Qfin Holdings, Inc. (QFIN) Q4 2024 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Qifu Technology Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions]. Please also note that today's event is being recorded. At this time, I'd like to turn the conference call over to Ms. Karen Ji, Senior Director of Capital Markets. Please go ahead, Karen.

Thank you, operator. Hello, everyone, and welcome to Qifu Technology's Fourth Quarter 2024 Earnings Conference Call. Our earnings release was distributed earlier today and is available on our IR website. Joining me today are Mr. Wu Haisheng, our CEO; Mr. Alex Xu, our CFO; and Mr. Zheng Yan, our COO. Before we start, I would like to refer you to our safe harbor statement in the earnings press release, which applies to this call as we will make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Also, please note that unless otherwise stated, all figures mentioned in this call are in RMB terms. Before we start, we would like to let you know that today's prepared remarks from our CEO will be delivered in English using an AI-generated voice. Now I will turn the call over to Mr. Wu Haisheng. Please go ahead.

Hello, everyone. Thank you for joining us today. 2024 was an exceptional year for our company. Despite the macroeconomic headwinds, we focused on driving high-quality development and evolving our business, consistently hitting new quarterly milestones to close out the year on a strong note. As our business model gradually shifts to a platform model, our organizational capabilities have been upgraded alongside it. As we look to the future, we will adopt a more open and collaborative approach to engaging and empowering our users and partners further enhancing the health and resilience of our business. By the end of 2024, our platform empowered a total of 162 financial institutions to serve more than 56 million users with approved credit lines on a cumulative basis. Throughout 2024, we maintained a disciplined approach, optimizing risk management and enhancing operational efficiency. In Q4, our C2M2 metric, representing the delinquency rate after 30-day collection for our overall loan portfolio declined further sequentially, reaching its lowest level of the year and approaching a historical best. With our risk metrics stabilizing, we strengthened our ability to address user needs through differentiated risk and pricing strategies. Total loan facilitation and origination volume on our platform have grown for two consecutive quarters with Q4 loan volume increasing by 9% sequentially to RMB89.9 billion. Loan volume in the second half of the year regained positive growth, increasing by approximately 15% compared to the first half. With operational efficiency continuing to improve, our Q4 profitability hit a new record high with non-GAAP net income, increasing 71.5% year-over-year to RMB1.97 billion and non-GAAP net income per diluted ADS surging 91.3% year-over-year to RMB13.7. Despite macroeconomic headwinds, we have consistently improved upon our results over the year and outperformed our market commitments through the ongoing evolution and enhancements to our business. In 2024, with our take rate continuing to improve, full-year non-GAAP net income rose 44% year-over-year to reach an all-time high of RMB6.42 billion. Additionally, we successfully executed USD410 million share repurchase buying back approximately 12% of our share count at the beginning of the year. This also contributed to improved non-GAAP net income per diluted ADS for 2024, which increased 55.7% year-over-year to RMB42.4. Coupled with ongoing improvements in profitability and capital allocation efficiency, our ROE for 2024 increased further to 27.9%, significantly outperforming most financial services and Internet companies in China. Now I'll walk you through the progress we made in 2024. First, we remain committed to driving quality growth. We enhanced user acquisition efficiency by proactively diversifying acquisition channels. The number of new borrowers in 2024 increased by 16.2% year-over-year, while average acquisition cost per credit line user declined by 5.3%, reflecting a significant improvement in user acquisition efficiency. Notably, the addition of 18 new channels to our embedded finance business for over 26% increase in new credit line users and a remarkable 98% increase in loan volume from the embedded finance channels, with users acquired through this segment, now accounting for 41% with improved user profiling accuracy on partner platforms, both credit costs and operational efficiency further improved, driving an ROA increase of approximately 2.48 percentage points from last year. Additionally, our embedded finance model further expanded its reach and now covers the majority of leading Internet traffic platforms in China with penetration rates also increasing. Simultaneously, we deepened collaboration with financial institutions to engage with their existing customer bases, leveraging their proprietary traffic and our precise user identification capabilities and differentiated risk strategies to extend our credit product offerings. As we expand into more channels and strengthen our presence across platforms, we expect loan volume from our embedded finance business to maintain rapid growth momentum in 2025. Additionally, we are developing our intelligent marketing capabilities. 74% of the graphics and 27% of the videos we deploy are now generated by AIGC technology, resulting in a 25.1% improvement in user outreach efficiency and an approximately 10% reduction in average cost per credit line user. Furthermore, with 40% of our ad placements now automated, we achieved a 9% improvement in ROI compared to manual placements. Second, our asset quality improved significantly in 2024, following the decisive initiatives we implemented to optimize our loan portfolio and prioritize high-quality growth. We upgraded our application scorecard or A Scorecard by integrating AI to enhance credit data analysis. This allowed us to lower risk metrics back to target levels and establish a foundation for continuous improvements. Within our post-lending processes, we enhanced overall collection efficiency by upgrading our collection scorecard or C Scorecard with large language models for real-time analysis of user communication data and refining partner management and case assignment strategies. In the second half of the year, despite a moderate recovery in market demand, we maintained a disciplined risk strategy and focused on differentiated user operations, driving further improvements in our risk indicators. In Q4, our D1 delinquency rate decreased by 0.21 percentage points year-over-year, while 30-day collection rate increased by 3.23 percentage points. This robust asset quality has laid a solid foundation for our 2025 strategic planning and with optimized risk strategies now firmly in place, we expect risk performance to remain stable in the coming quarters. Benefiting from a favorable interest rate environment and robust asset quality, we maintained our negotiating leverage on the funding side and drove a continuous decline in funding costs throughout the year. Our ABS issuance for the year increased by 21.6% to RMB15.2 billion, further optimizing our funding structure. We also issued the first domestic exchange-traded ABS with a AAA international rating which attracted subscriptions from multiple international institutional investors and expanded our funding channels globally. Our leadership in ABS issuance has given us a distinct competitive advantage in funding. In 2025, we plan to ramp up ABS issuance and increase the share of ABS in our funding mix. Although there has been a slight uptick in interest rate uncertainty this year, we are confident in our ability to drive a moderate decline in our funding costs in the coming year. The proportion of loan volume from our Capital Light segment increased by approximately 10 percentage points to 53% throughout 2024. We are the first mover to adopt this model and now boast the highest ratio when compared to our industry peers, a direct result of our strong asset quality and precise asset allocation capabilities. Our flexible asset structure ensures that our loan portfolio remains significantly more resilient during market cycles. Over the past year, by onboarding funding partners with more diverse risk appetites, we have strengthened our ability to serve various loan segments and further optimize our asset allocation strategy. This has driven continuous improvements in our ROA under the capital-light model. Our Technology Solutions business reached meaningful scale in 2024. We continue to enhance and upgrade our credit tech solution, Focus Pro, to meet the diverse needs of financial institutions. Over the year, we added 11 new partner institutions, bringing the total to 16 with 11 already live on our platform. Loan volume under the Focus Pro model grew at a compound monthly growth rate of 17% in 2024. By extensively engaging with our partners, we have seen strong demand from financial institutions for AI-driven solutions. In response, we plan to develop an AI-plus bank agent platform to help banks address pain points in their core business processes and improve operational efficiency. We look forward to sharing more updates on this initiative in the coming quarters. AI is deeply embedded in our DNA, empowering every stage of our operations. Over the past year, AI has driven significant efficiency improvements across our business from AI copilot models in loan collection and telemarketing to automating the development of marketing materials with AIGC technology and assisting developers with coding. As large language models increasingly mature and Deepseek significantly improves inference efficiency, we will allocate more resources to the application of AI across credit scenarios going forward. First and foremost, risk management is the cornerstone of our business. We have gained valuable insights from over 200 million users and developed more than 2,400 models with 590,000 data dimensions. In 2024 alone, we iterated our models more than 670 times. We believe Deepseek will revolutionize how data is mined and analyzed in risk management, transitioning us from a single model to a multimodal approach and driving exponential growth in data dimensions. It's powerful reasoning capabilities will enable us to further enhance user profiling and improve the accuracy of end-to-end risk identification. Second, we are fully committed to advancing our AI-Plus strategy. We plan to build an agent platform that will empower core lending processes, leveraging the memory, planning and collaboration capabilities of AI agents. This platform will fundamentally reshape how we operate, boosting efficiency while unlocking greater potential within our teams to drive even more business value. We have assembled a dedicated team to execute this strategy and expect 1/3 of our core business processes to be powered by this agent platform in the next 1 years or 2 years. This initiative has already gained strong traction among our financial institution partners, and we believe AI-Plus Bank will become a key pillar of our Technology Solutions business moving forward. In the second half of 2024, we saw marginal improvements in the macroeconomic environment and a modest recovery in credit demand. The 2025 government work report emphasized a commitment to supporting technological innovation, boosting consumption and advancing the AIs initiative, including the widespread adoption of large language models. We will continue to observe the impact these initiatives will have on our business. From a long-term perspective, our vision is to become a globally respected fintech company. To achieve this vision, we are executing a one core two wings strategy, where our domestic credit business serves as the core and our Technology Solutions business and international expansion serve as the two wings. This strategy will allow us to continuously expand business boundaries and drive digital financial inclusion on a larger scale. Looking ahead to 2025, we remain cautiously optimistic and expect our core credit business to maintain high-quality development, while our Technology Solutions business will expand the depth and breadth of our partnerships with banks through our AI Plus strategy. For international expansion, we will maintain a disciplined approach, focusing on markets with stable regulatory environments and solid infrastructure. We will start small, move quickly and iterate continuously as we progress. We look forward to sharing more updates on our journey in the future. In 2024, we further optimize capital allocation to enhance shareholder returns, executing our share repurchase plan at a significantly ahead of market expectations. Our dividends and buybacks for 2024 amounted to USD280 million and USD410 million, respectively, with total shareholder returns reaching 100% of our 2023 GAAP net income. As of the end of 2024, we had repurchased a total of USD24.5 million ADSs and have begun executing a new repurchase plan of up to USD450 million in 2025. We are confident in the future of our company and remain dedicated to delivering long-term value to our shareholders. Moving forward, we will continue to prioritize efficient capital allocation and shareholder value creation through recurring share buybacks and dividends. With that, I will now turn the call over to Alex.

Thank you, Haisheng. Good morning, and good evening, everyone. Welcome to our fourth quarter earnings call. We closed the year with a strong Q4 as microenvironment start to see tentative indication of modest improvement in user activities. Our continuous effort to optimize operations, improve efficiencies and manage risk exposures generate healthy financial results and operating metrics. Total net revenue for Q4 was RMB4.48 billion versus RMB4.37 billion in Q3 and RMB4.5 billion a year ago. Revenue from credit-driven service, capital heavy was RMB2.89 billion in Q4 compared to RMB2.9 billion in Q3 and RMB3.25 billion a year ago. The year-on-year decline was mainly due to significant decline in off-balance sheet loans despite strong contribution from on balance sheet loans and other value-added services. Overall funding costs were stable Q-on-Q in seasonally timing funding environment. Revenue from platform service capital light was RMB1.59 billion in compared to RMB1.47 billion in Q3 and RMB1.25 billion a year ago. The year-on-year growth was mainly due to strong contribution from ICE and other value-added service, more than offsetting the decline in capitalized loan facilitation. For the full year 2024, platform service account for roughly 53% of our total loan volume and 58% of the year-end loan balance. We expect the ratio to be roughly stable in the near term. During the quarter, average IRR of loans we originated and/or facilitated was 21.3% compared to 21.4% in prior quarter. Looking forward, we expect pricing to be fluctuating around this level for the coming quarters. Sales and marketing expenses increased 25% Q-on-Q but declined 5% year-on-year. The sequential increase was mainly due to increased customer activity and the typical Q4 seasonality. We added approximately 1.69 million new credit line users in Q4 versus 1.58 million in Q3. We will continue to make timely adjustment to the pace of the new user acquisition based on macro conditions from time to time and further diversify our user acquisition channels and improve user engagement and retention. Meanwhile, we will also continue to focus on reenergizing existing user base as repeat borrowers historically contribute the vast majority of our business. 90-day delinquency rate was 2.09% in Q4 compared to 2.7% in Q3. Day one delinquency was 4.8% in Q4 versus 4.6% in Q3. 30-day collection rate was 88.1% in Q4 versus 87.4% in Q3. Another key risk metrics C-M2, which represents the outstanding delinquency rate after 30-day collection improved slightly Q-on-Q to 0.57% with higher loan volume. We are comfortable with our current risk exposure, and we expect to see relatively stable risk metrics in the coming months. Under current macro conditions and geopolitical uncertainties, we continue to take a prudent approach to book provisions against potential credit losses. Total new provision for risk-bearing loans in Q4 were approximately RMB2.07 billion versus RMB1.63 billion in Q3. The increase in new provision was mainly due to increase in risk-bearing loan volume Q-on-Q and higher provision booking ratios. Write-backs of previous provisions were approximately RMB1.02 billion in Q4 versus RMB910 million in Q3. Provision coverage ratio, which is defined as total outstanding provisions divided by total outstanding delinquent risk-bearing loan balance between 90 and 180 days were 617% in Q4, a historical high compared to 482% in Q3. Non-GAAP net profit was RMB1.97 billion in Q4 compared to RMB1.83 billion in Q3. The significant improvement in profitability was mainly due to favorable year-end tax adjustments. Non-GAAP net income per fully diluted ADS was RMB13.66 in Q4 compared to RMB12.35 in Q3 and RMB7.14 a year ago as strong earnings growth and proactive share repurchase created significant EPADS accretion. Effective tax rate for Q4 was 1.0% compared to our typical ETR of approximately 15%. The lower than normal ETR was mainly due to benefit from withholding tax provision adjustment as withholding tax rate was lower to 5% in Q4. With solid operating result and higher contribution from capitalized model, our leverage ratio, which is defined as risk-bearing loan balance divided by shareholders' equity was 2.4 times in Q4, near historical low, we expect to see leverage ratio fluctuate around this level in the near future. We generate approximately RMB3.05 billion cash from operations in Q4 compared to RMB2.37 billion in Q3. The sequential increase in operating cash flow was mainly due to better-operating results and lower tax payout. Total cash and cash equivalents and short-term investments was RMB10.36 billion in Q4 compared to RMB9.77 billion in Q3. As we continue to generate strong cash flow from operations, we will further optimize our capital allocation to support our business initiatives and to return our shareholders. During Q4, we, in aggregate repurchased approximately 3.1 million ADS in open market for a total amount of approximately USD107 million, inclusive of commissions at the average price of USD 34.5 per ADS. As such, we have completed substantially all of the 350 million shares repurchase plan we announced on March 12, 2024. Furthermore, on November 19, 2024, our Board of Directors approved a new share repurchase plan to buy back up to USD450 million worth of ADS over a 12-month period starting January 1, 2025. As of March 14, 2025, we have in aggregate purchased approximately 2.2 million ADSs in open market for a total amount of approximately USD86 million, inclusive of commissions at the average price of USD39.7 per ADS under the new share repurchase plan. The proactive execution of our share repurchase plan demonstrate management's confidence and commitment to the future of the company and the management intend to further use share repurchase to accelerate EPADS accretion. In accordance with our current dividend policy, our Board has approved a dividend of USD0.35 per Class A ordinary share or USD0.70 per ADS for the second half of 2024 to holders of record of Class A ordinary shares and ADSs as of the close of business on April 23, 2025, Hong Kong time to New York time, respectively. We intend to gradually increase the dividend per ADS on a semiannual basis. Finally, regarding our business outlook, while we started to see some candid sign of marginal improvement in user activity, we will continue to take a prudent approach in business planning for 2025 and focus on enhancing efficiency of our operations. For the first quarter of 2025, the company expects to generate non-GAAP net income between RMB01.8 billion and RMB1.9 billion, representing a year-over-year growth between 49% and 58%. This outlook reflects the company's current and preliminary view, which is subject to material changes. With that, I would like to conclude our prepared remarks. Operator, we can now take some questions.

[Operator Instructions]. Your first question comes from Richard Xu with Morgan Stanley.

[Foreign Language]. Two questions from me. Number one, on the AI, could the management discuss what areas we're seeing the most potential to integrate it maybe Deepseek and other AI modules and what type of efficiency gain could be achieved and any progress so far? Second of all, there's been some, obviously, policy support since September of last year. Are we seeing any credit demand recovery at the moment? And what's the credit demand at the moment? Outlook for 2025? Any improved credit outlook as well as supply maybe credit growth outlook.

Okay. Richard, thank you. For your first question about the AI and Deepseek. Actually, it's really a hard topic for now. And over the past year, we are happy to see the great improvement in large language module technology, especially in its writing efficiency. We believe credit is perfect scenario for AI application because this industry has a strong data foundation and a high degree of digitalization. Last year, we had a lot of AI practice and efficiency work like sales, loan collection, intelligence, marketing and R&D. For tempo, we launched the competitive system to empower our collection team by analyzing our historical phone costs the system can effectively lead user’s intent and suggest how to effectively communicate with the users. So far, the adoption rate of the Capella system among our collecting team has reached about 84%. Deal usage is roughly 30x per person. And this year, we will allocate more resources to apply AI into our credit assessment, leveraging the AI reasoning capabilities to enhance our ability to analyze credit reports. One example is when we use feature recognition during the loan application process, AI will recognize additional information from the pictures or videos, such as users closing or their rounding’s. This information can be cross-checked with the identity information provided by the users to reduce the fraud risk. This year, we will put a more portion of our traffic into the end-to-end AI-driven risk decision-making process. We are really looking forward to the results of this test. In addition, we are fully committed to advancing our AI is strategy. We plan to build the trading platform that will empower our whole company. This AI agent could become our digital employees working together with us. We have built the dedicated team to execute this AI Plus strategy. And by the end of the year, we expect this team to grow to around 150 people. In the next 1 year, we expect 1/3 of our core business processes will be powered by this agent platform. We have seen strong interest for the engine platform among our financial institution partners. And we believe AI Plus Bank will meet our Technology Solutions business more competitive. And I want to say over the past decade. We have captured the growth opportunities in the next plus era. We are confident that based on our scenario, technology and data, we are also at a good position to capture the AIs opportunities. That's for your first question. And for the second question about customer demand. Yes, we did observe some improvements in user activities after September 21. For example, the loan application ratio was 10% higher in Q4 versus Q3. In January, we also noticed a seasonal pickup in credit demand ahead of Chinese New Year, especially from SME users. Then credit demand declined in February due to the holiday, but rebounded in March. Based on the current situation, we expect Q1 loan volume to grow by more than 10% year-over-year. At this stage, it is -- I think it is too early for us to call a macro recovery. We still want to adopt a prudent approach to plan our business for this year. But if the market environment improves meaningfully, we will adjust our strategy timely to capture the growth opportunities. Thank you.

Your next question comes from Alex Ye with UBS.

[Foreign Language] So, my first question is about what's the drivers for the movement of the 2 early equating pages in Q4, including Taiwan delivered ratio and collated collection ratio what's the latest trend in Q1 and the outlook going forward? And second question is about the net tariff outlook which was started by management previously at around slightly above 5% for the full year. So, based on your related results, and your operation into this year so far. So, what's the -- is there any adjustment to this guidance?

[Foreign Language].

Okay. Let me do the translation for Mr. Zheng. First, let me explain how we monitor our risk internally. We usually look at both the day 1 delinquency rate and the 30-day collection rate together because individual matrix can fluctuate for various reasons. What we focus on more is the C2M2 ratio which is the delinquency range after a 30-day traction period. Based on this metric, our risk level is very, very stable. Now about the slight increase of our day 1 delinquency rate and the collection rate compared to Q3, it was mainly due to the optimization we've made to our repayment reminders strategy. We reduced the coverage of our early reminder by about 13% to improve unit experience without compromising our loss rate. As a result, some of our high-quality users is the repayment on the due date, but today quickly caught up. That's why you will see a small increase in both day-one delinquency rate and the collection rate. but it didn't have any meaningful impact on our actual credit losses. Our risk performance in January and February was pretty much in line with Q4, with overall risk levels remaining stable. I also want to emphasize that we are not aiming to reduce our risk to the absolute lowest level as it doesn't serve the best interest of the company. Right now, with a decent level of take rate we have a solid margin opportunity to experiment with new strategies and find a better balance between growth and risk.

Okay. And Alex, I will respond to your second part of the question about the take rate. As you know, the -- throughout 2024, we have been on a steady improvement trend in trade grade as we reduce the risk and with the funding costs continue to trending lower around last year. So, by the end of last year, in Q4, our take rate net approach to 6%. So that's a trend for last year. And obviously, there are some one-off factors, as you guys know, for example, the mix change on the revenue recognition different between the second half and first half. But excluding all this kind of one-off factors, I think we're looking at for this year. It's a reasonable assumption. As you mentioned, we achieved sort of a 5% above kind of a take rate for the year. And overall, we as our CRO just mentioned, we have enough sort of cushion in our take rate, all our risk metrics that enable us to actually do a little bit testing around the margin. If we see the opportunity, which could be resulted by the macro environment change or could be resolved by the user activity change if we see the opportunity, we will take that and try on the margin to see whether we can bring the incremental marginal profitability on top of our sort of base case. So that will be the process we will continue to pushing throughout 2025. The end results or the ultimate goal is to really drive higher profit -- total profit on top of the sort of the base case there. So that's our approach to looking at this year's profitability and this year's kind of a take rate.

Your next question comes from Cindy Wang with China Renaissance. Please go ahead.

[Foreign Language]. Thanks for taking my question. So, I have a question related to the regulation side. So last week, National Financial Regulatory Administration issued a notice requiring financial institutions to promote consumer finance and boost consumption -- to boost consumption in China. So how do you see the new policy impact to the overall industry and the company? Thank you.

Okay, Cindy. I'm glad you mentioned this. It's really a big news for our industry. We believe this document and a very positive signal. And we are very encouraged. It is very clear that the government's direction is to boost consumption by encouraging the development of consumer credit industry. And I think there will be a series of policies to support that direction. I think we noticed three details in the document. The first, increasing the supply of consumer loans, which means support in terms of monetary policy and liquidity. And secondly, they encourage financial institutions to increase loan volume and fair reasonable terms of for loan products, which means that the regulator will provide more flexible space for financial institutions. And thirdly, they emphasize the consumer protection and providing support for users who have difficulty in repayment. [indiscernible] the regulators have fully recognized the value of consumer finance in boosting consumption. Therefore, we expect that the regulator environment will remain relatively stable, leaving enough more room to innovate and serve our customers. Thank you.

The next question comes from Emma Xu with Bank of America Securities. Please go ahead.

[Foreign Language]. So, I have a question about the funding cost. So, is your funding cost continuing to decline? And what's the lowest level you think the folding cost can go to?

In terms of funding costs, over the past few years, our funding costs have continued to decline even much faster compared to the LTR. This is partially driven by the risk cuts but more driven by the demand oversupply of consumer credit assets. And in the future, if macro improves, the supply and the demand situation will also change. And we always emphasize that financial institutions have their operating costs. The current cost of funds has already approved the bottom line of financial institutions. And so, this is -- there is a limited room for further decline. In addition to the funding provided by financial institutions, a significant portion of our funding comes from ABS. We will continue to issue more ADSs this year to further optimize our funding structure. So, hope we can achieve further decline in overall funding cost.

Yes. I Just -- Emma, I just want to add a couple of points. So basically, you can see there are three factors to really drive the funding cost to external and one internal. The two externa are on the LPI obviously, is that if you see the reduction in LPR, it will more or less kind of pass through to us a little bit. But at the same time, the supply-demand situation will also have the impact on the funding cost, in particular, if the macro situation is getting a little bit hot, then you will -- you may run into a short of a fund kind of environment overall, that certainly will put some pressure on our funding costs there. So that's two external factors. The internal one, on the ABS side, last year, we did about 100 -- I'm sorry, 15 billion, a little bit over 15 million in ADS issuance. And which represent about 20-some percent increase over the year before. I think at least from our planning perspective, we try to maintain this kind of a year-over-year growth pace for this year. If we had achieved that will certainly help us from a mix perspective, reduce the overall funding cost a little bit. But net-net, given we are how low we are already be, so there's limited -- the space in terms of downward movement will still be quite limited. Thank you.

Your next question comes from Yada Li with CICC. Please go ahead.

[Foreign Language]. Hello management, thanks for taking my question. my question is about the shareholders' return. I was wondering you expect to deliver more value to the shareholders and how to view the sustainability and there is still potential for future growth? That's all. Thank you.

Sure. Thank you, Yada. I'll take this one. We have been very committed to returning value to our shareholders in the past couple of years. And we are looking at -- if you look at the 2024, the actual payout almost represents 100% of our earnings for 2023 there. And so, going forward, we have been saying that we try to maintain a 70-plus percent payout ratio for the next few years. And given that we also have a target to kind of shrink our share base by a significant percentage. So, we put the current priority and also maybe the next year's priority into the share buyback side, and we have the current $450 million share buyback program running so far in first quarter, even though our share prices have been moving up quite significantly. We still maintain a very consistent pace in terms of executing the current $450 million buyback program. And we intend to continue to do so for the remainder of the year. If there's opportunity to arise, we also may consider to accelerate the buyback program down the road. On the dividend side, given the priority for now is on the buyback, we try to achieve a continued increased per share dividend on the semiannual basis. For example, this quarter, we declared a $0.70 per ADS dividend versus 6 months ago, that's only about $0.60. So, it's a pretty significant rate in dividends. And you should expect that the dividend per share number to continue increase over the course of next few dividends, given that we are shrinking our share base quite significantly, and we also have to meet the Board authorized at least 20% dividend payout ratio. So mathematically, you have to see an increased DPS in the going-forward basis there. And in the long run, once we achieve our sort of share repurchase target, which may be about 2 years down the road, we will, at that time, reconsider the mix between the buyback and the dividend, but that's still a little bit long time away. So, for now, the priority is still be on the buyback side. Thank you.

Thank you. There are no further questions at this time. I'll now hand back to management for closing remarks.

Okay. Thank you, everyone, to joining us for today's conference. We are very efficient to make the call going very quickly. And we saw -- but if you have any additional questions, please feel free to contact us off-line. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.