Cheetah Mobile Inc. (CMCM) Q4 2015 Earnings Report, Transcript and Summary

Hello and welcome to Cheetah Mobile Fourth Quarter and Full-Year 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation there will an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Helen Zhu. Please go ahead.

Thank you, operator. Welcome to Cheetah Mobile’s fourth quarter earnings conference call. First of all, we are very sorry for our delay of the earnings call and also the earnings release. With us today are our CEO, Mr. Fu Sheng, and our CFO Mr. Andy Yeung. Following management’s prepared remarks we will conduct a Q&A session. Before we begin, I refer you to the Safe Harbor Statements in our earnings release, which also applies to our conference call today, as we will make forward-looking statements. At this time, I would now turn the conference call over to our CEO, Mr. Fu Sheng. Please go ahead, Fu Sheng.

Thanks, Helen. In Q4 we had strong performance on both on the mobile user growth and monetization front setting new records across a number of areas including Mobile MAUs, revenues and profit. For 2016, we’ve reached our exceeded our strategic target for growing our mobile and overseas revenue to account for the vast majority of Cheetah Mobile’s overall sales. This enabled us complete our transformation into a truly global and mobile company. Looking ahead, we remain firmly committed to building Cheetah mobile into one of the leading mobile platforms globally and are sustainable and profitable basis. Our strategy is simple and clear. Using tool apps a main entry point for user acquisition further building content into our platform for user engagements and the leverage big data analytics as our strategic differentiation which is serving both our user and advertisers more efficiently and effectively. Clean Master, CM Security and other utility apps has helped us acquire a massive user base and we continue to serve as main entry points of our user occupation. To leverage our massive user base for 635 million mobile MAUs, we intend to build highly engaging mobile platform with content reach apps that we are doing out. In fact, our content strategy is already showing some promising results. In February our breakthrough mobile game apps Piano Tiles 2, was reached ranked as number one most downloaded free game on both Google Play and Apple app globally. In China, since integrating these content and personalization new servers into our mobile browser, we have seen significant growth in daily time spent per user to over 27 minutes. And these listings are our strategic is big data. Over the top of the year, we have made significant investments in big data analytics in order to better understanding and better serve our users. We believe such data analytics can help us present more personalization. Personalized content and information including advertising to our users, at the same time we understand and respect our user privacy rights. Our overseas users’ data are such on amazing AWS and we follow strategically privacy regulations in U.S. and Europe. While we made good progress in data analytics so far, we still see much more room for improvement and data analytics will remain a key focus of our efforts and investment. Geographically, we will continue to focus on the U.S. and China for mobile monetization. And in India for the user acquisition in addition to enhancing our partnership with Facebook, Google and Yahoo, we aim to further expand our user presence for, by building and R&D center in searching value. And under the leadership of Tech inventing, Charles Fan, who recently joined us as our new CTO, in addition, with [indiscernible], our Director of Sales Operation by more local sales talents in U.S. markets. In India, while mobile internet is still investing, we see excessive growth and the market potential, which become our largest MAU growth market contributing over 8% of our total MAUs last quarter. We aim to become a dominant leader in over the next few years through strategic partnership with leading mobile companies like Micromax and Lava mobile. In short, in 2015, we made solid progress in our mobile and global transformation. In 2016, we will continue to focus on executing our strategy to remain a leading mobile platform globally. And we want to do it profitable and sustainable managing by mentally our leading operations teams, better utilize our marketing dollars and maintaining a balanced approach towards user acquisitions, user engagements, revenue growth and profitability. For full of 2016, we target 60% year-over-year increase in revenue growth. And the RMB1 billion non-GAAP net income roughly 70% non-GAAP margin for product developments in 2016. Our main focus will be using tool apps as main entry points for user acquisitions and build content into our platform for user engagements. With that, I’ll stop and hand the phone to our CFO, Andy.

Thank you, Sheng. Hello everyone. Again, we apologize for the delay in release our earnings announcement today also the delays in our conference call. We actually closed 2015 with a very solid quarter both financially and operationally. For the full-year 2015, we are pleased to report that we have successfully accomplished the ambitious subsidiaries that we sat for last March, mainly exiting 2015 with more than 600 million monthly mobile active users doubling our annual revenues and making both mobile and overseas revenues the last maturity of our total revenue. Overall, 2015 marked an important and successful milestone for our transformation into a leading global mobile internet company having a tap for more sustainable and profitable growth in the future. Now, I’ll walk you through the details of our financial performance, all financial numbers are in RMB unless otherwise noted. Total revenues grew by 92% year-over-year and 12% quarter-over-quarter to RMB1.13 billion in the fourth quarter. For the full year 2015, our total revenues increased by 109% year-over-year to RMB3.68 billion. This strong performance was again driven by our mobile and global businesses. By platform, mobile revenues grew by 262% year-over-year and 14% quarter-over-quarter to RMB804 million for the fourth quarter. Mobile revenues account for 71% of our total revenues in the quarter up from 38% in the prior year period, and 70% in the previous quarter. In December, Cheetah has approximately 635 million mobile monthly active users worldwide, a 61% increase from the year ago and about 12% increase from September 2015. For the full-year 2015, mobile revenues grew by 423% year-over-year to RMB2.43 billion and accounted for 66% of total revenues in 2015. PC revenue declined by 10% year-over-year in Q4 and 4% year-over-year in the full-year 2015, the decreases in PC revenues were mainly due to the migration of internet traffic from PC to mobile in China. By region, overseas revenues were RMB616 million for the quarter up 343% year-over-year and 15% quarter-over-quarter. Overseas revenues accounted for 54% of total revenues and 77% of mobile revenues in the quarter. For the full-year 2015, overseas revenues grew by 730% year-over-year to RMB1.84 billion and contributed to 50% of total revenues or 76% of mobile revenues in 2015 up from 13% total revenues and 48% of mobile revenues in 2014. The increase was primarily driven by the growth of our overseas mobile user base and rapid adoption of mobile advertising business in the overseas market. In December, 79% of our mobile user Mobile MAUs, were from the overseas market compared to 69% a year ago and 74% in the September 2015. China revenues grew by 15% year-over-year and 10% quarter-over-quarter in Q4 supported by strong mobile advertising revenues which more than offset PC revenue declines in China. For the full-year, China revenue grew 20% year-over-year. By segment, revenue from online market services were RMB1.03 billion for the quarter, up 131% year-over-year and 15% quarter-over-quarter. For the full year 2015 revenues from online marketing services grew 145% year-over-year to RMB3.24 billion. Revenue from IVAS for the fourth quarter were approximately 89%, a decrease of 35% year-over-year and 10% quarter-over-quarter. For the full-year 2015, roughly from IVAS decreased by 1% year-over-year to RMB395 million, the decreases were primarily due to a temporary suspension of our online lottery operation in response to regulation changes in China and the overall softness of working factors in the Chinese markets. Revenue from Internet security services and other for the quarter were approximately RMB12 million, an increase of 106% year-over-year and 37% quarter-over-quarter. For the full-year 2015, revenues from internet security services and others increased by 12% year-over-year to RMB45 million. The increases were mainly due to the sales of our air purifier product. Now moving to costs and expenses. SBC expenses for the fourth quarter were approximately RMB99 million compared to RMB51 million in the same period last year and RMB115 million in the prior quarter. SBC expenses for the total year 2015 were approximately RMB315 million compared to RMB132 million in 2014. As we said in the past, we will incur higher SBC expenses mainly due to share and options planned to management employees for attracting and retaining top talent for the still leading R&D area. To help facilitate the discussions of the company’s operating performance, the following discussion will be on a non-GAAP basis, which excludes stock-based compensation expenses. For financial information presented in accordance with U.S. GAAP, please refer to our press release which is available on our website. Non-GAAP cost of revenues for the fourth quarter were RMB299 million, up 113% year-over-year and 11% quarter-over-quarter. Non-GAAP cost of revenues for the full-year 2015 were RMB934 million up 132% year-over-year. The increases were primarily due to higher traffics and costs associated with the Cheetah mobile and app platform business, higher bandwidth and Internet data center cost associated with increased user traffic worldwide and data analytics. Non-GAAP gross margin for the fourth quarter was RMB834 million, up 86% year-over-year and 13% quarter-over-quarter. Non-GAAP gross profit for the full-year 2015 were RMB2.75 billion up 102% year-over-year. Non-GAAP R&D expenses for the fourth quarter were RMB160 million, up 52% year-over-year and 16% quarter-over-quarter. Non-GAAP R&D expenses for the full-year 2015 were RMB545 million up 41% year-over-year. The increases were primarily due to increased headcount associated with the expansion of our mobile business. On a net basis, we added about 350 R&D staff in 2015. Non-GAAP sales and marketing expenditure for the fourth quarter RMB500 million, up 175% year-over-year and 33% quarter-over-quarter. Non-GAAP sales and marketing expenses for the full-year 2015 were RMB1.46 billion up 155% year-over-year. The sequential increase in sales and marketing expenditure was primarily due to spending on promotional activities for our mobile business, the global promotional activities associated with the launch of our Piano Tiles 2 product. Non-GAAP G&A expenses for the fourth quarter were RMB46 million, representing a decrease of 3% year-over-year and 5% quarter-over-quarter. The decreases were mainly due to lower professional service fees. Non-GAAP G&A expenses for the full-year 2015 were RMB217 million up 95% year-over-year. The year-over-year increase was mainly due to increase in professional fees and headcount associated with being a publicly listed company. The company recognized impairment losses of goodwill and intangible assets of RMB13 million for the fourth quarter of 2015 and RMB15 million for 2015 respectively. The impairment losses were primarily associated with our online lottery business. The online lottery business was temporarily suspended in response to regulatory changes in China. Other operating income was RMB16 million for the fourth quarter 2015 and RMB98 million for the full-year 2015 respectively. Other operating income primarily consisted of government grants, subsidies and financial incentives that the company received for its operations that fell outside the scope of R&D project subsidies. Non-GAAP operating profit for the fourth quarter was RMB175 million, an increase of 66% year-over-year and 7% quarter-over-quarter. Non-GAAP operating profit for the full-year 2015 was RMB522 million, an increase of 104% year-over-year. Non-GAAP net income for the fourth quarter was RMB166 million, an increase of 88% year-over-year and 9% quarter-over-quarter. Non-GAAP net income for the full-year 2015 was RMB492 million, an increase of 104% year-over-year. Non-GAAP diluted earnings per share per ADS for the fourth quarter increased by 84% year-over-year and 9% quarter-over-quarter to RMB1.09 or $0.17. Non-GAAP diluted earnings per ADS for the full-year 2015 increased by 92% year-over-year to RMB3.45 or $0.53. Adjusted EBITDA for the fourth quarter was RMB213 million, an increase of 62% year-over-year and 6% quarter-over-quarter. Adjusted EBITDA for the full-year 2015 was RMB669 million, an increase of 100% year-over-year. Again, to remind everyone, adjusted EBITDA is a non-GAAP measure that is defined as earnings before interest, tax depreciation and amortization added on operating income and share based compensation expenses. Now, let me provide you with our first quarter revenue guidance and full-year 2016 outlook. We currently expect total revenues for the first quarter to be between RMB1.08 billion and RMB1.1 billion representing a 61% to 64% year-over-year increase. The high sequential decline in revenues in the first quarter was expected mainly due to two factors, one is seasonality, with 90% of our revenue coming from online marketing services our overall revenues are subject to seasonal fluctuations. Revenues from online marketing services are typically higher in the fourth quarter and much weaker in the first quarter of each year, particularly in the U.S. and China, the two most important mobile markets for us. And two, more than expected seasonal fluctuation in revenues generated from our largest third party advertising platform partner. However, as Sheng mentioned earlier we have implemented a number of initiatives to strengthen our direct sales network globally particularly in the U.S. In addition, we also, we streamline our operation in particular we will be more focused on optimizing our marketing spending in 2016. We expect this initiative to payoff beginning in the second quarter. As such, for the full-year 2016, we will target to achieve 60% year-over-year increase in revenues and on RMB1 billion non-GAAP net income. As Sheng mentioned, that’s about 13% non-GAAP net margin or almost 4% margin expansion that we try to achieve in 2016. Please note that the forecast reflects the company’s current and preliminary view and is subject to change. Finally, we also, the board has also announced a share repurchase program. On March 16, 2016, the company’s board of directors approved a share repurchase program whereby the company may purchase its share or ADS with an aggregate value up to US$100 million over the next 12-month period. So, with that, that concludes our prepared remarks for today. Operator, we are now ready to take questions.

[Operator Instructions]. And the first question comes from Jeff Hao with China Merchants.

Hi, thank you for taking my question.

Hi Jeff.

[Interpreted]. Hi. So, my first question is about overseas competition landscape. We’ve seen that lot of Chinese firm have achieved a very good progress in terms of user acquisition and monetization in the overseas market, especially in the tool app category, so also especially in the emerging market. So, can the management comment on your views on competitive landscape and will this issue, impact your profitability for this year and I have a follow-up?

[Interpreted]. So, thank you for your question Jeff. Our overseas competition is a hot topic at this stage. In fact, we are glad that like Cheetah Mobile have not only being successful overseas, but now have become a model for other Chinese companies, even they look for business opportunity. And to a great extent, there is recognition our model success, the success of our model. Right, so, yes, we do see a lot of competitors topping our business model. We think that there are two types of competition, the first type is that they initially use a very - vast amount of money to spend on sales and marketing expenditure to try to acquire user fairly quickly. The example of that would be some company like Apple. Yes, initially they are very successful. You think the channel to acquire some possible number of users download and value acquisition. But that’s not sustainable model. So as we have seen it in all the past two quarters, we are going to see the user acquisition when app was declining. So as such, like we do not think that, just by spending a lot of money in sales and marketing to acquire users is a long-term sustainable model. Right, so, another type is that they completely copy our business model. And it’s true that for small sized players it’s much easier to copy our overall product and business model. I think the comfortable with that 360 Security. I think they enjoyed some earlier success. So, certainly like they were successful which and our scales, but once they reached that I think they reached a pattern it’s very difficult for them to reach the scale of our level. So, I think if you look at some of the very concentrated stages, we work with only third party like Facebook and mobile traffic. And if you look at the geographic distributions, generally they would target certain markets and try to achieve some scale in those markets. But really in order to achieve the scale that, the bubble, to reach the scale that we have, the operations that we have would be very challenging I think. So, certainly we obviously pay a lot of attention to the competitive landscape. And once our competitor of the threshold that we think, we need to respond, we would respond aggressively. In fact, I think we have number of counter measure that we would aggressively pursue, to mixture that we would meet the market leader in our respective markets. So, and finally, I think we want for us to move beyond a simple business model this year. We will, again, our charges reported this year is probably simple and straight forward. We’ll continue to use two applications at the main entry point for our user acquisition. But we’ll continue deal content into our platform for user engagement and also leveraging our big data analytics and like to really differentiate our software competitor. I think this year we’ll make more significant progress on both fronts, both in terms of our content charges and also our big data analytics. Right. If you look at Cheetah Mobile today, we’re in product development, in big data analytics, in content - understanding of content products. I think we are at least couple of years ahead of our competitor. I think their understanding of those markets will probably at least be couple of years behind us. So, I think if you look at the global advertising market I think its large enough market for number of products. We have not seen material impact on our users or on our revenues at this time. I think the softness that you may see in the first quarter guidance which indicated sequential decline for the first time is mainly due to not only seasonality but also some declines in one of our largest third party advertising platform partners, where we see significant sequential moderations in south. We don’t see any structural changes in overall market or any competitive landscape. Thank you.

[Interpreted]. So my second question is about the content-driven product. Management mentioned in last quarter that there may be some breakthrough in one or two quarters, so can management give us some updates on development of content-driven products and if there can be some examples that would be great? Thank you.

[Interpreted]. So, I think when we talk about content, I think maybe we can give some example of the recent product that we have launched. The first one is our like, Piano Tiles 2, it continued it went very well globally, very well with C5 users. I was I think number one on both iOS and Google Play in February. So, that’s one example. Right. So, another one of that we have mentioned before what was called personalized content. This product has been mentioned on the prepared remarks in China, this product, we have user engagement levels on a daily basis on average user use it for almost 30 minutes per day. So, we also have beginning to rollout our product in some of the overseas markets. I think in the second quarter we’ll have a more, wider rollout of those products in the second quarter. Thank you.

Thank you.

Thank you. [Operator Instructions]. And the next question comes from Evan Zhou with Credit Suisse.

[Interpreted]. Hi, good evening Follow-up Sheng. Thanks for taking my questions. Questions regarding the performance of the legacy two core products CM Security and Clean Master, now we’re seeing some recent slight drop in the app download ranking in Google Play and all the other major rankings. So, just want to pick and source regarding, what’s your source regarding that and how do we see the kind of the overall lifecycle for these two key products? And also, how do you think about balance between the investments in user acquisition versus the itinerary of profit in 2016? Thank you.

[Interpreted]. So, well, thank you for your question Evan. This is a very good question. I think if you look at our scale today, we already have more than 600 million monthly mobile active users, in fact 35 million. And I think as we set the target last year, we’re hoping for that very ambitious target. But given the critical math what they have acquired, I think we don’t want to make pursuing a high MAU as our target or goal this year. So, I think if you look at our focus this year, we have to shift a little bit from focusing on the quantity of user growth into more the quality of the user growth and engagement. We know that some methods also have concern regarding the time users spend on the two applications. And as we have mentioned all along, we have a strategy over time to convert our user into high-engagement product. And this year our main focus will be improving that user engagement levels and the time spent that they have on our applications until content will be a major driver for that. And so, that’s how we look at the quantity versus quality of growth for our user base. The second part is that, regarding the modest declines in our rankings on app pennies, I think there are a couple of things and one is mentioned here. One is that we have, right now as we mentioned, beginning in 2014 late second half of 2014 we have a strategy to install our applications in some of the handsets with some OEM. And that now has become a quite an important channel for us especially in the emerging market. We acquired almost on a daily basis several hundred thousand new users every day, to installations. The number does not show up in app pennies. And so, I think overall, our user acquisition would be maintaining a fairly healthy rate this year, so. So, the same popular question which is old users, old products versus new products and how people know those new products, I think as we mentioned before, like this year, our focus has been on the quality of the user growth. So, and the main focus would be on content product. And overall, if you look at our target this year for example, we sort of have again like we move the over emphasis on MAU growth and then we also set a fairly realistic target of 60% year-over-year increase in revenue. The main reason that we want our product team to go back to basic for some product, and focus on user experience, and we do use dollar to promote products, we will promote our new products and new content and let our older product to grow. We’re lining Ming-Me [ph] on traffic, word of mouth and I think we have strong product and very good grand and user review. I think they would, those older products will continue growth organically. Thank you.

[Interpreted]. Thank you. Questions regarding the R&D spending and operation plan, I think you’d been recently launching the R&D center in U.S. and also hired a new CTO. I’m just wondering which are the major R&D areas that you’d be focusing on, is it more relied to - ready to fundamental technology or product driven enhancement, and how do we see the kind of the R&D spending in 2016 download? Thank you.

[Interpreted]. Okay. Thank you for your question. Your question is very professional. So, your question is very professional, very good questions. I think when we talked to some of the investors of industry a lot of time they only see one dimension of our company which is our user number, user growth and MAU growth. But we also, actually we have very strong R&D team. Over time we have now close to almost like 1,600 people that is in R&D department. And those folks have developed very good strong skill in new products. So, I think compared to our competitors we have a much stronger R&D project line teams. I think that would make a big difference in our competitive landscape. Right. So, I believe if you look at the mobile market today, I think you will see that user would use less to seek out information but rather they would enjoy the benefit of smart content delivery, more personalized content will be delivered to mobile user. So, this is an area that we think lot of opportunity there. So, if you look at what we have done, we also have higher charge on, a very experience reference in the tech industry in Charles Fan to become our CTO, and leading our global effort in some of these moments in R&D. So, I think if you think about it right, it will only deliver, if you want to focus on two applications we probably don’t need a very big team, only a few people can develop two applications. But if you think about, we want to use big data to help us to deliver and personalize content I think still there is some technical difficulty bottleneck there. I think this is an area that we have some experience and will continue to focus on it. And I think that from expertise that we can utilize in second, and that’s why we’re doing a global R&D operation. So, I think we would re-translate into competitive advantage for us. Again, we utilize big data analytics to develop personalized smart content delivery applications. And I think that would make us real competitive in the marketplace. Thank you.

Thank you, Fu Sheng. Thanks Andy.

Thank you. And the next question comes from Wendy Huang of Macquarie.

[Interpreted]. Thank you. My first question is so Cheetah originally was found from the Kingsoft Group. So, within the Kingsoft Group there was, also other fast growing things such as Kingsoft Cloud. So, is there any collaboration that Cheetah can have with other sister companies to generate more synergies in the future? And the second is about the global advertising market, such as [indiscernible] and also the personalized recommendation actually on the lines has changed a lot. So, what a kind of the bottlenecks or issues or issues that Cheetah focus on to address in the next one year and also what kind of resources that Cheetah expects to devout to adjust this issue? Thank you.

[Interpreted]. Thank you for your question. I think when we look at our issue with Kingsoft, I think one of the very important contribution that Kingsoft had, is that they were very smart to maintain, allow us to maintain independence, operating independently from other products of the operations. So, if you look at our cooperation with other product, Kingsoft Corporation, they are always enhancing transactions that are based on normal commercial terms. So I think over time you would see they would continue to provide more, enhancing our last influence on Cheetah Mobile. I think that’s a good thing. I think as a publicly listed company, we always maintain our independence. So, of course like overall, we’ve continued to work very well with Kingsoft and the operation there. For example, going forward we’re going to utilize Kingsoft Japan to be part of how expansion effort in Japan. And that agreement they have been reached between us and Kingsoft operations on that. So, I think you would continue to see in certain areas we’ll work very well with Kingsoft to benefit both companies. But generally we always have often transaction with our parent company. So, your question about the global advertising market, I was very tuned. So if you look at some of the softness in the first quarter in our guidance I think that’s as we mentioned before big data seasonality and some of the greater than expected seasonality or softness coming from one of our largest platform partners Facebook. So, I think if you look globally, I think that’s how we look at it. One of the key areas for us for investment in the direct Southeast, in the direct south market team, we initially go with these. This is an area that we will have to probably do up one. Selling, advertising in developed market like U.S. and Europe is more complicated and more complex than most people would think. So, this is an area that we will continue to investing, to mention, we have a number of initiatives to expand our direct sales network in U.S. And we think that in couple of - probably in the second quarter or third quarter we will see some content coming from those efforts.

[Interpreted]. Yes, my question is about the Indian market expansion, so what you’re thinking up there and what kind of investment size and also what kind of partners are you looking in the Indian market? And second question is about Seabird’s database recently talked. So was the intuition of the Seabird’s database many to actually increase the ROI of the advertising platform in future and also to kind of reduce some malicious or the fraud clicks? Thank you.

[Interpreted]. Yes, so quickly to answer your question, I think you were trying to, the announcement that we made that we have formed, it’s not like alliance with other firms to share information on potential threat to content. And I don’t think we’re collecting viruses, I think we’re trying to collect information on potential strategic smartphone and share that with industry players. I think that’s a pretty normal security issue practice where different security firm would share what they know about different viruses and share information to help protect some on similar entity. So, that’s the purpose of that announcement and that agreement which is we’re working with other industry players, to provide better security software for mobile handsets. So that’s the second part of the question. I think the first part of the question, do you want to answer that. So, I think your question is about our investment strategy particularly in India. I think the overall point of view that we have for investment is that we, investment has to be considered case by case basis. And we have to make clear stand for us and we are also mindful of migrations. Obviously, some of our competitors for example, a company called 360 when overseas acquired Opera for a very happy migration of RMB1.2 billion, it was like $200 million of net debt. That’s a pretty happy price when we look at it because we actually have studied this case for more than a year now, almost a year now. And then, we cannot use the Asia migration to make acquisition overseas. We have to make sure that it should valuate, take the investment, valuation makes sense to us. So, for India, our view is that, India is a very attractive long-term market. There is a lot of potential. But it’s also a market that has limited multi-station capability at this point. So we’re mindful of that. Given the market view, we’re early in development. I think we’ll continue to rely on organic growth in India and only use investment as a supplementary strategy that’s not going to be a meaningful [indiscernible] our effort in India. But yes, opportunity presents itself when there is no small investment that makes sense to us, we’ll make that investment. But again you have to consider context of our overall strategic in India and also in terms of reasonable valuation that makes sense to us. If you look at our, currently if you look at our balance sheet we have almost $200 million in cash and we can certainly have the capability to raise more funds if we need to make investments. But I think at this point we’re pretty comfortable with our cash balance and also our position in market right now.

Thank you.

Thank you.

Thank you. And as there are no more questions, I would like to turn the call back over to management for any closing comments.

Yes. Before we end the call, I just want to, just in case, due to an earnings release, we actually we also have make another announcement in addition to just our fourth quarter earnings. As we mentioned before, our board of directors have announced share repurchase program. And so I just want to provide a bit more details of that to investors before we close out the call today. Our board of directors has authorized in purchase of up to RMB100 million worth of our share on ADS. If you look at our board of directors’ decisions, it’s our strong belief that our company is in a very strong position, and our shares are undervalued and demonstrate our confidence in the longer-term business prospects for our business. So, just in case, people have not noticed that on our earnings call or in the press release, I just wanted to mention that. So, Helen?

Yes. Thank you all for joining our conference call today. If you have further questions, please do not hesitate to contact. Thank you. Bye.

Thank you.

Thank you.

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