JOYY, Inc. Sponsored ADR Class A (JOYY) Q4 2018 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to YY Inc Fourth Quarter and Full Year 2018 Earnings Call. [Operator Instructions] Please note this event is being record. I'd now like to hand the conference over to your speaker host today, Mr. Matthew Zhao, IR Director of YY. Thank you. Sir, please go ahead.

Thank you, operator. Good morning, and good evening, everyone. Welcome to YY's fourth quarter and full year 2018 earnings conference call. Joining us today are Mr. David Xueling Li, Chairman and acting CEO of YY; Mr. Bing Jin, CFO of YY; and Ms. Ting Li, COO of YY. For today's call, management will first provide a review of the quarter and then we will conduct Q&A session. The fourth quarter 2018 financial results and webcast of this conference call are available at ir.yy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I refer you to our safe-harbor statement in our earnings press release, which applies to this call as we will make forward-looking statements. Finally, please know that, unless otherwise stated, all figures mentioned during this conference call are in renminbi. I will now turn to the call over to Mr. Bing Jin, CFO of YY to provide you a business update on behalf of our Chairman and acting CEO David Xueling Li. Then he will also go over the details of our financial results of the quarter. Please go ahead, sir.

Thank you, Matthew. Hello, everyone. Welcome to our fourth quarter and full year 2018 earnings conference call. At the beginning of my prepared remarks, I want to share the joy with you since a few hours ago we announced news regarding YY's successful completion of the acquisition of Bigo. You can find more details from our separate press release. It is an important milestone for YY group which demonstrated our confidence and commitment to the globalization strategy. Bigo has delivered both rapid user growth and significant monetization progress in 2018, making it one of the fastest growing internet companies worldwide. While Bigo LIVE is consolidating its leadership in entertainment live streaming market outside China, LIKE, the short form video app also experienced tremendous user growth and user time spend increase in short form video market. The combination of YY and Bigo's unparalleled business and services in both China and overseas will enable us to create intense live streaming content. Expand our global footprint and offer world class user experiences for our global user community. As a result, we will be well positioned to become a world leading video based social media platform. Next, let's talk about the quarter and the full year results. We concluded 2018 with another quarter of solid operating and financial results. Our total revenues increased by 28% year-over-year to RMB4.64 billion during the fourth quarter, exceeding the high end of our previous guidance range. Revenues from our live streaming business grew by 30.4% year-over-year to RMB4.39 billion. Revenue from game live streaming subsidiary Huya increased by 100.31% year-over-year to RMB1.5 billion. During the fourth quarter, we achieved year-over-year and subsequent sequential increases in both our mobile live stream and use and live streaming pay users. Our number of mobile live streaming monthly active users increased by 18.1% to 90.4 million and numbers of live streaming pay users increased by 36.6% to 8.9 million in the fourth quarter of 2018. Since we own one of the most loyal and engaged live streaming communities throughout the industry, the continuous healthy expansion of our community has enabled us to sustain our strong growth momentum. I would like to share with you more color on three key areas efforts. International expansion, content upgrade and AI technology enhancement. Firstly, we are actively exploring opportunities globally in 2018, our initial foray into the global market with several early-stage innovative products generated exciting results. One good example is HAGO, H, A, G, O. A casual game oriented social media platform that we officially launched in the third quarter of 2018. HAGO only provides around 50 casual games, but also induces multiple social features such as live streaming chat rooms, karaoke and others into the app. As a result, that platform encourage young generations to use these features to establish and maintain social connections, while enjoying casual games. Now HAGO is available in 33 countries and regions worldwide with a focus on Southeast Asian markets. In the fourth quarter of 2018, HAGO consistently topped the charts of the most popular apps on both App Store and Google Play in both Indonesia and Vietnam, HAGO's monthly active users reach 20.9 million and on average its users spend over hour on the HAGO platform on a daily basis. Looking ahead, we intend to further expand our product portfolio globally to achieve faster user growth and explore more monetization opportunities. With HAGO proven to be a smash hit in its targeted markets and the acquisition of Bigo, we're very confident that the successful model of our international operations will be a very important driver for our long-term growth. Secondly, moving to our content upgrades. In the past through our proven cross channel promotion strategy, we successfully transformed a number of grassroots performance into social phenomenon. In addition to promoting our hosts online, we have also implemented creative methods to reinforce their popularity offline. Such as our recent YY Annual Award 2018. That event features 20 original performances from 31 of our top hosts, attracting over 20 million video views on our platform. Looking forward, we will continue to build up our capabilities in packaging, promoting, and marketing our talented hosts for entertainment live streaming. We also intend to diversify our content to include more lifestyle and interest oriented live streaming content. Thirdly, on the technology front, we have continued to upgrade our proprietary AI algorithms, which resulted in increased average user time spent on our platform. We leveraged our sophisticated machine learning models to enhance the effectiveness of our content tagging. We implemented our AI-powered visual recognition technology into our content distribution engine, so that it can automatically tag and accurately recommend the most relevant live streaming shows to our audience. Through these efforts, we can create an optimal experience with users by ensuring that we distribute the right content to the right audience at the right time. As a result, our average user time spent along live has increased by 7% sequentially. In summary, during 2018 we made significant progress in upgrading our content operations and enhancing our user engagement through advanced AI technology. As we entered into 2019, we will continue to execute our international expansion strategies, while simultaneously enriching and diversifying our live streaming content. We expect these efforts to result in improved traffic to monetization conversion rates on our platform. We intend to build upon the momentum created this quarter by evaluating potential opportunities in partnerships and mergers acquisitions to further expand our operation, user base and influence as a leader in the global live streaming industry. Now that concludes the remarks of our Chairman and acting CEO Mr. David Xueling Li. Now as the CFO of YY, I would to discuss our financial results in more details. We continue to deliver solid financial and operating metrics during the fourth quarter of 2018. Our total net revenues for the fourth quarter increased by 28% year-over-year to RMB4.64 billion. Specifically our live streaming revenues increased by 30.4% year-over-year to RMB4.39 billion, accounting for 94.6% of our total net revenues this quarter. In the fourth quarter, mobile contributed 64% of our live streaming revenues, while mobile live streaming MAUs increased by 18.1% to 90.4 million in the fourth quarter of 2018. Live streaming paying users increased by 36.6% to 8.9 million in the fourth quarter of 2018. While mobile paying users constituted 75.7% of overall live streaming paying users. Cost of revenues for the fourth quarter increased by 37.2 % year-over-year to RMB3.01 billion. Revenue sharing fees and the content costs paid to the performers views and content providers increased to RMB2.56 billion in the fourth quarter, reflecting the growth of both YY and Huya's lives streaming revenues. In addition, bandwidth cost for the fourth quarter increased to RMB246.5 million, primarily reflecting continued user expansion and live streaming quality improvement. Gross profit for the fourth quarter increased by 13.8% year-over-year to RMB1.63 billion; gross margin was 35.1% as compared to 39.4% in the prior year period, primarily due to the increase in revenue sharing fees and content costs. The decrease in gross margin was attributable to the impact caused by the relatively low cost margin of the Huya segment as its contribution to our total net revenues increased significantly year-over-year. Our operating expenses were RMB931.2 million during the fourth quarter of 2018, as compared to RMB652.9 million in the prior year period, primarily due to our increase efforts in sales, marketing activities as we continue to expand in domestic and overseas markets. Sales and marketing expenses for the fourth quarter were RMB323.7 million or 7% of total revenue, compared to RMB148.8 million or 4.1% of total revenue in the prior year period. Our R&D expenses for the fourth quarter was RMB332.5 million or 7.2% of total revenues, compared to RMB282.8 million or 7.8% of total revenues in the prior period. G&A expenses were RMB275 million or 5.9% of total revenues in the fourth quarter compared to RMB218.8 million or 6% of total revenues in the prior period. Our GAAP operating income for the fourth quarter of 2018 was RMB718.6 million compared to RMB 821.5 million in a prior year period. Our non-GAAP operating income which excludes share based compensation expenses, impairments of goodwill and investments was RMB888.5 million in the fourth quarter of 2018. GAAP net income attributable to YY was RMB684 million compared to RMB740.4 million in the prior year period. Our non-GAAP net income attributable to YY was RMB836.2 million compared to RMB932.1 million in the prior period. Non-GAAP net margin in the fourth quarter of 2018 was 18% compared to 25.7% in the year prior period. Diluted net income per ADS in the fourth quarter of 2018 was RMB10.4 compared to RMB11.53 in the prior period. Non-GAAP diluted net income per ADS was RMB12.86 compared to RMB14.51 in the prior period. Now turning to the results of the full year 2018. Our total net revenues increased by 36% year-over-year to RMB15.76 billion, driven by 39.4% year-over-year increase in live streaming revenues. Our GAAP net income attributable to YY for the full year 2018 was RMB1.64 billion and our non-GAAP net income attributable to YY for the full year 2018 increased by 18.4 % to RMB3.2 billion. Diluted net income per ADS for the full year 2018 was RMB25.38 compared to RMB41.33 in the prior year period. And non-GAAP diluted net income per ADS for the full year 2018 increased by 9.7% to RMB49.05 from RMB44.72 in the prior period. Before I provide our guidance, let me first share an update regarding our online game related business. Recently, we entered into a strategic partnership agreement with Shanghai Chuangsi Enterprise development Co Limited. Shanghai Chuangsi owns 9377 Games, one of the leading game platforms in China. Under that agreement, we will obtain 30% equity interest of Shanghai Chuangsi by injecting our online game business into Shanghai Chuangsi. As a result, the financial results of YY’s online games business, which contributed to less than 3% of YY segment’s total revenues in the fourth quarter of 2018, will no longer be consolidated upon the completion of the transaction. Currently, the transaction is expected to be completed in the first quarter of 2019. With that said, we expect our net revenues for the first quarter of 2019 to be between RMB4.01 billion and RMB4.16 billion, representing a year-over-year increase of 23.4% to 28% without giving effect to the acquisition of Bigo Inc. This forecast reflects our current and preliminaries views on the market and operational conditions, which are subject to change. That concludes our prepared remarks. Operator, we would now like to open the call to questions.

[Operator Instructions] Your first question comes from the line of Thomas Chong from Credit Suisse. Please ask your question.

If I translate my questions in the English, first congratulate management on the completion of the Bigo deal. I have a question regarding the strategies of our overseas expansion in 2019 and 2020 after the completion of Bigo. Is there any KPI that we can share? How we should think about this year and next year and also if any synergies that with YY can be share, would be great. Thank you.

Thank you for your concern. It is David to answer your questions. So, firstly, I would like to thank you for all of you to join this conference call. This is actually the first conference call after we have completed acquisition of Bigo. And first, I want to share you more colors in terms of the currently asset condition for Bigo. Bigo actually has been established in the year since 2014. And at the beginning while it already became the one of the major shareholders for Bigo's business. The initial goal for Bigo is always be focused on the overseas expansions in terms of the live streaming and other video based services. In overseas, Bigo has two of their major business segment. Firstly, Bigo Live, this is our services focus on the entertainment live streaming services. Another services is called LIKE, is another services which is focused on a short form video app. Our model true services, we actually have been found out lot of synergies. So both of the products actually can promote the traffic, as well as other synergies between of the two part of the business already. So actually Bigo is another company which has been fully qualified for their own IPO. But after our series consideration for both of the YY's board as well as Bigo's board, so both of the management teams actually has been fully operate by integrating of the two part of the business, definitely will have better development for future. So that also is representing a big strategy for the YY's growth. So in the future while we will bring in more valuable asset or other investee business back to the growth. So all achieve the whole management as well as to bring more synergies between the different parts of the business into the YY group. So success of the Bigo also has proven several of the factors. Firstly, in overseas market definitely the live streaming business also has a very promising future which is quite different from -- as other people thinking before. So through of the success of Bigo definitely we will see more opportunities to continue grow the entertainment live streaming business in overseas. Announcing probably you can all see from outside from the financial performance is actually for the whole group in year 2018 where it actually has to go through a very significant changes internally, which is means we actually transforming the company into a more technical driven focused of the company. In the year of 2018 we are actually focused on build one of the leading AI technology teams in China and while we also see very significant progress for the AI development. Since both of the Bigo and YY owns two of the leading AI based of the technical teams in China, so we merged that after we complete acquisition of Bigo, actually the two of the AI teams can work together which is help us to influence the overall -- of the AI technology capabilities in the company. In conclusion, the year 2018 actually a lot of our internal management has been changed from the labor force into the AI management. Our capabilities for the integration of the AI technology also help the Bigo's short form video business which is LIKE huge successful in oversea market in the year 2018. Looking into 2019, definitely we believe the Bigo's focus is to focus on the short form video market expansion especially for LIKE user expansion in oversea market. Meanwhile, the rich experience for YY past decade experience in terms of operating live streaming business also will help Bigo to further improve their monetization capability for the overseas and live streaming business. Yes, that is our major strategies for the future. Thank you.

Your next question comes from the line of Karen Chan from Jefferies. Please ask your question.

My question is about more color on Bigo financials. We can able to share the revenue scalability in 2019, MAU and also paying user ratio. And what's also on the long-term margin profile on overseas live streaming if we compare to core YY domestically? Thank you.

Thanks Karen. This is Bing. Let me address the question. So for Bigo's financial details, as we just consolidate acquired Bigo and we are still in the process of discussing with the auditor to get the numbers streamlined, so I cannot disclose too much financial numbers with you at this stage. For the MA use, at the end of last year the total Bigo MA use is around 69 million that includes both Bigo LIVE and includes short form video LIKE and actually it's growing very rapidly. So we expect the MAU growth pattern to continue throughout 2019. For the paying ratio and paying user number, as I said, we are still in the process of internal streamlining so we cannot disclose too much information. But I think it's too lower than YY's domestic paying ratio because in lot of these Southeast Asia market, the live streaming business is still in early stage. Now and then regarding the margin profile, obviously, Bigo's current margin is lower than YY. And that's why I told many investors that for Bigo there is a clear path to profitability, coming from several venues. One is on the cost side. In overseas market because the under development all the payment channels, big chunk of cost go into the payment. So with the provision of the mobile payment infrastructure in overseas market that will getting better and better. Secondly, Bigo's revenue stream just more than YY so as Bigo increase the revenue the operating efficiency both in terms of R&D spending, in terms of sales marketing as percentage of revenue will getting better and better. So I think in general Bigo's margin will improve gradually down the road.

Your next question comes from the line of Natalie Wu from CICC. Please ask your question.

Firstly, congratulation on the consolidation of Bigo. And my question related on the AI investment. You mentioned that you will be owing AI in your -- just wondering what the major related area will you --could assess in the AI development. Also the investment scale, how should we anticipate the related investment scale for that investment test? Should we expect an update in the R&D expenses in 2019 for YY? Also you mentioned that you have latest strategy change which is that you will bring other Investee back to the build under core management to add the synergies among different type of YY group. Just wondering what are the major investee we can expect or if there is not convenient for you to touch that topic at current stage, it would be great if you can help us understand what is your latest stand will be. Thank you.

Yes. This is David. Let me address your question. So firstly, you are right. Since we actually focused on the AI technology development so that is why looking to the year 2019 in terms of the R&D expenses as a percent of revenue it probably will goes up from about 5% to 7%. So the major spending is about - is labor related cost and expenses related to the AI technology teams. And the second -- to address your second question so internal speaking, the artificial intelligence is a very big top. But combined with the nature of our company we will be focused along the several of the fact - fields. The firstly definitely we will be focused on the content understanding through of the AI technology. For example like the pictorial or all the video based content, how we can better understand through of the AI technology for those kinds of different types of content. And we truly believe is go through a quite long period of the procedures through our accumulation as our better understanding into the content, definitely we will be build out more comprehensive models, AI models to understand and identify the content. And for those parts of we truly believe is there no limitation. Definitely the technology will continue become more robust. The second part for the AI technology we will focus on the content recommendation and related results of the sales. So all those questions in China domestic market [Indiscernible] will be the leading technology company for the content recommendation in the past two years. But the meanwhile --for a while in the past two years we also see very significant progress in terms of our content recommendation AI technology development. So going forward through our continued effort to improve our content recommendation, technology capability definitely we have the better capability to match our content into our usage. The third field will definitely focused on the product artificial live vision. So our automated goal will be for each of the our major product, it will be hundreds of the different kind of versions and maybe thousands of the different kind of switch on the backside of the platform and through of the AI technology we can using the AI to choose of the best of the -- the most ideal and best of the versions among the different kind of -- hundreds of the different kind of versions. So our ultimate goal will be achieved so each ending year everybody can upgrade a new version into the platform and through of the AV test, we can easily find out the best of the version for this product. And we also can using the automatically investment for the traffic acquisition based on those kind of decisions through of the AI technology. As a first part for the AI technology we will be -- the evolution of the internal management, so we will fully like to as AI capability into the internal management. So the traditional internal company will be the business unit structure focused but going forward I truly believe the new structures for the internal company will be technology centralized management. For example like the Facebook or the best tops in the past few years practice will be -- so company has a one big united technology team. And it's through of the technology capabilities we can allocate the technical fault into the different kind of unit or the different kind of products. So we truly believe it will be the future. And definitely there will be significant -- they will bring structural changes for the internal management going forward. So in conclusion, the competitive edge for the AI technology going forward definitely will be the internal technical management as well as data management platforms. And so ours definitely will be focused on to improve our capabilities for both of the platforms. So in single words it will be four major parts. So the firstly the content understanding; the secondly content recommendation. The third part will be the united technical teams and fourth will be the internal technical management. So these two parts -- four parts will be our key focus going forward in terms of the AI development. Thank you.

Your next question comes from the line of Eileen Deng from Deutsche Bank. Please ask your question.

My question is mainly focusing on the outlook, given that the first quarter's guidance seems to be nice and I am wondering what is the full year core business growth will be and for the traffic acquisition plan is there any difference you see this year versus last year and the paying user growth trajectory behind that? Thank you.

Eileen thanks. Let me address the question. So domestic, even though we put international association as our key strategy but we also put a lot of effort domestically, particularly on the traffic acquisition as you asked. So in the New Year in 2019 we are doing following things to attract new traffic in China. One is on our new -continued new product launch and new product features within YY LIVE. And also secondly through the shop form video, as we said, more other example how we promote our popular hosts to become all channel star and attract fans from our short form video or social media platform. And they kept this -- kept pool of friends back to YY towards live streaming. Thirdly, we actively are exploring partnership with other traffic platform. We successfully did a partnership with Xiaomi. We also in active dialogue stage with other similar platforms which we will take over the back end of the live streaming business and then we share revenue with them. So if all of those happened then obviously our user can accelerate. Now as we guided towards the street before, we are assuming that the status quo then YY's live core business meaning the revenue will grow in the high single digit kind of range in 2019. But as I said, if one of those initiative become fruitful then our user can accelerate. For the paying ratio, again, we are the best in the industry. Once we get the users we always know how to cultivate them, how to help them pay more. And as I explained to you, investor before that our paying ratio compared with gaming still has room for improvement. So again I think for paying ratio in a new year we definitely have room for growth as well.

Your next question comes from the line of Daniel Chen from JP Morgan. Please ask your question.

I will translate myself. So my two questions -- I have two questions related to Bigo. So for the first is on the LIKE short video app. I know that the current focus for the app is still the use acquisition. So how should we look at long-term monetization model for the app? That was the first. The second one is wondering what's the overseas market user demographic for the live broadcasting. Is it really mainly driven by the top spend like in the domestic channel market or it's more longtail driven? Thank you.

This is David. Let me address your question. So first in terms of the Like's future revenue source, it will be coming from two major sources. One will be that they are already paying services. For example, such as lives streaming game or key services et cetera. Then other part will be advertisement models. We truly believe one of the major advantages for the China companies is compared with other major peers in overseas which are majorly focused on advertisement models. So Chinese companies always has a better capabilities to generate revenues through --of the paying model or other like the user base services such as live streaming gaming or app services. So once we build out the channel for the user paying model and definitely we can continue to make guidance similar about the market. And meanwhile through of the Bigo's successful model in the overseas definitely our live streaming other paying model has been proven -- is also another efficient monetization model in the overseas market. So in general speaking in conclusion for Bigo's future monetization plan definitely will be focused on the LIVE directly paying services and other VA services. And meanwhile through supplement by the other advertisement revenues. Once we can build out very healthy of the model we can [Indiscernible] to increase our advertisement models, which is also help us to avoid the directly pressure or directly competition from other peers in the overseas market. Thank you. In terms of the live streaming monetization models, we actually see a very different trend in the different countries of the different market. So the overall market actually is quite balanced. For some of the countries or regions where we actually see this similar kind of trends similar to China which is means that the bulk part of the paying users dominant of the model. But for other countries very interestingly the major paying model was throughout these small paying users in the small room social features or other types of the services.

Another quick point. I think just now we mentioned that the R&D as a percent of revenue will increase from 5% to 7%. Actually it already has increased in the past few quarters from 5% to 7%. So going forward they might be even higher-- little bit higher because we need to continue to add more AI technology expert, I just want to clarify that.

And your last question comes from the line of Wendy Huang from Macquarie Research. Please ask your question.

Thank you. So given that TikTok is already doing quite well in overseas market and short video, can you tell about the potential competition against the Chinese companies in overseas market? And secondly, we asked already the talk about to diversify the content offerings, I just wondered if you can share some color in terms of the content overlapping with Huya? Thank you.

This is David. Let me address your question. So firstly in terms of the competition landscape for Like in the overseas market. We actually look as -- firstly, we agree so that you talk -- actually see very fast user growth in the overseas market. But very interesting we also at the same time to monitor for Live in some of the countries and regions. We also given TikTok has been experienced rapid user growth for Like. We also see the rapid user growth as well in the same kind of retail auto market. That's because of the firstly the Like has a relatively very competitive team which is especially focused on end result as well AI capabilities. And also like I said comparatively the better usage experience now would be the first reason. The second reason it seems Like actually to enter the market through of the true based of the video functionality. And they also the big-- they also has a good experience both in terms of quality and better user communities. So considered the two part of the factors that in going forward we truly believe for like's competition will continue -- take like in the good competitive position into the market. And we are not afraid of the competition in the overseas market as well. Thank you. In terms of your question related to the YY and Huya's competition in the overseas market in terms of the game live streaming services. Our judgment is firstly the overlap between YY and Huya's overseas users is very limited is very low. And the meanwhile since both of the business units just started to explore the oversea game live streaming services. So it's too early to talk about the competition between the two parts of the business. So in the future if you look at our major focus on the operation in overseas such as Bigo Live, live as in plus HAGO which is a --overseas product. So now focus is on the game live streaming. So we truly believe we will now see directly competition with Huya in overseas market in the future. Thank you.

Your next question comes from the line of Eddie Leung from Bank of America. Please ask your question.

Can you share with us more color on a macro impact? Do you think that it will continue impact our domestic business? Do you see domestic ARPU, you have room to improve? And my second question is about your new stage or you mention any color about these? And any plan to have similar type feature like Bigo like, should we do in a domestic market. Thank you.

Thank you. Let me address the first question and leave the second question to our COO, Mr. Ting Li. So regarding our macroeconomic, obviously slowing down of China economy had an impact across market and industries. But for live streaming and the film industry is relatively less impacted because people still need time or kill the time for better quality content. As I mentioned many times live streaming represents one of the best quality content because it is immersive, it is impacting, and it is engaging. So that's why our user stickiness continues to increase. If you look at the daily time spend their number, no matter from third party data or from internal source continue to increase, that indicate even in economy downturn, many more audience continue to come back. In terms of ARPU, it can fluctuate. As I said many time, ARPU is a result not a driver. So it depends on the user growth and revenue growth .So we track more importantly on the MAU growth and paying ratio, ARPU can fluctuate from time to time.

This is Ting. Let me address your question. So for the overall YY growth, we actually seeking the different metrics of the product allocations to continue boom our growth fro the future. Firstly, starting from the last year, the whole growth actually starts to globalization of the strategies. So you can see one also very obvious example is a huge success from our newly initiative product HAGO in the Southeast Asia market. And secondly, in the domestic market we actually launched the night version of YY Live last year which is focused on the lower tier of the user expansion in China. And thirdly, it is our partnership with Xiaomi and other ecosystem of the traffic in the China potentially in the future. So through of those kinds of strategic partnerships we also can improve our monetization capability in the domestic market. Secondly, the successful experience which is accumulated from Live overseas operation in the past definitely will help us for the domestic expansion in the future especially in terms of the short form video management, data management, as well as algorithm and AI capabilities. For those of the capabilities definitely will help us to continue expand of the domestic market in the future. Yes, thank you for the question. End of Q&A

Next I would now like to hand the call back to today's presenter. Please continue.

Thank you, operator. Thank you all for joining us today. We look forward to speaking with you in the coming quarters. Thank you.

Ladies and gentlemen, this does conclude our conference for today. Thank you for participating. You may now all disconnect.