three-dimensional opportunity brought about by the development of the new industry. In the first half of the year, the number of new jobs on the platform increased by about 14% in the same ratio. Among them, smart hardware, artificial intelligence, aerospace equipment, whole car manufacturing and other segment areas have increased by more than 35%. And the second quarter growth rate is further accelerated by the first quarter. So it shows that the company's recruitment confidence continues to warm up. On the other hand, AI for the current market The demand for talent and the choice of talent is further diversified. AI technology is rapidly upgrading from bonus to labor-intensive in the labor market. The necessary basic capabilities from Liepin big data to see the requirement for AI tools The position is nearly 100% higher than the growth in this year's quarter. Further reflects the impact of AI on the recruitment market

Looking back at the first half of the year, China's recruitment market continued to exhibit two major trends, a structural recovery and the deepening impact of AI. On one hand, the pace of the overall market recovery showed clear differentiation across industries, benefiting from the continued implementation of national policies to support economic growth and the strong expansion of emerging industries. recruitment demand remained robust in sectors such as advanced manufacturing, telecommunications, semiconductors, IT, and the Internet. We successfully captured the opportunities arising from the development of emerging industries. In the first half of the year, the number of newly posted positions on our platform increased by approximately 14% year-on-year. with job postings in segments including smart hardware, artificial intelligence, aerospace equipment, and vehicle manufacturing, each increasing by more than 35%. Growth in the second quarter further accelerated from the first quarter, indicating a continued recovery in corporate hiring confidence. On the other hand, AI is driving further evolution of talent demand and talent preference in the market. AI skills are rapidly transitioning from a value-added skill into a fundamental capability required in the labor market. According to Liepin's big data, in the first quarter of this year, the number of positions requiring proficiency in AI tools increased by nearly 100% year-on-year, further demonstrating the impact of AI in the recruitment markets.

In June this year, we and Tsinghua School of Human Resources and Management Research Center of Tsinghua School of Human Resources and Management Research Center published a report on the trend of AI technology in the age of AI. It provides a new direction of guidance for the deep understanding of AI in the age of AI for Chinese enterprises. In the future, we will continue to continue to research and cooperate with Tsinghua University to continue to lead the new business of hiring human resources. in the AI era. In this report, it also shows that in today's enterprises, he is willing to pay a high price for a talent with compatibility. The general demand for talent is also gathering towards the middle and high levels. As a brand with a deep and high-end talent recruitment, Liepin has a firm change in the history of AI waves, and has systematically integrated AI into the product and service chain of companies. In this transition, the BHC platform has shown a relatively good growth trend. As of June 30, the number of personal users on the platform has exceeded 1.22 billion, which is 9.6% of the same growth. In March this year, the more active the platform, the higher the number of users it has created in history. In the first half of the year, the size of the talent recruitment has also achieved rapid growth. In June of this year, we partnered with the AI and Management Research Center of Tsinghua Universities

School of Economics and Management to jointly release the report of skills trends in the AI era, which provides new guidance for Chinese enterprises to get an in-depth understanding of the evolution of talent structures and the shifting demands of capabilities in the age of AI. Going forward, we will continue our research collaboration with Tsinghua University, further lead the new paradigm in the talent recruitment industry, and strengthen Liepin's dynamic capability edge in the AI era. The report shows that companies are increasingly willing to pay a premium for the talent with cross-functional capabilities, while overall talent demand is increasingly concentrated at mid to senior levels. As the platform focused on mid to high-end talent recruitment, Liepin embarked firmly on its transformation from the outset of the AI wave systematically integrating AI capabilities across the entire product and service lifecycle. Against this backdrop, our BHC ecosystem has all demonstrated healthy growth. As of June 30th, the cumulative number of registered individual users on the platform exceeded 122 million, representing a year-on-year increase of 9.6%. monthly active users reached a record high in March this year, while the recall volume of core talents during the first half of the year also achieved rapid year-on-year growth. On the B side, the number of registered business users reached 1.51 million at 5.4% year-on-year, including around 63,000 paid customers, representing a year-on-year increase of 0.4%. On the H side, The number of verified headhunters reached approximately 231,000, up 6% year-on-year, while the number of times headhunters reached out to individual users increased by 10.6% year-on-year.

AI products have become the most important driving force for the company's growth. . . In the six months since the launch of the AI account, four out of the AI account users have completed the upgrade to the general account, of which more than 70% of new customers have chosen the AI account. So whether from the customer's account distribution rate or from the proportion of active accounts, the AI account has been greatly improved compared to the previous AI accounts.

Putting on the brand positioning of AI talent on Liepin, AI recruitment with Liepin, our AI products have become the company's most important growth driver. The current customer coverage of our AI account, including AI Pro account, has increased to nearly 100%. At the end of last year, we upgraded our AI account to the AI Pro account, adding features such as AI-assisted search and AI job memory. These capabilities help recruiters expand the boundaries of talent discovery and deliver an experience that becomes more accurate and more seamless with every use. Within six months of the launch of the AI Pro account, around 40% of AI account customers had upgraded to the AI Pro account, while more than 70% of new customers chose the AI Pro account. Both the distribution rate per customer and the proportion of active accounts increased significantly compared with the AI account prior to the upgrade.

我们另外一个AI全自动招聘产品意向人选 交付能力进一步提升 有将近60%的岗位订单交付第一意向人选的时间 已经从两小时进一步压缩到了一小时 Another fully AI-driven recruitment product intended candidate search

has further enhanced its delivery capabilities. Nearly 60% of job orders can now deliver the first interested candidate within two hours. And we have further shortened this delivery time to within one hour. At the same time, both the average daily number of orders initiated and the average daily number of CV downloads increased by more than 70% year on year. In terms of cash blinks from our AI products, It exceeded RMB 100 million for the full year last year. In the first half of this year, AI products maintained a strong momentum with cash billings increasing by nearly 100% year-on-year. Going forward, AI products will contribute further to the continued increase of the company's overall cash billings.

So, our self-proclaimed large model, Tongdao Huicheng, has continued to be delivered. We rely on a large number of industry experience, knowledge and exclusive field data to enhance the accuracy and efficiency of the match. At the same time, based on the behavior of the full chain of users at the end, we have built a strong learning system that strengthens the currency. The user's interaction experience continues to improve. For the western-end office AI, it has fully realized the coverage of professional planning, the expansion of the job search method, the matching of precise positions, and the one-stop currency service that establishes the full flow of investment. Our large language model continues to evolve, leveraging extensive industry expertise and domain-specific data. It enhances both matching accuracy and efficiency. At the same time,

Based on behavioral feedback throughout the entire user journey, we have built a closed-loop reinforcement learning system, continuously improving the user interaction experience. Our C-Side Career Partner AI has fully implemented a one-stop end-to-end service, covering the entire process from career planning and expanding career directions to precise job matching and resume submission. In the first half of the year, we launched a new memory function module, which effectively extended the user interaction journey and strengthened user engagement, further enhancing individual user activity and the overall job-taking experience.

In the future, we see that in the wave of AI resetting the position structure, the initial white-collar position is very obvious, and the professional and leadership talents are relatively stable. The impact of the blue-collar position is also relatively limited. Therefore, our future development strategy will continue to surround AI-era recruitment needs to carry out product delivery and in-depth service, and continue to improve our standby priority. On the other hand, we will also focus on the blue-collar and city service channels in-depth, and expand our commercialized version.

Looking ahead, we see that amid the wave of AI reshaping the job structure, entry-level white-collar positions are facing significant pressure, while professional and leadership roles remain relatively stable. The impact on blue-collar positions, meanwhile, is also relatively limited. Accordingly, in terms of our future development strategies, On one hand, Liepin will continue to iterate our products and deepen our service around recruitment needs in the AI era, continuously strengthening our generational competitive advantage. On the other hand, we will continue to focus on the blue-collar and urban services sectors, further expanding our commercialization footprints.

This year is the 15th year of Liepin's rise in human resources. We all know that companies now want to find a suitable candidate, but it is no longer a simple match. It requires a lot of thinking about industry standards, organizational strategy, structural logic, and position design. It is also a full test of HR experience and ability. In the future, Liepin hopes to become a professional AI and HR consultant. Realize from the previous consultation This year marks Liepin's 15th year of deep engagement in the human resources industry.

We understand that for companies today, finding the right candidates is no longer simply a matter of matching. It also requires extensive consideration of industry benchmarks, organizational strategies, organizational structure and logic, and job design, while also placing significant demands on the experience and capabilities of HR professionals. Looking ahead, Liepin aims to become a professional AI HR advisor. Within vertical industry ecosystems, we seek to deliver end-to-end AI solutions for complex long-horizon tasks. From front-end consulting and process communication to talent sourcing and successful placement, providing HR professionals with comprehensive talent solutions for the AI era across the entire recruitment lifecycle.

本周公司正式发布了面向企业客户的Agent Lily, 也标志着我们的AI应用业务迈向了一个全新的发展阶段。 . . . . . . The company officially launched Lili, an AI agent targeting business users, marking a brand new stage of development for our AI application business. Currently, Lili is initially embedded within our AI Pro account.

with version one now available for client trial. We aim to help recruiters gradually transition from extensive use of our existing AI tools and features to end-to-end support delivered by this intelligent assistant. By expanding in-depth service offerings and introducing more invocation scenarios, we will further boost recruiters' reliance on and engagement with our AI products. Moving forward, Lillie will serve as a powerful catalyst for the end-user penetration of our AI products and sustain business growth, opening a new chapter for Liepin in the application of AI agents within the HR sector.

Finally, I would like to talk about the shareholder feedback. In the shareholder meeting in 2025, we promised that ah ah ah ah ah ah ah For the final part, let me talk about shareholder returns. At our 2025 Annual General Meeting, we committed that over the next three years,

we would distribute dividends equivalent to no less than 50% of non-GAAP profit attributed to owners of the company. This year, we have completed the payment of the 2025 dividend with the actual payout ratio reaching approximately 63%. This fully demonstrates management's confidence in the company's profitability and our determination to actively enhance shareholder returns. As Liepin's operating performance continues to improve this year, we will continue to honor our commitment to shareholders while exploring diversified shareholder return initiatives and actively giving back to all of our investors for your longstanding trust and support of Liepin. We remain committed to creating sustainable and long-term value for our employees, customers, and shareholders. That concludes my presentation. Next, our CFO team will walk you through the company's detailed financial performance.

Thank you, Rick. Once again, thank you for attending the company's press conference. In the first half of this year, we felt that the recruitment market was in the warm-up phase. The structure of the system was significant. The company also underwent a direct transformation of its performance. The cash return since the third quarter of last year has achieved a total growth of 4 consecutive quarters. In the second half of 2026, the company achieved a total growth of 9.89 billion yuan. In terms of business, the growth of income mainly comes from the recruitment of talents and other human resources provided by businesses and households. The business achieved a profit of 8.2 billion yuan, a total growth of 6.7%. Among the AI products, the cash return achieved nearly 100% rapid growth.

Once again, thank you all for joining the company's earnings call. In the first half of this year, we saw the recruitment market showing signs of recovery with significant structural opportunities emerging. The company reached an inflection point in its performance, transitioning from decline to growth. Cash billings have reported year-on-year growth for four consecutive quarters since the third quarter of last year. In the first half of 2026, the company generated revenue of RMB 989 million, representing a year-on-year increase of 5.6%. By business segment, revenue growth was primarily driven by our talent recruitment and other human resources service to business customers. which generated revenue of RMB 820 million at 6.7% year-on-year. In particular, cash billings from our AI products increased by nearly 100% year-on-year. Meanwhile, revenue from talent development service to individual paying users remained broadly stable compared with the same period last year, increasing by 0.2% year-on-year.

In the first half of 2020, the company's profit margin has been further increased. The profit margin has increased by 1.1% to 79%, which is mainly due to the improvement of the product structure of the AI product input station, as well as the improvement of the performance of the delivery team. In the first half of 2020, the overall operating cost of the company was 7.14 billion yuan, and the total operating cost was 72.2%, which is 0.5% lower than last year. Among them, On the cost and expense side, the group's growth margin continued to improve in the first half of 2026, with growth margin increasing by 1.4 percentage points year-on-year to 79%.

This was mainly attributable to an improved product mix driven by the increasing contribution of AI product, as well as higher productivity across our delivery teams. In the first half of 2026, the group's total operating expense amounted to RMB 714 million with an overall operating expense ratio of 72.2%, down 0.5 percentage points from the same period last year. Sales and marketing expenses were RMB 462 million, representing a year-on-year increase of 9.8%. This was mainly due to higher online sales expense resulting from changes in the channel strategy of the online certification training business operated by our subsidiary.

In 2020, the annual cost for the first half of the year was 1.09 billion yuan, which is 13.3%. The cost of development is 11%, which is a significant decrease of 2.4%. This is mainly due to the efficiency improvement brought by AI tools' domestic capacity and the optimization adjustment of the structure of the industrial organization. The management cost is 1.44 billion yuan, and the management cost is 14.5%, which is the same as the quality. In the future, we will continue to focus on the management of software optimization and optimization management, improve the operational ability of new projects, and continue to improve the organizational performance of AI tools.

Research and development expenses were RMD 109 million in the first half of 2020, down 13.3% year on year, with the RMD expense ratio declining significantly by 2.4 percentage points to 11%. This was mainly driven by efficiency gains from the internal adoption and tools, as well as the optimization and adjustment of our RMD organizational structure. General and administrative expenses were RMB 144 million, with a GNA expense ratio at 14.5%, probably stable compared with the same period last year. Looking ahead, we will continue to focus on cost reduction and efficiency enhancement, further deepen our streamlined management structure, strengthen our capabilities in refined operational management, and continuously improve organizational effectiveness due to the adoption of AI tools.

Taking all of these factors together, the company delivered a significant improvement in operating performance in the first half of 2026 with substantial growth at the profit level.

In the first half, the company's operating profit and the profit attributable to owners of the company amounted to RMB 114 million and RMB 88 million respectively, representing year-on-year increase of 5.2% and 9.6%. After adding back share-based compensation expenses and the amortization of intangible assets arising from maximization, Non-debt operating profit was RMB 136 million at 8.8% year-on-year, while non-debt profit attributable to owners of the company was around RMB 110 million, representing a year-on-year increase of 30.5%. Excluding the impact of other income, which includes interest income, non-debt operating profit increased significantly by 42.6% year-on-year, demonstrating a further improvement in the quality of the company's operations.

As of June 30, 2026, the companies had a total cash reserves of more than RMB 2.4 billion.

This provides a strong financial foundation for the company's future operations and development, the expansion of new products and markets, as well as enhanced shareholder returns. In July this year, the group completed the payment of its 2025 annual dividend of HK$0.2 per share, with a payout ratio of 63%, exceeding our previous commitment to the market. As Rick also mentioned earlier, we have adopted a sustainable dividend policy. Going forward, the company will continue to enhance its shareholder return mechanism and launch diversified forms of shareholder returns so that we can share the benefits of the company's growth with all of our shareholders. This concludes my presentation. Hi, operator. We can now open the floor for Q&A. Thank you.

Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on your phone line will indicate when your line is open. Please state your name before posing your question. And again, that is star 1. We'll take our first question from Jenny Hsu with CICC.

Hello, I'm Xu Zhongnan, an analyst at Zhongjin. Thank you for your introduction. Congratulations to the company for its outstanding performance in the first half of the year. I want to follow up on two questions. The first question is, can you help us generalize the development of AI for the whole photo industry? Good evening and thanks for taking the question. This is Jenny Xu from CICC. So I have two questions. The first one, how is AI changing the corporate recruitment demands and what's your outlook for the industry from your perspective? And my second question is, the company has achieved significant improvements in the first half. So moving forward, could you please share more about your outlook for the second half of 2026? Thanks.

Let me answer the first question. Thank you very much for your question. From the perspective of the industry, the domestic shopping market now presents some structural opportunities. For example, with the AI industry chain, high-end manufacturing continues to expand as a representative of the new industry. At the same time, traditional industries are also accelerating the intelligent transformation along the AI upstream and downstream channels. Thank you for the question.

From an industry perspective, China's recruitment market is currently presenting structural opportunities. Strategic emerging industries represented by the AI value chain and advanced manufacturing continue to expand. Meanwhile, traditional industries are accelerating their intelligent transformation along the upstream and downstream of the AI sector. In the first half of the year, Liepin capitalized on the new opportunities arising from these changes and achieved growth against the market downturn.

From the demand of talent The importance of the company's attention to the AI skill of the player It is significantly improved We also show in the list of platform numbers In the new position It marks the ability to use AI tools This kind of position is a large number AI ability to use Now it is already from the bonus in the workplace This becomes a necessary foundation And it will further extend to AI Agents In terms of talent demand, employers are placing significantly greater emphasis on candidates' AI skills

Liepin platform data shows a sharp increase in newly posted positions that specify AI tool proficiency as a requirement. AI application capability is rapidly transitioning from a value-added skill into a fundamental capability and is now extending further into advanced confidence such as AI agents. At the same time, the popularization of AI technology has given rise to substantial new demand. For example, talent that combines AI capabilities with cross-industry backgrounds.

企业面临的招聘挑战是在持续加剧的。 首先我们看到企业对人才间别的 ah ah ah ah ah shenmei suyang ah等等这种隐性能力呢就提出了更多的要求啊这些都会增加招聘工作的不确定性嗯最后就在招聘的难度持续上升同时呢企业其实对招聘效率要求的他只会增加不会减少那么从业者他就非常需要有一个有效的助力工具来去帮助他扩展这个能力边界以及提升他整体的

In this new environment, recruitment challenges are intensifying. First, companies have raised their standards for talent identification and assessment. Senior technical talent, management talent, and composite talent who meet the demands of the AI era remain in scarce supply. making talent identification and comprehensive assessment increasingly difficult. Second, talent profiles are becoming less defined. Employers now place greater demands on candidates' judgment, integrity, cognition, aesthetic sensibility, and other implicit capabilities, adding uncertainty to the recruitment process. Finally, as recruitment difficulty continues to rise, enterprise expectations for recruitment efficiency have increased as well, underscoring an urgent need for recruiters to expand their capability boundaries and improve the quality of recruitment delivery.

顺应这些市场和需求的变化, We hope to continue to create this value for customers and to open a new round of growth through the landing of this new product.

In response to this market and demand shifts, our core operating strategy is to help enterprise resolve their recruitment 10 points, leveraging Liepin's high quality talent pool, deep industry know-how and continuously evolving AI products. We aim to continue creating deep value for our clients and unlock a new round of growth for Liepin through capability deployment.

I'll say that much first. The second question, Tim, you can talk about it. The outlook on income and profits in 2026. OK.

I'll answer this question. We have already mentioned in the previous sharing. Since Q3 last year, we have achieved the correctness of cash refunds in four consecutive seasons. And then on this basis, we also expect cash refunds this year and the whole year. uh uh uh

As noted in our earlier remarks, cash billings have recorded year-on-year growth for four consecutive quarters since the third quarter of last year. Building on the foundation, we expect cash billing for the full year 2026 to maintain mid-single-digit growth. combined with the deferred effect of cash dealings from the second half of 2025, this will continue to drive revenue growth. In terms of growth margin, we are pleased to see the company's growth margin improve by 1.4 percentage points year-on-year in the first half. For the full year, we will continue to focus on AI products and sustain improvements in product mix. and delivery efficiency. Accordingly, we expect the 2026 growth margin to maintain the growth trend established in the first half.

The share price will also rise a little, but the overall GDP will fall. The impact of the share price impact on the share price impact on the share price impact on the share price impact on the share price impact on the share price I believe we will also bring you a better price report next year.

On the expense side, we estimate that total operating expense in 2026 will see a modest increase as the business recovers, though the overall operating expense ratio is expected to decline. Other income declined in the first half, primarily due to lower principal resulting from shareholder return-related outflows and the impact of overseas rate cuts. Concurrently, the depreciation of the U.S. dollar also resulted in certain foreign exchange losses. We expect these headwinds to partially improve in the second half. Based on the above assessment, profit performance in the second half will show a significant year-on-year improvement compared to the first half. And we expect full-year non-GAAP profit attributable to owners of the company to grow by more than 20% year-on-year. As profit upside is substantially unlocked, we will also deliver enhanced value returns to our shareholders. Okay, operator, we are ready for the next question.

Thank you. Thank you. We'll next go to Thomas Chung with Jefferies. Please go ahead.

Good evening. Thank you for accepting my question. I have two questions. The first one is to ask the management, how do we see the latest progress of AI? How do we look at the potential of the future transformation? The second question is also to go back to the cost-benefit side. How should we look at the investment in AI, as well as the market promotion cost, and the new cost of the company? How to look at it? Thank you. Thank you for your question.

I'm going to talk about the first question. You mentioned some of the recent progress of the company AI, and then look at the future cable capabilities. In fact, I just talked about some of them. In our company, we see that our corporate customers have a standard evaluation of talent and these user preferences are in rapid response. So the user demand is not in terms of more, but in terms of gold. . . . . . . . Thank you for the questions. As I mentioned earlier, enterprise evaluation criteria and hiring preference for talent are evolving rapidly

The focus of hiring demands is no longer on quantity, but on precision. The difficulty of identifying and assessing truly scarce talent continues to rise, which in turn creates great growth opportunities for me to high-end platforms like Liepin. Currently, leveraging AI equipment products such as the AI Pro account and intended candidate search, we have effectively helped enterprise recruiters achieve improvements in hiring quality and work efficiency. And the product value has been fully validated in our first top performance. At the same time, as AI continues to advance, our products need to be more deeply embedded into the daily workflows of recruiters. empowering enterprise organizational capability building through comprehensive end-to-end service.

LiLin can help recruit people to meet the needs of Hong Kong people, understand the image of talent, and develop the mapping of cross-industrial talent. The output is divided into the results of talent promotion, and from the executive level, it promotes recruitment projects to land. If you want to achieve this kind of ability, you must have strong know-how in the industry and a large number of talented talent resources.

As I noted in my opening remarks, this week we launched Lily, an AI agent targeting business users. Further extending our service boundaries across the four value chains, such as organizational development, role planning and design, and talent identification and assessment. Lily can assist recruiters in calibrating role requirements, defining talent profiles, conducting cross-industry talent mapping, delivering tiered talent recommendations, and driving recruitment projects at the operational level. Delivering these capabilities requires deep industry know-how and a substantial pool of high-quality talent resources. and these are precisely Liepin's foundational strengths and competitive advantages.

And these are precisely Liepin's foundational strengths and competitive advantages. We are also full of confidence in this product So what's next We will continue to co-create with customers Hope to continue to wait with Lily In the future, it can be used independently Become our key catcher in expanding the customer circle and extending the service chain At the same time, we also believe that Lily's launch will further improve the AI of this company The entire company's AI product evidence It leads to a rapid growth of our entire AI block At this stage, Lily is embedded within our AI Pro account, further enhancing its appeal and boosting crime sickness and penetration. Based on user feedback from the first week,

We have been highly impressed by both Lily's response speed and the wide service capabilities, and we are fully confident in this product. Moving forward, we will continue to cooperate with clients, and as Lily continues to iterate, it's eventually becoming available as a standalone offering, serving as a key lever to expand our client base and extend our service chain. We believe the launch of Lilly will further strengthen the company's AI product matrix, drive sustained market growth in the AI segment, and continue to lead innovation and transformation in the recruitment industry. We also welcome all investors and analysts to activate an AI Pro account to experience Lilly firsthand.

I'm going to talk about that first. Then the second question is for you. You talk about the market promotion fee and the payout fee.

Okay, thank you, Thomas. Your question. As for this three-part question, I just mentioned it in the previous question. We expect the comprehensive operating cost of 20 years to increase. But it must be with the increase in income. Its comprehensive cost rate will definitely not drop. uh uh

Thank you, Thomas, for your question. We expect total operating expense in 2026 to see a modest increase. However, as revenue grows, the overall operating expense ratio is expected to decline. Among these, the sales expense ratio is expected to edge up slightly, mainly due to higher expense resulting from changes in the market channels operated by our subsidiary. For Liepin's main platform, benefiting from AI2 enablement and productivity gains, the sales expense ratio is expected to decline year on year, with marketing expense remaining a relatively low proportion of total sales expense.

然后管理费用方面的预计权限还是维持稳定管理费用率 uh uh uh will continue to work hard in the future.

On the general and administrative expense side, we expect overall stability of the full year with the G&A expense ratio expected to remain broadly stable with a moderate decline. will continue to advance our streamlined management structure and focus on enhancing organizational operation effectiveness. For research and development expenses supported by organizational efficiency gains driven by AI tool enablement, we expect the downward trend to continue for the full year. In terms of marketing promotions and user acquisition, we continue to attract individual users through the brand positioning of AI talent on Liepin and remain committed to substituting premium products for conventional marketing spend. This is also reflected in our user performance. Registered individual users grew by 9.6% year on year in the first half, and MAU reached a record high, demonstrating the effectiveness of the current strategy. Going forward, we aim to continue delivering high-quality growth through the service capabilities of our products. Okay, in the interest of time, that concludes our Q&A session. Thank you all once again for joining us today. If you have any further questions, please contact our IR team. Have a good night. Bye.

Thank you.

And this does conclude today's call. We thank you for your participation. You may now disconnect.